Unleashing the East African Lion - Welcome to … Presentation 2014.pdf · Unleashing the East...
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www.trademarkea.com Unleashing the East African Lion Mind Speak 6th December 2014 Click icon to add picture
Transcript of Unleashing the East African Lion - Welcome to … Presentation 2014.pdf · Unleashing the East...
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Unleashing the East African
Lion
Mind Speak6th December 2014
Click icon to add picture
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Growth is GoodEast African economies growing at 5-8%5/10 fastest growing cities will be in East
Africa Income growth accelerating – emergence of
growing middle classLabour cost inflation in China beginning to
attract investment – e.g. socks in RwandaGrowth is balanced & not just extractivesExtractives offer windfall gain for investment
& value addition
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Opportunities Expanding Regional market opportunities high – consumer base in EAC of
150m, wider markets 300m Regional Integration reducing challenges to trading across borders
& larger Free Trade Area from Cape to Cairo (Tripartite) emerging Extractives discoveries provide new momentum for growth Trade Growth is projected to increase by six times to 2030 Incremental improvements to investment climates Governments recognise need to invest in trade infrastructure &
energy as part of a competitiveness strategy
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EAC Growth Corridors
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Northern Corridor
Highway
Rail
Central Corridor
Highway
Rail
Transit Points
Sea Ports
Border Post
Overlays
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Large Growth in Trade Projected
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2009 2015 20300
10
20
30
40
50
60
70
80
90
100
21.5
35.26
89.58
18.28
30.33
77.04
20.21
31.74
77.93
Northern Corridor traffic
NC traffic through port of Mombasa
NC traffic by road
Tons -
Millions
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Big infrastructure investments
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10 lane Highway?Six Lane Highway?
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Not all Challenges…..• Demographics & skills in labour markets• Complex and burdensome red tape – increases
potential for corruption• 3rd quartile investment climate rankings with the
exception of Rwanda – unpredictability deters investment
• Low levels of competitiveness in a variety of goods, high in commodities – need for value addition
• Infrastructure & energy deficits & high costs• Shallow supply chains - most businesses are small
and informal• Barriers to growing the regional market (only 18%
trade) increase trade costs
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Transport Cost Components
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Mombasa Port/Mombasa CFS Channel Kampala Bujumbura0
2000
4000
6000
8000
10000
12000
14000
Costs for an average Bujumbura bound container
Bribes
Distance-Based Costs
Fixed Costs
Time Based Costs
Cost
$
1%
49%
23%
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What are we?
• Trade and Markets East Africa (TMEA)
• Not for profit registered in all partner states
• Regional & National presence - branches in all 5 member states, Juba & Arusha
• Multi-donor – Belgium, Canada, Denmark, Finland, Netherlands, Sweden, UK & USA
• Budget - $590m 2010 to 2017
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TMEA’s Approach
• National implementation of regional policies
• Trade facilitation (‘software’) combined with trade infrastructure (‘hardware’)
• Fast & flexible demand-led approach
• Strong national and regional governance
• Focus on private sector engagement & dialogue
• Results and value for money driven
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Increased Trade
Increased physical market access
Increased business
competitiveness
Enhanced trade
environment
Increased Trade competitiveness in East Africa
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Expected Results by 2016
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10%
increase in the total value of exports from the EAC region
25%
increase in intra-regional exports when compared to total exports in the region
15%
reduction in average time to import or export a container from Mombasa or Dar es Salaam to Burundi or Rwanda
30%
decrease in the average time a truck takes to cross selected borders
Value of benefits $ 17 billion - $30 return for every $1 invested
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Emerging Results• 6 positive reviews – solid backbone of 160 projects – interest in
replication of model
• Trade Facilitation: Electronic Single Window in Rwanda – time reduced from 8.5 days to 21 hours; Customs system for Uganda $56m savings pa & halving of clearance times;
• Regional Integration: $290m pa trade standards harmonised, NTB legal sanction mechanism
• Revenue: 110% increase in national revenue collection from 2011 in Burundi through support to new revenue authority – 40,000 people with improved access to health services monthly
• Infrastructure: Rwanda Logistics Hub, Dar Port (Berths 1-7), on-going construction at 7 OSBPs, Mombasa Port program, Charter
• Private Sector engagement: CEO round-tables, traders' platform
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Future Themes: 2016-2020
1. Reducing trade costs through full Customs Union & implementation of improved trade facilitation (Bali TFA)
2. Increased informal trade, women in trade & poverty focused trade programme
3. Transformative development of trade corridors to support emerging growth & spatial development – fused with policy development
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Possible Bear Traps• Need for institutional reform resilience – reforms must
continue and adapt – requires deeper institutions
• Dutch Disease – need to avoid macro-effects & over-reliance on extractives income
• Political commitment to reform needs to be sustained, some power needs to be ceded regionally
• Asymmetric benefits need to be addressed – inequality, landlocked countries, youth unemployment
• Security & civil unrest – Kenya & South Sudan
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