Tanzania has earned the distinction of being among the world's 10 fastest-growing economies. The east African nation grew at the rate of 6.8 per cent, according to the 2020 African Economic Outlook report. Other five African countries that have been making impressive growths are Rwanda (8.7 per cent), Ethiopia (7.4 per cent), Côte d'Ivoire (7.4 per cent), Ghana (7.1 per cent) and Benin 6.7 per cent. Not only did Tanzania achieve the highest growth rate among African countries, it’s inflation also fell to 3.3 per cent in 2019 due to improved food supply. The Tanzanian shilling also stood fairly stable in 2019, exchanging at an average of 2,290 to the dollar, compared with 2,263 in 2018. An impressive growth in the middle class of Africa has seen a steady rise in demand for consumer and capital goods all across Africa. The East Africa region has emerged as the continent's fastest-growing regions with an average growth estimated at five per cent in 2019; North Africa is currently the second-fastest, at 4.1 per cent, whereas West Africa's growth has been recoded at 3.7 per cent in 2019. The 2020 African Economic Outlook report predicts that Tanzania's growth will to be stable at 6.4pc in 2020 and 6.6 per cent in 2021. Overall, Africa's economic growth stood steady at 3.4 per cent in 2019 and is expected to pick up to 3.9 per cent in 2020 and 4.1 per cent in 2021.

Ethiopia is planning to convert its garbage into energy through use of new technology. Koshe is the biggest garbage dump in Ethiopia and is located on the outskirts of the country's capital city, Addis Ababa. The Koshe garbage dump was in the news last year when 114 people died due to the pollutants emanating from the garbage dump – spread over an area approximately the size of 36 football fields.  Ethiopia has since turned the site into a new waste-to-energy plant via the Reppie Waste-to-Energy Project which is the first of its kind in Africa. This forms part of efforts to revolutionise waste management practices in the country. The plant is designed to generate electric power from solid waste collected from the capital.  Incinerating 1,400 tonnes of waste every day, the plant is capable of contributing 185GWh of electricity each year to the national grid.  However, Reppie Waste-to-Energy Project fell flat due to disputes between Ethiopian Electric Power (EEP) and two contractors – Cambridge Industries and its partner, China National Electric Engineering Company – which finally led to the plant ceasing operations soon after its inauguration. Now, after hectic efforts to resolve the dispute, the Ethiopian Electric Power (EEP) is planning to restart operations of Reppie Waste-to-Energy power plant in three months and once again start generating electric power using the garbage at the Koshe rubbish dump. Waste-to-energy uses trash as a fuel for power generation. Similar to other power plants (just using trash rather than other fuels like coal, oil, or natural gas), the fuel is burned in an environmentally sustainable manner, in a combustion chamber to heat tubes of water in boiler walls. The water is heated until it turns into steam, which is then used to drive a turbine generator that produces electricity.  "The hulking waste-to-energy power plant taking shape on the edge of Addis Ababa, Ethiopia’s capital, symbolises ambitions to convert the agrarian Horn of Africa country into an eco-friendly industrial powerhouse." wrote the Guardian newspaper. In about a year, green, cutting-edge Reppie will replace a vast rubbish dump picked over by hundreds of scavengers. Currently, toxic effluent from the landfill seeps into nearby rivers when it rains and methane perpetually drifts into the atmosphere. Constructing Africa's first major waste-to-energy facility fits perfectly with Ethiopia’s Climate Resilient Green Economy.  The plant will eliminate over 80% of the Municipal Waste delivered to it, whilst at the same time maximizing energy recovery in order to deliver much-needed renewable power to the surrounding cities and towns. 

Kenya plans to boost its meat exports by investing in state-of-the-art slaughterhouses that meet international quality standards. This was announced by none other than President Uhuru at a recent meeting with government officials and business owners recently. “We will begin with the export of live animals but in two years, we should have our own export slaughterhouse. My vision is to revive this important sector,” said President Uhuru Kenyatta. Meat exports to Europe and the Middle East markets has been growing in recent years and the building of halal-certified slaughterhouses will certainly boost Kenya’s foreign exchange earnings though meat exports. “My main interest is that the farmer and herder of livestock get good prices for their animals,” said the President. President Kenyatta said livestock farming used to be a lucrative agribusiness in the 1970s but was brought down through mismanagement. “We used to do well in this livestock industry in the early 1970s. Unfortunately, due to mismanagement, it collapsed,” he said. Global Foods and Blue Mountain are two UAE-based companies that have been appointed to market Kenya Meat Commission (KMC) products in the Middle East with Dubai as the distribution point. KMC is also planning to set up distribution centres and cold storage warehouses in the Kuwait, Qatar, Saudi Arabia, the Democratic Republic of Congo (DRC), Sudan, and Egypt. “We want to directly take charge of the export market by doing away with middle men in our supply chain system. This will also help us convert agent commission fees into income,” said Patrick Mutemi, the deputy managing commissioner and head of finance and marketing at KMC. The Middle East is a prime market for small stock products — lamb, mutton, and goat meat — while corned beef is more popular in the African market and Saudi Arabia. Recently, a team from the United Arab Emirates visited Kenya to assess the capacity of Kenya Meat Commission to export meat to the Middle East country. The inspectors, mainly veterinary doctors, nutritionists and environmentalists studied how KMC meets international standards on food safety, health and sanitation, livestock disease control and meat handling. KMC is targeting the Middle East market to increase revenues and the company targets a 20 per cent profit at the end of this financial year. To enhance its capacity in meeting the market demand, KMC is constructing six satellite abattoirs in major livestock keeping areas countrywide, including Wajir, Samburu, Kajiado, Isiolo, Mandera, Garissa, Marsabit and Turkana counties. The European Union had banned the importation of Kenyan beef due to food safety concerns as a result of livestock diseases.

DP World Kigali is a secure, bonded facility spread over13 hectare that will improve imports and exports... DP World and the government of Rwanda have setup a state-of-the-a­ logistics hub, located 20 kilometers from the capital city Kigali, close to the international airport­. The facility is East Africa’s first ever Inland Dry Port developed by DP World.  DP World Kigali is a secure, bonded facility spread over 13 hectares and features an Inland Container Terminal (ICT) with modern warehousing capacity, a container yard, administrative and services buildings, parking areas and other facilities. DP World Kigali accesses two secure trade gateways for eastern Africa, the port of Mombasa in Kenya and Dar es Salaam in Tanzania. Rwanda is working closely with Tanzania on a new standard gauge railway from Dar es Salaam to Kigali that will add a direct rail corridor to the two existing road routes, furt­her improving connectivity for containers and bulk goods. Currently the cost of transport of a 20 foot container from Shanghai China to Mombasa costs anywhere between 500 US$ to US$1,000. The cost of transport of the same container from Mombasa to Kigali varies between US$3,000 to US$4,000. The introduction of DPWK will serve the inland logistics problems, delays and cost by providing a one-stop shop for all logistics requirements and cargo services. The facility offers container handling, stuffing and de-stuffing, warehousing, storage and other cargo handling services. Import­s from overseas can be routed through Kigali Logistics Platform for onward distribution to the surrounding countries of Uganda, Tanzania, Burundi and the DRC, a growing region of over 40 million people. Customs officers at the incoming po­rt use highly advanced e-tags, to seal incoming containers. These active RFID tags allow real-time tracking of cargoes on route to Kigali, for complete transparency and added security. A dedicated customs team inside DP World Kigali handles final customs clearances.  DP World Kigali is also establishing a road transport­ solution that will allow clients to fully outsource their end-to-end logistics needs, including international shipments, clearances, repacking and final deliveries. DP World’s single-window cargo management system and other investments in IT and automation will fu­rther increase efficiency and reduce costs. These are savings that can be passed down along the supply chain to drive more growth in the region’s economy.

Tanzania is building a new port that might challenge Mombasa Port’s status as the shipping, logistics and distribution hub of East Africa. Located about 75 kilometres from Dar es Salaam and 10 kilometres from Bagamoyo town, the new Bagamoyo Port, which upon completion is expected to be the largest in East Africa, is expected to be fully operational between 2020 and 2021. Construction of the port is being carried out through a collaboration of China and Oman. Also to be constructed around Bagamoyo area are over 190 industries, including the manure processing plant that will be put up by the government of Oman. The new port will handle cargo coming from several landlocked countries in East Africa and beyond (Rwanda, Burundi, Malawi, Zambia, and the Democratic Republic of the Congo (DRC), improving Tanzania’s trade infrastructure is critical for the region’s success. When fully developed, the Bagamoyo Special Economic Zone will attract about 700 industries to become a strategic investment zone in East Africa. The Bagamoyo port and its affiliate industrial zone will ease congestion at the old port and support Tanzania to become East Africa’s leading shipping and logistics centre. The Bagamoyo Special Economic Zone that is expected to attract about 700 industries and become a strategic investment zone in East Africa. About 190 industries, including a fertiliser processing plant, will be put up by the government of Oman around the port. The Bagamoyo port and its affiliate industrial zone are meant to address congestion at the old port and support Tanzania to become East Africa’s leading shipping and logistics centre. Tanzania is the second-largest economy in the EAC and boasts one of Africa’s most stable democracies. Known for its vibrant tourist industry, Tanzania has significant mineral wealth and strategic location.

Ethiopian Airlines will start helping Chinese visitors process visas to travel across Africa. Beginning in 2019, Africa’s No.1 airline will set up a hub that will allow travelers from China to apply for visas to 35 African countries, the airline’s chief Tewolde Gebremariam told Chinese news agency Xinhua. The scheme is aimed at reducing the process of application especially for citizens who have to travel to embassies located in the capital, Beijing. Chinese passport holders can get visas on arrival in Ethiopia’s capital Addis Ababa. “The visa scheme will facilitate easier air travel for Chinese experts and business people and reduces their financial cost,” Tewolde said, adding that “we are very excited about it.” As Africa’s dominant carrier, Ethiopian Airlines has in recent years taken up a pan-African strategy, launching more connections, reviving defunct national airlines, and setting up more hubs across Africa. Part of this growth has included servicing both cargo and passenger flights to five destinations within China namely Beijing, Chengdu, Guangzhou, Shanghai, and Hong Kong. To tap into the growing number of Chinese traveling abroad, the airline in September started accepting payments in its mobile app via the Alibaba-owned payment platform Alipay. The establishment of a visa center is likely also a tactical gambit, placing the state carrier at the heart of efforts to ease movement across the continent. In November, Ethiopia started a visa-on-arrival push for all African travelers as more African nations liberalized their visa regimes to attract more trade and tourists. The plan is also beneficial for Ethiopian especially since its hub in Addis Ababa has now overtaken Dubai as the world’s gateway into Africa. The visa hub is also symptomatic of China’s deepening place in Africa. Besides coming to work and trade, Chinese tourists are showing increased interest in the continent’s cultural and historical sites. Cognizant of this, countries including Kenya, Morocco, and Tunisia have eased their visa rules or launched marketing campaigns to incentivize and attract more Chinese travelers. South Africa has even gone as far as issuing business travelers five to ten-year, multiple-entry visas on arrival.

Saudi Arabia plans to build a $500 billion megacity that links to Africa via a bridge over the Red Sea. The development is part of Crown Prince Mohammed bin Salman's Vision 2030 plan to diversify Saudi Arabia's oil-driven economy. At 16,400 square kilometres, the megacity would be 33 times as large as New York City and one of the largest cities in the world to run on 100% renewable energy. Its name, Neom - from the Arabic terms for "new" and "future" - symbolises its utopian vision of robot workers and drone taxis, and it would connect to Africa via a bridge over the Red Sea. The smart and tourist cross-border city planned for construction is located in the far north-west of Saudi Arabia and is planned to be be constructed in Tabuk. It includes marine land located within the Egyptian and Jordanian borders. It aims to embrace digital technologies and services to make the city a major commercial location in the Middle East. The project is estimated to take between 30 to 50 years to complete, however, with the first phase due by 2025. It will be an independent zone, with its own regulations and social norms, created specifically to be in service of economic progress and the well-being of its citizens, in the hopes of attracting the world’s top talent and making Neom a hub of trade, innovation and creativity.

Michelin Tyres is targeting Africa to further consolidate its sales and distribution network in East Africa and has partnered with CFAO, a renowned distributor of industrial products with outlets and distribution networks all across Africa. The joint venture between Michelin Tyres and  CFAO will oversee the import and distribution of high-quality tyres in Kenya and Uganda.  A new company has been formed specially for this joint venture in which Michelin holds a 49 percent share and the remaining 51 percent are with CFAO. Administration of the new entity will be divided equally between Michelin Tyres and CFAO.    The new company will supply tyres for both heavy duty as well as smaller vehicles. This will depend largely on the business relationships built by Michelin over the years.     “With growth rates of 4.5 per cent for Uganda and 5.5 per cent for Kenya in 2017, these markets are very dynamic,” adds Richard Bielle, chairman and chief executive officer of CFAO. “As a result, they are of interest to the biggest players in the global industry. CFAO’s alliance with Michelin illustrates our know-how on the continent – providing our partners with immediate solutions to develop markets and to offer consumers high quality products and services.”   This new development is just another case of Michelin's objective of acquiring a stake in the distribution channels of its closest competitors. One of Michelin's acquisitions Ihle Holding AG has also been used in the acquisitions of German-based whole sellers.They have also entered into a 50-50 partnership with Nex Tyres SL in a wholesale joint venture in Spain. The company announced another identical venture earlier this year in North America with Sumitomo Corporation to tap the markets in the US and Mexico.  Tyre sales in East Africa have been rising over the years and have made East Africa an attractive market for tyre dealers, manufacturers and stockists. many tyre dealers in Dubai have been actively supplying all kinds of tyres, tubes and batteries to the East African markets like Kenya, Uganda, Tanzania, Rwanda, Burundi, Ethiopia and Sudan. As demand for tyres increases in East Africa, more and more multi-nationals are expected to enter the fray and expand their sales and distribution networks by appointing agents and distributors for their products.

Ethiopia has adopted a new system to tackle trade under-invoicing that costs the country an estimated $2 billion every year. Ethiopia Customs and Revenue Authority has linked its new Customs database to global price makers which updates itself automatically. The new system will help detect cases where importers under-invoice the value of their goods in order to reduce their import duties. “We are also identifying the major importers in the country for close follow-up by our intelligence unit. We also have a plan to pay up to 10 per cent of the recovered tax money to members of the public who inform us of tax fraud,” said Sisay Bikaru, director of Ethiopia Customs and Revenue Authority (ERCA). According to reports, Ethiopia loses $1.97 billion every year through trade under-invoicing, and a further $630 million every year through illicit financial flows. The losses constitute five to 10 per cent of the country’s GDP. Uganda, Tanzania and DR Congo lose about $720 million, $480 million and $225 million annually to illicit flows. In Africa, South Africa is ranked top at $20.9 billion lost through illicit flows annually, followed by Nigeria at $17.8 billion, Morocco at $4.1 billion, Egypt at $3.9 billion, Zambia at $2.8 billion and Cote d’Ivoire at $2.3 billion. Ethiopia’s tax to GDP ratio stands at 13 per cent, compared with 15 per cent for sub-Saharan Africa. According to recent reports developing countries lose $85 billion a year through trade under-invoicing, with China losing the most through illicit financial flows.  

Ethiopia is among Africa’s most impressive growth performers over the past decade averaging 10.9% annual growth between 2010 and 2020. With a GDP of US$91 billion in 2019 it is among the top ten largest economies in Africa and the third largest in Eastern Africa. After Nigeria, the country is also home to the continent’s second largest population of 95 million people. Undoubtedly, Ethiopia is a relatively untapped investment opportunity in Eastern Africa especially in the manufacturing sector. Ethiopia’s automotive market is dominated by second-hand imported vehicles – particularly commercial vehicles. Commercial vehicles were Ethiopia’s second most valuable import overall in 2019, worth US$955 million. On the other hand, commercial vehicles are also Ethiopia’s highest earning automotive export. This can largely be attributed to Bishoftu Automotive Industry (BAI), an automotive manufacturing and assembly company run by the Ethiopian military. BAI specialises in assembling, upgrading, overhauling and localising buses, pick-ups, SUVs, trucks and military equipment such as tanks and armoured personnel carriers (APCs). Military vehicles are largely for the use of the Ethiopian military and African Union peacekeeping missions while civilian vehicles are supplied to local customers such as state-owned transport providers. Small quantities of commercial vehicles have been exported to neighbouring Somaliland. Increasing Numbers Ethiopia has the lowest motorisation rate globally, with only two cars per 1,000 inhabitants. Recent reports estimate that in 2019 there were 175,000 vehicles in use in Ethiopia, of which 100,000 were passenger vehicles and 65,000 were commercial vehicles. Between 2010 and 2020, total vehicles in use grew at a CAGR of almost 2.1%. According to Ethiopia’s Ministry of Transport approximately 84% of the market is passenger vehicles while commercial vehicles make up 16%. Second-hand vehicles in Ethiopia tend to appreciate in value due to high import duties and limited supply of vehicles. As a result, second-hand vehicles dominate the market. Approximately 85% of vehicles are second-hand imports, of which almost 90% are Toyotas.These vehicles are imported primarily from the Gulf States, through the Port of Djibouti. Automotive Sales Although there is almost no publicly available reliable data on vehicle sales in Ethiopia. It is however estimated that 18,000 vehicles are brought into Ethiopia each year. The majority of these are second-hand vehicles. Each year, 2,000 new Toyotas and between 5,000 and 7,000 used Toyotas are imported. Clearly, Toyota controls approximately 65% of the total market (new and second-hand) due to its reputation as being reliable and inexpensive to maintain. The main drivers of new commercial vehicle sales are construction, agri-business and retail while passenger vehicle sales are driven by government (including diplomatic corps) purchases. Vehicle affordability is further locked up by prohibitively high vehicle taxes of sometimes more than 220% depending on engine size. As taxes in Ethiopia are cumulative, excise tax is calculated on the customs duty, surtax is charged on top of the excise tax, and customs duty and final VAT is calculated once the surtax, excise tax and customs duty have been added. Imported vehicles may cost as much as three times the retail price of the vehicle outside of the country. Commercial vehicles, such as pick-ups, vans and trucks, have a lower tax rate than vehicles for personal use. Relative disincentives exist vis-à-vis personal vehicles compared to commercial vehicles. Diplomats and foreign investors are allowed to import vehicles duty-free. The supply-depressing character of foreign exchange shortages contributes to imbalances in the market and drives up the market price of vehicles, thus also having a negative impact on the affordability of vehicles in the Ethiopian market. Production and Assembly The Ethiopian Investment Commission (EIC) reports that 31 foreign vehicle investment projects (largely Chinese projects but also someinvolvement of European companies) and 73 domestic vehicle assembly investment projects have been licensed since 1998. This means that a total of 104 companies have been licensed for vehicle assembly in the country over the past two decades. However, only a few of these are operational, with the vast majority licensed at the pre-implementation stage. During the past decade, a number of leading international automotive companies have carried out market scoping exercises to assess the viability of Ethiopia as an assembly hub. However, due to the limited market size, large-scale investments by these automotive firms have not yet materialised. Although a number of assemblers source some components such as tyres locally, Ethiopia has no defined local content requirement. A number of assemblers indicated that they are instructed that local content should be approximately 30% in order to qualify for the 30% tax incentive associated with all local manufacturing, but that no written agreement exists between assemblers and the state. Due to Ethiopia’s tax system, which subjects vehicles to tax depending on their engine size rather than age or origin, it is often cheaper to import a second-hand vehicle with a smaller engine size than it is to assemble a vehicle locally, despite import taxes on these vehicles. Despite being home to the continent’s second largest population, the overall automotive market size remains small in the short to medium term for current and prospective assemblers and producers. However, Ethiopia’s strong government support for industrialisation and the development of auxiliary industries coupled with a large cost competitive labour pool, and sizeable investments in infrastructure (both physical and economic) could position the country favourably for automotive manufacturing in the long term to service both the regional and domestic market with price competitive vehicles. To achieve this, clear definitions of local content need to be developed. The country’s high tax rates on vehicles reduce the affordability of vehicles, especially given the low income of the population, and restrains the vehicle retail market. To address this, industry stakeholders should support the establishment of vehicle financing solutions, in order to encourage wider vehicle ownership. Taxes should be revised to also take the age of vehicles into account in order to provide incentives for locally produced vehicles.