Non-tariff barriers to trade (NTBs) or sometimes called Non-Tariff Measures (NTMs) are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs. The Southern African Development Community (SADC) defines a non-tariff barrier as any obstacle to international trade that is not an import or export duty. They may take the form of import quotas, subsidies, customs delays, technical barriers, or other systems preventing or impeding trade." According to the World Trade Organisation, non-tariff barriers to trade include import licensing, rules for valuation of goods at customs, pre-shipment inspections, rules of origin ('made in'), and trade prepared investment measures. One of the reasons why industrialised countries have moved from tariffs to NTBs is the fact that developed countries have sources of income other than tariffs. This explains the fact that most developing countries still rely on tariffs as a way to finance their spending. Developed countries can afford not to depend on tariffs, at the same time developing NTBs as a possible way of international trade regulation. The second reason for the transition to NTBs is that these barriers can be used to support weak industries or compensation of industries which have been affected negatively by the reduction of tariffs. The third reason for the popularity of NTBs is the ability of interest groups to influence the process in the absence of opportunities to obtain government support for the tariffs. With the exception of export subsidies and quotas, NTBs are most...

https://www.youtube.com/watch?v=E9JQoWHUHGg

African countries are facing a dual crisis – the impact of COVID-19 on their populations and the global economic slow-down which threatens to undo the hard-fought gains of the last 25 years Nestled in the undulating hills of central Ghana is a Fair Trade cooperative cocoa farm that produces chocolate for export to the world, including to supermarkets across the UK. When I visited the farm last summer, I saw for myself the many jobs the farm provides – many taken by women – and the families that these support. Consumers of the chocolate that originates from Ghana include, no doubt, thousands of workers in my constituency of Stafford, like those in the General Electric factory in Stafford. They manufacture transformers for the energy grid across the globe, including in developing countries like Ghana, where electricity supply can often be insecure or not available. That’s how trade works. Both sides win. For the UK and Africa, our two-way trade has enormous value – a total of £35.1bn of goods and services in 2018 according to ONS – creating and sustaining countless jobs across our country and on the continent. The Prime Minister has been quick to seize the opportunity. At the inaugural Africa Investment Summit in London earlier this year, he promised to renew our economic partnership with Africa, containing some of the fastest-growing economies in the world. Today, however, African countries are facing a dual crisis – the impact of COVID-19 on their populations and the global economic slow-down...

CEGA is committed to sharing a diversity of voices and perspectives. This post, written by Anthony Mveyange (EASST Fellow, TradeMark Africa) and Andrew Mold (United Nations Economic Commission for Africa), was originally published on the Brookings Institution website. Recent global trends like the COVID-19 pandemic, the climate change crisis, and heightened trade disputes among the world’s leading trade partners have highlighted the vulnerability of global value chains (GVCs). At present, the scale of the disruption in East Africa is quite dire — imports from China (a common source of intermediate goods) through the Mombasa Port declined by a drastic 20 percent shortly after the onset of the pandemic, between January and February 2020. In light of these trends, governments and industries in East Africa should consider rapidly shifting from focusing on global value chains (GVCs) to regional ones (RVCs). Given the region’s past difficulties with entering global value chains and consolidating the gains from regional integration processes, heightened emphasis on regional value chains could reap compounding benefits. The time is ripe: As documented in our recent report, the recently signed and ratified African Continental Free Trade Area (AfCFTA) can be the great enabler of that shift. THE STAGNATION IN GVCS The literature on GVCs emerged in the 1990s, after which the development community began to frame development success in terms of the ability of countries to insert themselves into these GVCs. Although not uncontested, academic research provided evidence of the benefits to workers and improved prospects for poverty reduction from participating in GVCs. However, the...

On February 27, Nigeria confirmed the first case of Covid-19 in Sub-Saharan Africa. Since then, the virus has spread to all corners of the continent. Even before the first cases were recorded in Africa, Covid-19 was already impacting international demand for exports in key sectors such as textiles and horticulture. Flower exports are down by more than 90 per cent and tourist arrivals have ground to a halt. The Kenya National Bureau of Statistics reported that imports dropped by more than 20 per cent in the first two months of 2020, with Chinese imports plummeting around 37 per cent. As the pandemic continues, the projected losses grow. Trade volumes in the EAC are down by up to 25 per cent since the beginning of 2020, with even greater reductions in the informal sector. African countries, conscious of the fragility of their public health systems and limited intensive care capacity, have instituted strict measures to stem the spread of the virus. However, for many in the region, their livelihood depends on moving about freely. There is no work-from-home option for the hundreds of thousands of small-scale traders. A day of work missed often translates to a day without food on the table. While health considerations are of primary importance, the prospects for tackling the challenges the pandemic presents are inextricably linked to trade and the economy. Continued trade at this time is crucial for three main reasons. First, trade is essential in ensuring people and governments have what they need to...

Fixing the economic impact of the COVID-19 pandemic could cost the Government over Rwf800 billion over two fiscal years. The spending would propel economic growth rate to an average of 8 per cent by 2022.  With the recent partial lifting of the lockdown allowing resumption of economic activity, all eyes are on the Ministry of Finance and Economic Planning strategy to accelerate recovery. Among the key challenges that were observed by the United Nations Economic Commission for Africa (ECA) as a result of lockdowns across the region include a drop in demand for goods and services owing to reduced purchasing power, limited operational cash flow,  difficulties in obtaining raw materials essential for production among others. The Ministry has already announced that this month, a special fund will be launched with an aim to enable access to capital for business operators especially Small and Medium Enterprises who will need to restart their operations or start over. While the fund will come in handy, experts say that reviving an economy requires more than just capital in the private sector. The Minister for Finance and Economic Planning, Uzziel Ndagijimana, on Friday, May 7 while speaking at an EAC virtual meeting on lock-down exit strategies said that Rwanda has so far set an economic recovery strategy and commencing on implementation. The recovery plan, Ndagijimana said, has ambitions such as ensuring social protection, supporting businesses recovery and at the same time conscious of the decline in tax revenue. According to The Economic Recovery Plan, covering...

From a political and economic point of view, the African Continental Free Trade Agreement (AfCFTA) represents one of the most ambitious initiatives since the establishment of the African Union. Things were going as expected, until Covid-19 got involved, and so now the negotiation for implementing the agreement is temporarily suspended. The issues concerning rules of origin, dispute settlement, agreements of tariffs for certain products and more remain to be settled. No Reason to panic! The AfCFTA is not going to peter out. Yes, at this stage, the pandemic may produce less enthusiasm for the AfCFTA. Governments don’t know what to think. …to free or protect the economy! Will our leaders learn the lesson, and realize that a closed economy is poorer? We’ll see. But the first indication is not inspiring. African countries should continue negotiation to construct an effective AfCFTA regime that promotes development, and is beneficial in a balanced and fair manner, to all parties that participate in the market. The AfCFTA should offer a system that builds on deeper integration within a shared rule-based framework, provide benefits across the continent by restraining costly and inefficient protectionism, encourage cost-reducing scale economies in production of goods and services, and help prevent races to the bottom that would have otherwise have occurred from competitive pressures. No wonder why poorer countries want to be sure free trade is not only acceptable but is a promising solution for development. Why should policymakers be concerned about poorer African countries? Naturally, poorer African countries, in...

Ethiopia-Eritrea relations continue to thaw, as on Sunday, May 3, Eritrean president Isaias Afwerki, Foreign Minister Osman Saleh, and Presidential Advisor Yemane Ghebreab, visited Ethiopia, where they were received by Prime Minister Abiy Ahmed. During the two-day diplomatic visit, the leaders discussed bilateral cooperation and regional issues affecting both states, including the COVID-19 pandemic and the desert locust infestation. Afwerki and his delegation also visited several agricultural and water development projects in Ethiopia’s Oromia Regional State. After two decades of hostility, Eritrean-Ethiopian diplomatic relations were revived in June 2018, when a peace deal was signed to formally end the countries’ 1998-2000 border war and to open borders between the countries. However, borders were again closed several months after the initial agreement; Ethiopia and Eritrea have yet to come to a formal agreement on their reopening. Also in Ethiopia, the Tigray region has announced plans to hold regional elections in defiance of a nationwide postponement of voting due to the COVID-19 pandemic. Defending their decision, the region’s governing Tigray People’s Liberation Front (TPLF) said, “We are making preparations including the holding of a regional election in order to safeguard the rights of our people from chaos.” Ethiopia’s National Election Board has stated that the TPLF did not submit a request for a vote, and that only the National Election Board has the mandate to conduct an election. In other regional news, on Monday, May 5, Sudan announced the appointment of its first ambassador to the United States in 23 years. Sudan’s...

The Acting Chief Trade Negotiator/Director General, Nigerian Office for Trade Negotiations, Mr. Victor Liman, has said that the African Continental Free Trade Agreement (AfCFTA) is now expected to commence from January 1, 2021.Speaking on Nigeria’s Channels Television programme on Thursday, Liman  said that the AfCFTA, which was earlier scheduled to kick-off on July 1, 2020, was postponed due to the ravaging impact of COVID-19 pandemic on Africa. The Continental trade agreement entered its operational phase on July 7, 2019, following the ratification by 54 of all the 55 African countries. Liman disclosed that the Extraordinary Africa Union Summits scheduled to hold in South Africa on May 30, 2020 has been postponed to December 5, 2020. According to Liman, the summit is aimed at encouraging trade negotiators to complete their bargaining on tariff reductions, rules of origin and other necessary regulations and that the new date will also give sufficient time for trade ministers and their experts to finalise negotiations and prepare adequately for the Summits. The agreement for the largest regional market in the world was organised by the African Union and signed on by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018. Source: Journal du Cameroun

The International Monitory Fund (IMF) executive board on Wednesday approved a total of $1.23 billion (about Sh2.8 trillion) to help two East African Community (EAC) member states in addressing the economic impact of Covid-19.The money will be disbursed under the IMF’s Rapid Credit Facility. The RCF provides rapid concessional financial assistance with limited conditionality to low-income countries (LICs) facing an urgent balance of payments need.It (the RCF) was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the IMF’s financial support more flexible and better tailored to the diverse needs of LICs, including in times of crisis.Out of the $1.23 billion, Uganda will receive $491.5 million while Kenya will pocket $739 million.This brings the total number of EAC member states that have so far received IMF funding for Covid-19 to three.Last month, Rwanda became the first African country to benefit from the IMF’s RCF when it secured $109.4 million in emergency coronavirus funding.Across the region, the Democratic Republic of Congo, Malawi and Mozambique have already benefited from the funds.A few days ago, the IMF approved a $91 million loan for Malawi to help fund a balance of payments deficit exacerbated by the Covid-19 pandemic, the Fund said in a statement. Towards the end of last month, the IMF executive board approved a disbursement of $363 million under its RCF to help Democratic Republic of Congo confront the impact of the Covid-19 pandemic.During the same period, the IMF approved $309 million to help...