East Africa Nations to Set Up Regional Central Bank in 2023 Ahead of Common Curr...

China has announced that it will waive tariffs on 98% of taxable imports from 9 additional countries in Africa as it aims to foster a global economy,  according to official media.

“The step is conducive to opening up with win-win outcomes, building an open global economy, and helping least-developed countries to accelerate their development,” said China’s Customs Tariff Commission of the State Council.

The 9 countries include:

• Benin
• Burkina Faso
• Guinea‑Bissau
• Lesotho
• Malawi
• Sao Tome and Principe
• Tanzania
• Uganda
• Zambia

The new countries join Djibouti, Togo, and Rwanda which benefitted from a similar initiative announced in September 2022.

The policy will be applicable to 8,786 items, including agricultural products such as cocoa powder, nuts, and olive oil, as well as various products and chemicals. The tariff policy will gradually expand to benefit all least‑developed countries which have diplomatic ties with China.

The Customs Tariff Commission of the State Council said this policy measure would ‘gradually expand to all the least-developed countries that have established diplomatic ties with China.’

In 2021, China imported $5.03 billion of agricultural products from Africa, a year-on-year increase of 18.23% reaching a record high. From January to October 2022, bilateral trade between China and Africa grew 14.3% year-on-year to reach over $236 billion, according to figures released by the General Administration of Customs.

In addition to maintaining a strong focus on oil, precious minerals, and metals, China is increasingly importing agricultural products and manufactured items from Africa.

China is also interested in increasing the value of imports from the continent to $297 billion. Data from the General Administration of Customs also showed it was one of Africa’s largest bilateral trading partners, with a 20-fold increase in trade over the last two decades.

The number of goods that can now be sent to China duty-free has also expanded.

With the addition of 10 countries to the zero-tariff regime, now 33 of the poorest countries in Africa export 97% of their products to China with no tariffs and customs duties.

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The 7 nations of the East African Community (EAC) are set to launch a common regional bank in 2023, part of a road-map to having a single currency in the next 4 years.

East Africa Community (EAC) to set up regional central bank in 2023.

The Central Bank of East Africa will be key to implementing a single currency for the region in about 3 years pic.twitter.com/dPvEXkNoJy

— BitKE (@BitcoinKE) January 16, 2023

This is according to EAC Secretary-General, Dr Peter Mathuki, who said ministers from the respective nations are meeting to discuss the location of the East African Monetary Institute – the Central Bank of East Africa

“The EAMI will be in place this year in what will allow us to harmonize member states’ fiscal and monetary policies, then in about three years we will have a common currency in place.” – Secretary General, EAC

EAC has long envisioned creating the common currency to boost trade and movement of persons in the community and has already established a customs union and the common market protocol.

The organization, headquartered in Arusha, Tanzania, has also announced that trade within the region was increasing standing at US$10.17 billion by September 2022.

Here is the list of EAC member nations:

• Kenya
• Uganda
• Tanzania
• Rwanda
• Burundi
• South Sudan
• Democratic Republic of Congo (DRC)

“The intra-EAC trade, accounting for imports and exports in the 7 EAC Partner States, grew from 13% in 2019 at a value of $7.1 billion to 15 % in 2021 at a value of $9.5 billion. By September 2022, the EAC trade value was recorded at $10.17 billion representing a 20% share of Intra-trade to global trade.”

Dr. Mathuki disclosed that EAC’s total trade with the rest of the world stood at $62 billion, adding that there was still room for improvement.

In April 2021, the community secretariat indicated that it was consulting on the feasibility of a CBDC as it sought enhancements for the upgrade of the East Africa Payments System (EAPS).

The potential for a CBDC is expected to end reluctance by the member countries to trade in each others’ currencies given that the goal for a singe currency was expected in 2024 but experienced challenges in implementation.

On the EAC Political Federation, Dr. Mathuki said that national consultations for the EAC Political Confederation have so far been held for the Republics of Burundi and the Republic of Uganda.

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