CMA recently released the Capital Markets Soundness Report for the second quarter of 2019. The report notes that the trade disagreements between Kenya and Tanzania have substantially affected intra-regional trade.
For instance, in 2018 Tanzania introduced a 25% import duty on confectionery imports from Kenya. Currently, Tanzania has a ban on tour operators from Kenya accessing the Serengeti National Park which Kenya reiterated by baring Tanzanian tour vans from visiting Maasai Mara National Park.
As a result of the disagreements, trade within the East African region stands at 20 percent. In contrast, trade within the South African Development Community stands at 58 percent while the European Union intra-regional trade is at 68 percent.
The CMA report also highlights the launch of the African Continental FreeTrade Agreement (AfCFTA) which came into effect on May 30 2019. AfCFTA is expected to have a combined consumer and business spending capacity of $6.7 trillion by 2030. Nearly all African countries have joined the free trade area with the exception of Eritrea, and Benin.
As per the soundness report, South Africa’s economy shrank by 3.2% in the first quarter of 2019. It is the largest contraction in the country since the global financial crisis in 2008. Moody’s Investors Service lowered the country’s growth projection for 2019 to 1% from 1.3%. Nonetheless, SA’s equity market went up by 4.8% in the month of June 2019.
Rwanda rolled out the EAC electronic passport, a step geared towards boosting faster cross border clearance and enhancing regional integration. This follows a directive issued in March 2016 for EAC member states to adopt new generation passports and phase out national documents by June 2021. Rwanda joins Uganda, Kenya, and Tanzania that have already issued e-passports to their citizens.
Nigeria experienced slow economic growth in the first quarter of 2019, growing by 2.01% against the Central Bank of Nigeria targeted rate of 3%. The reason behind the decline is the shrinking oil sector. The country’s non-oil sector grew by 2.47% while the oil sector weakened by 2.4 percent. The Nigerian economy is dependent on revenues from crude oil exports, which make up over 90% of its earnings.