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African leaders sign largest trade treaty

Posted IVAN R. MUGISHA in Kigali and HELLEN GITHAIGA in Nairobi

on  Wednesday, March 21  2018 at  19:19

African leaders gathered in Kigali, Rwanda, Wednesday signed the Continental Free Trade Area (CFTA) treaty to create the world’s largest single market.

The agreement, signed by more than 40 African nations, is said to be the largest since the creation of the World Trade Organisation.

The pact aims at boosting intra-Africa trade by making the continent a single market of 1.2 billion people and cumulated GDP of more than $3.4 trillion.

The barriers

"For Africa, after decades of independence, marked by persistent under-development and a marginal place in the international system, the terms of the debate are laid down in almost Manichean terms: Unite or Perish, as Kwame Nkrumah said at the Addis Ababa founding Summit," the African Union Commission chairman, Dr Moussa Faki Mahamat, told heads of state and government at the signing ceremony.

"Our peoples, our business community and our youth, in particular, cannot wait any longer to see the lifting of the barriers that divide our continent, hinder its economic take-off and perpetuate misery, even though Africa is abundantly endowed with wealth," Dr Mahamat said.

Of the 55 African Union member states, 44 countries signed the agreement establishing the CTFA and 43 nations the Kigali Declaration launching the CFTA.

Notable among those that failed to sign the deal is the continent's largest economy, Nigeria, with President Muhammadu Buhari having skipped the AU summit amid reservations on the treaty.

Some 27 countries also signed the Protocol on Free Movement of Persons and the African Passport. The protocol allows for free movement of people, right to live and establish a business anywhere in Africa.

The future

“The promise of free trade and free movement is prosperity for all Africans, because we are prioritising the production of value-added goods and services that are made in Africa,” Rwandan President Paul Kagame, the chairman of the AU said.

For businesses, CFTA commits governments to remove tariffs on 90 per cent of goods produced within the continent and phase out the levy in the future.

Governments now have to ratify the CFTA in their countries within the next six months, by September this year. Those that did not sign can also do so during the window.

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South Sudan telco rues closure order

Posted JOSEPH ODUHA in Juba

on  Wednesday, March 21  2018 at  18:46

South Sudan’s largest mobile telecom operator Vivacell has regretted the government's suspension of its operations.

In short notice to the public on Wednesday, Vivacell described the decision as ''unfortunate event" that has caused inconvenience to its customers both inside and outside South Sudan.

“Vivacell regrets this unfortunate event in our operations and the inconvenience it has caused to our valued customers,” the statement reads.

“We are expeditiously working with the relevant authorities to have the matter resolved and we are confident that our operations shall continue across the country,” it says.

To conform

The National Communications Authority (NCA) on Tuesday issued a public notice ordering the suspension of the Vivacell operations, saying it had failed to conform to the state laws and regulations.

Information, Communication, Technology and Postal Services minister Michael Makuei confirmed the suspension of Vivacell.

“Yes, we have shut down Vivacell because it has decided not to conform to our laws and regulations. We have suspended international calls from 20 March and within seven days we will shut it down completely if they don’t conform,” Mr Makuei said.

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Kenya Airways makes $61m loss

Posted MUGAMBI MUTEGI in Nairobi

on  Wednesday, March 21  2018 at  15:55

Kenya Airways has posted a $61 million (Sh6.1bn) net loss for the nine months to December as it announced a change in its financial calendar to sync with the calendar year.

The national carrier's management has attributed the loss to higher fuel costs and the negative impact of a prolonged electioneering period.

Fuel costs, which went up 14 per cent in the period, remain the biggest challenge to KQ's profitability.

A revenue boost

However, the airline has an optimistic outlook for 2018 as it plans to rollout daily flights between Nairobi and New York this October, non-stop flights to Cape Town and direct flights to Mauritius.

Chief executive Sébastian Mikosz said the full financial impact of the new US route will be felt in 2019, adding he expects a revenue boost of between 8 and 10 per cent.

The firm will be recalling its Dreamliner from Oman Air to serve this long haul route.

Kenya Airways will, in partnership with its European partners, also roll out economy comfort class on all aircraft in the next 12-15 months as part of its strategy to increase revenues.

Michael Joseph, KQ's chairman, said Wednesday at an investors' briefing that Polish consultants were still part of the team alongside consultants from other countries, adding that the focus that has been on the Polish is misplaced.

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Egypt bans Uber and Careem

Posted BBC

on  Tuesday, March 20  2018 at  20:20

An Egyptian court has banned ride hailing apps Uber and Careem, according to AFP news agency.

The court has accepted a petition asking the government to stop licensing Uber and Careem activities in Egypt, AFP explains.

Air conditioning

Taxi drivers had complained that their counterparts for both services did not need to pay the hefty fees to operate transportation vehicles.

The news agency adds that Egyptians who complained about taxi drivers refusing to turn on their meters or their air conditioning had switched to the ride sharing apps.

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Optimism and fear as Africa opens single market


on  Tuesday, March 20  2018 at  19:38

Some African countries have expressed reservations as the continent moves to make the world’s largest free trade area with the signing of the Continental Free Trade Area (CFTA) treaty in Kigali, Rwanda on Wednesday.

Africa's largest economy, Nigeria, has pulled out with President Muhammadu Buhari saying the country was holding domestic consultations on the deal before signing it.

Tanzania has hinted that it may not sign the agreement as it waits parliament to debate it, while Uganda has raised concerns over some tariffs.

“Tanzania has the political will to sign, but we need sometime to first subject the treaty to parliament and also understand what our population thinks about it before signing,” Tanzania’s Foreign minister Augustine Mahiga, told The EastAfrican.

Continental bloc

Of Africa's 54 countries, only about 20 heads of state were expected to sign the CFTA at the extraordinary African Union summit in Kigali. The agreement targets to boost intra-Africa trade by making a single market with a population of 1.2 billion people and cumulated GDP of more than $3.4 billion.

Rwanda’s President Paul Kagame, the AU chairman who is driving reforms at the continental bloc, said at the opening ceremony on Tuesday, the trade treaty provides Africa with an opportunity to break barriers and reap the benefits of integration.

“The stakes are enormous for Africa, but also for the entire global economy, to which Africa will contribute an ever-greater share in the decades ahead,” said President Kagame.

“Increasing intra-African trade, however, does not mean doing less business with the rest of the world. On the contrary, as we trade more among ourselves, African firms will become bigger, more specialised, and more competitive internationally,” he added.

Several countries have expressed fears that a free trade area, which includes free movement of labour, would disrupt local markets, jobs and revenues.

Addressing concerns over the reluctance to open domestic markets, President Kagame urged “fair but also expeditious” consultations to iron out issues.

“Let’s also be realistic. We cannot take the Continental Free Trade Area for granted. After it is signed, there will still be challenges.

“Implementation will mean reform of procedures and rules at the national level. This won’t happen overnight. It will be a process requiring dialogue and flexibility,” he said.

The AU Commissioner for Trade and Industry, Mr Albert Muchanga, urged countries that were yet to complete national consultations to do, saying they would have another chance of signing at the next AU summit.

“When the negotiations started in 2015, a key principle agreed was that those ready to sign should go ahead. A lot of countries have not yet finalised national consultations and others are directly talking to parliamentarians and they require some time to finalise,” Mr Muchanga said.

“But signing is the first thing that has to happen. Just after this, on Wednesday, we shall have another summit in Mauritania, and we shall expect those member states with reservations to have finalised the process.”

At a meeting of Foreign Affairs ministers on Monday, some countries expressed concerns over the number of signatures needed to ratify the treaty. Some, like Tanzania, wanted the number increased from 15 to 22 countries.

Reasonable threshold

“If you need a reasonable threshold, it cannot be only 15 countries; otherwise Ecowas (West African bloc) which is made up of 15 countries can sign it alone. This would not be representative. If we move it to at least 22 signatures to have it ratified then it can be taken seriously,” Tanzania’s Foreign Affairs Minister, Augustine Mahiga, said.

Heads of state that confirmed attendance of the AU summit include Kenya, Somalia, Djibouti, South Africa, DR Congo, Zimbabwe and Ghana. Others are Niger, Chad, Congo Brazzaville, Togo, Mauritania, Gabon, Guinea, Senegal, Mali, Madagascar, Guinea Bissau, Mozambique, Burkina Faso, Central African Republic, Libya, Comoros, Sahrawi, Lesotho, Gambia, and Angola.

Those sending delegates include Tanzania, Uganda, Egypt, Cote d'Ivoire, Seychelles, Morocco, Swaziland, Benin, Malawi, Mauritius, Botswana, Cape Verde, Namibia, Sao Tome, Tunisia, South Sudan and Eritrea.

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Two million customers flee Nigerian banks

Posted MOHAMMED MOMOH in Abuja

on  Monday, March 19  2018 at  14:57

Nigerian banks lost more than 2 million customers between 2016 and 2017 in spite of the government's efforts to promote financial inclusion.

The Central Bank of Nigeria (CBN) report says the number of active accounts dropped from 65 million to 63.5 million, reflecting a 1.5 million reduction.

The Nigeria Inter-Bank Settlement System (NIBSS) report disclosed further that the total number of customers dropped from 61 million in 2016 to 59 million in 2017.

According to NIBSS, the financial sector, however, made great strides in linking customers’ account using the Bank Verification Number (BVN).

Many people

The NIBSS report, published on its website, showed that linked BVN accounts grew from 26 million in 2016, to 41.3 million in 2017.

According to a banking industry source, the reduction in customers could be due to the Federal Government’s declaration of war against corruption.

“When (President) Buhari assumed office, many people abandoned their accounts, especially civil servants because of fear of investigation.

“While some closed down their accounts, others opted for gradual withdrawal so as not to raise the alarm,’’ a source, who requested anonymity, said.

Illegal charges

The source, who works at one of the top five banks in the country, blamed BVN for the low patronage of products, especially in the rural areas, where awareness was low.

A bank customer, Mrs Olaitan Alagbe, said she closed some of her accounts due to unnecessary and illegal charges by banks.

“First of all, the interest rate is next to nothing, so there is little reason to keep your money at the bank when you can turn it over doing other businesses,” she said.

Another customer, Mr Tolulope Ajayi, said he opened several accounts during the Ponzi scheme boom in the country, but was forced to abandon them after the schemes crashed in late 2016 and early 2017.

However, a source at CBN said the reduction in the number of banking customers was caused mainly by the introduction of BVN.

The money

“The reduction may not necessarily be a bad thing. For example, many people opened accounts using different variations of their names.

“A person bearing Musa Salisu Mohammed, may have other accounts as Salisu Mohammed or Musa Salisu,’’ the source said.

The financial inclusion strategy aims to ensure that the bulk of the money in the economy remains within the banking sector.

A major challenge in the process is how to ensure that the poor rural dwellers were carried along, considering the lack of financial sophistication in the segment.

CBN, money deposit and micro-finance banks and other stakeholders were currently implementing different policies to enhance financial inclusion.

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Somali parliament votes against UAE port deal

Posted ABDULKADIR KHALIF in Mogadishu

on  Monday, March 12  2018 at  19:04

The Federal Parliament of Somalia Monday overwhelmingly voted against the Dubai Port Operator (DP World) of the United Arab Emirates (UAE) operating in the country.

The vote followed a controversial agreement signed between the breakaway Republic of Somaliland and DP World on March 1 in Dubai. The agreement involved the port of Berbera, whose operations are shared between DP World, 51 per cent, Somaliland, 30 per cent and Ethiopia, 19 per cent.

The majority

The third session of parliament was opened by President Mohamed Abdullahi Farmajo on Sunday. The assembly’s first meeting on Monday had the issue of DP World as one of its agendas.

After debate, the majority of the MPs voted to nullify the said tri-partite agreement.

Some 168 out of 171 MPs in the Peoples’ Hall voted in favour of the ban. However, the legislation will be enforceable only once it is approved by the Upper House of Parliament and eventually signed by President Farmajo into a law.

Somaliland, which unilaterally declared independence from the rest of Somalia in 1991, albeit unrecognised by the international community, insists that the Mogadishu- based government has nothing to do with its agreement with DP World.

The sovereignty

Berbera is Somaliland's main port and is located in the Gulf of Aden.

Somalia's Ports and Marine Transport ministry on March 2 issued a statement in Mogadishu against the tripartite agreement.

“The so-called agreement is both defective and detrimental to the sovereignty of the Federal Republic of Somalia. The ministry, therefore, considering the above, declares this deal as non-existent null and void,” the ministerial statement read.

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Sierra Leone launches $318m Chinese-funded airport

Posted KEMO CHAM in Freetown

on  Thursday, March 8  2018 at  15:47

Sierra Leone has started the construction of its $318 million Chinese-funded second airport.

The proposed Mamamah International Airport, named after its host community, will be constructed by the China Railway Seventh Group, with the work planned to last for four years.

Outgoing President Ernest Bai Koroma presided over the ground-breaking ceremony last week as the campaigns for the Wednesday General Election went on.

The project, which has drawn huge criticism from international lending institutions, also entails the construction of a new city in the vicinity and an exclusive economic zone.

President Koroma revealed plans to build a new State House, parliament and ministerial buildings to provide an alternative work environment in the new city, away from overcrowded Freetown.

The capital

He hailed his development achievements, noting that the airport was one of three major projects his government was implementing with the aim of transforming Sierra Leone to a Middle Income state by 2035.

The other two projects are the ongoing port expansion and the planned bridging of the river that separates the capital Freetown, from Lungi, home of the current airport.

Critics say the new airport was an unnecessary economic burden on the West African country struggling to recover from the effects of war, epidemic and a deadly mudslide last year.

The Chinese Exim Bank is providing the funds for the Mamamah International Airport, through a loan agreement the World Bank and IMF criticised.

The Sierra Leone government insists that Mamamah was needed to resolve transportation problems associated with Lungi Airport.

The Mamamah airport too will be located outside Freetown, but it is on mainland, unlike Lungi which involves a tedious journey, the government says hinders foreign direct investments.

“The overarching objective of this project is to improve on international connectivity and reduce the burden on travellers,” said Finance and Economic Development minister Momoh Vandi.

He added that the project would also enhance competitiveness and improve on investment climate of the country.

Interest rate

In the face of the Western opposition to the project, the Chinese government has always appeared determined to push on with it. China’s ambassador in Freetown Wu Peng said the project should not just be seen as a new airport, but that its overall effect on the economy should be considered.

He announced that the Chinese government had agreed on a favourable repayment plan to lessen the burden on Sierra Leone.

China will provide $30m grant to cushion the effect of the interest rate on the life of the project.

“This is not only just about commissioning an airport project, it is also about launching a transformative economic and social development, including investment, tourism as well as a new economic zoon and airport city,” Mr Wu said.

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Inflation hits Sudan hard

Posted MOHAMMED AMIN in Khartoum

on  Thursday, February 15  2018 at  12:31

The inflation rate in Sudan rose to 52.4 per cent in January, the Central Bureau of Statistics (CBS) disclosed.

CBS chairman Karam Allah Abdul Rahan told press conference in Khartoum on Wednesday that the figure was the highest in more than a decade.

Mr Raham said further that the January inflation was double the 25.2 registered in December 2017.

Austerity measures

“This increase is attributable to the austerity measures implemented by the government last month,'' he explained.

Inflation in Sudan has been on the rise since the country lost more than 70 per cent of its oil revenues due to the secession of South Sudan in 2011.

The country has witnessed sporadic demonstrations since January, against higher commodity prices occasioned by the government removing subsidies on wheat, electricity and medicines.

Sudan earlier this month devalued its currency to exchange at 30 pounds per $1. It was the second devaluation in the recent months.

The Sudanese opposition parties have continuously called for protests to overthrow President Omar al-Bashir, accusing him of poor governance and economic mismanagement.

In 2016, Sudan witnessed nationwide civil protests against the lifting of subsides on oil products and electricity.

Human rights organisations have recorded hundreds of people killed in the protests against the high cost of living.

The 74-year-old Bashir rose to power in a coup in 1989 and has ruled what was until 2011 Africa's largest country with an iron fist.

The International Criminal Court (ICC) has issued a warrant of arrest against him for crimes against humanity, war crimes and genocide in Darfur.

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Five injured as Delta Airline crash-lands in Lagos

Posted MOHAMMED MOMOH in Abuja

on  Thursday, February 15  2018 at  11:25

A US-bound Delta Airlines flight with 219 passengers made an emergency landing in Lagos following a fire that engulfed one of its engine.

Authorities said five passengers were injured in the Wednesday incident.

The Nigerian Civil Aviation Authority (NCAA) has classified the fire on the Atlanta-bound flight as “a very serious incident”.

The airline media consultant in Nigeria, Mr Tope Awe, confirmed that the A330-200 aircraft had a problem with one of its two engines.

The flight landed safely and customers exited the aircraft on the runway, via emergency slides.

The terminal

“Airport fire authorities met the aircraft upon arrival. Delta’s customers were bussed back to the terminal. Delta is aware of five customers reporting non-critical injuries as a result of the evacuation.

“Delta teams have provided overnight hotel accommodations to customers and will re-book customers on an alternate Delta aircraft,” Mr Awe said.

NCAA said the aircraft had taken off from the Murtala Muhammaed International Airport, Lagos at about 9.51pm. when the crew noticed abnormal engine conditions in one of the two engines.

The passengers

The pilot made a return after declaring an emergency.

Nigerian authorities said it had handed over its investigation to the Accident Investigation Bureau (AIB).

NCAA spokesman Sam Adurogboye explained that the classification was in line with the standards of the International Civil Aviation Organisation (ICAO).

“Some of the passengers who sustained injuries, were rushed down to the Lagos State University Teaching Hospital (LASUTH), Ikeja for medical attention.

“In line with safety standards, the international Runway (18R) was promptly closed to traffic while the domestic Runway (18L/36R) was opened to other flights for emergency operations.

The runway

“However, at time 0020UTC (1:20am local time), the international Runway (18R) was reopened to traffic after the aircraft was evacuated from the runway and a runway sweeping and inspection conducted.”

He said the incident was classified as serious in line with the ICAO classification, and investigation was handed over to AIB.

Mr Adurogboye said the pilot acted in accordance with the Standard and Recommended Practices (SARPs) by making an air return.