The EPAs are ongoing negotiations expected to create a free trade area between the European Union and African, Caribbean and Pacific Group of States (ACP).
Although they are a response to rules set by the World Trade Organisation (WTO) to enforce reciprocity in trade with the European Union, the African continent has been indifferent over them.
Several countries in blocs such as the Economic Community of West African States (ECOWAS) signed the agreement on the conviction that it would boost their exports to new European markets. While other countries, particularly in the East African Community, have been indifferent over the deal arguing that it does not offer enough protection for local industries against goods imported from Europe.
While discussing his paper titled "Economic Interactions Based on Free Trade Agreements between European and African Countries", Leleng Kebalo argued that African states should consider ratifying agreements that include technological factors that improve the quality of their exports.
"If the agreement includes technological transfers, then this can lead to economic transformation. Free trade with Europe or any developed region, without technological transfers is harmful for the evolution of less competitive economies in Africa," he told a session at the African Economic Conference in Addis Ababa on Tuesday, December 5.
"We advise African leaders to improve competitiveness of their economies through a gradual opening of their economies to European goods, in return for freedom of learning and adapting innovations," the researcher from the University of Lomé added.
Another researcher from the Food and Agriculture Organization of the United Nations (FAO), Davide Del Prete, said that trade policies and agreements must be analyzed deeply because they impact food and agriculture global chain participation in Sub-Saharan Africa.
"We find that trade policies are key determinants of the heterogeneity of the quality of agricultural transformation across the Sub-Saharan region. Policy-makers should test alternative trade policy measures on bilateral trade relationships, including agricultural value chain interactions," he said.
The research papers were commended by John Anwanyu, Lead Research Economist in the Macroeconomic Policy, Forecasting and Research Department at the African Development Bank (AfDB).
He encouraged the researchers in the session and asked them to continue their role in advancing fact-led policy implementation of trade agreements.
"Political will and evidence-based implementation are encouraged by facts and quality research that is specific and relevant to the African situation. With vast majority of African economies advancing free trade and pursuing overseas markets, research is a vital key that will ensure positive policies," he said.
The AfDB has supported the growth of exports and trade for countries across the Africa continent.
The Bank has also advanced intra-African trade as a sure channel with the greatest potential for building sustainable economic development and regional integration.
The Bank's flagship report - the African Economic Outlook 2017 - cited that trade among African countries expanded from a mere 10% in 2000 to 14% in 2014, reflecting gains in policies advancing intra-African trade. (African Development Bank)
The Dangote group has opened a $300 million cement production plant in the Republic of Congo. The facility which has a capacity of 1.5 million metric tonnes per annum is expected to be the biggest such facility in the Central African country.
The plant is located at the Mfila area of the capital Brazzaville. The event which was graced by Congolese president Denis Sassou Nguesso brings to five the Dangote Group’s African footprints in the cement production business.
The Nigerian president Muhammadu Buhari was represented by a government delegation led by the Mines and Steel Development Minister, Kayode Fayemi. He emphasized the Buhari administration’s desire to help indigenous companies to thrive.
Africa’s richest man Aliko Dangote who was present for the event also commended the Congolese government for its economic decisions in the wake of fall in global commodity prices. He also announced that the group was aiming at becoming one of the top global 10 producers of the product.
Speaking on the new plant Dangote said: “It is envisaged that this will contribute substantially to the availability and affordability of cement in the country and the Republic of the Congo will no longer need to depend on imports to bridge the gap between demand and supply.
“It is our hope that the inauguration of the plant will boost Congo’s economy, conserve foreign exchange that would otherwise have been spent on imports for the country, and create employment opportunities down the value chain.”
Dangote cement has so far commissioned cement plants in four African countries namely: Ethiopia, Zambia, Cameroun and Tanzania. The Congo-Brazzaville plant, which began operations in the third quarter of 2017, will be the fifth cement plant that would be inaugurated in the last two years. (Africa News)
An effort that hopes to draw billions in investment in Africa from Europe wrapped up at the Palace of Culture in Abidjan this week. In many ways, there couldn’t have been a better place for talk of a free market drive to revive the economies of Africa.
For Cote D’Ivoire, for all its economic difficulties, scarce capital and heavy taxes, has a claim to being an economic phoenix rising from the ashes of a violent civil war. Ever since the Ivorian army marched back to its barracks, in 2011, the country has seen signs of an economic revival akin to that of post-Genocide Rwanda and post-war Singapore. In fewer than seven years of peace, Cote D’Ívoire has thrown its doors open to foreign investors on its way to a growth rate of more than 8%, albeit from a very low base.
The European Union-Africa Forum, in Abidjan this week, was here to discuss an ambitious plan to help unleash the entrepreneurial spirit of Africa to create jobs and wealth. The EU is pushing a plan to prise investment out of a tight European financial market – especially from the big pension funds – to plough into entrepreneurs with emphasis on women and the youth.
The plan revolves around a fund of around $4 billion. The EU hopes to leverage this money up to around $44 billion by encouraging powerful financial institutions and pension funds in Europe to get behind it in the hope of high returns. In achieving this, around $1.5 billion of this money will be used as investment guarantees to take the risk out for foreign investors.
“It is done. We passed everything through our legislators in September and you will see the first projects taking shape next year,” says Roberto Ridolfi, in Abidjan, one of the technocrats at the EU who helped guide the plan.
At the conference, young entrepreneurs were given the chance to pitch their ideas to earn the chance of a sliver of the seed capital.
Academic and director general of DEVCO at the European Commission, Stefano Manservisi, is an expert on international and economic integration. He says the EC is in discussions with African nations in a bid to ease the flow of goods and services across borders to encourage investment.
One of the areas that the EU scheme is targeting is technology. I put it to Manservisi that these kinds of investments do not create many jobs in a content that needs about 20 million in the next 20 years.
“You have to remember that Facebook was created in a garage. There are many garages in Africa and people can create wealth and jobs in them if they are given the support and capital,” says Manservisi.
There are also reservations among African leaders about a lack of consultation over plans in this effort to create jobs. People on the ground in Abidjan question whether the benefits will trickle down to the millions living in poverty.
In a year when thousands of Africans died trying to flee this poverty – heading for Europe on leaky boats across the Mediterranean – the EU admits this investment effort may not be a quick fix, but at the very least it is a start. (CNBC Africa)
African Union Ministers of Trade (AMOT) will meet in Niamey, Niger, on 1 and 2 December in a bid to finalize negotiations on the Continental Free Trade Area (CFTA) by the end of 2017, as directed by the African Union (AU) Heads of State and Government in June 2015.
David Luke who coordinates the African Trade Policy Centre at the Economic Commission for Africa (ECA) said that the month of November was characterized by a series of meetings by the CFTA Technical Working Groups, the CFTA Negotiating Forum, and the African Union Senior Trade Officials.
“The objective of these meetings is to conclude the outstanding issues of the Modalities for Tariff Liberalization that were adopted at the 3rd Meeting of the AU Ministers of Trade in June 2017; and to consider the draft Texts of the CFTA Agreement, its Protocols and its Annexes and Appendices,” added Mr. Luke.
The ECA official expressed optimism about the December deadline for the establishment of the CFTA, stating “Given the momentum behind the negotiations thus far, we are confident that there will be the essential substance of an agreement to come out of the ministerial meeting in Niamey."
He cautioned, however, that some technical work will be needed during the first half of 2018 to finalize tariff schedules and rules of origin arrangements.
Mr. Luke added that "ECA is advocating for implementation of the agreement to begin early in 2018 on the basis of the level of ambition of tariff liberalization that has been agreed and with interim rules of origin pending the finalization of the outstanding technical issues."
The main objective of the CFTA negotiations is to achieve a comprehensive and mutually beneficial trade agreement among the Member States of the African Union.
The trade ministers are expected to consider the Report of the 4th meeting of the Senior Trade Officials, which took place on 27 - 29 November in Niamey; and approve the Text of the Agreement establishing the CFTA, Protocols on Trade in Goods and Services and any other Annexes deemed as early harvests.
The meeting is organized by the African Union Commission’s Department of Trade and Industry. (UNECA)
At the invitation of the African Union, WCO Secretary General Mr. Kunio Mikuriya attended the 9th Meeting of the African Union (AU) Sub-Committee of Directors General of Customs, held in Yaoundé, Cameroon from 13 to 17 November 2017.
The theme of the Meeting was “The contribution of Customs to the analysis of international trade data, for security and the boosting of intra-African trade”.
During the opening ceremony, Mr. Fongod Edwin Nuvaga, Director General of Cameroon Customs, welcomed delegates and updated them on current developments in his Administration.
H.E. Ambassador Albert Muchanga, the African Union’s Commissioner for Commerce and Industry, outlined the AU’s current activities, including its work on the introduction of the African Free Trade Area.
Secretary General Mikuriya highlighted the main priorities of the WCO, and urged AU Members to draw on the content of WCO instruments to bring about, inter alia, the implementation of the African Continental Free Trade Area and the WTO Trade Facilitation Agreement. He emphasized that the WCO offers assistance in many relevant areas, mentioning seminars on transit and origin conducted recently for the benefit of AU Members as examples of such support.
Mr. Alamine Ousmane Mey, Cameroon’s Minister for Finance, welcomed the representatives of the 54 AU Members present at the meeting, and emphasized the central role of Customs in ensuring a safe and secure trade environment and facilitating trade.
The Directors General heard and debated the reports of several Working Groups, and provided orientation for future work based on the outcomes and analyses of the Expert Working Group which had met prior to the Meeting. Issues addressed included the Interconnectivity of Computerized Customs Transit and Clearance Systems, and the outcomes of the Regional Economic Communities Sub-Committee on Customs Cooperation, the 3rd AU Customs Experts Trade Facilitation Forum, and the 1st Extra Ordinary Meeting of the AU Sub-Committee of Directors General of Customs.
The Directors General discussed and adopted a number of recommendations, relating in particular to: how to increase the number of accessions to the WTO TFA; the setting up of National Committees on Trade Facilitation as foreseen in the TFA; and issues related to the further development and implementation of AU objectives and programmes, notably those aimed at boosting intra-Africa trade which continues to show very low levels of improvement. Delegates also endorsed the need for enhanced consultations with Trade, as well as the sharing of information and best practices.
The Meeting elected Cameroon as Chair of the Bureau (Chair of this Group) for 2017/2018, with Comoros, Uganda, Benin, Côte d’Ivoire and Morocco completing the Bureau’s membership.
Secretary General Mikuriya joined delegates in congratulating Cameroon Customs on the excellent arrangements for the Meeting; he also met bilaterally with Cameroon’s Minister of Finance Mr. Alamine Ousmane Mey, to discuss issues of mutual interest. (World Customs Organization)
Facebook will open a “community hub space” in Nigeria next year to encourage software developers and technology entrepreneurs and become the latest technology giant to pursue a training program in fast-growing Africa.
The U.S. social media company said the center would host an “incubator program” to help develop technology start-ups, while it will also train 50,000 Nigerians in digital skills.
Africa’s rapid population growth, falling data costs and heavy adoption of mobile phones rather than PCs is attracting technology companies looking to attract more users.
Facebook did not provide details of the period over which its planned training would take place in Nigeria, which is Africa’s most populous country with 180 million inhabitants.
“We understand the important role Facebook plays here in Nigeria with developers and start-ups and are invested in helping these communities,” Emeka Afigbo, its regional head of platform partnership, said in a statement on Wednesday.
Facebook said the training – aimed at software developers, entrepreneurs and students – would be offered in cities including the capital, Abuja, Port Harcourt in the south, Calabar in the southeast and Kaduna in the north.
Last year Facebook founder Mark Zuckerberg visited technology companies in Lagos and his charitable foundation provided $24 million to Andela, which trains developers.
Google’s chief executive in a July visit to Lagos said the company aimed to train 10 million people across the continent in online skills over the next five years. He also said it hoped to train 100,000 software developers in Nigeria, Kenya and South Africa.
Although Africa may not offer as much opportunity to add consumers as China or India, because large wealth gaps mean that many people in places like Nigeria have little disposable income, Facebook said more than 22 million people already use its social media website every month in Nigeria.
Widespread poverty means mobile adoption tends to favor basic phone models. That, combined with poor telecommunications infrastructure, can mean slow internet speeds and less internet surfing, which tech firms rely on to make money. (CNBC)
The East African Community (EAC) would need a hefty $ 55 billion to implement a number of proposed flagship infrastructure projects in the coming years.
The projects are seen as key in connecting the six partner states and hence boost intra-EAC trade and economic integration.
They were approved last week during the fourth extra-ordinary sectoral council of Transport, Communication and Metereology (TCM) during its session held here.
The transport links would also connect the bloc with the neighbouring states.
"The projects would have high impact on socio-economic growth and required an investment amounting to more than $ 55bn", said Steven Mlote, the deputy secretary general in charge of Planning and Infrastructure.
On the source of funds for implementation, Eng Mlote noted the bloc would approach the development partners and the private sector "in order to realize the huge financial investments required".
On the Tanzanian side, projects already approved include construction of the proposed 144 kilometre Dar es Salaam-Chalinze expressway and a mega hydropower project at Stiegler's Gorge along Rufiji river.
Also approved is the development of Zanzibar ports.
However, some of the projects such as the 1,442 kilometre Hoima (Uganda) to Tanga port crude oil pipeline and an oil refinery in Uganda are implemented bilaterally by the two countries with financing from the multilateral agencies.
Those whose civil works are already underway include the construction of the standard gauge railway (SGR) from Dar es Salaam and which will later connect to Burundi and Rwanda.
While the long-awaited Dar -Chalinze expressway is now on the radar of implementation within the framework of EAC, a similar expressway is planned for Mombasa-Nairobi-Jinja for the northern corridor.
The first SGR in the region between Mombasa and Nairobi has been completed and is now being extended to Malaba on the border with Uganda with a spur to South Sudan and Rwanda.
The projects which were reviewed by experts during the meeting include construction of a new single point mooring, one stop centre, expanded gates and improved access roads at the port of Dar es Salaam.
Also earmarked for implementation on the Tanzania side are upgrading of the Ndumbi port on Lake Nyasa,construction of the road from Simiyu region and to Sirari on the Tanzania/Kenya border.
According to Eng Mlote, the EAC Heads of State had way back in 2014 gave a priority status to the projects, paving way for implementation pending availability of the funds.
The Uganda minister of State for Works and Transport Aggrey Bagiire underscored the need to enhance capacities of the existing transport networks in the region "to cope with the future demands and to meet international standards and requirements". (All Africa)
African countries are forging ahead to complete negotiations for a continental free trade area between 55 countries by early next year. The idea, adopted by the African Union in 2012, is to create a single market which includes the free movement of goods, services and people. The integrated African market covers 1.2 billion people and a combined GDP of over USD$3.5 trillion.
Large markets are job-creating as they support more trade in goods, services and assets. It is expected that a well designed agreement would help Africa boost industrial development, promote economic transformation and create new wealth. The benefits won’t be automatic but will require continuous national, regional and continental efforts.
Large regional markets are also essential for industrialisation. This is because they attract investment into firms that can diversify their product lines and stimulate the creation of related industries. This includes the supply of spare parts, distribution of goods and provision of advisory services. Some of these may start as their supplies but they may also grow into independent enterprises.
Viewed against the odds of success in getting 55 countries to foster meaningful regional integration, Africa has made commendable progress in crafting its own creative approach. But reports from recent talks and a slowdown of regional integration efforts suggest a disturbing trend.
Some government delegates are likely to seek to include protection for existing products and industries. This would be detrimental to the process if these lists ended up shaping the final agreement given the 2018 signing deadline. Such a retreat would run counter to recent advances in Africa’s trade integration efforts. In 2015 for example, three regional trading blocs, covering 650 million people in 26 countries, signed the landmark Tripartite Free Trade Area with a combined GDP of over USD$1.5 trillion.
The trade agreement nevertheless needs to be carefully thought out, particularly given that Africa is starting with a low intra-regional trade of 15% compared to 19% in Latin America, 51% in Asia and 72% for Europe.
There is the risk that rushed negotiations could result in an agreement with too many exceptions to cover protected industries. This could include using non-tariff barriers – like safety measures – to protect local industries. A range of African countries use non-tariff barriers to curb imports of goods such as maize, milk, sugar, food oil products, and steel and iron.
Sensitive and excluded products – like sugar and dairy products – might in some cases cover up to 600 tariff lines (product codes used at the national level). But these exceptions should be used sparingly to enable domestic industries to access the larger regional and global markets needed for their growth.
In addition, the trade agreement needs to address the effects it may have on existing industries, environment, peace and security. It also needs to provide the policy space needed for governments to promote social policies such as job creation that could provide new performance standard for industries. Such policies should also balance between social goals and the need to be competitive on the global market.
Concerns over the expansion of foreign imports, rather than regional trade integration, also needs to be carefully assessed to avoid the free trade area becoming a conduit for imports. This could undermine Africa’s goals to increase its industrial and trade capacity. At present, nearly 85% of the goods traded in Africa come from outside the continent. Only 15% of the goods traded in Africa are produced locally, leading to an annual food import bill of over USD$35 billion.
But the focus of the negotiations should not be the fear of imports. Rather the focus should be on scaling up export production in existing niche markets through the creation of new industries. Examples of growing industries include the supply of semi-processed processed foods that are turned into final products by importers. African firms such as the Agro Chemical and Food Company in Kenya are also producing speciality chemicals which are used in a variety of medical and manufacturing industries.
Moving away from protectionism
The alternative to protection is therefore market growth. This involves having deeper knowledge of markets through the collection of key information market, eliminating trade barriers, reducing subsidies and upgrading the quality of infrastructure. It also involves building capacity to manage the rules of origin of products to avoid illegal dumping of goods, customs and trade procedures and reporting and resolution of trade barriers.
The negotiations need to shift their focus from protectionism to greater regional trade integration. One way to do this is to set up a high-level expert committee or panel – drawn from government, private sector, academia and civil society – to include other relevant perspectives on issues such as infrastructure, technological capacity, and industrial growth. This would help to broaden discussions to reflect Africa’s current needs of trade as an instrument for economic transformation.
This committee would be guided by evidence-based research as well as by Africa’s own regional trade experiences. There are many examples that show how quickly Africa is learning about the risks of using bans and exemptions to restrict regional trade. For example, Zambia’s positive decision to reverse a ban on fruit and vegetable imports.
The committee would also need to draw on lessons from other regions of the world. As I set out in Emergent Africa: Evolution of Regional Integration, Africa has a lot to learn from regional trade integration, especially the Association of Southeast Asian Nations .
The bloc’ approach to integration transcends the traditional focus on the free movement of goods. It includes measures such as the creation of industrial parks to foster industrial development. The region also uses technology-based agreements covering key fields such as information and telecommunications technologies. This is particularly important because of the role of engineering and technology in all aspects of trade covering product design, production and distribution through international logistics chains.
The future is open
The challenges facing African trade negotiators are not easy. Africa’s regional integration efforts are the most complex ever undertaken. They are not just about emulating trading rules used in other regions of the world. They are about remaking the continent to create new networked interactions between sovereign states in a flexible way. This makes for a more open future with expanding possibilities to use regional trade integration to spread prosperity.