By Andrew Mold and Anthony Mveyange from Brookings institute  At the beginning of the COVID-19 pandemic, such was the scale of the economic disruption caused by lockdown measures that there was much talk of the collapse of global trade. In the midst of the lockdowns, in April, the World Trade Organization estimated that the decline would amount from anywhere between 13 and 32 percent. In a similar vein, UNCTAD was forecasting a 20 percent decline in global trade for 2020. However, recently released trade statistics across the world reveal that those forecasts may have been overly pessimistic and underestimated the relative resilience of the global trading system. In fact, in June, after several months of sharp declines, trade volumes recorded their biggest monthly rise on record, with a 7.6 percent increase. East Africa may be shadowing these global trends. Kenya, the largest regional trader, is a good barometer of broader East African trends. The country was initially hit quite hard in terms of the decline in trade volumes, with a 19 percent drop in total trade volumes in April. As warned in our earlier Brookings policy brief, re-exports to the rest of the region were hit extremely hard, with a 83 percent decline in April. Since June, though, total trade volumes have begun to recover rapidly, with a 9 percent increase in June and a 12 percent increase in July (Table 1). Moreover, the story is a similar if the analysis is undertaken using year-on-year percent changes. Table 1. Kenyan trade, percent monthly change, January-July 2020 Total exports Re-exports...

Florence Atieno and Robert Ogola are among the cross-border traders in Busia who have been adversely affected by COVID-19. They’ve lost a huge chunk of their customer base and their revenues have taken a tumble since March when the first case of COVID-19 was reported. “Right now we don’t have business because of COVID-19. We don’t have stock to sell since we don’t have access to Uganda to bring the stock. We don’t have any business right now,” says Atieno. Robert also expressed that that business has been very low and the prices of commodities have increased while the quality of commodities has drastically dropped. Through the Safe Trade Emergency Facility programme, TradeMark Africa (TMA) is working together with the European Union in Kenya to keep trade going at the border point for people to get the goods, food and medical supplies that they need. The initiative is also working with the private sector to adapt to the new environment, especially through the production and distribution of PPEs and hand sanitizers to the border point workers like traders, immigration officials and health workers. TMA also rolled out an app for truckers that will allow for electronic COVID-19 certificates, tracking off the trucks for monitoring of the trade corridor  efficiency and bottlenecks and it was also help with contact tracing if the need arises. FAO Kenya Land Governance Programme In the Sere-Olipi community in Samburu East, Food and Agriculture Organization of the United Nations (FAO) Kenya has fully adopted social distancing as...

The OPEC Fund for International Development (the OPEC Fund) (www.OPECFund.org) has signed a US$20 million term loan in favor of East African Development Bank (EADB). EADB will use the loan to support small- and medium-size enterprises (SMEs) and infrastructure projects in East Africa. EADB is an important regional development institution for delivering key development objectives across the East Africa region. It enjoys a high level of commitment from member states Kenya, Uganda, Tanzania and Rwanda, as well a diverse shareholder base that includes multilateral and bilateral development institutions and international financial institutions. SMEs account for more than half of EADB’s portfolio. They play an important part in development, driving economic growth and employment opportunities in East Africa and in developing countries more generally. The bank is expanding its resource mobilization activities to meet the growing financing needs of SMEs. “We are very pleased to support private sector development in East Africa, which goes to the core of our mandate,” said OPEC Fund Director-General Dr Abdulhamid Alkhalifa. “We have partnered with EADB since 2001 and we appreciate the opportunity to strengthen our relationship. SMEs are critical to achieving progress toward Sustainable Development Goal (SDG) 8 on decent work and economic growth. Efficient infrastructure, as part of SDG 9, improves access to social services, reduces business and production costs, supports trade, and will ultimately provide East Africa with a more competitive business environment.” Vivienne Yeda, the Director General of EADB, said: “We are pleased to receive a line of credit of US$20...

Barcelona, September 24, 2020.- The global pandemic of the Coronavirus Covid19 remains, increases its expansion in many countries and does not have a near end. Its economic consequences are unprecedented in the last 100 years. However, we have to learn to live with this situation and conjuncture. The transport and logistics sector is one of the most important to keep us alive. The Freight News South Africa’s publication has highlighted some keys to the proper functioning of the global supply chain: Globally, movement restrictions, health screening, and border controls and closures – put in place to ward off the virus that caused Covid-19 – had led to an estimated 18% average decline in annual turnover for goods transported by road, Hügel said Unlike anything before it, the Covid-19 pandemic has underlined the importance of harmonising legislation governing the transport of goods across borders. This was the message from all four speakers at the second webinar hosted by the Southern African Transport Conference (SATC) earlier this month. The webinar explored Covid-19’s impact on freight and logistics, and was addressed by Transnet group chief executive Portia Derby, TradeMark Africa senior director of transport Abhishek Sharma, and International Road Transport Union senior advisors Jens Hügel and Kazeem Asayesh. The view of every speaker was that harmonising the legislation that governs cross-border good transit would bolster economies by reducing transport and warehousing costs, and thus increase individual countries’ resilience in the face of economic crises. Sub-Saharan Africa had taken several hard knocks due to...

“Investment and Trade for Africa’s Economic Development” – a public webinar held on Wednesday – targeted opportunities for cross-border collaboration between Africa and Germany. The African Export-Import Bank announced its plans to sign a Memorandum of Understanding with German car manufacturers to establish an automotive industry in Africa. The Germany-Africa Business Forum (GABF), Africa Oil & Power and the African Energy Chamber co-hosted the webinar, as part of a GABF cooperation-focused series. Berlin, 24th of September, The Germany-Africa Business Forum (GABF) hosted its second installment of its German-African cooperation-focused webinar series on Wednesday, aimed at outlining the opportunities for sustainable FDI between Germany and the African continent. The panel comprised H.E. Günter Nooke, Africa Envoy to German Chancellor Angela Merkel; NJ Ayuk, Executive Chairman of the African Energy Chamber; and Rene Awambeng, Global Head Client Relationship at the African Export-Import Bank (Afreximbank). Anchored by the theme of investment and trade for African economic development, the opening keynote was delivered by H.E. Nooke, and outlined four key success factors in driving Africa’s economic development: investment and business climate, transport, energy and technological infrastructure, available workforce, and access to markets. Digitalization and green energy were advanced as two of the critical sectors for facilitating Africa’s economic and social development. Africa contains a young, tech-savvy population, noted H.E. Nooke, translating to smooth technological adoption and enhanced opportunities for both consumers and businesses. Highlighting efforts to expand global market reach, H.E. Nooke noted the anticipated benefits of the recently adopted African Continental Free Trade...

In recent months, the U.S. began negotiations for a bilateral free trade agreement with Kenya. These negotiations are aligned with the current administration’s vision for trade reciprocity rather than unilateral trade preference programs. Although these negotiations could produce the first bilateral trade agreement between the U.S. and a sub-Saharan African country, a shift from regional preferential trade agreements to bilateral free trade agreements could undermine the growth of smaller countries, who may not be of enough economic interest to the United States. Bilateral agreements could also undermine efforts to create a regional economic bloc through the African Continental Free Trade Area (AfCFTA). When President Bill Clinton signed the African Growth and Opportunity Act (AGOA) in 2000, African countries were given a competitive edge by providing unilateral duty-free exports for 6,500 products from Africa to the United States. Twenty years after AGOA was first adopted, we see that it has created long-term, sustainable growth by stimulating the private sector and creating jobs in a region where many countries are battling high unemployment, thereby addressing structural challenges the region faces. Additionally, in choosing a regional approach for the trade agreement, Clinton empowered both big players like South Africa and smaller players like Lesotho. In many ways, this approach aligns with the “trade not aid” mantra. Although AGOA has been extended twice, most recently until 2025, it has come under threats over the last four years, as tariffs were imposed on key steel and aluminum products and duty-free access was suspended for apparel...

Kenya is targeting to conclude deals on services in ongoing and pending trade negotiations with various partners in order to boost export volumes amid COVID-19 pandemic going into next year. According to Industrialization, Trade, and Enterprise Development CS Betty Maina, previous trade negotiations have focused more on the sale of goods even though the services sector has indicated the fastest growth in Kenya. CS Maina says education, tourism, and medical, financial, ICT services have been identified as the fastest-growing segments which Kenya is keen to add on a list of exports in its negotiations with various countries. “One of the challenges is that we have not concluded as many trading services agreements like the East African Common Market Protocol. There are still a lot of restrictions and misunderstandings on services especially the mode and presence of service notably those to do with work permits,” Maina said. She went on, “In our negotiations with the US services are part and parcel of it but if there is contestation about the mode of export, presence, and export it would be difficult to realize growth,” Data compiled by the Observatory of Economic Complexity indicate that Kenya service exports amounted to 492 billion shillings as of 2014. Following a disruptive period marked by coronavirus pandemic which slowed exports of key products since March this year when the health crisis began, the government is also keen on expanding the volume of exports to new markets and increase investments in the production value chain. “We have...

Governments in Africa are being urged to harmonise trade policies to ensure the continent strikes the right balance between tackling coronavirus and keeping trade flowing. In a report the Economic Commission for Africa (ECA) said inefficiencies and disruptions to cross-border trade risk holding back the continent’s development goals, though innovations such as a common African Union (AU) Covid-19 test certificate for truck drivers were a step forward. Read original article

This week, Kenya joins the rest of the world to mark World Maritime day to commemorate the contribution of shipping and seafarers to global economic development. The celebrations could not have come at a better time when the world is slowly winning the war against COVID 19 pandemic. This has been ably demonstrated by the International Maritime Organization (IMO) Secretary-General Kitack Lim, in his address to the world to commemorate the World Maritime Day. Lim’s clarion call on "voyage together", that rallies member States, NGOS, and multiple maritime stakeholders to work hand in hand, is almost bearing fruits here in Kenya. The Covid 19 pandemic though seen as a dark cloud in the maritime sector, we can equally agree that it came along with its silver lining. Due to the restrictions in travel during the pandemic period, the silver lining is slowly emerging to be the rapid adoption of digitization of shipping operations. This makes Lim’s dream on the willingness of member states to work together in supporting shipping, seafarers, and the maritime sector to fulfil their responsibilities a reality. Back at home, the Voyage together dream can only be realized with the implementation of the Maritime Single Window System. The system is at an advanced stage and is envisaged to be rolled out for operations in the course of this year. The system is a mandatory requirement for member states to introduce electronic information exchange between ships and ports, which came into effect from 8 April 2019. This is...

THE 2020 Africa Agriculture Trade Monitor (AATM), published by the International Food Policy Research Institute (IFPRI), has recently been released, providing an analysis of continental and regional trends in African agricultural trade flows and policies. According to the AATM report, the third in a series of flagship reports, policy reactions among the world’s leading food and agricultural producers during the coronavirus pandemic since the beginning of the year have caused disruptions in world supply chains and threatened food-security systems in food import-dependent countries. Furthermore, measures to contain the virus have magnified the negative impact of the crisis on intra-continental trade flows and the livelihoods of millions of people across Africa. But opportunities lie in the crisis, as the foreword to the report points out. Among these is a strong political will to improve intra-African integration with the ratification of the African Continental Free Trade Area (AfCFTA) agreement. This agreement, launched in July 2019, aims to eliminate tariff and non-tariff measures on goods, improve continental integration, and speed up customs procedures that remain a serious barrier to trade performance in Africa. According to the report, countries should not let the pandemic stop progress towards economic integration. It said that agreements like the AfCFTA could provide not only a solid basis for long-term economic development, but also a means of effectively fighting future pandemics by facilitating the cross-border trade of food and medical goods. According to the report, virtual negotiations on the AfCFTA could begin in the coming days and set a...