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<p>Mahin Dissanayake, Senior Director, for EMEA Financial Institutions Group at Fitch ratings joins CNBC Africa to look at the prospects that the African free trade agreement has on the banking sector and the competition of new digital platforms for the traditional banking sector.</p>


Why the AfCFTA is a game changer for SA banks – Fitch

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<p>There are almost 300 trade treaty agreements worldwide according to data from The World Bank but none are as big as the one set in motion by the African Union. 54 countries have agreed to adopt a free trade area covering the continent. What does this mean for your next trip to the store to buy a loaf of bread? Bohani Hlungwane, Regional Head, Trade and Working Capital, Absa Corporate and Investment Bank joins CNBC Africa for more.</p>


Why Africa’s free trade agreement is a game changer for the continent

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<p>Afreximbank is providing a one-billion-dollar adjustment facility to cushion the effect of sudden significant tariff revenue losses, arising from the implementation of the African Continental Free Trade Area (AfCFTA). Theophilus Emuwa, Managing Partner at Aelex joins CNBC Africa for more.</p>


AFCFTA: Tax implications for Nigeria

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<p>Ghana says it will donate $10 million for the Operationalisation of the Secretariat of the African Continental Free Trade Area (AfCFTA) agreement this comes as the country was selected as the home for the Secretariat of the treaty. Chief Executive Officer of the Ghana Investment Promotion Council, Yofi Grant, joins CNBC Africa for more.</p>


AFCFTA: Investment case for Ghana


<p>NIAMEY (Reuters) &#8211; African leaders met on Sunday to launch a continental free-trade zone that if successful would unite 1.3 billion people, create a $3.4 trillion economic bloc and usher in a new era of development.</p>



<p>After four years of talks, an agreement to form a 55-nation trade bloc was reached in March, paving the way for Sunday’s African Union summit in Niger where attendees will unveil which nation will host the trade zone’s headquarters, when trading will start and discuss how exactly it will work.</p>



<p>It is hoped that the African Continental Free Trade Area (AfCFTA) &#8211; the largest since the creation of the World Trade Organization in 1994 &#8211; will help unlock Africa’s long-stymied economic potential by boosting intra-regional trade, strengthening supply chains and spreading expertise.</p>



<p>“The eyes of the world are turned to Africa,” Egyptian President and African Union Chairman Abdel Fattah al-Sisi said at the summit’s opening ceremony.</p>



<p>AfCFTA “will reinforce our negotiating position on the international stage. It will represent an important step.”</p>



<p>Africa has much catching up to do: its intra-regional trade accounted for just 17% of exports in 2017 versus 59% in Asia and 69% in Europe, and Africa has missed out on the economic booms that other trade blocs have experienced in recent decades.</p>



<p>Economists say significant challenges remain, including poor road and rail links, large areas of unrest, excessive border bureaucracy and petty corruption that have held back growth and integration.</p>



<p>Members have committed to eliminate tariffs on most goods, which will increase trade in the region by 15-25% in the medium term, but this would double if these other issues were dealt with, according to International Monetary Fund (IMF) estimates.</p>



<p>The IMF in a May report described a free-trade zone as a potential “economic game changer” of the kind that has boosted growth in Europe and North America, but it added a note of caution.</p>



<p>“Reducing tariffs alone is not sufficient,” it said.</p>



<h3 class="wp-block-heading">&nbsp;DIVERGENT INTERESTS</h3>



<p>&nbsp;&nbsp;&nbsp; Africa already has an alphabet soup of competing and overlapping trade zones &#8211; ECOWAS in the west, EAC in the east, SADC in the south and COMESA in the east and south.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;But only the EAC, driven mainly by Kenya, has made significant progress towards a common market in goods and services.</p>



<p>These regional economic communities (REC) will continue to trade among themselves as they do now. The role of AfCFTA is to liberalise trade among those member states that are not currently in the same REC, said Trudi Hartzenberg, director at Tralac, a South Africa-based trade law organisation.</p>



<p>&nbsp;&nbsp;&nbsp; The zone’s potential clout received a boost on Tuesday when Nigeria, the largest economy in Africa, agreed to sign the agreement at the summit. Benin has also since agreed to join. Fifty-four of the continent’s 55 states have signed up, but only 25 have ratified.</p>



<p>&nbsp;&nbsp;&nbsp; One obstacle in negotiations will be the countries’ conflicting motives.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;For undiversified but relatively developed economies like Nigeria, which relies heavily on oil exports, the benefits of membership will likely be smaller than others, said John Ashbourne, senior emerging markets economist at Capital Economics.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;Nigerian officials have expressed concern that the country could be flooded with low-priced goods, confounding efforts to encourage moribund local manufacturing and expand farming.</p>



<p>&nbsp;&nbsp;&nbsp; In contrast, South Africa’s manufacturers, which are among the most developed in Africa, could quickly expand outside their usual export markets and into West and North Africa, giving them an advantage over manufacturers from other countries, Ashbourne said.</p>



<p>&nbsp;&nbsp;&nbsp; The presidents of both countries are attending the summit.</p>



<p>The vast difference in countries’ economic heft is another complicating factor in negotiations. Nigeria, Egypt and South Africa account for over 50% of Africa’s cumulative GDP, while its six sovereign island nations represent about 1%.</p>



<p>&nbsp;&nbsp;&nbsp;&nbsp;“It will be important to address those disparities to ensure that special and differential treatments for the least developed countries are adopted and successfully implemented,” said Landry Signe, a fellow at the Brookings Institution’s Africa Growth Initiative.</p>



<p>Regulations governing rules of origin, removal of non-tariff barriers and the development of a payments and settlements system are expected to be unveiled at the summit.</p>



<p>Reporting by Boureima Balima, Alessandra Prentice; Additional reporting by Alexander Winning and Edward Mcallister; Writing by Alessandra Prentice; Editing by Edward Mcallister and Dale Hudson</p>


African leaders launch free-trade zone, what you need to know about this potential economic “game changer”


<p><em>Content supplied </em></p>



<p><em>By</em> <em>Magdi Amin, an Investment Partner with </em><a href="http://www.omidyar.com/"><em>Omidyar Network</em></a> </p>



<p>Africa’s digital revolution is transforming our economy at a record pace. Africa is home to the 10 fastest growing cities in the world,<a href="#_ftn1">[1]</a> and for nearly a decade, we’ve had the world’s fastest rate of internet adoption – gaining 20 percent more users in the last year alone.<a href="#_ftn2">[2]</a> This expanded access has given rise to a powerful digital economy—one that’s expected to grow by more than US$300 billion by 2025.<a href="#_ftn3">[3]</a> But all this change begs the question: How do we ensure that Africa’s transformative technology fulfills its promise as a force for good?</p>



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<p>As Africa’s economy moves online, so do the people who engage with it. And in this digital age, we need a modern way of proving that we are who we say we are, establishing trust, and transacting from afar. Increasingly, we will access a common digital market with our “digital identities,” often via a finger scan or a digital wallet.  </p>



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<p>The African Union (AU) has recently recognized digital identification systems as essential infrastructure to unlock access to profound new social and economic opportunity, such as education, employment, financial services, mobile communication, travel, and voting. Sixty percent of Africans believe their governments will introduce new or revamped identity systems in the next two years, in part to support the African Continental Free Trade Area (AfCFTA) and to deliver public goods and services more effectively.<a href="#_ftn4">[4]</a> </p>



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<p>Studies show that Africa
stands more to gain from the adoption of digital identity than any other region
in the world; it also risks a lot if the systems are designed without
safeguards. How we treat our identity data will determine if digital identity
empowers or exploit Africans. </p>



<p>Will we have choices? Will we
be required to submit so much information, including DNA, that it puts our
privacy and security at risk? Will we be consulted to ensure everyone is
included, especially the 500 million Africans who do not have a foundational form of ID today?<a href="#_ftn5">[5]</a>
Does the digital identity system design reflect the rights and protections
afforded by law? Will our data be shared with foreign companies or governments,
and if so, will the rights I enjoy in my country with respect to my data still
protect me?</p>



<p>Human and digital rights groups have raised these questions in response to recent ID-related decisions in Kenya, Zimbabwe, and Nigeria. On April 1, Kenya’s High Court suspended some of the contentious design decisions, such as making ID mandatory for public services, pending a hearing. When ID is mandatory, we have seen less pressure on governments and businesses to ensure the system is useful, safe, and trusted by individuals.</p>



<p>Digital identity is a complex
task with many moral, economic, political, and technological choices. The AU, <a href="https://medium.com/positive-returns/why-we-invested-un-economic-commission-for-africa-c55b824f09f3">UN Economic Commission for Africa</a>, Smart Africa, Internet
Society, Africa Digital Rights Hub, the World Bank and others are actively equipping
governments, businesses, and civil society with tools and training that can
lead to good outcomes for people. </p>



<p>For example, they are helping
all 54 AU governments define and implement a shared set of principles for Good
Digital Identity in Africa. The principles convey an African view on inclusion, data
ownership, interoperability across borders, compatibility with existing
systems, privacy, security and safeguards, governance, neutrality, and
accountability. Building on both the AU Data Protection Guidelines and the
Principles on Identification for Sustainable Development, the framework also
addresses exclusion, discrimination, surveillance, consent, and other key
issues of our time. </p>



<p>As technology shapes the very
notion of identity and introduces new risks and dilemmas, civil society,
businesses, and other stakeholders should engage in this conversation. It’s up
to all of us to help ensure governments and companies deliver solutions that
protect and empower citizens. </p>



<p>It’s an opportunity Africans cannot
afford to miss. Digital identity systems could unlock as much as 6 percent GDP
growth,<a href="#_ftn6">[6]</a>
and up to 50 percent of that economic value can go straight into the hands of
citizens. But those gains are possible only if digital identity is implemented equitably
with trust, transparency, and accountability.<a href="#_ftn7">[7]</a>
</p>



<p>If we truly want to escape from hunger,&nbsp;disease,&nbsp;illiteracy,&nbsp;gender
inequality,&nbsp;and&nbsp;other global
challenges,&nbsp;everyone must have equitable access to engage in the
daily transactions that power societal and economic progress. And they must be
able to do so fearlessly—with privacy, security, and individual control. A good
digital identity will lay the foundation for the future we want.&nbsp;&nbsp; </p>



<p>Africans must ask for all ID
to be Good ID. They must trust that ID and, therefore, use it voluntarily
because it empowers without putting them at risk. Without this, Africans will continue to suffer from
unequal access to employment and educational opportunities; health and
financial services; and many of the critical social
protections they need to succeed. Good ID provides a framework to improve the quality of our
digital identities with important safeguards embedded in technology, policy,
and practice while helping millions of Africans participate in and benefit from
today’s digital economy. </p>



<p>With Gambia’s ratification,
the AfCFTA has drawn enough signatures to go into operation. This milestone
makes Africa the world’s largest free trade area. And with increased connectivity,
shared government platforms, entrepreneurship, and skills, our digital economy
is building to become a powerful force for good. Now, our challenge expands
beyond keeping pace with the digital revolution—we must enable Good ID to
thrive by placing the interests of Africans at the center of our social and
economic future. </p>



<p>Transparent, accountable, and
trust-building practices lead to Good ID. System planners, technologists,
program managers, policy makers, and investors can either build or erode trust
with digital ID holders with every choice they make. An emphasis on privacy,
inclusion, user value, user control, and security will ultimately create the
foundation for impact and mitigate most risks of digital identity. </p>



<p><em>Magdi Amin is an Investment Partner with </em><a href="http://www.omidyar.com/"><em>Omidyar Network</em></a><em>, </em><em>focused on digital identity. Prior to joining the
Omidyar Network, he worked for the World Bank Group for over two decades –
living and working across Africa, East Asia and MENA. He led the development of
the World Bank’s Africa Digital Economy strategy and recently spearheaded
Omidyar Network’s first investment in digital identity in Africa, in
collaboration with the Economic Commission for Africa.</em><br></p>



<hr class="wp-block-separator"/>



<p><a href="#_ftnref1">[1]</a> United Nations Department of Economic and
Social Affairs: <a href="https://population.un.org/wup/Publications/Files/WUP2018-KeyFacts.pdf">2018 Revision of the World Urbanization Prospects</a></p>



<p><a href="#_ftnref2">[2]</a> We Are Social &amp; Hootsuite: <a href="https://digitalreport.wearesocial.com/">Digital in 2018 Report</a></p>



<p><a href="#_ftnref3">[3]</a> McKinsey Global Institute: <a href="https://www.mckinsey.com/industries/high-tech/our-insights/lions-go-digital-the-internets-transformative-potential-in-africa">Lions go Digital: The Internet’s Transformative
Potential in Africa (2013)</a></p>



<p><a href="#_ftnref4">[4]</a> ID4Africa: <a href="https://www.biometricupdate.com/201804/id4africa-survey-shows-near-universal-support-for-biometrics-elections-among-african-identity-community">2018 survey</a></p>



<p><a href="#_ftnref5">[5]</a> World Bank: <a href="https://datacatalog.worldbank.org/dataset/identification-development-global-dataset">2018 ID4D Global Data Set</a></p>



<p><a href="#_ftnref6">[6]</a> McKinsey Global Institute: <a href="https://www.mckinsey.com/featured-insights/innovation-and-growth/the-value-of-digital-id-for-the-global-economy-and-society">Digital Identification: A Key to Inclusive Growth</a></p>



<p><a href="#_ftnref7">[7]</a> McKinsey Global Institute: <a href="https://www.mckinsey.com/featured-insights/innovation-and-growth/the-value-of-digital-id-for-the-global-economy-and-society">Digital Identification: A Key to Inclusive Growth</a></p>


As more Africans go online this is what needs to be done to protect their identities

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<p>The highly anticipated, much talked about African Continental Free Trade Area officially came into force last week as per article 23 of the of the agreement, which stipulates that it would happen 30 days after the minimum required 22 countries have ratified the agreement. With just weeks before the market is launched on July 7th, CNBC Africa spoke to Analyst and Chief Strategist of Impact Communication Strategies, Ken Agatumba on what it all means for the continent and the independent entrepreneur alike.</p>


AfCFTA goes into effect with 22 countries on board

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<p>The 52nd Session of Economic Conference in Marrakesh, Morocco dealt with the theme of fiscal policy, trade and private sector in the digital era. With a variety of topics at the side events, youth involvement and unemployment is one of the major discussions held. CNBC Africa’s Fifi Peters caught up with Bitania Berhanu the International Branches Coordinator at Youth Alliance for Leadership Development in Africa.</p>


Bitania Berhanu on tackling youth unemployment in Africa

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<p>It’s the 52nd Session of the Economic Commission at Marrakesh, Morocco – where the African ministers of Finance, Development and Planning discussed fiscal policy, trade and the private sector in the digital era. With experts covering various side events pertaining to the strategy for Africa, CNBC Africa’s Fifi Peters caught up with Segun Aina, Chairman for Fintech Associates about the role of Fintech in the scope of the African Continental Free Trade Area.</p>


The role of fintech in the African Continental Free Trade Area

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<p>The 52nd Session of the Conference of Ministers provides a suitable opportunity for African Ministers to examine the fiscal policies necessary for the implementation of the African Continental Free Trade Area within the frameworks of the 2030 Agenda and Agenda 2063 and the critical role of private sector in the era of the digital economy. This year’s conference is taking place in Marrakesh, Morocco.  CNBC Africa’s Fifi Peters caught up with David Pierre about how the blue economy can alleviate poverty, inequality and unemployment on the continent.</p>


How the blue economy can help alleviate poverty, inequality in Africa

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<p>The 38th meeting of the Committee of Experts of the Conference of African Ministers of Finance, Planning and Economic Development opened in Marrakesh, Morocco on Wednesday 20th of March. This year’s event celebrates the one year anniversary of the signing of the African Continental Free Trade Area agreement. CNBC Africa’s Fifi Peters caught up with Stephen Karingi, Director, Regional Intergration &#038; Trade, ECA to hear his thoughts on about Ethiopia&#8217;s ratification of AfCFTA and the progress of the Inter Africa Trade so far.</p>


ECA’s Stephen Karingi shares on AfCFTA agreement progress

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<p>With Africa pushing towards full integration, experts are advising that caution is taken in order to avoid mistakes that could hurt the gains made so far. The African Continental Free Trade Area agreement signed in March 2018 in Rwanda if fully implemented will see Africa become the world’s largest free trade area. Wanyama Masinde, Professor of regional integration and Executive Director at the Centre for Regional Integration speaks on the key factors to be considered as Africa integrates.</p>


Regional integration: The red flags to look out for

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<p>The African Union has set December 20 as the target to have at least 30 African countries ratifying the African Continental Free Trade Area. CNBC Africa spoke to Anne-elvire Esmel for a quick look into the agreement.</p>


AU targets 30 countries to ratify AfCTA by December

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<p>On 21 March the African Continental Free Trade Area was created, now from 11-17th December 2018 the continent will have its inaugural Intra-African Trade Fair in Egypt to explore trade and investment opportunities on the continent.</p>


First ever Intra-African Trade Fair launched

<figure><img decoding="async" src="https://images.theconversation.com/files/211715/original/file-20180323-54878-d9bedj.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="File 20180323 54878 d9bedj.jpg?ixlib=rb 1.1" /><figcaption>African leaders meet in Kigali to sign the continent’s free trade agreement.<br />
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<p>By <a href="https://theconversation.com/profiles/prof-landry-signe-455169">Prof. Landry Signé</a>, <em><a href="http://theconversation.com/institutions/stanford-university-890">Stanford University</a></em></p>
<p>African leaders have just signed a framework establishing the African Continental Free Trade Area, the <a href="https://www.cnbc.com/2018/03/20/africa-leaders-to-form-largest-free-trade-area-since-the-wto.html">largest free trade agreement</a> since the creation of the World Trade Organisation.</p>
<p>The free trade area aims to create a single market for goods and services in Africa. By 2030 the market size <a href="https://www.brookings.edu/opinions/capturing-africas-high-returns/">is expected</a> to include 1.7 billion people with over USD$ 6.7 trillion of cumulative consumer and business spending – that’s if all African countries have joined the free trade area by then. Ten countries, including Nigeria, have yet to sign up.</p>
<p>The <a href="https://au.int/en/ti/cfta/about">goal</a> is to create a</p>
<blockquote><p>single continental market for goods and services, with free movement of business persons and investments.</p></blockquote>
<p>The agreement has the potential to deliver a great deal for countries on the continent. The hope is that the trade deal will trigger a virtuous cycle of more intra African trade, which in turn will drive the <a href="https://unhabitat.org/books/structural-transformation-in-developing-countries-cross-regional-analysis/">structural transformation</a> of economies – the transition from low productivity and labour intensive activities to higher productivity and skills intensive industrial and service activities – which in turn will produce better paid jobs and make an impact on poverty.</p>
<p>But signing the agreement is only the beginning. For it to come into force, 22 countries must ratify it. Their national legislative bodies must approve and sanction the framework formally, showing full commitment to its implementation. Niger President Issoufou Mahamadou, who has been championing the process, aims to have the ratification process completed by January 2019.</p>
<h2>Cause and effect</h2>
<p>Some studies have shown that by creating a pan-African market, intra-Africa trade could increase by <a href="https://www.ictsd.org/bridges-news/bridges-africa/news/launch-of-the-continental-free-trade-area-new-prospects-for-african">about 52%</a> by 2022. Better market access creates economies of scale. Combined with appropriate industrial policies, this contributes to a diversified industrial sector and growth in manufacturing value added.</p>
<p>Manufacturing represents only about <a href="https://data.worldbank.org/indicator/NV.IND.MANF.ZS">10% of total GDP in Africa</a> on average. This falls well below other developing regions. A successful continental free trade area could reduce this gap. And a bigger manufacturing sector will mean more well-paid jobs, especially for young people. This in turn will help poverty alleviation.</p>
<p>Industrial development, and with it, more jobs, is desperately needed in Africa. Industry represents <a href="https://data.worldbank.org/indicator/SL.IND.EMPL.ZS">one-quarter to one-third of total job creation</a> in other regions of the world. And a young person in Africa is <a href="http://acetforafrica.org/highlights/unemployment-in-africa-no-jobs-for-50-of-graduates/">twice as likely to be unemployed when he or she becomes an adult</a>. This is a particularly stressful situation given that over <a href="http://www.unesco.org/new/en/unesco/events/prizes-and-celebrations/celebrations/international-days/world-radio-day-2013/statistics-on-youth/">70% of sub-Saharan Africa’s population is below age 30</a>.</p>
<p>In addition, <a href="http://www.africaneconomicoutlook.org/en/home">70% of Africa’s youth live on less than US $2 per day</a>.</p>
<p>The continental free trade area is expected to offer</p>
<blockquote><p>substantial opportunities for industrialisation, diversification, and <a href="https://www.brookings.edu/blog/africa-in-focus/2018/02/02/foresight-africa-viewpoint-africas-bold-move-towards-integration-the-continental-free-trade-agreement/">high-skilled</a> employment in Africa.</p></blockquote>
<p>The single continental market will offer the opportunity to accelerate the manufacture and intra-African trade of value-added products, moving from commodity based economies and exports to economic diversification and high-value exports.</p>
<p>But, to increase the impact of the trade deal, industrial policies must be put in place. These must focus on productivity, competition, diversification, and economic complexity.</p>
<p>In other words, governments must create enabling conditions to ensure that productivity is raised to international competitiveness standards. The goal must be to ensure that the products manufactured in African countries are competitively traded on the continent and abroad, and to diversify the range and sophistication of products and services.</p>
<h2>Drivers of manufacturing</h2>
<p>Data shows that the most economically diverse countries are also the most successful.</p>
<p>In fact, <a href="http://atlas.cid.harvard.edu/learn/glossary">diversification</a> is critical as “countries that are able to sustain a diverse range of productive know-how, including sophisticated, unique know-how, are able to produce a wide diversity of goods, including complex products that few other countries can make.</p>
<p>Diverse African economies such as South Africa and Egypt, are likely to be the drivers of the free trade area, and are likely to benefit from it the most. These countries will find a large continental market for their manufactured products. They will also use their know-how and dense industrial landscape to develop innovative products and respond to market demand.</p>
<p>But the agreement on its own won’t deliver results. Governments must put in place policies that drive industrial development, particularly manufacturing. Five key ones stand out:</p>
<p><strong>Human capital:</strong> A strong manufacturing sector needs capable, healthy, and skilled workers. Policymakers should adjust curriculum to ensure that skills are adapted to the market. And there must be a special focus on young people. Curriculum must focus on skills and building capacity for entrepreneurship and self-employment. This should involve business training at an early age and skills upgrading at an advanced one. This should go hand in hand with promoting science, technology, engineering, entrepreneurship and mathematics as well as vocational and on-the-job training.</p>
<p>Policymakers should also favour the migration of highly skilled workers across the continent.</p>
<p><strong>Cost:</strong> Policymakers must bring down the cost of doing business. The barriers include energy, access to roads and ports, security, financing, bureaucratic restrictions, corruption, dispute settlement and property rights.</p>
<p><strong>Supply network:</strong> Industries are more likely to evolve if competitive networks exist. Policymakers should ease trade restrictions and integrate regional trade networks. In particular, barriers for small and medium-size businesses should be lifted.</p>
<p><strong>Domestic demand:</strong> Policymakers should offer tax incentives to firms to unlock job creation, and to increase individual and household incomes. Higher purchasing power for households will increase the size of the domestic market.</p>
<p><strong>Resources:</strong> Manufacturing requires heavy investment. This should be driven by the private sector. Policymakers should facilitate access to finance, especially for small and medium enterprises. And to attract foreign direct investment, policymakers should address perceptions of poor risk perception. This invariably scares off potential investors or sets excessive returns expectations.</p>
<h2>Increased productivity</h2>
<p>The continental free trade area facilitates industrialisation by creating a continental market, unlocking manufacturing potential and bolstering an international negotiation bloc.<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/93827/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />Finally, the continental free trade area will also provide African leaders with a greater negotiating power to eliminate barriers to exporting. This will help prevent agreements with other countries, and trading blocs, that are likely to hurt exports and industrial development.</p>
<p><a href="https://theconversation.com/profiles/prof-landry-signe-455169">Prof. Landry Signé</a>, Distinguished Fellow at Stanford University&#8217;s Center for African Studies, David M. Rubenstein Fellow at the Global Economy and Development and Africa Growth Initiative at the Brookings Institution, and Young Global Leader of the World Economic Forum, <em><a href="http://theconversation.com/institutions/stanford-university-890">Stanford University</a></em></p>
<p>This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/why-africas-free-trade-area-offers-so-much-promise-93827">original article</a>.</p>


Why Africa’s free trade area offers so much promise

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<p>The African challenges are opportunities to develop unique approaches in many sectors, and the African Continental Free Trade Area (AfCFTA) is a way to scale them up to the entire continent. CNBC Africa spoke to Dr. Mukhisa Kituyi, Secretary General for the United Nations Center for Trade and Development (UNCTAD) for more on this.</p>


UN lauds Africa for AfCFTA deal

<p><em>Jared Jeffery | NKC African Economics</em></p>
<p>Ugandan President Yoweri Museveni was conspicuously absent from proceedings in Kigali on Wednesday, March 21, where many of the continent’s leaders gathered to sign the African Continental Free Trade Area (AfCFTA) agreement.</p>
<p><img loading="lazy" decoding="async" class="aligncenter wp-image-42921 size-full" src="http://cnbc.africa/wp-content/uploads/2017/02/8718467280_85348ef4fb_o.jpg" alt="Ugandans brace for Museveni life presidency bid" width="1536" height="1024" /></p>
<p>The Daily Monitor, a Ugandan newspaper, reports that his absence was due to security reasons after his advance security team and its Rwandan counterparts failed to work out his itinerary. Meanwhile, the president’s press secretary, Don Wanyama, stated that the reason for the cancellation was confidential, before saying: “The president is here [in Uganda] because he has equally important matters to take care of.”</p>
<p>Mr Museveni is famously an enthusiastic proponent of pan-Africanism and would hardly give up the chance to wax lyrical about the prospects for such an ambitious agreement. Thus, it is likelier that Mr Museveni’s snub is another sign of the chilly relations between the neighbouring countries.</p>
<p>Relations between political elites in Kampala and Kigali are complicated, to say the least.</p>
<p>Rwandan President Paul Kagame spent his youth as a refugee in Uganda and was part of Mr Museveni’s National Resistance Army (NRA) when the latter took power from former President Milton Obote in 1986.</p>
<p>In fact, around a quarter of the NRA’s fighters at the time were Rwandan Tutsis and many were rewarded with high ranks in the new Ugandan army for their efforts – Mr Kagame was made acting chief of military intelligence.</p>
<p>Between 1990 and 1993, the Ugandan army supplied the Rwandan Patriotic Front (RPF) with provisions and weapons as it carried out its attempts to topple former President Juvénal Habyarimana’s Hutu-dominated regime in Rwanda. Indeed, it is thought by some that the missile that downed Mr Habyarimana’s plane, the spark that set off the Rwandan genocide in 1994, was a Russian-made SA-16. The Russian military prosecutor’s office has said it sold the SA-16 rocket launchers found in range of the airport to Uganda in 1987.</p>
<p>With such an intertwined history of helping each other come to power, one would expect nothing but cordiality between the two regimes; however, it was not long before their two armies clashed.</p>
<p>During the 1998-2003 war in the Democratic Republic of Congo (DRC), Uganda and Rwanda backed opposing rebel groups. With the DRC once again teetering on the brink of conflict, there is a chance that their interests in the volatile eastern part of the country may once again not be aligned.</p>
<p>But the causes of the current chill in relations probably have more to do with domestic politics.</p>
<p>Rwanda’s Defence Minister James Kabarebe last October reportedly accused the Ugandans of offering a space for Rwandan enemies to conduct their operations.</p>
<p>According to The East African, this was a reference to exiled tobacco tycoon Tribert Rujugiro (PanAfrican Tobacco Group) who is close to Mr Museveni’s brother General Salim Saleh. A memorandum of understanding between Mr Saleh and Mr Rujugiro reportedly gives the general a 15% stake in M/S Leaf Tobacco and Commodities Ltd in exchange for ‘security’ (it is unclear what that involves).</p>
<p>Mr Rujugiro was a special economic advisor to Mr Kagame before going into exile in 2009.</p>
<p>Those in the Rwandan tobacco business appear to have a particularly difficult relationship with the government. It will be remembered that another tobacco tycoon, Assinapol Rwigara, died in a car accident in 2015 that his family claims was a politically-motivated assassination. Mr Rwigara’s wife and two daughters are standing trial for insurrection after his daughter Diane Rwigara attempted to run against Mr Kagame in last year’s presidential election.</p>
<p>Complicating matters further, on October 31 nine Ugandan police officers, a Rwandan ex-general and a Congolese national appeared in a military court in Uganda on charges related to the kidnapping of Mr Kagame’s former bodyguard. Lieutenant Joel Mutabazi was allegedly kidnapped five years ago and handed over to Kigali without the Ugandan government’s consent, and then sentenced to life in a Rwandan prison.</p>
<p>The case is confused further by the alleged threats against the Rwandan general, René Rutagungira, by Kayumba Nyamwasa (Mr Kagame’s former right-hand man and former lieutenant general in the Rwandan army who now lives in exile in South Africa and has had multiple attempts made on his life).</p>
<p>Mr Nyamwasa was reportedly trying to get Mr Rutagungira to join the Rwandan National Congress (RNC), an opposition group in exile. According to Mr Rutagungira’s brother, when he refused, Mr Nyamwasa used his relationship with the head of Ugandan intelligence to get the charges of espionage brought against those put on trial in October.</p>
<p>Mr Rutagungira claimed in court in December that he had been tortured by former Security Minister Henry Tumukunde and the head of Chieftaincy of Military Intelligence (CMI) Abel Kandiho with the intention of forcing a confession that would link former Inspector General of Police Kale Kayihura to kidnappings in Rwanda and Uganda.</p>
<p>On March 4, Mr Museveni fired both Mr Tumukunde and Mr Kayihura. The reasons for their firing are still unclear, but some speculate that they are related to the tensions between Kampala and Kigali.</p>
<p>Mr Kayihura was close to Mr Kagame, having been the best man at his wedding, and there are rumours that Mr Kagame was backing Mr Kayihura to succeed Mr Museveni as president. Opposition frontman for Uganda’s Forum for Democratic Change (FDC) Kizza Besigye is among those that believe Mr Kayihura’s axing was due to his links with Kigali.</p>
<p>Mr Tumukunde, meanwhile, was pulling in the other direction and apparently working against Kigali.</p>
<p>Of the two leaders, Mr Museveni’s position appears more vulnerable. Countering resistance and rebellion will require a loyal security force, and Mr Museveni has had to work hard to shore up his support in the armed services over the past year or so. In November, he promoted over 300 officers in the intelligence and special forces divisions of the Uganda People’s Defence Force (UPDF). It was the third shakeup of the military in 2017, following reshuffles in January and May.</p>
<p>Mr Kagame, meanwhile, does not appear to have the same concerns over the loyalty of his troops, but those in exile could still cause a headache. He met with his South African counterpart ahead of Wednesday’s signing of the AfCFTA agreement and it seems that diplomatic relations are improving – something that may worry Mr Nyamwasa and others who have sought sanctuary in the Southern African country.</p>
<p>In November last year, Ugandan police raided the tabloid Red Pepper after it ran a story claiming Mr Museveni was plotting to overthrow Mr Kagame. In December, Kenyan newspaper The Standard claimed it had credible evidence that the Ugandan intelligence services (reportedly the CMI) were recruiting fighters for the RNC in refugee camps in Nyakivara and Bweyale Kiryandongo. The article claims Mr Nyamwasa’s cousin, Rugema Kayumba, does the recruiting and Mr Kandiho of the CMI oversees the project.</p>
<p>With rumours of plots by both sides, it is no wonder relations are chilly. Open conflict in the DRC, with proxy groups again put to use, could see them turn hot. Even if the worst does not come to pass, the mistrust will negatively affect regional projects and business between the two countries.</p>


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African Continental Free Trade Area

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AfCFTA goes into effect with 22 countries on board

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AU targets 30 countries to ratify AfCTA by December

First ever Intra-African Trade Fair launched

Why Africa’s free trade area offers so much promise

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Museveni skips Kigali summit because of security concerns

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