KAM calls for change of laws toreduce excessive drinking

Kenya needs to develop a more comprehensive policy if its fight against illicit alcohol is to succeed, according to a new analysis of the regulation of alcohol in the country by the Institute of Economic Affairs (IEA).

The policy recommendation is contained in a White Paper by the Institute of Economic Affairs and launched by the Kenya Association of Manufacturers during the summit on illicit trade.

Kwame Owino, the Institute’s Chief Executive said that their analysis had shown that the approach taken to regulate alcohol is population-based rather than targeted at reducing excessive drinking.

“Regulation of the alcohol beverage sector is through the Alcoholic Drinks Control Act, which by reducing the amount of time for drinking and limiting the advertising of alcohol, assumes that it solves the problem of heavy drinking. But that does not work and more people are pushed towards illicit alcohol. By suppressing one side, you go back to the other side. Our licensing model actually creates barriers to market entry,” said Mr Owino.

Direct interventions targeting individual drinkers

He said that a regulation model that involves direct interventions targeting individual drinkers and others aimed at specific alcohol-related problems such as drunk-driving are less likely to affect the non-problem drinker.

“Kenya’s alcohol policies should not be exclusive but should encompass a mixed approach involving Problem Directed Policies and Intervention Policies. They have been proven to work elsewhere,” said Mr Owino.

The White Paper was launched at a day-long summit on illicit trade in Kenya, with focus on the alcoholic beverages sector. A resolution paper will be developed from the submissions made at the summit and submitted to the Treasury.

IEA argued that Population Based Policies are easier to administer but are unlikely to be most successful in Kenya given the low per capita consumption of alcohol, demographic changes, dual market structure and expected income growth among Kenya’s working population.

Consumption of alcohol in Kenya stood at 3.4 litres of pure alcohol

Data from the World Health Organisation shows the per person consumption of alcohol in Kenya stood at 3.4 litres of pure alcohol in 2018, much less than the global average of 6.4 litres per person.

Of the 3.4 litres, says the WHO, 1.9 litres is recorded (legally recognized) while 1.5 litres is unrecorded (not officially recognized).

“The negative effect on the industry by illicit alcohol is too big to ignore, given the extent of loss in Kenya. We are not only concerned by the health risk to consumers; illicit alcohol trade denies formal players a level-playing ground and the economy billions of revenue over time. This paper provides some insight to a cross section of stakeholders on how to forge ahead to eliminate this danger,” said Eric Kiniti, the Secretary of Alcoholic Beverage Association of Kenya. The alcoholic beverages industry is a leading contributor to the Exchequer East African Breweries Limited, the leading player in the industry, estimated that it made tax contributions of up to Ksh. 42 billion in the fiscal year 2018.

The significance of the industry is amplified because the direct tax contribution represented 2.74% of all government revenues for the financial year 2017/18.

With the excess regulation that the recorded alcohol is subjected to, says IEA in the White Paper, more consumers are pushed towards the alcohol that is not officially recognised, and which bears risks for drinkers.

“In sum, excessive regulation can generate the unintended consequences of driving demand for alcoholic beverages in the informal sector and generate worse health outcomes owing to the production methods employed in the latter,” IEA says.

Wanyama Musiambo, the head of the Multi-Agency Taskforce on Enforcement of Standards has so far succeeded in clamping down on illicit products.

“We cannot say that we let people drink what they want yet the cardinal responsibility of the government is to protect Kenyans. If nothing else has been achieved, we have achieved public awareness and Kenyans know there is a problem of illicit trade,” said Mr Musiambo.

Mr Musiambo said the taskforce’s work is intelligence-led.

“Once we make a raid, we should, in a very accountable manner, be able to process and prosecute the case as we strengthen our borders to reduce the level of illicit products in this country,” said Mr Musiambo.

Githii Mburu, the commissioner for intelligence and strategic operations, said it is evident that a more comprehensive approach is needed if illicit products is to be dealt with.

“We have to have a more comprehensive approach so that we look at both the policies and the enforcement, and this is where this study comes in,” said Mr Mburu.

A friendlier tax regime

He said that with neighbouring countries having a friendlier tax regime, ethanol is cheaper there and thus the motivation by a lot of those who import it illegally to source it there.

The commissioner said there must be collaboration between the State and non-state actors for eradication of illicit alcohol to work.

“It should never be left to the government. It’s a partnership between the government and the private sector and we must work together for it to succeed,” said Mr Mburu.

Kenya Association of Manufacturers Chairman Sachen Gudka said companies are of the view that the issue of illicit products was bigger than initially thought.

“It is our view that a better informed regulatory and policy framework will be the bedrock with which the agencies tasked with enforcement will better carry out their mandates,” he added.

Also Read: This is what alcohol manufacturers in Kenya want

Why construction industry needs to embrace human resource management

Human resource has been described as the most essential resource in an organization since it is the human aspect that makes sure that all other resources work optimally (or not).

In the construction industry, the concept of human resource management is not as well defined and improved as in other mainstream and formal industries.

For every industry to grow there has to be continuous improvement of efficiency in resources usage. There has to be capacity building to empower all the stakeholders to be better and to do better.

Every construction site has labour, whether mechanized systems are employed or not and also regardless of the magnitude of mechanization. This therefore makes it necessary to direct enough attention and resources towards human resource management and development in construction.

How many times have you commissioned a site and you only know the contractor out of an average of 20 craftsmen in your premise? How many times have you thought of the fundi who helps the mason build your wall as a resource that could be improved through training and empowerment using fringe benefits such as insurance facilitation?

As a contractor, how many times do you think of your fundi as a resource that could benefit from  remunerations other than their daily wages?

Human resource management is a critical part of project management. A client who is building should be keen to know how well the resources are being utilized through-out the project. A contractor on site must be very hands on when considering the usage of resources in any individual project because this has a direct effect to the quality of his deliverables, his profit margins and eventually his reputation as contractor.

Imagine a contractor solution that comes in to help you conveniently manage your human resources on the job site; having the  proper knowledge of the people working on your projects, including their skills and skill level will increase a their capacity to function as a developer. Even as an independent Home Owner managing their own project, this knowledge brings then confidence in getting the right talent for every job. We live in the age where information is more powerful than anything!

There is no more need to imagine that solution. The iBUILD app  is here to revolutionize the human resource management aspect in the construction industry. It is a one stop shop where you have an elaborate and detailed list of all the fundis on your site, their skills, their reviews and recommendations from other contractors as proof of their capabilities. The iBUILD mobile app also allows you to digitize your day to day operations by running and managing timesheets. For every worker you hire through the iBUILD app, a timesheet is generated that helps you manage their working hours as it keeps records of the amounts due to each of them according to the hours worked. At the end of the day, it gives you a summary of who was on site and how long they worked and how much is due to them! iBUILD then provides the best tool of all- the ability to upload time sheets directly to the payment gateway and pay all of your workers through the iBUILD wallet. Straight from the contractor wallet into the worker wallets. And there is more! Workers can cash out of their wallets directly into their Mpesa accounts. Contractors will have a permanent record of who gets paid what amount, and who worked on which projects for how long. Workers are rated every time they are paid and contractors will never have to remember which workers performed well and which did not- it all becomes part of the permanent transaction history. Organized details, and historical knowledge all at your fingertips so that you minimize mistakes and continue to hire and manage the best talent for your projects.

What the App is able to achieve

You can even save your favorites for easy access to contact and hire them for new projects- all directly through the app.

As a Home Owner or developer, you are able to see the work profiles of all the people involved in your site. This puts the control back into your hands!

Marlowa Okwogo of Marvin Interiors Inc. is a company that specializes in interior installations and external façade finishes in Nairobi and Kisumu Counties. Marlowa has been using the new technology from iBUILD  to manage his fundis on site. He sent out a posting for some positions he needed urgently filled and within 6 hours he had a number of qualified applications. He was able to review and hire, all through the app. One worker in particular was named Charles. He has been managing these workers along with Charles through the timesheet on the app, as well as paying them and it has increased efficiency and accuracy and using the e-wallet in the app, the contractor no longer has to deal with all of that cash.

Mr. Marlowa was especially impressed by the convenience and the ability to keep better records. He can revisit these records in his project detail on the app at any point for referencing purposes. Charles, on the other hand appreciated the convenience of being able to get work to do right from the comfort of his home- without standing for hours on street corners. He is no longer just at home or roaming around. He has found consistent work and has started building his portfolio in the construction industry. He is now able to show tangible evidence through his profile on the app of the history of all his jobs and total hours he has worked and he has aa separate record of the payment dates and amounts he received.  This gives Charles the ability to qualify one day for a loan of his own and to help him to grow and scale his career in to the future!

The Kenyan development agenda requires that, as a country, we must be ready to improve our efficiency in all sectors. We must begin to add value to what we produce and what we build. The  iBUILD app is at the fore front to champion the ability of the construction industry to maximize efficiency and quality.  This improves production and scalability in the delivery of their products and services and it also improves the construction sector as a whole.  As acceptance for finance technology grows in the construction industry, so will the value that is ultimately delivered to customers in the form of increased production, greater choice, and lower prices due to increased efficiencies and better project management.

Read Also: Kenya mulls over new road construction method

African aviation has potential to rake in $29 billion

It has been by AviaDev event, in conjunction with partners, MIDAS Aviation and Futureneers Advisors, that the estimated potential revenue from new African aviation routes could yield $29 billion in direct revenue.

This revenue, which is more than the individual GDP’s of 70% of the countries in Africa, could be realized if the largest airports in each African country are connected with one another. Currently, only 33.7% of this huge market is served, meaning that there is over $19 billion in untapped annual revenue.

Now in its fourth year, AviaDev, brings together airports, airlines, tourism bodies, and suppliers and customizes one-to-one meetings so that new partnerships and routes can be created. AviaDev’s managing director, Jon Howell, unveiled the event’s mission: to connect the largest airports in each African country with one another. He stated: “AviaDev aims to challenge the status quo through encouraging disruptive thinking. We believe our new mission crystallizes the opportunity that African aviation presents, and we look forward to driving the industry forward and measuring the progress made. We are encouraged by the drive on the continent towards partnership and collaboration”

Rebecca Rowland, Partner at Midas Aviation, who estimated the current aviation services said: “We’ve looked at how well-connected Africa is in terms of the flights between the largest airports in every country, which mostly means the capital cities. Only a third of these routes currently have regular air services. We know that connectivity is vital for economic growth and trade, so the potential is huge. As the visa regimes become more open and regulatory constraints looser, we should see many more of Africa’s capitals connected to each other and, with that, we’ll see more of the opportunities realized.”

Martin Jansen van Vuuren, founder of Futureneer Advisors, quantified the potential revenue from the new aviation routes. He indicated that the potential aviation growth could result in additional hotel growth, which will further add revenue to the destination.  He said: “Considering the anticipated increase in air connectivity, estimations on the number of room nights and expenditure per person can be made.  With this is mind, it is fair to say that anticipated investment of US$194 billion could be made in new and existing hotels across the continent in the coming years, further showcasing the untapped potential of Africa.”

Africa also has plans underway to establish a Single African Air Transport Market (SAATM) as was discussed at the recently concluded Second Ordinary Session of the African Union Specialised Technical Committee in Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism in Cairo Egypt. The SAATM is aimed at promoting intra-regional connectivity between the capital cities of Africa by creating a single unified air transport market in Africa, as an impetus to the continent’s economic integration and growth agenda.

African Union (AU) member states that have subscribed to the solemn commitment of establishing SAATM  are: Benin, Burkina Faso, Botswana, Capo Verde, Central African Republic, Chad, Congo, Côte d’Ivoire, Egypt, Ethiopia, and Gabon. Others are Gambia, Ghana, Guinea, Kenya, Liberia, Mali, Mozambique, Niger, Nigeria, Rwanda, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe.

Read Also: Single air transport market for Africa in pipeline

AfCFTA timeline starts to count in July

That will be decided during the forthcoming African Union meeting slated to take place in the next three months, according to the officials who gathered in Arusha on Thursday 25th April, 2019.

The proposed African Continental Free Trade Area is not simply a `Free Trade Agreement` it is about establishing a unified continental market with 1.2 billion potential customers and where the private sector is the major engine to make it happen.

This was the tone from the discussions of the meeting held in Arusha about how the East African Private Sector including Small and Medium Enterprises (SMEs) could benefit from the African Continental Free Trading Area (AfCFTA)

The one-day meeting, organized jointly by the East African Business Council (EABC) and the United Nations Economic Commission for Africa (ECA), convened close to 40 key players from the region`s private sector. The office for Eastern Africa of ECA estimates large potential gains from the AfCFTA, including an increase in intra-African exports of Eastern Africa by nearly Tshs.2.3 trillion ($1 billion) and the job creation of 0.5 to 1.9 million.

`Together African economies have a collective GDP of $2.5 trillion, making it the eighth largest economy in the world. That makes the continent much more attractive to investment, both from within and from outside the continent, ` said Andrew Mold, acting Director of ECA in Eastern Africa. `This should encourage business people to take advantage of AfCFTA and make the investments necessary to sustain economic growth and create employment.`

Nick Nesbitt, Chairman of EABC, emphasized the importance of the continent having a clear vision to put an end to the fragmentation of the internal market. `I really applaud everybody who has been involved in creating the AfCFTA because their vision is the one of Pan-Africanism. It is something our founding fathers aspired for a long time. Our thanks to ECA for being at forefront of this conversation and pushing the agenda forward so that the continent becomes a single economic trading bloc, ` he said.

Kenneth Bagamuhunda, Director General of Customs and Trade at the East African Community Secretariat, cited the experience of Regional Economic Communities as the building blocks for the AfCFTA. `The AfCFTA should build on what has already been achieved in regional negotiations like the Tripartite Free Trade Area, as well as within our respective regional blocks,` he said. Bagamuhunda also highlighted governments need to set a conducive environment for the successful implementation of AfCFTA.

The AfCFTA was signed in March 2018, at a historic meeting of the African Union in Kigali. 52 of 55 African Union member states have so far signed the AfCFTA, 22 countries that have ratified the agreement, which was the minimum number for it to enter into force. It seeks to create the largest trade zone in the world, increase intra-African trade by 52% by the year 2022 and remove tariffs on 90% of goods.

A summary of AfCFTA’s progress

  • 52 countries have signed the AfCFTA agreement
  • 22 countries have ratified the agreement as of April 2,2019
  • 15 countries have deposited their instruments of AfCFTA ratification with the AU
  • 7 countries including Gambia have received parliamentary approval for ratification but are yet to deposit instruments with AU.
  • Eritrea, Nigeria and Benin are yet to sign the AfCFTA agreement
  • The AfCFTA Agreement will enter into force; 30 days after the required number of ratifications have been deposited with the AU.

Also read:Africa’s move to push for cheaper, faster trade

How diplomats’ mass exits from Kenya have affected real estate

In filling Nairobi’s many top-end residential estates, the flight of international residents is now being felt in the real estate, a report has revealed.

According to the report released by Hass Consult, economic growth and consumer demand have also affected tax revenue growth and donor funding during the decade-long ‘great recession’ that has followed.

“This steady attrition in numbers was accelerated last year in the new government drive curbing work permits. This triggered a new uptick in international departures, which by the first quarter of 2019 had resulted in significant falls in the sales prices and rents of top-end detached houses, which fell by 4.4 per cent and 4 per cent respectively in the first 12 weeks of the year,” said Sakina Hassanali, Hass Consult’s Head of Development, Consulting and Research.

According to Ms Sakina, the firm foresees some continued downwards pressure in this segment until the international economy improves or Kenya initiates policies to attract renewed growth in international residency.

However, while the top end of the market has been affected by global trends and domestic policies, the other strong mover has come in apartment rentals.

But the other principal strand of this market has been internationals, with Nairobi positioned as one of the four ‘poles’ of Africa, as a centre of diplomatic and commercial activity. This has brought incoming, foreign top management to the African and East African headquarters of European, Asian and American multinationals. It has also brought an abundance of diplomatic staff, and donor-funded staffing, as well as pools of social entrepreneurs and business adventurers.

There has however been a steady downgrading of diplomatic and donor-funded postings since the world financial crisis of 2008, with many western governments running austerity programmes to cover the debt funding for their support of the financial system at that time.

Starting with the top end, it is a fact, and often commented on, that the primary focus for developers over the last two decades, and particularly in the 1990s, and the decade from the year 2000, was at the very top end of the residential market. Thus, today entire suburbs, such as Muthaiga and Karen, Nyari, Runda and Spring Valley, are filled with large detached houses, and lived in by the wealthy.

The report however noted that in filling thousands of large stand-alone houses and villas one has to reflect on the nature and make-up of the market – both for owners and for residents for such homes.

These certainly include the expanding Kenyan elite: CEOs, top politicians, from governors to cabinet secretaries, private secretaries and company directors.

In Kenya’s ever more sophisticated land and property market, the future of all prices is no longer powerful growth. But, as ever, pricing remains a remarkable pointer to unmet demand and shortages and still the clearest guide available to the most strategic development going forwards.

Hass Consult also reported a continuing shift to growth in the Kenyan property sector’s mid-market, as the top-end market adjusts to international pressures and tightening budgets.

Unveiling its property sales and rental price indices for the first quarter of 2019, Hass Consult reported that the strongest price growth in the first 12 weeks of the year was in apartment rents, which rose by 4.9 per cent in just three months, taking the year-on-year growth to 19.6 per cent.

“However, returning to building after the decade of slowdown in apartment pricing would require close attention to location and gaps in the market. “The Kenyan property market has matured, and the only apartments that will now sell and fill quickly are those where developers have properly researched the market and constructed accommodation that fills a proven and unmet need,” said Sakina.

In this, Kenya may also now start to see a new trend in the more widespread conversion of large detached houses into multiple residences. Developer construction over the last 30 years has been dominated by the building of large homes on individual plots, in estates such as Spring Valley, Runda, and Nyari, and areas such as Muthaiga and Karen. However, a substantial proportion of these homes were occupied by international residents. As governments globally have continued to curb foreign spending following the extra debt loading they took on during the financial crisis of 2008, many international and aid-funded operations have been retrenched.

At the same time, changes to Kenya’s work permit regime marked a sharp exodus of internationals in 2018, leading to the vacating of many larger properties. As a result, the prices of detached houses for sale fell by 4.4 per cent in the first quarter of 2019, while rents fell by 1 per cent, as owners and sellers cut prices in an effort to sell or refill. Only in the mid-market of town houses has growth remained solid and inexorable, with sales and rentals having slowed marginally, but remaining robust. In the first quarter of 2019, rental prices on town houses rose by 1.7 per cent, taking year-on-year growth to 11.1 per cent, while sales prices rose by 1.3 per cent, taking year-on-year growth to 7.9 per cent.

“Each quarter we see ever more marked evidence of the relative strength and demand for properties in the middle and lower market, versus the clear slowdown at the top end of the market,” said Sakina.

Also Read: How mergers are shaping up Kenya’s banking industry

Single air transport market for Africa in pipeline

Nigeria’s Minister of State for Aviation, Hadi Sirika, and other Africa transport ministers have rallied other countries on the continent behind the Single African Air Transport Market (SAATM).

Sirika, at the ongoing Second Ordinary Session of the African Union Specialised Technical Committee in Transport, Transcontinental and Inter-regional Infrastructure, Energy and Tourism in Cairo Egypt, made the resolution of the ministers known via his twitter handle.

The ministers, in the resolution concerning transport in Africa, “urge all remaining member states to join the Single African Air Transport Market (SAATM), ratify the African Road Safety Charter, the Revised Maritime Transport Charter and the Africa Civil Aviation Commission (AFCAC) Constitution.” Presently, only 28 African  countries have so far shown interest in the SAATM, even as the African Union awaits the decision of others to join the train.

According to African Union, SAATM is “Promoting intra-regional connectivity between the capital cities of Africa by creating a single unified air transport market in Africa, as an impetus to the continent’s economic integration and growth agenda. “In Cairo, the ministers unanimously agreed to strategies that would boost infrastructures in Africa. “We, the Ministers in charge of Transport Transcontinental and Inter-regional Infrastructure, Energy and Tourism meeting in Cairo, Arab Republic of Egypt on 16 and 17 April 2019, in the Second Session of the Specialised Technical Committee on Transport, Transcontinental and Inter-regional Infrastructure, Energy and Tourism , organised by the African Union Commission (AUC) in collaboration with the Government of the Arab Republic of Egypt to consider strategies for developing smart infrastructure to boost Africa’s continental transformation and integration,” said the ministers in Cairo.

We, the ministers, reiterating our commitment to develop Transport, Transcontinental and Inter-regional Infrastructure, Energy and Tourism sectors and our strong will to implement the outcome of the meeting as we have agreed.”

The committee of ministers requested the African Union Commission (AUC), to take the appropriate measures to accelerate the development of the African integrated High Speed Railway Network (AIHSRN) flagship project, revitalisation of the Union of Africa Railways (UAR) and speed up operationalisation of SAATM.

They also called upon the African Development Bank (AfDB) to continue providing support and mobilise more financial resources for priority intercontinental transport sector programmes such as SAATM and implementation of African Plan of Action for Road Safety.

The committee appealed to member states to speed up signing and or ratification of pending legal instrument related to infrastructure, notably Maritime Charter, Yamoussoukro Declaration (YD), SAATM, AFREC Convention and Road Safety Charter.

Member states that have subscribed to the solemn commitment are: Benin, Burkina Faso, Botswana, Capo Verde, Central African Republic, Chad, Congo, Côte d’Ivoire, Egypt, Ethiopia, and Gabon. Others are Gambia, Ghana, Guinea, Kenya, Liberia, Mali, Mozambique, Niger, Nigeria, Rwanda, Sierra Leone, South Africa, Swaziland, Togo and Zimbabwe.

The second Ordinary Session of the African Union was a meeting of the African Union (AU) Specialized Technical Committee on Transport, Transcontinental and Interregional Infrastructure, Energy and Tourism (STC-TTIET) with a theme: Developing SMART Infrastructure to Boost Africa’s Continental Transformation and Integration. The meeting occurred during 16th and 17th April of 2019, organized by the African Union Commission; through the Department of Infrastructure and Energy; in collaboration with the Government of the Arab Republic of Egypt, the African Development Bank (AfDB), the United Nations Economic Commission for Africa (UNECA) and the African Union Development Agency (AUDA-NEPAD).

Also read: AfDB, AU banks on creative industries in Africa for GDP growth

 

Why Central Africa is dragging Africa’s growth

Central Africa remains one of the continent’s least integrated regions due mostly to an infrastructural deficit and several other barriers

Intra-African trade is expected to grow by 52 per cent by 2022 once the Africa Continental Free Trade Agreement (AfCFTA) comes into force in all the African countries.

The AfCFTA is expected to see the removal of tariffs on 90 per cent of goods.

And with this, countries which have not been big players on the continental stage will gain some advantage. Some of these countries are in Central Africa which includes Cameroon, Central African Republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea and Gabon.

Increasing economic growth in Central Africa

According to a report by the African Development Bank (AfDB), GDP growth rate in Central Africa accelerated slightly to hit 2.2 per cent from 1.1 per cent in 2017.

However, this remained below the African average of 3.5 per cent.

In 2018, the Central African countries’ growth was driven primarily by the rebound in raw material prices, principally oil.

Real GDP is projected to grow by 3.6 per cent in 2019 and 3.5 per cent in 2020 if Central Africa takes advantage of global economic growth, rising oil prices, macroeconomic reforms and natural resources.

Challenges to Central Africa’s growth

The Central African region faces several challenges among them the security situation; a possible economic downturn linked to a fall in oil prices and the need for economic diversification, improvements to the business climate and governance, and the development of human capital.

The report by AfDB says that in general, Central Africa remains one of the continent’s least integrated regions due mostly to an infrastructural deficit, tariff and nontariff barriers, low economic diversification and weak human capacity.

After the election, there was speculation that the DRC was mulling joining the EAC but no official stand has been communicated regarding this.

Volatile security and political instability

Several multifaceted conflicts for the control of natural resources or involving armed gangs characterize a volatile security situation and political instability.

Central Africa’s fragility is caused by the lack of good governance and structures to guide the exploitation of resources equitably.

These conflicts have been exacerbated by countries’ inability to tackle insecurity and reconstruction, high poverty and governance deficit, according to the AfDB report.

The Central African Republic, Chad and the Democratic Republic of Congo are the three countries considered the most fragile in Central Africa.

The four other countries may be seen as more resilient, though they have pockets of fragility.

Establishing a Central Africa common market

Effective regional integration would increase business and investment flows and stimulate the development of national markets.

This would help mitigate institutional and infrastructural deficiencies and spark structural transformation that would encourage fair and sustainable development and reduce fragility.

To boost this structural transformation through regional integration, Central Africa should develop human capital, add value through infrastructure, improve commercial potential, promote an investment climate for private sector development, and establish a common market.

Central Africa is having difficulty prospering despite the legislation and various treaties and institutions established to govern regional integration.

Implementation failures by member states, exogenous shocks, internal conflicts, natural resource dependence, poor economic diversification and security issues continue to be obstacles.

Yet, regional integration is clearly a path to the structural transformation that, in turn, should reduce factors of fragility in the region, notes the report.

Integrating Central Africa for economic growth

The report notes that fragility is closely linked to the poor governance of the region’s natural resources, recurrent security issues and political instability.

It adds that strengthening the resilience of the countries in the region is essential to achieving inclusive growth.

The report recommends accelerating economic diversification of member states to reduce fragility due to exogenous shocks.

It also proposes developing a financial system to promote inclusive finance and entrepreneurship, especially among young adults and women.

It also calls for the re-establishment of the rule of law and institutional order in fragile states.

The report also recommends strengthening the connectivity of infrastructure for electricity, transportation and information and communication technology.

Combining strengths among countries to develop human capital and enhance countries’ comparative advantages is highlighted as one of the ways to help increase growth.

The report also recommends formulating an effective strategy to implement and monitor regional integration projects and accelerating the conditions for the creation of the future continental free trade area.

With the ratification of the AfCFTA, the UN Economic Commission for Africa (ECA) says the trade agreement will be the world’s largest free trade zone by the number of countries if ratified by all the 55 African countries.

ECA says that once operational, AfCFTA will boost the level of intra-Africa trade in excess of 52 per cent by the year 2020.

The Central Africa Region can reap the benefits from the trade agreement which could see its economy surpass the projections.

Digital health technology improves patient safety in Africa

In a 2018 report by the World Health Organization (WHO), it was revealed that within Africa, about 15 per cent of all hospital activity and expenditure was a direct result of adverse events, and the costs of treating safety failures amount to trillions of dollars each year.

The investments needed to improve patient safety pale in comparison to the costs of harm.

Millions of patients across Africa die or are injured every year due to unsafe and poor quality healthcare. A majority of these cases could be avoidable through the implementation of digital health technology, with out-of-hospital care and monitoring forecasted to grow globally by 30 per cent to cross the $25 billion mark in 2019.

Ryan Sanderson, Exhibition Director of Africa Health Exhibition and Conferences, explains that the demands on healthcare systems in Africa are also increasing as non-communicable diseases, such as cancer, hypertension, diabetes and heart disease are on the rise. He also hinted on how technology is transforming how healthcare is delivered on the continent, giving more people in remote areas around the world access to better care.

Fewer than 50 per cent of Africans have access to modern health facilities. While this remains a challenge for many developing nations on the continent, countries like Rwanda are embracing technology as a way to improve healthcare for its citizens, especially those living in remote and rural areas.

Sanderson says that Rwanda is a pioneer in digital health in Africa. ` Their success includes the use of an artificial intelligence-based algorithms in mobile phones to get diagnosis, doctors  using telemedicine to consult, blood delivery by medical drones and a central electronic health records system ensuring data is collected accurately. The insights that can be learnt from projects like this are critical in order to achieve Universal Healthcare (UHC) `

`Africa needs to embrace digital technology on every level, ` adds Sanderson. `Artificial intelligence, telemedicine, drones, health apps, and mobile solutions will bring healthcare to a whole new level. Smart health needs to be recognized as one of the pillars of a country`s information and communication technology (ICT) policy. ICT is really something that governments need to prioritize for development as a whole. `

Innovation in digital healthcare will be at the forefront of discussions at the 9th Annual Africa Exhibition and Conferences which will be held at the Gallagher Convention Center , Johannesburg from 28th – 30th May 2019. Key topics include;

Digital health: Past, Present and the Future

E-patients role in a sustainable digital health system

Rwanda Health Project: Digital solutions for a country-wide health

While offering the latest medical education through 19 CPD accredited conferences, supported by various healthcare associations across South Africa, the 2019 edition will also be debuting four new conferences including Digital Health, Laboratory Medicine, Infectious Diseases and Physiotherapy.

Also read: Amref to setup health systems training across Africa

 

 

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Africa becomes world’s largest free trade zone

AfCFTA, when fully ratified, will cover more than 1.2 billion people with a combined GDP of USD2.5 trillion.

Gambia has become the 22nd nation to approve the Africa Continental Free Trade Agreement (AfCFTA) giving the African Union (AU) the minimum threshold for the agreement to come into force.

On Tuesday, April 9th, Gambia’s parliament approved the AfCFTA which was enacted last year to create the largest trade zone in the world.

AfCFTA is expected to increase intra-African trade by 52 per cent by the year 2022 and remove tariffs on 90 per cent of goods.

AU’s Commissioner for Trade and Industry, Albert Muchanga led celebrations of the historic achievement saying that ‘the AfCFTA market is ready for the launch of its operational phase in July this year’.

Ethiopia deposits free trade pact ratification to AU

And as if on cue, Ethiopia on Thursday deposited the instrument of the AfCFTA ratification to the AU Commission.

Ratified by 22 African countries, the AfCFTA has so far seen 19 AU member countries depositing the instruments of ratification to the 55-member pan African bloc.

Sierra Leone and Zimbabwe are expected to make their ratification, according to an AU statement on Thursday.

AU Commission Chairperson Moussa Faki Mahamat receives Ethiopia’s ratification deposit from the representatives of the Federal Republic of Ethiopia on Wednesday in Addis Ababa. www.exchange.co.tz
AU Commission Chairperson Moussa Faki Mahamat receives Ethiopia’s ratification deposit from the representatives of the Federal Republic of Ethiopia on Wednesday in Addis Ababa. [Photo/AU]
AfCFTA coming into effect

After the receipt of the 22nd instrument of ratification, the AfCFTA will enter into effect in a month.

Following Ethiopia’s move to deposit its ratification, the Senior Advisor and Chief Trade Negotiator in the Prime Minister’s Office, Mamo Mihretu, said Ethiopia’s ratification was “a historic occasion, marking the first ever free trade agreement Ethiopia has ever signed.”

Mahamat added that Ethiopia, which is the host country of the AU “has taken concrete steps such as the issuance of visas on arrival for citizens from AU member states, as a demonstration of the country’s commitment towards the Free Movement of People Protocol as an integral component of the AfCFTA.”

AU Commission Chairperson Moussa Faki Mahamat said in a statement that this “was indicative of the commitment of the Ethiopian government and the leadership of Prime Minister Abiy Ahmed in advancing the African integration agenda.”

What is AfCFTA?

The UN Economic Commission for Africa (ECA) says the AfCFTA will be the world’s largest free trade zone by the number of countries if ratified by all the 55 African countries.

Once operational, the AfCFTA will expand intra-African trade by up to USD35 billion per year and usher in freedom of movement for goods, services and people across the continent’s internal borders. www.exchange.co.tz
Once operational, the AfCFTA will expand intra-African trade by up to USD35 billion per year and usher in freedom of movement for goods, services and people across the continent’s internal borders. [Photo/WEF]
AfCFTA, when fully ratified, will cover more than 1.2 billion people with a combined GDP of USD2.5 trillion.

Launched in Rwanda’s capital Kigali, in March 2018, this continental free trade pact was signed by 44 African countries then. It aspires to create a tariff-free continent to grow local businesses, boost intra-African trade, spur industrialization and create more jobs.

ECA says that once operational, AfCFTA will boost the level of intra-Africa trade in excess of 52 per cent by the year 2020.

The AU says that by the time it convenes its mid-year coordination meeting in July this year in Niamey, Niger, more of its member countries will deposit instruments of ratification.

In a continental meeting held in Addis Ababa in March, African Trade Policy Center Coordinator at the ECA, David Luke, described the AfCFTA as one of the milestone trade policy developments in Africa.

“Africa is set for massive transformation as more countries are expected to sign up and ratify the African Continental Free Trade Agreement (AfCFTA) in 2019. It is expected to change the way Africa does trade and catalyze transformation in a way trade policy has not done before,” he added.

Countries missing from the AfCFTA

Nigeria, Africa’s largest economy is among countries which have abstained from the AfCFTA. The others are Benin and Eritrea whose economies are estimated at less than USD30 billion each.

Interestingly, Nigeria’s economic nominal value is estimated at USD400 billion.

Nigeria’s lack of commitment may be due to the fierce opposition from labour unions and the fact that the country hosts the largest concentration of people living in extreme poverty in the world.

The World Economic Forum acknowledges that “a united African continent working towards common goals would be a major force on the global economic stage.”

WEF adds that there are challenges to effecting the AfCFTA since currently, Africa is a patchwork of regulations and tariffs.

Due to this, trade between countries has suffered as a result.

“For example, only 10 per cent of Nigeria’s annual trade activity is with other African countries. This is a surprise given the country’s dominant economic standing and location firmly in the centre of the continent.”

WEF says that as a whole, Africa’s intra-continental trade level hovers at just around 20 per cent, while nations in Europe and Asia are at 69 per cent and 59 per cent, respectively.

While there is a lot of room for growth, UNCTAD has acknowledged that opening borders between countries could help spur growth on the continent.

Growth and development in Africa are pegged on boosting internal migration within the continent, a United Nations Conference on Trade and Development (UNCTAD) report says.

UNCTAD Secretary-General Mukhisa Kituyi said that for a long time the narrative on African migrants has been driven by fear.

“Contrary to media projections, the largest movement of African migrants is within Africa. Migrants also make a very clear contribution to the economy of the country they move into,” Dr Kituyi said.

You can also read how safe, controlled migration benefits African countries where the AfDB’s Senior Vice-President Charles Boamah says migration challenges require bold responses.

He adds, “In this regard, the Bank has developed the CRFA- an excellent tool to build resilience in our regional member countries.”

AfDB says that the AfCFTA is a major force for continental integration.

“It will expand intra-African trade by up to USD35 billion per year and usher in freedom of movement for goods, services and people across the continent’s internal borders, with a regime of reduced tariffs and non-tariff barriers to cut the cost of doing business on the continent. It will also boost agriculture and industrial exports by up to USD66 billion per year.”

This is a guide on how to invest in Ethiopia and questions whether Uganda fair better than Kenya with ALSF’s membership? and reasons why trade in East Africa will be simpler.

Africa’s property market thrives on domestic capital

Private capital remains an important driver of investment activity in much of Africa

Office yields remained largely stable in most African markets over the past two years, anchored by patient domestic capital as local investors assume a longer-term perspective, a new analysis by Knight Frank shows.

The analysis, published in a new Knight Frank report dubbed Africa Horizons, shows that of the 35 office markets covered, yield remained stable in 16 locations in the two years to 2018 and rose in six, while 13 markets recorded declines.

Africa Horizons provides a unique guide to real estate investment opportunities on the continent, examining developments in agriculture, hospitality, healthcare, occupier services (office), capital markets, residential and logistics property sectors.

“By taking a longer-term perspective, and in some cases a lower return profile, local investors have remained more active than headline figures suggest. This explains how yields in most major markets have remained stable in the face of weaker reported transactions,” the report states.

Just under US$2 billion worth of deals in Africa were publicised in 2018, predominantly involving assets in South Africa.

Contrary to the global trend, Africa’s recorded transaction activity peaked in 2016, and has since eased.

Notably, private capital remains an important driver of investment activity in much of Africa, although ultimately somewhat opaque.

According to the report, healthy economic prospects suggest that Africa will remain a compelling investment destination for those targeting key centres.

In addition to the office markets in these locations, the report notes, rising wealth will favour sectors exposed to consumer logistics, and selectively, retail.

“We envisage rising investor demand for those African locations that can demonstrate something of a counter-cyclical nature, combined with rising domestic wealth,” the Africa Horizons report concludes.

In 2018, Africa recorded more than 700 separate inward investment projects, half of which originated from corporations domiciled in the US, UK, France, China and Germany.

The investment destinations were broad although South Africa, Morocco, Kenya, Nigeria and Ethiopia accounted for over half of the projects, according to the report.

In Nairobi, yields in 2018 stood at eight per cent for office, 8.5per cent for logistics property, and nine per cent for retail.

A-grade warehousing around the capital currently commands monthly rents in the upward of US$6 per square metre, almost double that of the predominant stock of older units that lack modern features such as cross-docking and intermodal facilities.

Ben Woodhams, Knight Frank Kenya Managing Director, said: “Yields in each of the market segments align to their risk profiles, with retail being much riskier in Nairobi currently hence the proportionately higher yield.”

According to the Africa Horizons report, top residential investment opportunities across the continent include student accommodation (with Zambia, South Africa and Kenya being education hotspots), retirement homes, and middleincome housing as demographics change.

In Kenya’s logistics sector, formal retailers have emerged as a major driver of growth owing to their increasing need for large centralised warehouses as they gain critical mass countrywide.

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