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...

The Coronavirus pandemic (COVID-19) has become a fully-fledged global economic crisis with governments now issuing Level 4 – Do Not Travel advisories, instituting curfews, partial and full lockdowns. These lockdowns that started from Wuhan, China - the epicentre of coronavirus outbreak - are fast turning in to the safest way of life with Italy, Spain, India, South Africa, Uganda, Kenya, and Rwanda among countries administering shutdown doses. The lockdowns mean that factories and private companies cease most economic activities. Therefore, disposal incomes for both people and companies is reduced in sectors of the economy including the health, manufacturing, retail, trade, transport, tourism, entertainment, education and many others. Conservative estimates indicate that the global economic aftermath of COVID-19 pandemic could last at a minimum of one year. The Organisation for Economic Co-operation and Development (OECD) estimates annual global GDP growth is expected to drop to 2.4% in 2020, from an already weak 2.9% in 2019. World exports are forecast to decline by more than 5% to US$1.28 trillion in 2020. Further, the United Nations Conference on Trade and Development (UNCTAD) reports that the number of container cargo ships from China, reduced by 30 percent, in January 2020 alone from 540 ships to 370 ships per day. A March 10, 2020 Baker-McKenzie report highlights that many African countries face a “twin supply-demand shock,” due to a decrease in imports of manufacturing inputs and supplies from China and reduced demand from exports in key sectors in various export markets. Reports from the Uganda...

  The US Trade Department has started negotiations on a comprehensive trade agreement with Kenya in a move that will extend Kenya’s preferential access as the current trade arrangement under the Africa Growth and Opportunity Act (AGOA) closes in 5 years. If successful, the United States would forge its first bilateral trade accord with a sub-Saharan African country. Grant Harris CEO, Harris Partners LLC joins CNBC Africa for more.

The recently launched Kenya Customs Agents and Freight Forwarders Bill 2020 aims to enhance professionalism in service delivery and compliance to the existing regulations in order to end cargo delays at ports, improve cargo flow, improve revenue collection by the revenue authority and lowering the cost of doing business. Fredrick Aloo, Secretary General of Kenya International Freight Forwarders and Warehousing Association joins CNBC Africa on challenges faced and the impact the bill will have.

Africa is lagging behind in the lucrative global digital economy, worth around $12tn globally. With the African  Continental Free Trade Agreement in force, it is time to launch a continent-wide digital revolution to keep pace with the rest of the world. By Thierry Zomahoun On 30 May 2019, the African Continental Free Trade Area (AfCFTA) officially came into force. Like most African leaders and a large proportion of informed observers, I remain convinced that the AfCFTA is an opportunity for the development and integration of our continent. A free trade area that includes nearly a billion consumers will surely prove to be a powerful driver of economic growth in the sectors that can ensure our continent emerges. One of these is the digital economy. Africa is still lagging behind in this area. You might even think that Africa has resigned itself to sitting out this competition that is already shaping tomorrow’s world. There is a digital re-colonisation looming over our continent. Perhaps you have heard about what we call ‘unicorns’. These are online micro-enterprises that started from nothing and built a stellar empire within a few years. Take note – of the 575 known unicorns across the world, only three of them came out of Africa. This African lag can be explained by a number of factors, one of which is an inadequate infrastructure, not to mention the shortage of requisite skills. These are real challenges holding back the growth of innovation and the emergence of industries linked to new technologies. Such barriers...

Residents of Budalang'i in Busia County have started feeling the effects of a  government order to close the border to human traffic. Locals said they depend heavily on food brought in from Uganda, thus the travel restrictions could result in some families sleeping hungry.“If the government is ready to distribute relief food, that will be good for us in Budalang’i," said Rael Akumu, a cereals trader who was unable to replenish her stock with grains from across the neighbouring country. Following the order to close the border to human traffic from Port Victoria in Budalang’i to Malaba, only heavy commercial vehicles are being allowed across. On Tuesday, police chased away traders who operate in Kenya's Sofia area, which borders the country's no-man's land with Uganda.Jane Atieno said she has been crossing the border for the last seven years to buy fruits, onions, tomatoes and vegetables in Sofia, Uganda. "Our bread basket is Uganda. We source foodstuff from there and since the closure of the border, it has been hard for us to cross," she said.Kenya National Chamber of Commerce and Industries Busia vice chairman Sylvanus Abungu warned that the directive will have far-reaching negative economic effects. Mr Abungu said Kenya imports millet, maize, cassava, sweet potatoes, fish, milk, eggs and sugar from Uganda.Other commodities include sugarcane, charcoal, timber and cereals, which are later transported across the country."Informal cross-border trade is the worst hit. Busia is the gateway to markets outside the region and it is already affected. If the government...

With border closures announced to contain the spread of the corona virus pandemic, the road transport sector has been hardest hit. The road transport accounts for over 60 percent of goods movement from ports of entry to the region. Besides shutting of the borders, more checks have been introduced to minimize exposure and curtail export of the virus. Logistics experts have predicted business could reduce by more than half going forward, with players calling for measures to minimize disruption and provide a critical service. Kagure Wamunyu, Africa region chief executive officer at Kobo 360, said logistics business will drop by 50 percent since borders trucks are spending up to two days before they cross the border due to the stringent checks. Kobo, a freight logistics firm, connects and supports cargo owners, truckers, drivers and importers. “The logistics sector has been disrupted by the pandemic and will suffer the sharpest blow. Developing a supply chain response to the coronavirus outbreak is extremely challenging, given the scale of the crisis and the rate at which it is evolving,” Ms Wamunyu told Shipping & Logistics in a phone interview. She said since road transport plays a crucial role in linking industries with the ports where raw materials are delivered, there is need for quick solutions to the current challenges. Kenya’s borders with Uganda and Tanzania have been shut, with minimal truck movement. This has led to delays in delivery of goods within the region. Mombasa is the gateway to East African countries of...

One of the largest Norwegian business delegations to ever visit an African country has just returned home after three full days in Kenya. The large and broad specter of companies represented in the delegation reflects the increasing interest among Norwegian businesses in the Kenyan market. Many Norwegian actors with experience from Kenya are now seeking to strengthen their existing portfolios, while even more companies new to Africa are attracted by the diversity, openness and vibrancy found in the East Africa’s largest economy. Kenya is an especially interesting market for Norwegian companies within renewable energy, ICT, smart cities, agricultural technology, flower production and tourism sectors. Business cooperation is indeed an increasingly important part of the bilateral relationship between Norway and Kenya. The Government Pension Fund Global —the world’s largest sovereign wealth fund —and Norfund have already placed their bets on Kenya. Sustainable Kenyan and foreign investments are a prerequisite for development, job creation and tax revenues. Private sector growth is key in ensuring Kenya’s young population can graduate from poverty. More Norwegian firms are now ready to contribute to growth through increased trade and investments. Around 25 Norwegian companies are currently set-up in Kenya. Norwegian investors in renewable energy and solar energy production, where companies such as Scatec Solar, Gjertsen and Bright Products already have a presence in Kenya. There is also significant economic cooperation within agriculture and agricultural technology. Companies such as Yara, Mester Grønn and Bama are stakeholders in this sector. Up to 60 per cent of Norway’s exports...

Kenya’s deal with the US for a Free Trade Agreement is taking shape with United States Trade Representative Robert Lighthizer notifying Congress officially of a plan that is likely to threaten the unity of the East African Community. In a letter dated March 17, 2020, President Trump through Mr Lighthizer wrote to Nancy Pelosi, US Senate Speaker; Senator Charles Schumer, Minority Leader; Kevin McCarthy, Minority Leader US House of Representatives; Charles Grassley, President Pro Tempore, of the US Senate, notifying them of the president’s intentions. “I am pleased to notify Congress that the president intends to initiate negotiations on a trade agreement with the Republic of Kenya. We are committed to concluding these negotiations with timely and substantive results for US consumers, businesses farmers, ranchers and workers consistent with US priorities and negotiating objectives established by Congress in statute.” “In pursuing negotiations on a trade agreement with Kenya, we are responding to Congress support, as expressed in the African Growth and Opportunity Act (Agoa), to negotiate reciprocal and mutually beneficial trade agreements that serve the interests of both the US and sub-Saharan Africa,” said Mr Lighthizer in a letter to the Senate Speaker. The deal comes hot on the heels of the second official visit of President Uhuru Kenyatta to Washington a month ago. It was also a follow-up to trade and security talks that Kenya held with the US two years ago. The proposed deal, if passed, would see Kenya open its borders for duty-free imports from the US,...

The implementation of the African Continental Free Trade Area (AfCFTA) in Eastern Africa could result in welfare gains amounting to USD 1.8 billion for East Africa, boosting intra-African exports by more than USD 1.1 billion and creating more than 2 million new jobs, says a new report. This report, entitled: “Creating a Unified Regional Market - Towards the Implementation of The African Continental Free Trade Area in East Africa” jointly published by the UN Economic Commission for Africa (ECA) and Trademark East Africa, was launched in Nairobi, Kenya. Betty Maina, Kenya’s minister for trade and industrialisation, explained that her country pursues growth in trade by identifying different markets to its products. She stressed that to maximise benefits from the AfCFTA, greater attention must be geared towards supply chains in agricultural commodities and processed food products to scale it up to the continental level. “We need to up our game and I am glad that large numbers of young people enter the food processing industry, which provides a lot of jobs for our youth”, she said. Stephen Karingi, Director Regional Integration and Trade Division at the ECA, who also attended the event, said that by 2040 the AfCFTA has the potential to increase the value of agricultural and food exports on the continent by US$16.8 billion. Karingi noted that according to recent estimates by ECA, the largest percentage increases - that is over 25 per cent in intra-African exports for industrial sectors - are found in textile, wearing apparel, leather, wood...