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Kenya to allow duty-free imports from EU after latest trade agreement

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After ten years of talks, Kenya and the EU have finally implemented a trade agreement, allowing tax-free goods from the 27-member union to enter its domestic market after 25 years.

The EU-Kenya Economic Partnership Agreement (EPA) went into effect on Monday, according to Kenya’s Cabinet Secretary for Investment, Trade, and Industry, Rebecca Miano. The agreement maintains unimpeded access for Kenyan commodities to the European Union, except weaponry.

“The EU-Kenya EPA is one of the most ambitious agreements negotiated between the European Union and an African country in terms of promoting economic sustainability. It can serve as a template for other African countries, particularly those in Eastern Africa to adapt,” Ms Miano said in a statement.

“The agreement includes trade, economic and development cooperation and a chapter on trade and sustainable development which covers provisions on labour issues, gender equality, forestry and environment and the fight against climate change.”

Kenya’s mostly agricultural products, including fruits, vegetables, cut flowers, tea, and coffee, will continue to be able to enter the EU market duty-and quota-free thanks to the agreement, which is the first trade agreement between the bloc and a developing nation.

The agreement guarantees Kenya’s primarily agricultural products, including vegetables, cut flowers, fruits, tea, and coffee, to continue entering the bloc duty-and quota-free. It is the first trade agreement between the EU bloc and a developing nation.

Conversely, Nairobi has promised to liberalize trade after 25 years by progressively lowering import duties from Europe. This implies that mechanical, mineral, and chemical items coming from Europe would not be subject to duties, and EU investments will also receive incentives.

However, the EPA agreement contains protectionist language that prevents the EU from providing broad subsidies for Kenyan agricultural exports until there is a more in-depth policy discussion with Nairobi. The purpose of this section is to protect Kenya’s agriculture and food security from unfair competition from the European Union.

The EU benefits from trade with Kenya, as it imports Ksh150.08 billion ($1.2 billion) and sells items worth Ksh223.12 billion ($1.7 billion) to Kenya. Following the European Parliament’s approval on February 29, heads of state and government can now finalize the ratification procedure, bringing the EU-Kenya EPA into force.

A total of 366 members of the European Union voted in favour of the agreement, 86 against it, and 56 abstained. The document needed approval from Kenyan MPs in order to be put into effect.

The wording of the EU-East African Community agreement, which was previously signed in October 2014 and is currently blocked for approval by the individual parliaments, is extensively modified in this document. The introduction of provisions addressing climate change is the primary modification.

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Ethiopian PM reveals country could get $10.5 billion if talks with World Bank, IMF succeed

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If lengthy negotiations with the World Bank and the International Monetary Fund (IMF) are successful, Ethiopia would get $10.5 billion in support over the next few years, Prime Minister Abiy Ahmed announced on Friday.

The most populous nation in East Africa had severe inflation and ongoing shortages of foreign currency in December, making it the third country on the continent to experience a debt default in as many years.

If lengthy negotiations with the World Bank and the International Monetary Fund are successful, Ethiopia will get $10.5 billion in support over the next few years, Prime Minister Abiy Ahmed announced on Friday.

The most populous nation in East Africa had severe inflation and ongoing shortages of foreign currency in December, making it the third country on the continent to experience a debt default in as many years.

“We have been having a wide range of talks, negotiations and discussions with the IMF and World Bank. Because we were a bit tough with them and they were also tough with us, the (talks) took five years,” Abiy told lawmakers.

“Now with the support of some friendly countries, it seems like many of our ideas have been accepted. If this succeeds and we can agree on the reforms, Ethiopia will get $10.5 billion in the coming years,” he said.

Without going into further detail, Abiy continued, “There were some reforms the government was unwilling to undertake right away.”

“There are some areas we think should be reformed now, and there are things we think should stay as it is. If all these suggestions get accepted and we agree, there is an opportunity ahead of us. This reform agenda will play a huge impact in alleviating the debt burden,” the prime minister said.

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Nigeria beats competitors to host Africa Energy Bank

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Nigeria, the continent’s largest oil producer, defeated three rival nations to win the rights to host the newly established Africa Energy Bank (AEB), the country’s oil minister announced on Thursday.

Nigeria will be at the vanguard of Africa’s energy future thanks to a decision made at an extraordinary meeting of the Council of Ministers of the African Petroleum Producers Organization (APPO), according to a statement from Minister of State for Petroleum Resources, Heineken Lokpobiri.

After ratifying the bank’s charter and President Bola Tinubu approved an investment of $100 million, surpassing the needed $83.33 million for member nations, Nigeria’s quest to host the AEB was reinforced in late May.

Funded by Afrexim Bank and APPO, the fossil fuel-focused bank seeks to assist the continent’s energy transformation objectives and finance energy projects across the continent.

“This decision reflects our collective ambition to create African solutions to African energy challenges,” Lokpobiri said.

“The African Energy Bank will be instrumental in providing the financial backbone for energy projects that will drive growth and development across the continent,” he added.

When the AEB launches later this year, its first spending authority is $5 billion. According to analysts, Nigeria, one of Africa’s leading energy producers and an original member of APPO, has expressed a great deal of interest in the bank as it launches a fresh initiative to attract investment into its flagging oil and gas sector.

“Hosting the bank would be a vote of confidence in Nigeria at a time its energy industry badly needs a boost,” Clementine Wallop, director for sub-Saharan Africa at political risk consultancy Horizon Engage, said before the announcement.

After Ivory Coast and South Africa failed to meet the requirements, Algeria, Benin, and Ghana are the three other countries that bid to host the AEB.

 

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