22 July 2020 (ECA) - At a time when global trade seems so uncertain because of COVID-19 pandemic crisis, a recent paper strikingly highlights that Kenya experienced a significant improvement in exports in early months of 2020 together with the moderation of imports, leading to a marked decline in the trade deficit. The paper published by Brookings and written by Andrew Mold, Senior Economist at UN Economic Commission for Africa and Anthony Mveyange Director of Research at TradeMark Africa used Kenyan trade data published up through May 2020 to provide a preliminary evaluation of the impact of the COVID-19 crisis on regional trade in the East African Community (EAC). According to the paper, the curfews, lockdowns, and cross-border disputes linked to the crisis provoked a sharp decline in intra-regional trade, with a dramatic fall in Kenyan exports to Uganda, Tanzania, and Rwanda. These trends are worrisome because Kenya is the major exporter and importer of the East African Community (EAC), accounting for around 46 per cent of exports and 41 per cent of imports for the whole region. Recent trade evidence from East Africa Kenyan textile exports to the United States and flowers and shipments of vegetables to the European Union were severely affected, largely due to both suspensions of international flights and the collapse of demand in target markets. The paper notes, however, that despite these disruptions, not all supply chains were affected. Kenyan tea exports peaked at just under 58,000 tonnes in April – a record high. Similarly,...

This paper uses Kenyan trade data published up through May 2020 to provide a preliminary evaluation of the impact of the COVID-19 crisis on regional trade in the East African Community (EAC). Paradoxically, given the prevailing pessimism surrounding the prospects for global trade, Kenya actually experienced a significant improvement in exports in the first quarter of the year, together with a moderation of imports, leading to a marked decline in the trade deficit. While the initial shock to Kenyan trade caused by the COVID-19 crisis initially looked dramatic in terms of the declines registered, this paper reveals that i) the shock is not so alarming when seasonality is taken into account; ii) re-exports and imports have been the primary foci of impact; and iii) domestic exports have actually performed extraordinarily well under the circumstances, with incremental growth since 2019. Notably, not all supply chains were disrupted by the crisis, with some Kenyan exports like tea and fruit surpassing levels of years past. Rather, imports have been the principle victim of the crisis, declining by a quarter over the three months since the crisis began (between March and May 2020). Capital goods imports have declined markedly—a trend which, if sustained, could have implications for longterm economic growth. However, the fall in imports of consumer goods could also set the scene for a revitalization of national and regional industry, as local producers step up to fill the void created by the sharp lull in imports. At the same time, Kenya’s EAC neighbors—especially...

Smart24 TV will on July 29 broadcast virtual discussion focusing on how trade and investment in Africa can be fostered post-Covid19. Experts say viewers will get market insights, perspectives and practical tips to help them invest, transform strategy, processes, technology and people to drive growth. The value of intra-trade among East African Community (EAC) partner states increased to $5.98 billion in 2018 from $5.46 billion in 2017, accounting for a 9.4 per cent growth. This could be boosted further but it remains stifled by persistent trade disputes on rules of origin, non-tariff barriers, inadequate value addition to the agricultural sector and competition from other producers and regional blocs that benefit from export subsidies. On average, EAC countries source 6% of their total imports from the region, and supply 20% of their total exports to the region. According to the EAC Trade and Investment Report 2018, formal trade among the EAC partner states largely constitutes of chemicals, textile, iron and steel. Agricultural commodities also form a large portion with significance in food items like rice, maize, sorghum, coffee, tobacco, wheat and other cereals. However, manufactured goods such as cement, petroleum, textiles, sugar, confectionery, beer, salt, fats and oils, paper, plastics and pharmaceuticals are also traded across the Region. At this event, which is being organized by SSCG Consulting Webcast, expect to gain latest updates, perspectives, strategies and best practices as experts discuss investment and business opportunities in the region, trade relations and facilitation issues at both the regional and the continental...

Truck drivers also applauded the interventions the NCTTCA secretariat has put in place so far including the real-time quick response. Stigma along the Northern Corridor and delays at Malaba border crossing point are the biggest challenges facing transit truck drivers. The chairman of Kenya Long Distance Drivers and Conductors Association (LoDDCA), Mr Roman Waema said that truck drivers are not allowed to stop at designated areas in some counties in Kenya such as the Machakos for fear that they will spread the coronavirus. “Sometimes we are forced to drive for over four hours without stopping, going as far as 400km, just because people do not want us to stop in their neighbourhoods,” Waema said. The drivers said that they had been facing stigmatization in different places due to misinformation by the public with some being treated suspiciously even by very close family members. He was speaking during the launch of the sensitization campaign against the spread of COVID-19 and stigmatization along the Northern Corridor when the Northern Corridor Transit Transport Coordination Authority (NCTTCA) did a one week-long exercise of distributing 10,000 masks and reflective jackets to long distance truck drivers. The exercise was carried out in Mombasa and at the weighbridges- Busia, Webuye, Mariakani, Athi-River and Gilgil. Truck drivers also applauded the interventions the NCTTCA secretariat has put in place so far including the real time quick response through a WhatsApp group dubbed “Northern Corridor Stakeholders Forum”. “We appreciate the Northern Corridor Secretariat for their solidarity with the drivers and...

The European Union on Thursday offered to support Kenya fast track results of the COVID-19 testing for the long-distance truck drivers in Busia and Malaba border points. Currently, it is taking longer than is comfortable for these drivers to get their COVID-19 results at the border points connecting Kenya and Uganda. The EU Ambassador to Kenya Mr Simon Mordue said they have come up with a regional electronic cargo driver-tracking system which will help track the COVID-19-status of truck drivers electronically. “In the next two weeks, the App will be up and running and will be linked to all Covid-19 testing Centres across the country. The technology will at the same time make it possible to follow the trajectory of the trucks and help the detection of short-landing,” he said. The EU envoy made the revelation at the Busia One-Stop Border Post where the EU donated equipment including re-usable boots and masks, washing points, hand sanitizers, liquid handwashing soap, disinfectant sprays and protective PPEs to border frontline health workers, customs operators and women organizations in Kenya and Uganda. “The EU through TradeMark Africa (TMA) will also establish safe trade which will allow close space zone for women small scale traders to continue operating their businesses as the border remains closed due to Corona Virus pandemic,” he added. Kenya’s Ministry of Health Chief Administrative Secretary, Dr. Rashid Aman said they will use the App to link up with their laboratory testing systems to facilitate detection of truck drivers’ Covid-19 status at...

Summary Business experts have already warned Kenya to be cautious considering she is entering into an agreement with a superpower. American Chamber of Commerce-Kenya chief executive Maxwell Okello said investment by US companies in Kenya will greatly benefit SMEs. The framework will also support development and competitiveness of key agricultural value chains in Kenya. Kenya’s need to export value-added agricultural products dominated the first round of talks with America after its formal launch on Wednesday last week. On the negotiation table, the US will be pushing its document with 24 chapters to be adopted so as to get access to almost all Kenyan economic sectors including State-owned enterprises. Kenya will, on the other hand, present its 14 areas which seek to provide safeguards to secure its industrial and agricultural sectors to avoid dumping America products in the country. In its objectives document, Nairobi wants to enter negotiation cautiously to make sure that the free trade agreement provides safety nets and exceptions to protect Kenya's economic interests. The US is seeking unfettered access to the Kenyan market in the proposed free trade agreement, which could have far-reaching implications on Kenya’s critical agricultural sector and its growth plans RIGHT REGULATIONS How can I make a successful pitch to a potential employer? In a virtual dialogue, the Kenyan team led by Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina, said there was need for agricultural value added products to be allowed in US market while America pushed for the right regulations to...

PRESIDENT John Magufuli’s fifth-phase government has set an indelible mark in enforcing East African Community (EAC) integration agenda, specifically on easing trade transactions across the borders. As his government winds up business to pave way for the General Election, slated for October this year, the mark left behind is unequivocal and if come five years of the second term, it would mean to segment the feats, for the benefit of individuals and the six regional States economically. The interest of galvanising the main pillars of integration in areas of cross-border trade, customs union, common market, monetary union and political federation was shown early, just after assuming the highest office, and he and his government has all along walked the talk, insisting on industrialisation as a strategy to move the region from poverty. That has since paid handsomely as the country has moved from its previous status and become a middle-income country, a goal that has been achieved five years ahead of the country's schedule. Last year, Tanzania recorded an economic growth of seven per cent, making it one of the fastest growing economies in Africa. Addressing the East African Legislative Assembly (EALA) on April 24th, 2018, Dr Magufuli rallied for industrialisation, home-grown solutions, and infrastructural development of the region saying it held the key for the transformation of Tanzania and the entire region. In his remarks, President Magufuli said the time had come for the region to think big and beyond parochial issues, urging the regional Assembly to take a...

In Summary It says categories that registered the largest drops include: Petroleum products; machinery equipment, vehicles & accessories; base metals and their products; and miscellaneous manufactured articles. In comparison with April 2020, the import bill increased by 23.4 per cent from $334.36 million (Shs1.2 trillion) to $412.73 million (Shs1.5 trillion) in May 2020, on account of growth in non-oil private sector imports. Despite the slowdown in international trade due to Covid-19 pandemic, the Ministry of Finance, Planning and Economic Development has revealed that Uganda recorded a trade surplus with the European Union of $0.32 million (Shs118 million) and the Middle East $87.70 million (324 billion) in May 2020 The Ministry said in the performance of the economy report of July 2020 that export earnings increased by 40.4 per cent in May 2020 to $290.93 million (Shs1.07 trillion) from $207.15 million (Shs765 billion) in the previous month. “This was the first time since January 2020 that exports were registering an increment, implying that the supply chain disruptions caused by the Covid-19 pandemic is starting to ease. However, in comparison with the same period last year, export earnings decreased from $349.61 million (Shs1.3 trillion) in May 2019 to $ 290.93 million (Shs1.07 trillion) in May 2020,” said the Ministry. They added: “The Middle East was the leading destination for Uganda’s exports accounting for 44.4 per cent of all exports. It was followed by the EAC at 23.1 per cent and the European Union at 12.5 per cent." However, during the under review,...

The COMESA bloc has developed an online portal for member states to exchange information on availability of essential products within the region as part of its strategy to lessen the impact of the Covid-19 pandemic. According to COMESA Secretary General, Chileshe Kapwepwe, the platform will connect buyers to suppliers of essential goods thereby promoting and fostering intra-COMESA trade. It is a platform largely meant to support regional trade, during the Covid-19 pandemic. Mwangi Gakunga, Head of Corporate Communications at the COMESA Secretariat, on Monday, July 20, told The New Times that the new tool "will enable suppliers in one country link up with buyers in another by uploading the products they have on the platform." Gakunga explained that for it to work, suppliers must be registered companies in their home countries. He said: "They will register on the platform and open an account and this will be vetted by the governmental focal points mainly in the ministry that coordinates COMESA activities who will approve and activate the account or advise otherwise." "This is to ensure the integrity of the companies allowed to post on the platform. Once the supplier account is activated, he or she can post the products on the platform." The platform will also help small-scale cross-border traders and SMEs to have access to market information and will link producers, sellers and buyers. It comes as the regional bloc noted that measures being implemented by member states such as closing borders to prevent the spread of the Covid-19...

The East Africa Community Trade and Investment Report shows that the value of intra-regional trade increased by 9.4 per cent to $5.98 billion in 2018 from $5.46 billion in 2017. Since the Common Market Protocol was launched in 2010, trade between East African Community member states has increased by 60.75 per cent from $3.72 billion to $5.98 billion in 2018, the latest trade data show. Despite non-tariff barriers (NTBs) continuously holding back the region’s potential, the Common Market Protocol has boosted trade in the region by easing the cross-border movement of goods and people. The East Africa Community Trade and Investment Report shows that the value of intra-regional trade increased by 9.4 per cent to $5.98 billion in 2018 from $5.46 billion in 2017. The growth was partly caused by EAC countries’ increased preference for trading with each other so as to counterbalance falling demand for the region’s products in European and US markets. All EAC member states apart from Burundi recorded growth in trade with their regional counterparts, the report showed. The East African Business Council said that the regional trade has been heavily impacted by the pandemic which has led to a rise in NTBs with most of the manufacturers shifting attention to local markets. In 2018, Rwanda’s total trade with EAC partner states increased by 13.4 per cent to $638.8 million from $563.2 million in 2017. Kenya’s trade with the EAC increased by 4.7 per cent to $1.95 billion from $1.86 billion in 2017, this was mostly...