Digitization of logistics and compliance with sustainability policies will shape the future of logistics in African markets. Digitalization involves the development of digital platforms that match supply to demand, whether it be courier apps that deliver groceries or platforms that coordinate freight delivery. Sustainability significantly overlaps with compliance and regulatory requirements. This means stricter regulations on emissions from logistics vehicles, monitoring of cargo ship pollution, and other issues. The COVID-19 pandemic caused massive damage to global supply chains, with challenges including route congestion and blockages, a global shortage of key logistics components including shipping containers, lack of space in warehouses, a spike in transportation costs, and substantially increased demand for goods around the world, post-lockdown. Supply chain stability is also under question due to increased tensions as the Russian-Ukraine war drags on. According to The Africa Logistics, measures to heal and strengthen ailing chains include digitizing parts of the supply chain, increasing manufacturing capacity in low-cost markets, reducing reliance on single-source suppliers, improving supply chain infrastructure through public and private funding, integrating sustainable practices into supply chain management and carefully monitoring changes in government policy across multiple jurisdictions. While the Logistics market in Africa may be drastically weakened after the global pandemic, many effective treatments for their repair and strengthening are already underway. Thorny challenges reveal immense opportunities. The world is once more looking at Africa as a potential growth market, so we need to be on top of our game. Digitization of logistics and compliance with sustainability policies will shape...

The Mombasa Tea Auction has been fully automated to boost efficiency and transparency. East Africa Tea Trade Association (EATTA), which runs the auction said that the new Integrated Tea Trading System (iTTS) costs Sh230 million. The automation was funded by the Danish International Development Agency (Danida) through Trade Mark East Africa, said EATTA chairman Arthur Sewe. Mr Sewe said automation of the auction will reduce the period in the tea trading cycle as well as direct costs associated with the auction process. The iTTS project automated the manual processes along the tea value chain and stakeholders hope it will enhance tea volumes traded at the auction and productivity. He said iTTS will ensure availability and access to tea trade data in a timely, reliable, accurate and verifiable manner. “When fully implemented, iTTS will significantly reduce the need for physical presence or representation. It will simplify the tea trading process, reducing, among other things, the learning curve for new entrants into the tea sector and streamlining of processes,” Mr Sewe said. He noted that automation will contribute to an increase in the income of farmers even in the event that prices remain constant. Mr Sewe explained that the digital platform will enable tea packers to effectively participate in the auction and enhance the opportunities for marketing and selling value-added teas. KTDA board chairman David Ichoho expressed hope that smallholder farmers will gain following the automation of the auction. [Sammy Omingo, Standard] “iTTS will increase the volumes of tea sold at the auction. Transparency in...

Transporters using the Northern Corridor have been bearing some of the highest costs in the world, reflecting how shortage of arteries is impeding the competitiveness of the East African region to trade. According to a survey carried out by the Shippers Council of East Africa (SCEA) , transport costs in the region are estimated at $1.8 per km per container against international best practices of $1 per km per container. “The most expensive route to transport cargo was Kampala-Mombasa at $2.5 per tonne followed by Mombasa-Kampala at $2.17, Dar es Salaam-Kampala $1.17 and Bujumbura-Dar es Salaam at $1.02 per tonne,” the SCEA Logistics Performance Survey 2021 report says. “The top three least expensive international routes were Dar es Salaam-Bujumbura at $0.02 per tonne, followed by Dar es Salaam-Kigali at $ 0.17 and Nairobi-Dodoma at $0.1 per tonne.” The Northern Corridor road network covers 12,707km (1,323.6km in Kenya; 2,072km in Uganda; 1,039.4 km in Rwanda; 567km in Burundi; 4,162 km in DRC and 3,543km in South Sudan). The port of Mombasa is the key entry and exit point for cargo belonging to a vast hinterland that includes Burundi, DR Congo, Kenya, Rwanda, South Sudan and Uganda. The port also serves Tanzania, Somalia and Ethiopia. High logistics costs The report summarises average transport cost per metric tonne, assuming a payload of 24 metric tonnes per 40-foot container. Speaking at a webinar by the East African Business Council and TradeMark Africa, National Logistics Platform in Uganda chair Merian Sebunya appealed to governments to...

The main focus for the EAC SMC is to ensure that standards are developed for the most traded commodities in the region. Secondly, for products that are thought to gain a market outside the EAC the SMC ensures that these standards too are developed accordingly. The East African Standards Management Committee is responsible for the development of harmonised standards in all the sectors i.e. products and services. The main role of the SMC is to provide support to technical committees in the EAC to have agreement on standards intended for harmonization so that products can easily cross borders within the seven (7) East African Community (EAC) partner states. There are currently 64 Technical Committees in the EAC which are spread across the sectors of engineering, chemical & consumer products, food & agriculture and Management & financial services. The main focus for the EAC SMC is to ensure that standards are developed for the most traded commodities in the region. Secondly, for products that are thought to gain a market outside the EAC the SMC ensures that these standards too are developed accordingly. The good thing with the EAC SMC is that the need for standards is as a result of studies which have been undertaken by the private sector organisations such as the East African Business Council, as well as development partners such as TradeMark Africa (TMA) on cross border trade of products. These studies are instrumental in identifying standards that need to be developed. It is therefore not by...

Competition between old and upcoming ports on the eastern African coast could signal better alternatives for importers who have struggled with inefficiency. A new report by logistics consultancy firm GBS Africa says that while veterans at the job such as the Port of Mombasa in Kenya and Dar es Salaam in Tanzania could face rough challenges from newcomers, it could be good news for importers as they may be spoiled for choices. The report is based on a survey on investments in ports in the region. It found that the planned new deep harbour facility at Bagamoyo in Tanzania and Lamu in Kenya offer importers and exporters alternatives. Bagamoyo is seen as the biggest game changer in Tanzania and the immediate challenge to Mombasa. In fact, new investments in Tanzania and Kenya could inadvertently cause some form of cannibalism, as players are likely to rush to where efficiency is. In Mombasa, the challenge of efficiency has been worsened by traffic snarl-ups on key corridors exiting goods from the port. The report notes that the port of Dar es Salaam offers faster and more cost-effective trade and transport solutions than Mombasa, citing that the port of Dar es Salaam is benefitting from ongoing expansion and investments. The Dar es Salaam port is designed to handle more than 10 million tonnes of cargo annually, where four million tonnes are dry general cargo, six million tonnes of liquid bulk and one million tonnes in the container terminal section. The competition among ports has already...

Kenya has listed 14 merchandise and service sectors for trade under the African Continental Free Trade (AfCFTA), as it becomes among the first six to pilot the continental pact. This comes even as countries continue to push to clear pending issues on preferential Rules of Origin on sensitive goods which account for 7% of the tariff lines. The stalemate is on textile and apparel, sugar and sugar products, goods produced in Special Economic Zones (SEZs), edible oils and motor vehicles. Nevertheless, member states have agreed on 88.7% tariff lines of about 6,000 products, open for trade on preferential terms. Industrialization, Trade and Enterprise Development CS Betty Maina yesterday said Kenya’s prioritised sectors in merchandise trade include agriculture, livestock and fisheries, manufacturing, handicrafts, mining, oil and gas. Priority export sectors under services trade are business including professional services, tourism, education, health, financial services, ICT, cultural and sports services; and transport and logistics. Kenya and Ghana were the first countries to ratify the AfCFTA and to deposit instruments of ratification with the AU Commission, after the agreement was adopted by the AU Extra-Ordinary Summit on March 21, 2018 in Kigali, Rwanda. Despite the launch of the commencement of trade in January 2021, commercially meaningful trade was yet to commence. To date, 54 African Union (AU) member states have signed the AfCFTA agreement with 49 having ratified it, making them eligible to trade. However, only six countries– Ghana, Cameroon, Egypt, Rwanda, Tanzania and Kenya are leading the pact in the pilot phase, with volumes expected...

Traders risk up to Sh500,000 in fine or a year in jail if they fail to register online for clearance of all imports and exports as the State moves to plug loopholes manipulated to ship in or export products. This follows the creation of the National Electronic Single Window System, which is now the only entry point to register and clear all inbound and outbound cargo. The online clearance system is linked to the Kenya Revenue Authority and the Kenya Ports Authority, giving the State more tools to tame tax evasion. “The system shall serve as a single entry point and platform for any person involved in trade and transport to lodge documents electronically, including import or export documents for processing and approval,” the Act reads in part. The law took effect on July 11 and revokes an Executive Order of 2010 that the government relied on to ensure that imports or exports are cleared electronically and ensure compliance with all taxes and duties. State agencies, including the Energy and Petroleum Regulatory Authority, Kenya Plant Health Inspectorate Service and Agriculture and Food Authority have also been linked to the system. An estimated 15,000 traders registered with the systems last year, highlighting why the government pushed for changes to the law to make listing compulsory. The platform will ease clearance hitches by offering a single paperless platform, a shift from the present situation in which traders have to visit every single entity. The system is key to facilitating cross-border and international...

The East African Business Council (EABC) just released its Barometer on Business & Investment in the EAC & Outlook 2022/2023, which captures the sentiment of the business stakeholders about how they see the business environment within the EAC. EABC is the apex advocacy body of private sector associations and corporates from the six East African Community (EAC) partner states Burundi, Kenya, Rwanda, South Sudan, Tanzania, Uganda, and DRC. It was established in 1997 to foster the interest of the private sector interests in the EAC integration process with the primary mission of promoting sustainable private sector-driven growth. EABC has Observer Status at the EAC level which offers an avenue for advocating the private sector interests in the EAC integration agenda with a view to promoting a conducive business environment in the region. This year’s EABC barometer shows the rate of investments, operation, and performance of businesses in the EAC bloc is recovering, and business stakeholders are optimistic about business in EAC. Economic Recovery from Covid-19 in EAC The Covid-19 pandemic has had a profound effect on businesses in the East African Community and globally. Some containment measures employed by EAC partner states to curb the pandemic such as curfews and closure of certain businesses negatively affected businesses in various ways. On the other hand, other businesses thrived by taking advantage of the new opportunities provided by the pandemic for instance manufacture of protective equipment, and medical care among others. The economic effect of the pandemic has been a subdued GDP...

Aid for trade is a crucial part of the integrated policy approach needed for trade and trade policies to advance sustainable development and support environmental objectives in least developed countries. At the Eighth Global Review of Aid for Trade on 27–29 July 2022, governments and stakeholders shared views on how best to harness aid for trade to support a just transition to sustainable trade that addresses the needs of developing and least developed countries. Extreme weather events and changing climate conditions are causing hundreds of millions in economic damage and severe suffering in least developed countries (LDCs). Eritrea, Madagascar, Mauritania, Chad, the Democratic Republic of Congo, Sudan, Mali, Ethiopia, and Congo face climate adaptation costs higher than their national spending on healthcare, with these adaptation costs ranging from around 5–22% of gross domestic product. The ocean states of Kiribati, the Solomon Islands, and Tuvalu and countries like Bangladesh, Senegal, Tanzania, and Uganda are flooded with plastic pollution with tremendous economic and health costs. From Laos to Madagascar and Guinea, rural populations, which account for two thirds of people living in LDCs, are experiencing the loss of biodiversity and ecosystems on which they directly depend for their subsistence. Faced with the huge social and economic toll of these planetary environmental crises, despite bearing the least historical responsibility for them, the world’s poorest nations have repeatedly highlighted the need for international support measures, including through Aid for Trade to address their trade-related impacts. Fostering aid for trade for sustainable development As governments and stakeholders...

Trade initiatives must keep up with the evolving needs of developing and least developed countries (LDCs) in order to adapt to climate change as part of a global economic strategy, participants heard at the Aid for Trade Global Review on 28 July. Open trade and lowering barriers to environmental goods and services must play a critical role in providing affordable access to advanced technologies needed to transition to a low-carbon economy, speakers said. At a plenary session on the second day of the Aid for Trade event, speakers focused on how this initiative can help develop critical trade infrastructure while supporting resilient, climate friendly and inclusive trade outcomes. The session benefited from the expertise and practical insights of experts and financing partners engaged in green transition activities. In his opening remarks, WTO Deputy Director-General Xiangchen Zhang told participants that climate change is one of the most pressing challenges of our time. The World Bank estimates that natural disasters already cost low- and middle-income countries USD 390 billion per year regarding damage related to water, transport and power infrastructure. “In that context, adapting to climate change by reducing climate-related risks and vulnerability is a key economic strategy. International trade can contribute to climate change adaptation efforts by enhancing economic resilience to extreme weather events through diversified supply chains, timely provision of essential goods and services, improved food security, and greater access to climate-related adaptation technologies,” he said. DDG Zhang stressed that the transition to a low-carbon economy entails a substantive transformation...