This paper uses Kenyan trade data published up through May 2020 to provide a preliminary evaluation of the impact of the COVID-19 crisis on regional trade in the East African Community (EAC). Paradoxically, given the prevailing pessimism surrounding the prospects for global trade, Kenya actually experienced a significant improvement in exports in the first quarter of the year, together with a moderation of imports, leading to a marked decline in the trade deficit. While the initial shock to Kenyan trade caused by the COVID-19 crisis initially looked dramatic in terms of the declines registered, this paper reveals that i) the shock is not so alarming when seasonality is taken into account; ii) re-exports and imports have been the primary foci of impact; and iii) domestic exports have actually performed extraordinarily well under the circumstances, with incremental growth since 2019. Notably, not all supply chains were disrupted by the crisis, with some Kenyan exports like tea and fruit surpassing levels of years past. Rather, imports have been the principle victim of the crisis, declining by a quarter over the three months since the crisis began (between March and May 2020). Capital goods imports have declined markedly—a trend which, if sustained, could have implications for long-term economic growth. However, the fall in imports of consumer goods could also set the scene for a revitalization of national and regional industry, as local producers step up to fill the void created by the sharp lull in imports. At the same time, Kenya’s EAC neighbors—especially...

It took a traffic jam of a couple thousand trucks at the Malaba border between Kenya and Uganda to fully visualize both the health and trade issues at stake when borders operate at optimum. The COVID-19 crisis has revealed both hairline fractures along borders in East Africa and the potential to solve them through better regional coordination. The East African Community (EAC) to date has been a grand experiment in more than just free trade between Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. It also seeks to transform the region into a single market that allows free movement of goods, people, services, labour and capital, and create a single investment area. The coronavirus pandemic has curtailed this dream in the short-term but the experience has been a learning curve, and UNCTAD, TradeMark Africa (TMA) and other regional partners have used the moment to help the region’s national trade facilitation committees (NTFCs) improve their skills and work more effectively by offering them ground-breaking online training. “It’s a complicated situation due to the necessity of imposing health controls and measures to manage COVID-19 on one hand, while still ensuring trade flows, especially of essential goods, on the other,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics. “The situation has been extremely challenging for everyone from policymakers to customs officials; truck drivers to traders,” she added. “Training is one of the solutions to this challenge.”   [caption id="attachment_54331" align="aligncenter" width="640"] Trade facilitation in East Africa is critical during COVID-19[/caption] Trade...

The African Continental Free Trade Area (AfCFTA) is one of the greatest examples of Pan-Africanism since the creation of the African Union (AU). The agreement has acquired the signatures of 54 of the AU’s 55 member-states, bringing together an impressive domestic market of more than 1.2 billion people with a collective GDP of $2.6tn. The logic behind the deal is sound. Africa is, by most standards, the least integrated continent, where internal trade currently accounts for just 16 percent of its total trade volumes. The potential benefits of liberalised trade across the continent, from the Atlantic to the Indian Ocean, Cape Town to Cairo, could be substantial. Evidence suggests the removal of tariffs, supplemented by trade facilitation initiatives, could boost intra-African trade by 52.3% or $34.6bn by 2022. However, the benefits are far from guaranteed, and the continent now faces the task of implementing the agreement. The deal stipulates signatories eliminate tariffs on 90% of goods and address a plethora of non-tariff barriers (NTBs), which will in turn tackle the comparatively high cost of trade across the continent. High cost of trade in Africa This latter point is crucial to Africa’s success. Recent studies published by the United Nations Conference on Trade and Development (UNCTAD)   and the World Bank suggest that NTBs prove more of an impediment to trade than tariffs do. In fact, the UNCTAD says that by tackling NTBs, African countries as a group could see gains of $20bn each year. Higher levels of internal trade will help wean Africa off its reliance on...

Logistics industry stakeholders in the East African Community (EAC) have renewed push to contain further spread of the novel coronavirus by adopting containment measures, while ensuring that the region continues to get vital supplies and inputs through the Central and Northern transport corridors. This follows emerging data that revealed that long distance truck drivers are a weak link in the fight against Covid-19 after several of them tested positive at various border crossing points.  With TMA’s support, The Federation of East African Freight Forwarders Associations (FEAFFA), the umbrella body of the region’s clearing agents has played a central role in the ongoing multi-agency efforts to tackle Covid-19 and enhance trade being employed in the region. Continuously, FEAFFA, Kenya Transporters Associations (KTA), Regional Lorry Drivers and Transporters Association (RLDTA), Transporters Association of Tanzania (TAT) and Tanzania Truck Owners Association (TATOA) held consultative meetings to develop recommendations which were presented to National Covid-19 Taskforces in the East Africa Community Partner States. This will inform the ongoing debate and shape the policy measures being pronounced.  The recommendations by the logistics representatives and players were guided by years’ of experience the agencies have on handling of cargo at various border crossing points. The basis of the recommendations was as follows: The agencies appreciated the plausible measures the EAC states pushed to adopt, for example deployment of relay driving where truck drivers swap with their counterparts in transit countries at the borders. And, drivers mandatory testing at borders. Additionally, the use of delivery of cargo...

Frank Matsaert and Erastus Mwencha On February 27th, 2020 Nigeria confirmed the first case of COVID-19 in Sub-Saharan Africa. Since then, the COVID-19 virus has spread to all corners of the Continent with the number of infections increasing exponentially, according to the World Health Organization (WHO) Regional Director for Africa, Matshidiso Moeti. Even before the first cases were recorded, COVID-19 was already having an impact on international demand for exports in key sectors such as textiles and floriculture, have severely threatened businesses and fuelled unemployment. Flower exports are down by more than 90% and tourist arrivals have ground to a halt. In the largest economy in East Africa, the Kenya National Bureau of Statistics reported that imports have dropped by more than 20% in the first two months of 2020, with Chinese imports plummeting around 37%.  As the pandemic continues, the projected losses grow. Trade volumes in the East African Community (EAC) are down by up to 25% since the beginning of 2020, with even worse reductions in the informal sector.  African countries, conscious of the fragility of their public health systems and limited intensive care capacity, have had to move quickly to try and protect their people by instituting strict measures to stem the spread of the virus. However, in doing so they are faced with a dilemma. For many in the region their livelihood depends on being able to move about freely. There is no work from home option for the hundreds of thousands of small-scale traders that...