The COVID-19 pandemic is expected to hit African economies extremely hard. According to the World Bank biannual Africa’s Pulse report, as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020, depending on the success of measures taken to mitigate the pandemic’s effects. This means that the region will experience its first recession in 25 years. The decline will be primarily due to large contractions in South Africa, Nigeria, and Angola driven by their reliance on exports of commodities whose prices have crashed as well as other structural issues. This will inevitably affect Africa’s participation in trade and value chains as well as reduce foreign financing flows. Given the limited regional market, trade with the rest of the world is vital for Africa. Before the pandemic, Africa’s trade with the rest of the world has been showing good momentum. According to UNCTAD’s Economic Development In Africa 2019 report, in the period of 2015-2017, total trade from Africa to the rest of the world averaged $760 billion in current prices, and the share of exports from Africa to the rest of the world ranged from 80% to 90% in 2000 –2017 in Africa’s total trade. The only other region with a higher export dependence on the rest of the world is Oceania. However, intra-African trade, defined as the average of intra-African exports and imports, was around 2% during the period 2015–2017, and the intra-African exports were 16.6% of...

Despite an agreement arrived at on Wednesday by government officials from Kenya and Uganda on the process of Covid-19 testing for truckers at the common border, an association for Kenyan truck drivers on Thursday advised its members to suspend services until both governments address stigma and harassment. Secretary-general of the Kenyan truckers union Nicholas Mbugua said on Thursday: “There is no safety agreement between Kenya and Uganda and yet drivers are being coerced by police officers to cross over to Uganda. We demand to be guaranteed the safety of our drivers in Uganda.” Speaking at the union’s offices in Mlolongo, Mr Mbugua said the drivers were tired of ‘’unbearable humiliation drivers were subjected to in Uganda”. The truckers had blocked the Kenyan side of the border for three days from Monday, stretching almost 50 kilometres. On Tuesday, meetings between senior government officials from both countries failed to reach an agreement. Mercy Ireri, the chief operations officer at the Kenya Transport Authority, said: “I can confirm people are moving. Trucks are also moving,” she told The EastAfrican on Wednesday. “Previously the drivers had demanded that they be addressed by both President Kaguta Museveni and Uhuru Kenyatta, but we managed to allay their fears,” she said. “There was a meeting yesterday [Tuesday] where we discussed with the truck drivers their grievances. One of the big issues was the Covid-19 testing. There is a full agreement to accept each other’s testing,” said Solomon Kitungu, the principal secretary in Kenya’s ministry of Transport. “Security...

Since the first case of Covid-19 was reported in the Great Lakes region in mid-March 2020, small scale traders have been unable to cross borders as they have traditionally done either to buy or sell goods. The regional supply of primary agricultural commodities, most of which are traded under the Simplified Trade Regime (STR), especially foodstuffs from surplus to deficit areas has also been disrupted by the long delays at borders as truck drivers wait to be tested for Covid-19 before crossing. To support cross border trade, which is the lifeline of a huge community in the region, the Great Lakes Trade Facilitation Project (GLTFP) engaged stakeholders to come up with innovative means of trading across the borders of the three countries covered by the project. These innovations are meant to ease the movement of goods and avoid food shortages. The project region covers eastern DR Congo bordering western Rwanda and Uganda. Subsequently, a new concept of bulk-buying has been developed whereby goods are procured in large consignments in collaboration with suppliers across the borders. This ensures there is no mass movement of traders crossing the borders. Led by the Cross-Border Traders’ Associations (CBTA),  this concept has helped traders minimize the risk of COVID- 19 spread and allow safe trade. It consists of packaging similar goods from either side of the borders and moving them across the border using joint means of transport. This limits the movement of people to a strict minimum. Only the driver conveys the goods accompanied...

As more details emerge on the proposed US-Kenya Free Trade Agreement, Kendall Keough and Sheng Lu from the University of Delaware look at various industry views on the pact – and why apparel-specific provisions are the focal point of the debate. In March this year, the Trump administration notified Congress of its plans to negotiate a free trade agreement (FTA) with Kenya, aiming to both deepen the economic ties between the two countries and complement Africa’s regional economic integration efforts. Further details around the specific negotiating objectives of the proposed US-Kenya Free Trade Agreement were released by the Office of the US Trade Representative (USTR) on 22 May. Overall, the pact intends to “build on the objectives of the African Growth and Opportunity Act (AGOA) and serve as an enduring foundation to expand US-Africa trade and investment across the continent.” It could also become a model trade agreement between the United States and sub-Saharan Africa countries and eventually replace the AGOA a trade preference programme currently set to expire in 2025. With regards to the textiles and apparel sector, USTR says it will: “Secure duty-free access for US textile and apparel products and seek to improve competitive opportunities for exports of US textile and apparel products while taking into account US import sensitivities.” The proposed agreement will also: “Establish origin procedures that streamline the certification and verification of rules of origin and that promote strong enforcement, including with respect to textiles.” The same or very similar language is used in...

For quite long, Kenya has been basking in the glory and pleasures that come with being a hegemon within the East African region. It is now conventional wisdom that Kenya bestrides the East African region like a colossus. It dominates business, technology, commerce and communications, its economy is the most successful in the region, and its diplomatic tact and influence is second to none. For quite long, Kenya has been basking in the glory and pleasures that come with being a hegemon within the East African region. Acting as a critical entrance route to the East African region - and enjoying relative peace in the region as compared to her neighbours ­­­­­­­­­­­­­­- Kenya has attracted bilateral and multilateral trade and investments, thereby boosting her outlook as an affluent diplomatic and economic powerhouse. However, this may change if the country does not rethink its diplomatic priorities. The country now finds itself in a train wreck with some of her neighbours, a make or break situation that could shift her diplomatic influence in the entire horn of Africa region for good. Coming at a time when there is a quest for hegemonic supremacy between Kenya and Ethiopia, the country appears to be making more foes than friends within the region, a phenomenon that could have dire repercussions on the country’s regional influence. Amidst the fight against coronavirus, Tanzania announced a ban on Kenya truck drivers entering their country. The decision was informed by the allegation by Tanzanian authorities that Kenyans are contributing...

Dar es Salaam — The Southern African Development Community (Sadc) is gearing up for a full reopening of cross-border trading. This comes after experts in the region expressed satisfaction over the precautionary measures countries within the 16-member bloc have taken to prevent further spread of the novel coronavirus which causes Covid-19. The move comes after about 50 days when the body adopted its regional guidelines for harmonising and facilitating movement of critical goods and services across the region during the Covid-19 pandemic. The guidelines, adopted after a meeting of the Sadc Council of Ministers on April 6, 2020, aimed at limiting the spread of Covid-19 through transport across borders; facilitating the implementation of transport related national Covid-19 measures in cross-border transportation and facilitating flow of essential goods such as fuel, food and medicines. The guidelines also sought to limit unnecessary and mass movement of passengers across borders and harmonising and coordinating transport-related national Covid-19 policies, regulations and response measures. But with some countries - including Tanzania - making some important milestones in their fight against Covid-19, a virtual meeting of experts met yesterday to draw the roadmap for a meeting of Sadc Council of Ministers today (Thursday, May 28) resolved that some things must now change. "This meeting is being held in preparation for a meeting for the Sadc Council of Ministers. Key on the agenda that we will be presenting to the Sadc Council of Ministers is that some of the issues that we knew about Covid-19 must now...

Transit goods transports have raised concerns over a directive that cargo destined for neighboring countries be ferried from the Port of Mombasa to the Naivasha Inland Container Depot via the Standard Gauge Railway.They noted that they will adversely affect livelihoods of thousands of Kenyans when it is effected next month. The government says the decision would help reduce the spread of Covid-19 as well as improve efficiency at the Port of Mombasa. But the directive has attracted debate with coastal leaders and those involved in the transport business raising concerns about the decision rendering thousands of Kenyans jobless. Kenya Transporters Association Chief Executive Officer Dennis Ombok says importers should be allowed to choose the mode of transport for their cargo.Early this month, Transport CS James Macharia, accompanied by KPA officials launched the Naivasha Inland Container Depot that will mainly process cargo destined for neighboring countries for transporters to pick it for onward delivery. Source: KBC

Plans by the government to transport all transit cargo from the Port of Mombasa to Naivasha Inland Container Depot (ICD) through the Standard Gauge Railway (SGR) effective June 1, have elicited protest from road transporters. They have termed the move as a deliberate plan by the government to “kill” the economy of Mombasa. Last Friday, the government directed that all transit cargo be moved and cleared at the Naivasha ICD for delivery to Uganda, Rwanda and South Sudan. Kenya Transporters Association (KTA) chief executive Dennis Ombok accused the government of overlooking them during decision making on cargo transport matters. The government said in a statement on Friday 22, that some of the cargo will be moved on the old metre-gauge railway directly to Tororo in eastern Uganda or Kampala, while fuel will be transported by pipeline to Kisumu, Kenya and thereafter by water through Lake Victoria to Portbell in Luzira, Kampala or Jinja. Ombok dismissed the government’s claims that transporting cargo by railway is cheaper than using trucks. He made the remarks during a joint briefing convened by Muslim for Human Rights (Muhuri) in collaboration with Okoa Mombasa lobby group. Hidden costs “The government does not want to tell the public the hidden costs of using the SGR to ferry containers. If Uganda says its comfortable with cargo going by road, why is the government forcing this mandatory cargo transportation through SGR?” posed Ombok. Now, the Kenya Long Distance Truck Drivers Association (KLDTDA) has threatened to mobilise its members to...

The domino effect of the coronavirus pandemic will plunge many economies into recession and means the African Continental Free Trade Agreement (AfCFTA) is now needed more than ever to ensure that member states are trading with each other and supporting one another at this time, according to Banji Fehintola, senior director and head of treasury at the Africa Finance Corporation (AFC). He says South Africa has a very important part to play. It is the most industrialised and diversified economy on the continent and is one of the only financial markets that is sound enough to be tapped for infrastructure projects. “Trade finance and infrastructure finance are incredibly important in the creation of growth across Africa. However, since the global financial crisis of 2008/2009, some global banks have retreated from emerging markets, including Africa. These means credit capacity from global banks for African Financial Institutions (FI) has reduced considerably, constraining their ability to serve clients’ needs,” he tells Fin24. No amount of policy change or cuts in taxes will truly make Africa competitive when the physical hinderances are ignored, according to Fehintola. He says the AfCFTA is not just a dream, but there is a long way still go before it becomes a tangible reality. The next phase comprises a new set of challenges as the ratifying countries commence implementing the AfCFTA with the goal of truly unlocking Africa’s potential through the free movement of goods, services and people. He points out that the elimination of tariff and nontariff barriers...

Kenya’s vegetable and flower exports have recovered to about 80 percent of the volumes before the COVID-19 outbreak, an apex industry organization, Fresh Produce of Kenya, confirmed on Thursday. Okisegere Ojepat, chief executive officer of the organization, said that initial panic resulting from the COVID-19 outbreak in March that disrupted exports had corrected itself gradually. “Our vegetable export has recovered up to 89 percent of volumes exported before the pandemic hit Kenya while flower export has recovered to 80 percent. In March, when the panic set in, our exports dropped from 100 percent to 30 percent,” said Ojepat during a webinar organized by Strathmore University in Nairobi. “What we are lacking now are enough supplies. This is because many farmers were disrupted leading to stoppage of production,” he said. Ojepat said cargo movement to Middle East, Europe and the United States from Nairobi has enabled Kenyan farmers to resume exports, and the market is becoming bigger. Horticulture is Kenya’s third foreign exchange earner after remittances and tea exports. Source: CTGN