Sunday, June 16

Regional Markets

Comesa programme targets horticulture production in East Africa
  • Under a new COMESA programme, farmers in the five East African countries are expected to access quality seeds, and training on how to improve production and distribution.
  • The five-year programme is expected to help the countries cut post-harvest losses in horticulture to 40 per cent or lower, from highs of 60 per cent, for instance in Kenya. 
  • Agriculture is estimated to contribute on average 27% of the gross domestic product (GDP) in the EAC and accounts for the highest share of employment not only in the region but across Africa.

Agriculture is the backbone of nearly all East Africa region’s economies and the main economic activity for more than 70 per cent of the population. It is estimated to contribute on average 27 per cent of the gross domestic product (GDP) in the EAC and accounts for the highest share of employment not only in the region, but the African.…

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East Africa's economic growth
  • East Africa’s economic growth is projected to grow at 5.3 and 5.8 per cent in 2024 and 2025-26, respectively. 
  • The World Bank projects African economies to grow by 3.4 per cent in 2024.
  • However, faster and more equitable growth is needed to reduce poverty.

East Africa’s economic growth to lead the continent

Economies in East Africa are expected to spearhead growth in Sub-Saharan Africa this year amid increased private consumption and declining inflation, which are supporting an economic rebound in the region.

The World Bank’s latest Africa’s Pulse report indicates the East African Community is projected to grow at the fastest pace at 5.3 and 5.8 per cent in 2024 and 2025–2026, respectively, thanks to robust growth in the Democratic Republic of Congo, Kenya, Rwanda, and Uganda.

This is higher than the compounded growth for Sub-Sahara Africa, which, albeit rebounding from a low of 2.6 per cent in 2023, is …

petroleum exports
  • Kenya is keen on extending its pipeline to Malaba (Kenya-Uganda border), with Uganda expected to construct a link line to Kampala.
  • According to the Shippers Council of Eastern Africa (SCEA), Mombasa used to command up to 70% of transit business, but this has decreased to 60 per cent.
  • Uganda imports an average of 2.5 billion litres of petroleum annually, valued at about $2 billion, with KPC handling at least 90 per cent of the volumes.

Kenya is courting Uganda in a fresh bid to retain and possibly increase petroleum exports amid increased competition from neighbouring Tanzania. In recent months, East Africa’s economic powerhouse has come under pressure from Tanzania, which is eyeing to tap more transit markets for imports and exports into the hinterland through the Dar es Salaam Port.

In the latest developments, Tanzania has offered to license Uganda National Oil Company (UNOC) to import petroleum products through Dar …

Kenya Looking to Boost Exports to $11.5Bn by 2028
  • The East African region and the Common Market for Eastern and Southern Africa (COMESA) were the single biggest trade blocs that consumed Kenya’s exports.
  • According to the Kenya National Bureau of Statistics (KNBS), the value of Kenya’s exports to the EAC totaled $496.7 million (Ksh77.9 billion) up from $431 million (Ksh67.7 billion).
  • There was an increase in earnings from exports to Uganda (27.7%), Tanzania (32.1%), South Sudan (64.4%) and the Democratic Republic of Congo (78.6%).

Kenya’s exports to her East African Community (EAC) neighbours increased in the third quarter of 2023, as the country continued to push volumes amid efforts to cut the high import bill.

This comes as Africa increasingly remained Kenya’s biggest export market, even as economies edge closer to operationalizing the African Continental Free Trade Area (AfCFTA).

The East African region and the Common Market for Eastern and Southern Africa (COMESA) were the single biggest trade …

  • Major shipping lines among them Mediterranean Shipping Company (MSC) and Maersk have been avoiding the Red Sea and the Suez Canal route.
  • This move follows attacks by the Iran-backed Houthi rebels in Yemen, who have been targeting ships travelling to Israel.
  • The Houthis have declared their support for Hamas in the ongoing war Israel war in Gaza that erupted following October 7 Hamas attacks.

The East African region remains exposed to high freight costs even as shipping lines indicate they are resuming voyages through the Red Sea after a hitch in December, caused by attacks by Houthi rebels.

Major shipping lines, including the world’s leading container carrier, the Mediterranean Shipping Company (MSC), and the second-placed Maersk, have been avoiding the Red Sea and the use of the Suez Canal.

This decision came after persistent attacks by the Iran-backed Houthi rebels in Yemen, who have been targeting ships traveling towards Israel.…

global shocks hurting Africa's growth recovery
  • AFDB has revised its short to medium-term macroeconomic forecast for Africa, for 2023 and 2024 downwards to 3.4% and 3.8%, from 4.0% and 4.3%.
  • The bank cites the effects of COVID-19, geopolitical conflicts, climate shocks, a global economic slowdown, and limited fiscal space as constraints to Africa’s recovery.
  • AfDB is calling on governments to scale up investment in human capital and infrastructure to boost productivity, and regain momentum in economic growth.

Global shocks have prompted the African Development Bank (AfDB) to revise its short to medium-term macroeconomic projections for Africa in 2023 and 2024, reducing the forecast to 3.4 per cent and 3.8 per cent from the earlier estimates of 4 per cent and 4.3 per cent.

AfDB cited persistent global shocks impacting African economies in the period under focus. The bank said the enduring impacts of COVID-19, ongoing geopolitical tensions and conflicts, climate-related shocks, a worldwide economic deceleration, and …

  • The advent of BRICS Pay could further strengthen these ties, offering African nations an alternative to the dollar-dominated trade and financial systems.
  • BRICS Pay is a bold step towards a more multipolar world economic order.
  • Its impact on US-Africa trade will depend on various factors, including its adoption by businesses and financial institutions across the coalition of nations.

The launch of BRICS Pay, a digital payment platform developed by the BRICS nations (Brazil, Russia, India, China, and South Africa), marks a pivotal moment in international trade dynamics. This innovative system promises to streamline transactions among these emerging economies, potentially challenging the long-standing dominance of the US Dollar in global trade.

BRICS Pay is a testament to the growing influence of these five major emerging economies. By facilitating payments in local currencies, the system is poised to reduce reliance on the US Dollar, fostering a more diversified and resilient global …

tourism market EAC
  • Annual tourist arrivals to the EAC are anticipated to increase to about 14.05 million by 2025, from the 7.2 million recorded in 2019. 
  • Kenya targets 5.5 million international tourist arrivals and a $6.3 billion annual contribution by 2028.
  • Fast-tracking of the EAC Single Tourism Visa remains critical to sell the region as a single tourism investment hub.

Diversification of products beyond traditional attractions and joint promotion of the region is a catalyst to revamping the East African Community as a single tourism market. This call on a single tourism market was underscored by regional Ministers responsible for EAC Affairs and Tourism and Wildlife Management who converged for the opening of the 3rd EAC Regional Tourism Expo (EARTE’23) and the Magical Kenya Travel Expo in Nairobi, Kenya.

The three-day Expo that kicked off on Monday provides an opportunity for EAC Partner States to create awareness of tourism investment opportunities and …

Zambia-Tanzania Trade Route
  • This strategic agreement aims to reduce border congestion, enhancing trade flow in a key African economic corridor.
  • Congestion at borders, especially in the Tororo and Busia areas, has long slowed the efficient transport of commodities throughout the region.
  • The idea calls for new border crossings to be set up at Mulwadda and Buteba to relieve traffic at Busia and Malaba.

Kenya and Uganda have signed a historic deal to reduce congestion at key border crossings, significantly boosting East African trade. To facilitate trade between Uganda, Rwanda, Burundi, the Democratic Republic of the Congo, and South Sudan, the highest-ranking officials have signed an agreement to build a dual carriage road along the Northern Corridor.

Congestion at borders, especially in the Tororo and Busia areas, has long slowed the efficient transport of commodities throughout the region; this project aims to alleviate this problem. The economies that rely on this route for …

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