The debate about economic growth and economic development in third world countries has been going on for decades and is not about to stop. For instance, policies that work in some countries, but failing in other nations, is one of the issues that arouse debate. In addition, though growth has gained momentum over the last two decades in some developing countries, it cannot be sustainable until it is localised or based on exploitation of local resources. As a result of these and other contradictions, most countries in the southern hemisphere are characterised by low levels of economic growth and development. Several reasons have been cited for low rate of development and growth in these countries, including colonisation, dependency, political instability, neo-liberalisation, and foreign involvement, among others. Many of these are external factors acting as constraints to their development. Some economists consider structural deficiencies and institutional weaknesses as reasons for low levels of economic development in third world economies. They believe that structural deficiencies and institutional weaknesses create conditions that keep developing countries at low levels of development and growth. In sub-Saharan Africa, domination of agriculture sector has led to continued heavy reliance on commodity exports as a major source of foreign exchange earnings, subjecting these countries to fluctuation in prices and weather conditions. Geographical factors were also considered as affecting Africa’s and developing countries’ economic growth. Landlocked countries which are also resource scarce, are some of least growing economies in Africa. Those do not have good bilateral and free trade...

A key factor that has constrained many Africa countries, including Kenya, from growing into a global economy is the continent’s small markets. These do not permit the realisation of economies of scale. Regional integration allows a country to effectively utilise its comparative advantage in a wider market to maximise its economic potential, diversify production lines, reverse de-industrialisation and marginalisation, and improve the living standards of the populace. Regional integration occurs whenever a group of nations in the same region, preferably of relatively equal size and at equal stages of development, join together to form an economic union by raising a common tariff wall against the products of non-member countries, while freeing internal trade among member countries. The East African Community (EAC), with a single unified market of more than 120 million consumers, should be viewed as a catalyst for economic growth. The ultimate goal of the EAC, beyond trade liberalisation and economic unity, is to pursue full political federation anchored on establishing regional structures and building institutions to foster international relations and strategic interventions. Kenya needs to fast-track the implementation of the EAC, given the various benefits, including trade creation due to specialisation based on comparative advantage, administration savings resulting from the elimination of border policing, enhanced bargaining power of member states, as in the case of the European Union with African countries, enhanced competition resulting in efficiency in production and improved quality of the products, and attainment of economies of scale from the enlarged market. Similarly, integration will stimulate...

 If Africa is to achieve the desired economic growth envisioned by the African Union (AU) Agenda 2063, it will have to provide employment opportunities for its growing young population, which is the largest the world has ever known, comprising about half of Africa’s population of 1.1 billion under the age of 25. This is the view of Cheikh Bedda, the African Union Commission (AUC) Director for Infrastructure and Energy. Bedda was speaking at the opening of the Programme for Infrastructure Development in Africa (PIDA) Week on 11 December 2017 in Swakopmund, Namibia. He said failure to effectively deal with deepening unemployment among Africa’s growing youth population could seriously erode the economic gains achieved across the continent in recent years. “The challenge of creating enough jobs and opportunities for the large African youth population for entering the labour market is one of the major challenges our continent faces,” he noted. He emphasised on the need for PIDA to play an important role in narrowing the gap between job creation and unemployment, with public decision-makers and private sector management actively undertaking training and skills acquisition in infrastructure development. He particularly stressed the need for training in building roads, rail systems, power generation, power transmission systems and information communication technology connectivity to prepare young Africans for the implementation of complex programmes such as PIDA. The African Heads of State and Government adopted PIDA in 2012, as the continental strategic infrastructure framework for the African Union’s stakeholders and partners to address the infrastructure deficit,...

The Trump administration may be about to throw spikes under the tires of three small but growing East African economies because they don’t want to import unlimited quantities of Chinese-made clothing that has been worn and tossed in charity bins by American consumers. Middlemen who profit from these donations insist they have a right to swamp African nations with American worn but foreign-made cast-offs even if it means undercutting those nations’ efforts to grow their own garment industries. It appears that Trump’s US Trade Representative (USTR), in a fit of misguided America First-ism, has bought the argument and will shortly announce sanctions against Rwanda, Tanzania and Uganda suspending their access to the American market. Organized as the Secondary Materials and Recycled Textiles Association (SMART), the middlemen contend that duties on pre-owned Chinese t-shirts levied by the three nations, the combined GDP of which is smaller than Hawaii’s, are threatening close to 200,000 US jobs. SMART members have refused to supply financial documentation to corroborate their outlandish fake news claim, insisting that USTR rely purely on self-serving member surveys. In any event, they have no way of knowing how much of what they export goes to East Africa because only a small proportion is shipped directly. SMART’s second-hand clothing that many Americans believe is going to charity, is actually sold to dealers in third countries, notably India, which bans imports of used clothing — with impunity — but allows them to be processed for re-export in special trade zones. To better...

The Africa 2017 Forum – held in Sharm el Sheikh in early December under the high patronage of President Abdel Fattah Al Sisi of Egypt – brought together seven heads of state and numerous political and economic decision-makers to discuss regional integration and job creation in Africa. Participants established partnerships and affirmed the forum’s theme of “Driving investment for inclusive growth”. The key narratives emerging from the public and private sector were the need to consummate African integration, to harness the power of entrepreneurial youth and to make the most of Africa’s growing investment climate. Speaking on the first day, President Sisi said: “Our priority is to support young entrepreneurs, especially those who come up with smart and innovative solutions in health, education and basic services. “The youth of the African continent are the future; you are our competitive advantage; you are the source of our wealth; we emphasise our will to support you and to be behind you to realise the ambitions of a brighter future on the continent.” During the same session, President Paul Kagame of Rwanda added: “The enormous wealth we have on the continent in terms of natural resources is outstripped by our human capital. Invest not only in youth entrepreneurs but also in the environment which helps them do what they are able to do to raise their game.” Fuelling startups The World Bank estimates that there now 200 innovation spaces across the continent when in 2010 there were just five. Tech startups and their associated financing...

African business leaders have stressed the need for self-reliance and domestic resource mobilisation on the continent. This, they said, will attract new investments into Africa to boost economic growth and development, as well as job-creation, a statement by the organisers of the just-ended Africa 2017 Forum, indicates. The event was held in the Egyptian resort city of Sharm el Sheikh. “There is need to set up joint projects, particularly in infrastructure, to support investment and trade among African states, and implementation of programmes that encourage entrepreneurship and also increase youth participation in the African economy,” the statement added. Other recommendations include the promotion of women empowerment in all fields of economy and considering them as “active members in the process of developing Africa and achieving economic stability”, and enhancing the role of the private sector to increase investment rates in the continent. The three-day event, organised by Egypt’s Ministry of Investment and International Cooperation and the COMESA Regional Investment Agency (RIA), attracted over 2,000 delegates from 75 countries. President Abdel Fattah El Sisi of Egypt hosted five African Heads of State and top business leaders from across the continent during the event. Intra-Africa trade, China-Africa cooperation Meanwhile, the forum rooted for policies that will help increase intra-Africa trade and drive inclusive growth, and stronger China-Africa cooperation, especially in terms of technology transfer. According to the statement, the event also discussed the industrial revolution for Africa and China-Africa economic relations. Ambassador Helen Hai, the CEO of Made-in-Africa initiative, China, said the...

Uganda Coffee Development Authority (UCDA) has called for actualisation of policy prescriptions such as the action plan on Economic Diplomacy by the ministry of Foreign Affairs and ministry of Trade’s National Export Development Strategy to help more Ugandan firms expand business abroad. These policies, UCDA’s market intelligence manager James Kizito, told Daily Monitor have a component of increasing Uganda’s exports with an emphasis on value added exports and service exports. He says if the implementing agencies including Ugandan embassies abroad would coordinate, it would enhance business to business dialogue including linking entrepreneurs in the diaspora to their counterparts home. “Exporting a finished product or a service export like Endiro is doing in USA, which is, establishing a coffee shop, is commendable and applauded. It means producers of high quality coffee would be linking with Endiro directly thus shortening the supply chain with subsequent increment in farm incomes,” Mr Kizito said. He said: “It also means there would be consistent supply of high quality coffee to Endiro. That entails having strong farmer organisations/cooperatives capable of supplying high quality coffee to the US market. It also warrants an efficient system to transport coffee from origin to the final destination.” Endiro Coffee, a Kampala-born café, in May this year opened a café in Aurora, a suburb of Chicago, in Illinois, and after reaching “breakeven pace in daily sales” by August its director Cody Lorance says in September “we began outside coffee sales (green and roasted) to other cafes and restaurants in the US.”...

UK Export Finance (UKEF) is lending €270mn to the Ugandan government to help finance the construction of a new international airport. The money will help support work on the construction of the runway, taxiway and cargo terminal that will be carried out by UK infrastructure company Colas. Additional financing will be provided by Standard Chartered, which acted as the lead arranger for the deal. The airport, which will be in the Kabaale region, will be the country’s second international airport and will open access for the delivery of equipment, materials and services. With large-scale infrastructure and energy projects planned in the area, the airport, which is due for completion in 2021, is expected to have significant long-term benefits for the country’s developing economy and energy independence. A second phase of development is planned to improve the airport’s capacity to support tourism and international trade at a later stage. The project is the first major project in Uganda supported by UKEF and the export credit agency’s largest-ever loan to an African government. Director of strategic projects at Colas UK, Carl Ferguson, says: “With huge untapped natural resources, rapid urbanisation and attractive demographics, the requirement for investment in infrastructure to support continued regional development is clear, and this aligns well with the outward-looking international element of the Colas strategy, which seeks to expand our activities in East Africa.” Source: Global Trade Review

For the first time in the history of the World Trade Organization, WTO members and observers have endorsed a collective initiative to increase the participation of women in trade. In order to help women reach their full potential in the world economy, 118 WTO members and observers agreed to support the Buenos Aires Declaration on Women and Trade, which seeks to remove barriers to, and foster, women’s economic empowerment. Actions outlined in the Declaration will ultimately boost economic growth worldwide and provide more and better paid jobs for women. These actions will also contribute to UN Global Development Goals, including the Sustainable Development Goal to achieve gender equality through the empowerment of women and girls (SDG 5). Supporting WTO members and observers have specifically agreed to explore and find ways to best tackle barriers to trade, lack of access to trade financing and sub-optimal participation of women in public procurement markets. Participating members will exchange information about what has worked – and what has not – in their attempts to collect gender-disaggregated economic data and to encourage women’s participation in the economy. Within the WTO context, members will scrutinize their own policies through a gender lens and find ways to work together to increase women’s participation in the world economy. They will also seek to ensure that trade-related development assistance pays better attention to its focus and impact on women. Progress will be reported in 2019. Currently, many women worldwide stand on the sidelines of the economy. While women comprise about half...

The Uganda Free Zones Authority (UFZA) has signed a Memorandum of understanding (MoU) with Trademark East Africa (TMA) to guide the formation of an investment, trade and logistics hub in Jinja District as well as promote collaboration between the two organisations. The logistics hub in Jinja is expected to boost economic growth, create employment and contribute towards sustainable and inclusive prosperity of the region by promoting the reduction of trade barriers and ensuring improved business competitiveness. Speaking during the MoU signing ceremony in Kampala recently, Mr Keith Muhakanizi, the Permanent Secretary ministry of Finance, said the Uganda Free Zones Authority was set up to establish, develop, manage, market, maintain, supervise and control Free Zones in Uganda under the Free Zones Act of 2014. “Free Zones are customs-controlled areas where goods introduced into the designated area are generally regarded so far as import duties are concerned as being outside the Customs Territory and include Export Processing Zones or Free Port Zones,” he said. The executive director of UFZA said: “This partnership is key in aiding us (UFZA) to deliver on our key objective of boosting export-oriented investment and trade. By putting in place the infrastructure and relevant facilities, TMA will have lifted the biggest impediments to investment and trade.” TMA, on the other hand is an aid-for-trade, non-profit, non-governmental organisation that was established with the aim of growing prosperity in East Africa through increased trade, funded by a range of development agencies. The partnership will be extended to a number of...