African trade ministers have resolved to remove barriers to regional trade and work towards the immediate improvement of the regional transport and telecommunication infrastructure to bolster trade within Africa.
Speaking at the conclusion of an Annual General Meeting (AGM) of the African Trade Insurance Agency (ATI) here Tuesday, the ministers of trade, finance and economic planning said the regional economic blocs in Africa had been involved in trade facilitation.
Addressing the closing session, Kenyan Vice President Kalonzo Musyoka said the E ast African nation was committed to regional initiatives that would promote trade within the African continent, especially the role played by the pan African insurer, ATI, in providing political risk cover for investors.
“The African continent must rise to the challenge to put up measures to facilitate trade and attract investments which are important ingredients in sustaining economic growth,” the Kenyan minister said.
Musyoka said although a country like Kenya had successfully increased its trade with other African states, its share of the global trade had been on the decline mainly as a result of its failure to diversify key sources of export to capture new markets.
The ministers later resolved to adopt strategies to bolster the risk insurer’s capital base to enable it play a more critical role in promoting trade amongst the African states, which has been low in volumes compared to Africa’s trade with t h e rest of the world.
Fred Omach, Uganda’s State Minister for Finance, Planning and Economic Development, said the AGM resolved to appoint new directors to strengthen the pan African insurance agency’s management base and set it on course to doubling its profit base.
The ministers also expressed their approval of ATI’s return to profitability this year after making a loss of US$ 57,000 in 2006. The continental insurance recorded an operating profit of US$ 126,000 this year.
The ministers also agreed to undertake a range of measures, including new capita l and legal restructuring, to “ensure new life comes” into ATI.
However, the AGM also failed to reach a consensus on the immediate renewal of the Chief Executive’s contract.
The meeting of 12 African ministers, all members of the ATI board, ended with the election of Uganda as chair to replace Burundi.
Kenyan Trade minister was elected Vice Chair while the DR Congo was elected secretary-general.
DR Congo was represented by Cesar Lubamba, the Vice Minister for Finance.
The ministers resolved to promote regional trade in Africa, noting that the ATI contributed US$ 1 billion worth of export credits to African exporters, which acted as a major step towards freeing the operating capital of most African exporting firms.
“We are moving into a Customs Union and all the five regional blocs of Africa have been encouraged to facilitate trade within Africa,” Omach told journalists.
The 20-strong state COMESA membership is expected to approve the implementation of its Customs Union by December 2008, which would enable states to apply common taxation on raw materials, semi-processed goods and finished products.
Kenya’s Trade Assistant Minister Omingo Magara said efforts to promote regional trade had been hampered by ‘natural fears’ of domination by economically stronger states.
“There are natural fears of domination that ATI is trying to cushion through its risk insurance and political risk cover,” the Kenyan official said.