May 5, 2020//-Ahead of the AU ministerial meeting on the 5-6th of May that will be discussing the trade response to Covid-19 and the state of the African Continental Free Trade Agreement (AfCFTA), a number of business leaders have signed a joint letter calling for ministers and Heads of State to ensure they stick to the deadline of July 1 for the Agreement to come into force. The letter has been written in response to rumours in international media that the AfCFTA date of July 1 will be postponed until next year. The signatories say that there is no legitimate reason to postpone the AfCFTA even if they understand that a staggered approach can be used given current circumstances. One of the signatories of the letter is Paulo Gomes, former Executive Director of the World Bank and Chair of Executive committee of AfroChampions. The AfroChampions network has been mandated by the African Union to coordinate private sector discussions around the AfCFTA. He said that ministers meeting next week had a duty to respect the current deadline. “We understand that certain parts of the AfCFTA are sensitive. The rules of origins and tariffs need time but we can start with trading of essential goods. That will send a strong message to the world that we are serious about the AfCFTA and to African businesses. The private sector is the biggest beneficiary of the AfCFTA and with supply chains being disrupted globally, it is even more urgent that we have a functioning...

Social networks have become an integral part of our day to day lives and it is really difficult to imagine our lives without it. The Crypto industry itself is no stranger to the disruptive capabilities of social media as it has thrived on platforms like Facebook, Twitter, Reddit, Instagram etc. However, the centralised nature of these platforms has seen growing concerns regarding the safety of one’s personal data and privacy.  With recent scandals involving Facebook and Cambridge Analytica, people have started to question the privacy policies of these internet giants impose on their users and how they utilize user data. Privacy, which is an innate human right, is no more in the control of the people. Creators have lost control over their content, and unfair censorships have hampered growth and development of emerging industries like crypto and blockchain. This has fuelled the move towards uncensored social networks, with the crypto community leading the revolution. IOTA powered social network In order to overcome the various discrepancies, the SOCIETY2 team has proposed a social network powered by IOTA’s distributed ledger technology, which returns control of data, privacy and identity to the users of the platform. Developed on the IOTA network, SOCIETY2 enables the construction of decentralized social networks, taking the use of DLT beyond finance. The primary goal here is to allow social network users to regain authority of their data and personal information that they share on the internet. The user data will be stored securely on IOTA’s Tangle network and the information will be completely portable....

The Covid-19 pandemic despite disrupting businesses that depend on international trade has presented various opportunities that the businesses should develop on. Disrupted supply chain have seen markets lack various products but they have seen to rise and start producing on their own. Kenya for one has started producing and manufacturing protective gear to combat the virus, which the country usually imports. In a webinar hosted by the Kenya Chamber of Commerce, various business leaders noted the potential Africa has, that will provide opportunities post covid. “We need to diversify our supply chain to be able to bounce back in business by creating Special Economic Zones in Africa,” said Mark Priestley, Senior Director, Trade Logistics at Trade Mark East Africa. Nations such as China and Dubai where most people source raw materials could set up in the SEZs and provide supply in Africa so that we are not heavily dependent on them. “However we need to protect our existing investors, as we reevaluate our supply chain to be more regional,” said Priestly. However according to the Kenya Association of Manufacturers (KAM), we are challenged by the competitiveness of our products. “To be able to maintain stable supply in Africa we need to heavily invest in logistics, power and labour to be able to compete globally,” said Job Wanjohi, Head of Policy and Research, KAM. Intra-African trade was at around 15.2 per cent in the period 2018, indicating that trade across the region is low. “We need to integrate the Africa value...

A blockbuster African trade deal is unlikely to be implemented before early next year, an official said on Friday, after the disruption caused by the new coronavirus made the current July 1 deadline unworkable.Wamkele Mene, Secretary-General of the African Continental Free Trade Area, told Reuters that while only the heads of state of the 55-member AfCFTA could sanction changes to the deadlines, the cancelled summit between leaders planned for May in South Africa left few options. “It is only after the summit that you can say we have a new trading date. The next opportunity of a summit is on 2 January 2021,” Mene said.The continental free-trade zone would, if successful, become the largest since the creation of the World Trade Organization in 1994, stitching 1.3 billion people together in a $3.4 trillion economic bloc. Mene’s role is effectively chief adviser to government leaders, who hold the exclusive right to approve all parts of the deal and its implementation. He has advised them to defer the July 1 implementation deadline due to the extraordinary circumstances. It would have required nations to liberalize at least 97 per cent of their tariff lines and 90 per cent of imports. Mene is instead advising them to allow free movement of goods, despite borders being closed to human traffic as part of virus containment efforts, and to allow zero duties on 40 specific goods that would help combat the virus, such as soap, disinfectant and personal protective gear. “The current circumstances simply are not...

African Business leaders have appealed to governments to take the African Continental Free Trade Agreement (AfCFTA) deal negotiations on July 1 seriously to enable the continent is to economically recover from the coronavirus pandemic. The call comes just two days before the planned African Union (AU) ministerial meeting to be held on the May 5-6th that will be discussing the trade response to Covid-19 and the state of the African Continental Free Trade Agreement (AfCFTA). Ahead of the meeting, business leaders have petitioned heads of state to uphold the AfCTA deal discussion deadline in which member states are supposed to make a landmark decision on the trade agreements to kick start business between each other. The commencement of trading within the AfCFTA is slated for 1st July 2020. Driven by President Paul Kagame, the AcFTA deal that was signed in Kigali on March 21st 2018 by several countries (over 50) and July 1 was set for the agreement to come into force. To push the deal, business leaders, through the AfroChampions network, have signed a petition a joint letter in response to rumours in international media that the AfCFTA date of July 1 will be postponed until next year. The AfroChampions network was mandated by the African Union to coordinate private sector discussions around the AfCFTA. One of the signatories of the letter, Paulo Gomes, the former Executive Director of the World Bank and Chair of Executive committee of AfroChampions said that ministers meeting next week had a duty to...

Africa’s extreme vulnerability to the disruption of international supply chains during the COVID-19 pandemic highlights the need to reduce the continent’s dependence on non-African trading partners and unlock Africa’s business potential. While African countries are right to focus their energy on managing the immediate health crisis, they must not lose sight of finalizing the Africa Continental Free Trade Agreement (AfCFTA), which can be a tool to help them do just that. Africa’s economy is highly dependent on international markets—for both its imports and exports. Given that an estimated 53 percent of African imports originate in countries that have been highly impacted by COVID-19, the pandemic is interrupting the region’s access to critical products. With two-thirds of African countries being net importers of food and medicine, global trade restrictions and cross-border blockages risk creating shortages and increasing the cost of items essential to mitigate the immediate effects of the pandemic. At the same time, global supply chain disruptions are expected to result in export earnings losses of $101 billion, with an estimated $65 billion for oil-producing countries and massive hits in other export sectors, such as the garment and cut-flower industries. Similarly, the pandemic has seriously disrupted key services industries on the continent, including tourism, transport, and logistics services. The operational launch of the AfCFTA—originally scheduled for July 2020—is now postponed. The next round of negotiations, scheduled for May 30, will likely not happen before November or December. Wamkele Mene, the newly elected secretary-general of the AfCFTA Secretariat, has noted that...

In 2019, Africa remained the leading destination of Kenya’s exports accounting for 37.6 per cent of the total exports at Sh224.2 billion, with exports to East African Community partner states, accounting for 62.6 per cent of the total exports to Africa. This is according to the recent economic survey 2020 by the Kenya National Bureau of Statistics (KNBS). The region is followed by Europe which is the country’s second-leading export destination with 25.4 per cent of the total exports at Sh151.3 billion. The data carves a sculpture of the sprouting fruits of the efforts put in place by the East African Community (EAC) treaty which aims to accelerate economic integration and political development of the 6 partner states. The community has for decades now been working on a system that will facilitate the achievement of the monetary union (having a single currency in the community) and ultimately a political federation of East African countries. All these steps together with the customs union and common market which have already been established will see that economies of trade are achieved, command respect and a stronger voice in the world community and improve social interactions between states. “Exports to African countries was Sh224.2 billion in 2019 with Uganda remaining the leading export destination, accounting for 28.6 per cent of total exports to Africa,” reads the report by KNBS. Exports to Rwanda and Tanzania also increased by 29.9 per cent and 13.0 per cent, respectively increasing the exports to EAC by 8.0 per cent to...

Informality is pervasive across the developing world. It is estimated that a substantial share (30%-40%) of Africa’s regional trade is informal, and that four times as many cross border traders are likely to be operating outside the formal economy than within it. Cross-border trade can encourage entrepreneurial activity and regional trade integration, and create employment opportunities for vulnerable groups. In fact, a key feature of informal cross-border trade is that most traders are women, for whom such trade is often their main or even only source of income. UNCTAD’s research found that African cross-border traders, especially women, face various obstacles that hinder their growth opportunities. Obstacles at the border include poor facilities, cumbersome processes, weak governance, payment of undue fees, harassment, bribery, and corruption. Traders also face supply-side barriers, such as misinformation about customs procedures and regulations, lack of access to capital and assets, limited literacy and entrepreneurial skills, among others. Moreover, when crossing the border through unofficial paths, female traders can be subject to fines, confiscation of goods, and sexual assault. Among these obstacles, access to finance was identified as one of the most pressing challenges for traders. However, field findings also show that most women traders have a mobile phone, which can open up opportunities to enable them to become financially included. Innovative technologies like mobile-phone-enabled solutions can expand access to basic financial services. Mobile money, for example, enables individuals to store and transact money in digital form without the need of a bank account. Research has also...

One of the never-ending issues that complicate public perception about the Kenya Ports Authority (KPA) is the confusion between the institution and the Port of Mombasa. Actually, they say the easiest way to pull the rug from under a port’s success is failing to understand the various stakeholders and their role in making the Port of Mombasa a success. The world over, the distinct roles of the port community and the institution that runs the port are always interrelated but unique in terms of interests, goals and objectives. How each seaport defines their stakeholder groups, identifies movers and shakers, carries out two-way communications and incorporates input varies by port and by country, but there are some commonalities and melting points. On a normal day, an average of over 20,000 people enter and leave the port. Out of this massive human traffic, only 6,800 are KPA employees. The rest are drawn from the port ecosystem, comprising cargo interveners such as shipping agents, clearing and forwarding firms, government agencies, suppliers and primary customers, transporters, residents of maritime districts, security agents, northern corridor actors, and business partners. This number has remained constant despite the continued business expansion, courtesy of advancement in automation of key port services. The interaction level of all these people inside the port is high. Depending on one’s work location, an employee has high chances of closely interacting with our different partners either in person or exchange paperwork for business transaction. The fact that each unique partner demands a unique...

COVID-19 is a global pandemic that has killed over 200 000 people, more than the World War II as observed by the UN Secretary General Antonio Gueterres. The IMF has summed the pandemic’s economic effects as the Great Lockdown that far exceeds effects of the 1930s Great Depression. Domestic and international trade has stalled save for trade in pharmaceuticals, protective equipment and other life-saving essentials as countries have closed their borders in an effort to contain the spread of the coronavirus. Stalling operationalisation of the African Continental Free Trade Agreement may be one of the major casualties of Covid-19 as discussions to postpone AfCFTA to January 2021 gain momentum. The rationale behind stalling AfCFTA in the face of the marauding Covid-19 is grudgingly acceptable as it sadly means delaying the onset of Africa’s industrialisation. AfCFTA is premised on the success associated with trade liberalisation which is also linked to trade facilitation. While in the short term, Micro Small Medium Enterprises (MSMEs) and women businesses may not benefit from trade liberalisation, it is in the long term that the country experiences welfare gains. This will be evident in growth of MSMEs, increased competition, economies of scale, reduced trade barriers, total growth of the economy, employment creation and positive flows to the fiscus. Women-owned businesses and MSMEs account for almost 70 percent of informal cross border trade. Women have been disproportionately affected by Covid-19 due to the multiple roles they play in the economy as workers, traders, tax payers and consumers. As...