[vc_row][vc_column][vc_column_text] According to the United Nations Conference on Trade and Development, global trade is predicted to fall by a record 27 per cent in the second quarter of 2020. In this episode of Doing Business in Rwanda, we take a look at the impact COVID-19 has had on trade and the establishment of cross border cargo transit logistics platform to curb the spread of the virus and facilitate smooth trade between neighbouring countries…. Watch video here: Source: CNBC Africa[/vc_column_text][/vc_column][/vc_row]

The Kenyan government says all transit cargo will be moved by the Standard Gauge Railway from Mombasa to Naivasha where truckers will pick them for delivery to Uganda, Rwanda, and South Sudan. Truck drivers have been seen as a weak link to spreading coronavirus and partner countries are trying to devise means to reduce their contact with the community. Early this month, the East African Heads of States directed the ministers responsible for Health, Transport, and EAC Affairs to adopt a Digital Surveillance and Tracking System for drivers and to immediately develop a regional mechanism for monitoring truck drivers to reduce the impact of the Covid-19 pandemic. The move is meant to reduce contact of drivers with local people, the main cause for the spread of coronavirus disease. Some of the cargo will move on the old meter-gauge railway directly to Tororo in eastern Uganda or Kampala, while fuel will be transported by pipeline to Kisumu, Kenya, and thereafter by water on Lake Victoria to Portbell in Luzira, Kampala or Jinja. This, according to the Kenyan minister in charge of transport, takes effect on June 1, 2020. James Macharia says the shift will cut off 600 kilometers that truck drivers would have to drive if they were to pick the goods directly from Mombasa port. Macharia said in a statement on Friday that Revenue authorities from Uganda, South Sudan, Rwanda, and Kenya will be accommodated at Naivasha inland deport to clear goods on time. Exports will also, be required to...

Many African countries are all too familiar with the social and economic upheaval posed by outbreaks of infectious diseases. Recent experiences with Ebola are fresh in peoples’ minds across West and Central Africa, as are those with TB and HIV/AIDS in Southern Africa. As a result, African countries understand the need for regional coordination in overcoming public health challenges. The World Bank Group has responded swiftly to each of these health emergencies – often through a regional response designed to counter immediate threats while also strengthening countries’ capacity to be proactive in detecting and responding to outbreaks. There are important lessons to draw from these experiences as we combat the coronavirus pandemic (COVID-19). First, leverage existing regional networks and operations to catalyze an immediate, large-scale response. Helping countries strengthen cross-border collaboration for detection and response to outbreaks is a long-standing priority of the Bank Group’s regional integration efforts in Africa. Large-scale investments, strong networks, and a joint vision among stakeholder countries are already in place. They are now being activated and scaled up quickly in response to COVID-19. The Regional Disease Surveillance Systems Enhancement Program (REDISSE) – a $670 million operation across 16 countries of West and Central Africa – has quickly mobilized over $193 million to help 13 countries with entry-point surveillance, reinforced laboratory testing capacity, infection prevention and control, access to essential medical equipment and materials, and risk communication. Having responded to Ebola in the last few years, REDISSE has provided countries with early and immediate access to financing so...

COVID-19 and the African trade dynamics Just like other countries in the world, African states were not prepared for the spread of the novel coronavirus. Interestingly and as expected, two powerful African states, Egypt and Nigeria, recorded the first cases of the virus in Africa and sub-Saharan Africa. Of 54 countries in Africa, 53 countries have recorded cases of the virus and only Lesotho is yet to record any. This record in Lesotho has perhaps been linked to a lack of testing materials and not that the country is indeed free from the virus. Source: Wikipedia Trade in Africa has primarily been a case of a producer exporting raw materials to foreign countries for production and the original producer importing the finished products. This situation has seen Africa contribute so much to global trade than it is given credit for. Indeed, Africans have a penchant for foreign goods, without necessarily producing the same goods. Producers who have made what can be referred to as “Made in Africa” products have not reaped much profit as much as their foreign counterparts because the African market is saturated with foreign products. For instance, 75% of the world’s cocoa is sourced from Africa yet Africa imports most of its chocolates. The oil-producing states in Africa contribute significantly to global crude but almost all petroleum products in Africa are imported. Source: World Bank The Economic Development in Africa Report 2019 suggests that the total trade record from Africa to the rest of the world was about US$760 billion between 2015 and 2017 and contributed between 80-90%...

Mr Wamkele Mene was recently appointed Secretary General of the African Continental Free Trade Area Secretariat. The effects of Covid-19 have halted free trade in member countries. In this interview with Africa Renewal’s Kingsley Ighobor, Mr Mene explains the way forward, and how increased intra-African trade can help lift post-Covid-19 economies. These are the excerpts: Describe the impact of Covid-19 on African Continental Free Trade Area (AfCFTA) so far? The African economy was set to grow at about 3.4 per cent in 2019 and projected to increase to 3.9 per cent in 2020, but Cocid-19 has had a very negative impact. We know that over 53 per cent of Africa’s exports go to countries, particularly Europe, that are themselves suffering from the pandemic. That has had a subdued effect on our export markets. Our services sector is set to fall by between 20 per cent and 30 percent, particularly travel and hospitality. We must find ways to mitigate the effects of the pandemic, but the primary focus for now is to save lives. Given the current situation, any idea when free trading can begin? We have recommended to the African Union Assembly of Heads of State, which is the body with the authority to delay the trading date, that given the current public health crisis and the need for some technical work to be concluded, we cannot meaningfully trade [under AfCFTA] on July 1. Does this mean free trading will not begin until the pandemic is defeated? We are exploring...

Experts have questioned the rationale for the dry port, with the extension of the SGR from Naivasha to Malaba uncertain. Kenya spent Sh150 billion on Phase 2A of the SGR project but is yet to secure funding to extend the railway line to Kisumu, then to Malaba border. In April, Uhuru went to China, hoping to secure $3.6 billion but the Asian giant declined, citing lack of feasibility. It asked Kenya to negotiate with Uganda. The country, however, secured $400 million (Sh40 billion) to rehabilitate the 120-year-old railway line to Uganda. Transport CS Macharia on May 7 said Kenya Railways directed cargo freights from Mombasa to the Naivasha Inland Container Depot for onward transportation to neighbouring countries. Macharia said the move would boost the movement of goods in the region, which has been hard hit by partial lockdown due to the coronavirus pandemic. The number of trucks operating across the borders has decreased. The inaugural freight via the standard gauge railway arrived in Mombasa late last week and was received by Macharia accompanied by top officials from the Kenya Ports Authority and the Kenya Railways Corporation. Most of the cargo is destined to Uganda, Rwanda, South Sudan, Ethiopia, Burundi and the Democratic Republic of Congo. Kenya Railways MD Phillip Mainga said the corporation would have two initial daily trains hauling up to 108 twenty-foot equivalent units (TEUS) and a minimum of 70 TEUS. Naivasha ICD can hold two million tonnes annually and is intended to reduce congestion at the Nairobi...

Kenya has recorded a spill-over of eight to 12 vessels every month since February, industry data shows, as cancellation and delays continue to hurt imports and the country's international trade. This is as a result of disruption on the international supply chain occasioned by Covid-19 that has pushed the globe into the worst recession than that of 2009—International Monetary Fund (IMF) warned recently. Most affected cargoes are wheat imports, construction material, farm inputs, and spare parts, a survey by African e-logistics firm–Kobo360 indicate, as the country continues to witness cancellations of an average 40 vessels month-on-month. “We have spill-overs every month with cargo from Europe and Asia being the most affected,” Kobo360 Kenya Country Manager Dennis Kathurima told the Star in an interview. The country is a heavy importer of wheat from Russia, Canada, Ukraine, and Germany. Kenya Ports Authority (KPA) data shows the country has been receiving an average of 31 vessels since the first week of March. Last month, KPA reported a week-on-week vessel arrival variance with a few blank sailings despite overall imports remaining high compared to last year. A blank sailing means a vessel is skipping one port, or that the entire string is canceled. A string is a set of ports served weekly by a carrier. We have not been that much affected. I can say port operations have been steady,” KPA head of corporate affairs Bernard Osero told the Star on the telephone. “Most vessels scheduled to call at the port came, save for a slight slowdown on titanium carrying vessels most which are from China,” he...

The Port of Mombasa recorded a 2.1 per cent decline in container traffic in the first quarter of this year compared with the same period last year. This casts doubts on the goal of attaining a 35.9 million tonnes total throughput and 1.49 million twenty foot equivalent units (TEUs) target in 2020 as stated in the Kenya Ports Authority’s Master Plan. In a report released last week by the Northern Corridor Transit and Transport Co-ordination Authority, the Covid-19 pandemic was cited as the reason behind the drop from 110,790 TEUs handled in February 2019 to 108,958 TEUs recorded in February this year. China, which was the first to report Covid-19 cases, is among the top trading partners with Kenya and contributes 29.2 per cent of the full import containers or 9.9 per cent of the total cargo throughput handled in Mombasa as per 2019 port statistics. CANCELLED VESSELS Big container liners from China and several bulk carriers cancelled their normal calls in the first quarter due to the virus. Exports were also curtailed due to restrictions in Europe, USA and other export markets in a bid to stem the spread of the virus. The report titled, Mombasa Port and Northern Corridor Community Charter analysis report on the impact of the Covid-19 pandemic on port performance and productivity, said that the volume of cargo handled at the Inland Container Depot Nairobi (ICDN) declined from 31,516 TEUs recorded in March 2019 to 26,200 TEUs this year. Source: The East African

The Port of Mombasa is facing a double crisis of Covid-19 pandemic effects and disruption caused by lack of cargo tracking seals. The problem of the seals emerged after the Kenya Revenue Authority (KRA) discontinued signing of Electronic Cargo Tracking System (ECTS) certificates for eight companies, which arm cargo with tracking devices on behalf of the authority. “Apart from having truck drivers’ menace due to measures set to contain spread of Covid-19, we are also experiencing problems in tagging our cargo due to miscommunication between private tracking companies and KRA,” said Abdalla Khamisi, an importer in Mombasa. “If this is not resolved on time, we are likely to have congestion in different cargo storage facilities which will also add storage charges to us.” In the past two months, eight private seal vendors- Automated Logistics, Borderless Tracking Ltd, I Spy Africa, Navisat Telematics, Oak & Gold Ltd, Rivercross Tracking Ltd, SGS Kenya and Track N Trace Ltd — have been seeking audience with KRA in trying to resolve the matter which has led to the abrupt suspension of their services leaving hundreds of importers who depend on such vendors to arm their cargo stranded. ALAccording to KRA, no cargo is allowed to leave the Port of Mombasa without a tracking gadget to monitor its movement to its destination to avoid dumping and loss of cargo. In the correspondence between KRA and the Electronic Cargo Tracking Systems Providers Association of Kenya (EPAK), cargo monitoring division stopped issuing 2020 ECTS certificates to the...

The UN Economic Commission for Africa is helping to bring unique African products and their promoters to the platform in a practical COVID-19 response move Imagine using one second to sell three thousand (3000) bags of a coffee produce which lay fallow hitherto in storehouses in Rwanda for months due to freighting stand-stills caused by the COVID-19 global lockdown! This is what happened on 14 May 2020 during a livestream by coordinated by the Alibaba Business Group to position small-scale world brands on the Electronic World Trade Platform (eWTP), a the six-year-old initiative which facilitates business-to-consumer (B2C) sales. The UN Economic Commission for Africa is helping to bring unique African products and their promoters to the platform in a practical COVID-19 response move. The sale was made by the Rwandan brand known as Gorilla's Coffee whose CEO, Mr. David Ngarabe, rejoiced at the feat following months of slack business as the COVID-19 lockdowns ruptured the supply chains especially to cafés and hotels. The cash-in is explained in terms of the wide reach to customers especially in China via the eWTP whose huge demand, in terms of economies of scale, would now lower overall freighting costs for the supplies. Ms. Vera Songwe, Under-Secretary-General of United Nations and Executive Secretary of the Economic Commission for Africa (ECA), who addressed participants of the livestream from Addis Ababa, said the Commission was taking action to getting many more small brands from Africa with distinct products to access the platform and make sales during and after the current health crisis....