Current state of play of the AfCFTA The secretary-general of the Africa Continental Free Trade Area (AfCFTA) secretariat, Mr Wemkele Mene made an announcement on 28 April 2020 of the postponement of the 1 July 2020 official implementation start date. Mr Mene cited the adverse effects of Covid-19 currently devastating Africa and the world at large as the primary reason. This postponement came after significant lobbying of African leaders not to move this long-awaited launch date as there are real concerns that Africa could lose momentum towards the implementation of the new trade architecture. He made no announcement of an alternative start date, though speculation is swirling that it may now be set for January 2021. As indicated in my previous article ‘In a post-Covid-19 World, the Africa Continental Free Trade Area could not come soon enough’, which featured in Engineering News, Mining Weekly and How we made it in Africa on 22 May 2020, the pitfalls of open-ended postponements were laid out. Africa needs to move forward at pace to implement the agreement or risk losing momentum, political will and failure to negotiate meaningfully with global trade partners to correct the existing highly skewed trade architecture – especially if Africa appears to the world as being incapable of multi-tasking! Once fully implemented, the AfCFTA aims to reshape the continent’s social, investment and trade arena in a fundamental manner. It lays the foundation for the African Customs Union, a cornerstone of the African Union (AU) Agenda 2063. The goal is...

Port users are seeking an extension of the free cargo storage period for local imports to cushion them from additional costs. This comes almost a month after Kenya Ports Authority(KPA) extended the free storage period for importers and exporters of transit cargo, leaving local tariffs unchanged. In the revised three month free storage tariffs which came into effect on May 18 , transit import containers are allowed 14 days of free storage at the port and the Inland Container Depot-Nairobi(ICDN), from a previous nine days.  Transit import containers at the Naivasha ICD have 30 days free storage while all transit export containers are now being stored for 20 days free of any charges from the previous 15 days. “This is in line with our continuous and deliberate efforts of cushioning our customers on effects of the Coronavirus,” acting managing director Rashid Salim said then. However, storage for domestic import containers remained unchanged where cargoes are stored free for four days, before attracting charges. This, according to the Shippers Council of Eastern Africa (SCEA) has led to increased cost of doing business for goods destined for Kenya as only 40 per cent of cargo is cleared within the free period. Importers and exporters incur charges of between $30 (Sh 3,203) and $90 (Sh9,611) per day for cargo that has stayed beyond the free storage period and more than 24 days, depending on the size of the container. Containers released by KRA and not collected after 24 hours are charged $100 (Sh10,679)and $200 (Sh21,358) per day for 20ft and 40ft respectively. “Shippers are...

Tea prices at the Mombasa auction fell to the lowest this week amid high supply, as brokers sought to move volumes accumulated during the Covid-19 period. A kilo averaged $1.78 (Sh189.84 ), the lowest price this year, down from $1.82 (Sh194.10 )last week and $1.86 (Sh198.37 ) in the previous sale, signalling a drop in farmers' future bonus payments. Tea farmers earn Sh649m dividends as KTDA defends sector This is equally lower compared to the average $2.05 (Sh218.63 ) a kilo went for in a similar sale last year.  A total of 10,039,385(more than 10 million) kilogrammes of tea was traded this week, 533,584 kilos more than the previous sale, which traded 9,505,801 kilos. “Out of 190,058 packages (12,500,000 kilos) available for sale, 151,638 packages (10,039,385 kgs) were sold. 20.21 per cent packages remained unsold,” the East African Tea Trade Association (EATTA), which overseas the auction, notes in its report. The high value export commodity opened with a $2.23 (Sh 237.83) a kilo in the first sale of January, which remains the highest. During this week's secondary auction,Egyptian packers lent strong inquiry and were dominant with increased support from Bazaar while UK and Russia were active. “Yemen and other middle eastern countries were active but selective with reduced interest from Pakistan packers, Kazakhstan and other CIS states,” EATTA said. Sudan packers were active but selective with Afghanistan selective. Iran were barely active while Somalia were active at the lower end of the market. Speaking to the Star yesterday, EATTA Managing Director Edward Mudibo pegged the price drop to demand and supply, which...

More infrastructural projects are on the way after the Department of Infrastructure received Sh189.5 billion, one of the largest allocations. While many government agencies have seen their allocations reduced, as the National Treasury reallocates resources to fight the coronavirus, the Infrastructure Department has been pampered with a three per cent increase in allocation compared to the Sh186.4 billion it received in the current financial year. Among the major roads the government is planning to start building over the 2020-21 financial year include the Sh400 billion controversial Mombasa-Nairobi expressway, Nairobi-Nakuru-Mau Summit Road and dualling of the Kenol (near Thika) – Marua (in Nyeri) road. The Ministry will also upgrade the old metre gauge railway between Naivasha and Malaba as well as build a connecting line between Naivasha and Mai Mahiu, where the Standard Gauge Railway currently terminates. The Department’s development budget is Sh121 billion, which is about 20 per cent of the entire government’s development budget of Sh584.3 billion. The Parliamentary Budget Office noted that Infrastructure, together State Departments of Water and Sanitation and Energy accounted for more than half of the government's development spending. “In the development budget, major expenditures are as follows; the state department for Infrastructure Sh121.6 billion, the State Department for Water and Sanitation Sh69.7 billion, Ministry of Energy Sh67 billion and the ministry of Health Sh49 billion. The expenditures represent 52 per cent of the total development budget,” noted the PBO when it analysed the proposals by Treasury. In a recent interview with The Standard, Dr Samuel...

The top private sector organization in East Africa has urged regional transport, health, and the East African Community (EAC) ministers to resolve the crisis at the Namanga border. This comes amid a 14-day standstill on the movement of goods between Kenya and Tanzania at the busy border point. “There are over 1,000 trucks stranded at both sides of the border, this is significantly affecting the intra-EAC trade and movement of essential and perishable goods across borders,” said East African Business Council (EACB) Executive Director and Chief Executive Officer, Dr. Peter Mathuki. Further, Dr. Mathuki warned that there is a slow down in the movement of cargo across all EAC borders. “This is disrupting regional value chains due to the emerging challenges restricting the movement of truck drivers in a bid to contain the spread of COVID-19,” said the EABC boss. According to the latest data from the International Trade Centre, Kenya imports products valued at Ksh19 billion while exporting to the same country goods worth Ksh32.3 billion annually. Rwanda on the other hand imports goods worth Ksh14.4 billion ($135 million) from Kenya and Ksh213 million ($2 million) value of goods from Tanzania. To ease the backlog in the borders, the EABC said that it is ready to offer support towards a public-private dialogue on cross border trade to unblock the current trade barriers. Dr. Mathuki said dialogue is not critical for economic recovery for the EAC region. This week, the Tanzanian deputy minister for health toured the Namanga border where...

The 2019 Africa Regional Integration Index published by the African Union, the United Nations Economic Commission for Africa and the African Development Bank has ranked the EAC at the top, noting that it had excelled in free movement of people. The Southern African Development Community remains the least integrated bloc on the continent. The EAC is a regional intergovernmental organisation of six Partner States, comprising Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda. Source: Top African News

In East Africa, mandatory coronavirus testing for truck drivers is causing long delays at the busy Busia border between landlocked Uganda and it’s neighbor to the east, Kenya. Watch video here Source: Deutsche Welle 

Content type: Graphic Analysis Location: AFRICA Keywords associated with this article: Geographic: Africa, ME/NAF, Central Africa, East Africa, North Africa, Southern Africa, West Africa Topical: economy, international relations, emergency, fiscal, foreign trade, government, health, immigration, infrastructure, investment, policy, regional, talks ISSN: 2633-304X Lagging regional integration is further complicated by the COVID-19 crisis Impacts COVID-19-related border and trade restrictions will strain various bilateral relationships over the short-to-medium term. Progress on freedom of movement and visa openness could face renewed setbacks. Recent continental efforts on procuring COVID-19-related supplies will intensify efforts to improve medical regional value chains. COVID-19-related border closures will exacerbate ongoing and emerging food security crises. Conclusion The latest Africa Regional Integration Index Report shows states and regional economic communities generally not well integrated, with the EAC overall the most integrated community across five criteria: trade integration; productive integration; macroeconomic integration; infrastructural integration; and the free movement of people. Sub-Saharan Africa’s growth is set to contract by at least 1.6% in 2020, and global growth by at least 3%, with severe impacts for regional heavyweights Nigeria and South Africa. With the African Continental Free Trade Area (AfCFTA)’s implementation now delayed (potentially until 2021), and COVID-19-related disruptions to global trade and financial markets, enhanced regional integration will become even more pressing to offset expected economic downturns. Source: Emerald

Rwanda and Uganda have recorded a reduction in trade flows in April and May 2020, according to the latest report from the COMESA Statistics on ‘COVID 19 Impact on Trade’. The report was prepared in the first two months in which COVID-19 spread to the region. Imports into Rwanda declined by 32 % in April compared to March. Rusumo and Airport borders posts recorded declines in imports of 35% and 16% respectively. In Uganda a drop in imports were recorded at 30% in April compared to March. Malabo, Busia and Entebbe border posts recorded declines in imports of 35%, 28% and 24% respectively. Imports for the month of May were projected to decline by 20%. Exports for Rwanda also declined by 8% in April compared to March 2020 while Uganda recorded a decline in Exports by 15% in April compared to March. According to the report, reduction in customs duties are listed as among the critical challenges faced by the Rwanda Revenue Authority. Customs duty receipts declined by 55% in April compared to March. Rusumo, Kagitumba and the Airport border posts recorded declines in customs duty receipts of 52%, 71% and 41% respectively. For Uganda, a reduction in customs duties was listed among the critical challenges faced by the Uganda Revenue Authority with declines of 42% recorded in April compared to March. Malaba, Busia and Entebbe recorded declined duties of 43%, 36% and 21% respectively. Both countries have however put in place measures to respond to the COVID-19. In Rwanda for...

Findings of the 2019 African Regional Integration Index indicate that regional integration in Africa remains low with the continent recording an average index score of 0.327 out of a possible 1. The latest index, published late May by the United Nations Economic Commission for Africa, the African Union, and the African Development Bank, builds on the first edition published back in 2016. It provides up-to-date data on the status and progress of regional integration in Africa. The ARII uses 16 indicators, grouped into five dimensions – free movement of people, trade, productive capacity, infrastructure, and macroeconomic policy – to measure how well each country and region is integrated with its neighbors. It shows the continent is still particularly poorly integrated on the productive and infrastructural dimensions, which are key aspects of the foundations of regional integration while free movement of people is the strongest dimension. Although 20 countries score above average, no African country can be considered well integrated with its region, the report said. Much more needs to be done to link regional economies to make them more resilient to shocks such as the current COVID-19 pandemic, it said. “The present COVID-19 pandemic has reopened the question of whether enough is being done in advancing regional integration as a means to help Africa withstand systematic shocks such as the one being experienced today,” said Stephen Karingi, Regional Integration Division Director at the ECA. By the metrics, the East African Community is ranked the best integrated among the eight Regional Economic Communities in Africa, while the Southern...