How East African businesses are going to lead the AFCTA

The apex body for East Africa’s businesses, East African Business Council has urged regional CEOs to opportunities arising from the EAC regional integration process.

This takes place even as the council in collaboration with TradeMark East Africa (TMEA) launched the regional programme on Public-Private Sector Dialogue (PPD) for Trade and Investment from 2019 to 2023.

According to EABC Chief Executive Mr Peter Mathuki said “The project aims to enhance advocacy and dialogue on transport and logistics, trade facilitation, customs & tax, standards, and NTBs at regional and country level. In addition, the programme extends beyond the EAC and incorporates the COMESA, COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) and  Africa Continental Free Trade Area (AfCFTA).”

“Public-Private Dialogue can facilitate the trade & investment climate reforms by promoting better diagnosis of investment climate problems, transparency and inclusive design of policy reforms making policies easier to implement. TMEA launched this new partnership with EABC to galvanize and facilitate trade and investments in the EAC,” said Mr. Allan Ngugi, Ag. Director Private Sector Advocacy TMEA.

For businesses in the region to grow and expand within and beyond the EA, there is a need for technical and financial support to EABC in a bid to advocate and input substantive issues affecting the business community in regard to policy formulation and implementation in the region.

According to Mr Mathuki businesses should proactively engage the East African Community through EABC given the proximity advantage that the EAC and EABC Secretariat are located in Arusha. He noted there is a need to remove Non-Tariff Barriers and embark on trading proactively with the neighboring countries even before venturing outside the continent.

“Let’s spur business within ourselves as the EAC bloc,” said Mr Mathuki.

According to the CEO, EABC is keen to enhance dialogue and partnership between the private and public sector; hence EABC will spearhead the programme in close collaboration with the all national and regional sectoral private sector associations in the EAC.

Speaking at the recently concluded CEO Round Table Meeting Mr. Charles Omusana from the EAC Secretariat informed the CEOs on initiatives and programmes that support businesses growth and Investment the EAC Secretariat is working on such as the review of the EAC CET.

He noted, “It is the right of the private sector to demand a better and improved business climate in the region.” He further urged the CEOs to give input on the EAC Private Sector Development Strategy that will be developed.

The Chairman of Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) Arusha Mr. Walter Maeda welcomed closer collaboration between TCCIA and the East African Business Council in a bid to support SMEs to take advantage of the opportunities availed by the  EAC regional integration process.

“Request for waiver of duty from the Import Commissioner for EAC Originating Goods takes 7 days, this delays business and intra EAC Trade” Mr. Amani Temu  from Taha Fresh elaborated one of the obstacles to cross border trade. Among other issues, affecting businesses is the recent notice on no conditional release for imported goods by the Tanzania Bureau of Standards, which subjects imported goods from the EAC Partner States to inspections causing delay.

The steel industry in Arusha is calling for the review of East African Harmonized Standards on hot-rolled steel plates of less than 1mm as the plates are an important raw material for their industries.

“Mutual Recognition of Standards is important to businesses, such protectionist administrative measures are NTBs which hinder intra EAC trade, “ said Hon Mathuki

The CEO Forum in Arusha also agreed to consolidate issues affecting businesses at the ground and through the support of EABC they are keen to engage the EAC Secretary General and Council of Minister for a quick resolution.

This comes at an opportune time when the EAC integration process is marking 20 years in November 2019  since the signing of the Treaty, it is important that the private sector and government dialogue and ensure that protocols and policies work on the ground for EAC businesses. In addition, Article 7 of the Treaty for the Establishment of the EAC states on people-centered and market-driven cooperation as a principle to govern practical achievements of the objectives of the EAC integration process. Further Article 128 emphasizes on strengthening of the private sector as a key partner in the EAC integration.

“Barriers to trading across borders such as multiple product standard inspections, bureaucratic trade procedures delays business transactions and increase the cost of doing business. EABC will evaluate and monitor EAC policies to ensure they work for businesses at the ground level and create momentum for accelerating the policy reforms related to business and investment climate in the EAC ” said Mr Mathuki.

The programme seeks to contribute to the reduction of transport (road, rail, and air) cost and time along transport corridors by 10 per cent and increase the efficiency of logistic services. Furthermore, it will increase the export capacity of East African businesses and enhance customs and other trade-related agencies efficiency by reducing time to process trade documentation.

It will enhance dialogue on customs matters such as tariffs, taxes, levies, Common External Tariffs, and import/export tax incentives. It will also look at Harmonization of East African Standards, counterfeit and sub-standard issues as well as Non-Tariff Barriers,” said Mr Mathuki.

“The operationalization of the Single Customs Territory has contributed to the reduction of delays in cargo clearance in the Northern Corridor, the turnaround time of goods transiting from Mombasa to Kampala has been reduced from 18 days to 4, and goods from Mombasa to Kigali, from 21 days to 6.2, “ said Mr Mathuki.

According to the World Trade Organization to the Central Corridor turnaround time between the port of Dar es Salaam and Kigali (or Bujumbura) has been reduced from over 20 days to 6.

WorldBank’s Ease of Doing Business report (2018), EAC is ranked at 149 out of 190 in the ease of trading across borders.  In the region, the time it takes to export is at an average of 76.hrs which is too high compared to 12.5 hours in OECD High-Income Economies. The cost to export outside the region is at an average of USD427.8 compared to 139.1 in OECD High-Income economies.

The export documentary compliance in the region takes 80.2hours and cost USD 170.2 while in OECD High-Income economies is at 2.4hrs and USD35.2 respectively.

TMEA will continue to play a critical role in facilitating ease of doing business in the region and the continent.

 

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Nigerian online trading Jiji to the rescue of OLX in key African countries

Jiji – the largest classifieds marketplace in Nigeria – has reached an agreement to redirect OLX users in Nigeria to Jiji and to acquire OLX businesses in four other countries, building a leading pan-African classifieds business

OLX, online classfied portal has been a major player in the African market for almost a decade even from its original name Dealfish.  However, things have not been going well for the online platform as new entrants including Jumia has pushed it to the blink.

And now Nigerians have come to the rescue in the name of Jiji.

Jiji and OLX have announced that both companies have reached an agreement under which Jiji will acquire OLX businesses in Ghana, Kenya, Tanzania, and Uganda, pending certain regulatory approvals, and OLX users in Nigeria will be redirected to Jiji. The transaction is backed by one of Jiji’s cornerstone investors, Digital Spring Ventures.

Joining Jiji’s family will allow OLX users in these countries to benefit from Jiji’s market-leading products and services. OLX’s reach, combined with Jiji’s own proprietary search and delivery algorithms, will create a beneficial combination – giving users a radically streamlined experience and making the buying and selling process more convenient.

Anton Volyansky, CEO and co-founder of Jiji commented, “Users will always come first for us. We warmly welcome OLX’s customers to the Jiji family and we look forward to our new customers joining Jiji on its journey to empower the lives of its customers by providing a safer, more secure and enjoyable online shopping experience”.

The ever expanding e-commerce industry in Africa also a tricky maze

Vladimir Mnogoletniy, Board Director and co-founder of Jiji commented, “We believe that this transaction is pivotal for Jiji’s business. We are a long-term investor in Africa and believe in the exceptional opportunities that exist in this amazing continent. With this transaction we plan to build the largest Africa-based classifieds business, creating a new experience for Africa’s fastest-developing countries and their combined population of 300 million. We firmly believe that in the next 2-3 years ours will be one of the top 10 classifieds businesses in the world by traffic.”

The ever expanding e-commerce industry in Africa also a tricky maze

Sjoerd Nikkelen, General Manager of OLX in Africa, Middle East and Asia comments “We are proud of our achievements in Africa, including the sustainable businesses we have built in Nigeria, Ghana, Kenya, Tanzania, and Uganda. We continually evaluate our portfolio of classifieds businesses to ensure a disciplined approach to how and where we allocate capital and management time. With our focus on accelerating the growth of other markets, now is an opportune time to sell our interests in these markets. We are pleased that Jiji will continue to provide the exceptional quality of products and services that the customers in these countries have come to know and enjoy from OLX.”

Zhanibek Sydykov, Partner at Digital Spring Ventures, commented, “We are pleased to be able to assist our partners at Jiji on this transaction, and we strongly believe that the combined Jiji and OLX businesses will become a formidable force in the African e-commerce market. This transaction further advances the consumer reach of one of the star portfolio companies in our current fund, which is focused on partnering with ambitious entrepreneurs to deploy capital in the internet and technology sectors in some of the world’s most exciting emerging markets.”

Following closing of the transaction (which is expected to occur once certain regulatory approvals have been obtained), all users of the sell-and-buy classifieds websites of OLX Nigeria, OLX Ghana, OLX Kenya, OLX Tanzania, and OLX Uganda will be redirected to Jiji. The Jiji team will strive to make the transfer seamless, and to provide a high-quality user experience across all geographies.

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