Video guest: Josephine Mwangi

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EDITO
Monday, 23 October 2017

East Africa received a mixed bag of results in doing business in the latest report by World Bank; with Rwanda and Kenya leading while Burundi, South Sudan and Somalia brought up the rear. The World Bank cited implementation of projects meant to improve trading across borders as key to the good showing while civil strife hampered those countries that did poorly. According to the World Bank's Doing Business 2017 report, Rwanda -- ranked 56 from last year's 59 -- remains the easiest place to start a business in the region. Rwanda is also the second easiest country within which to do business in sub-Saharan Africa after Mauritius, which is ranked 49th.

The East African Community (EAC) is yet to fully implement the common market protocols which were meant to boost the region's trade, a new report has shown. The second East African Community Common Market Scorecard 2016 launched in Kampala, Uganda on Thursday shows that Kenya, Uganda, Tanzania, Rwanda and Burundi still run their trades as separate and distinct markets, keeping their economies small and disconnected due to several bottlenecks in the regulations. This was blamed on failure by individual states to lift legal barriers like recognition of business certificates from each other and double taxation.

In recent times, the trade and investment potential of sub-Saharan Africa (SSA) has been well-documented with many investors from emerging markets now tapping into the opportunity. But many Western investors are still undecided about its growth and return on investment prospects. Factors that influence investor’s decision regarding market attractiveness, particularly for the manufacturing and consumer sectors, include market size and market integration network for scale economies. Investors would most likely be interested in an integrated regional market that can be leveraged to link global supply chains.

Wednesday, 02 November 2016

Boosting Africa’s intra-regional and international trade requires a good understanding of the African trade finance landscape, including the identification of markets where the need is greatest. This column presents some of the major patterns of the market in Africa using primary survey data from commercial banks. Banks intermediate almost a third of trade activities across the continent, but still reject a significant value of trade finance applications mainly due to weak client creditworthiness and inadequate collateral.

African countries, such as Namibia, have demonstrated just how the implementation of the TIR (International Road Transport) Convention can boost intra-trade. TIR is the world’s only universal customs transit system and one of the most successful international transport conventions. The International Road Transport Organisation (IRU) says its recently published study, ‘Transit costs in East and Southern Africa’, has “clearly demonstrated how African countries implementing the TIR Convention can reduce the costs of trade in southern and eastern Africa by hundreds of dollars per container, thus saving billions of dollars and increasing GDP in African countries”.