East African countries are likely to lose more than $5 billion in foreign earnings from agricultural exports this year as a direct result of the effects of the Covid-19 pandemic, and uncoordinated individual countries' mitigation and containment responses. With agriculture being one of Africa's most important economic sectors, making up 23 per cent of the continent's GDP and employing nearly 60 per cent of the economically active population, the disruptions being witnessed now means roughly half of the almost 670 million people face food insecurity. TRADE DISRUPTION Some 250 million are considered severely food insecure and the numbers might increase if the right measures are not taken. There is already reduced food demand, disruption of trade in export crops even within regions, and severe crop production and processing shocks. According to McKinsey & Company's latest report Safeguarding Africa's Food Systems Through and Beyond the Crisis, the supply disruptions could result in a severe economic blow for countries such as Kenya, Tanzania, and Uganda which rely on agricultural exports as primary or secondary source of export earnings. "Africa's exports of food and agricultural products are worth $35 billion to $40 billion a year, and some $8 billion a year flows through intra-regional trade in these products," says the report. CARGO COST INCREASE "In addition, Africa's food and agricultural imports amount to between $45 billion and $50 billion a year along with $6 billion a year in imports of agricultural inputs and if measures are not checked, we are likely to lose...

FACILITATING the free movement of cargo across borders is vital towards the economic recovery of the East Africa member states during and post Covid-19 pandemic, the East African Business Councils (EABC) has said. The EAC private sector body said recently that the cross border trade could have been a remedy to reduce the Covid-19 adversity through flow of essential goods like food, medical supplies and other hygiene products. The spread of Covid-19 has increased restriction on the movement of goods and people across borders threatening the livelihoods of traders and their families, and reduced revenue for partner states. When trade barriers remain unaddressed, the EABC said the economic recovery from the virus pandemic may take long time with the far reaching effects continue to bite member states. The characteristic nature of cross border trade in the region is conducted informally and mostly occupied by vulnerable, small and unregistered traders. Similarly, a significant portion of trade between East Africa and the rest of the world largely constitutes of primary commodities with huge prospects in exporting finished products. As the cross border saga on the free movement of goods and services persist, the EAC private sector body has called on the need for lasting solution to the barriers hindering the free movement of cargo across EAC borders and in particular, the borders between the two countries. For example, the 14 days standstill on the movement of goods between Kenya and Tanzania borders risks business continuity and affects intra-EAC trade. There are over...

It is hard to see how African economies will bounce back to the vibrant fast growing hubs that they were over the past two decades, the pre-corona era. Countries like Rwanda that led East Africa (and most of the World) with annual economic growth averaging 9.4 percent now looks at annual growth rates of a mere 2 percent.  When the tourism and hospitality industries reopen their doors, will tourists and holiday maker flock in triple and quadruple their previous numbers and will they do so long enough for the industries to stabilize and resume growth? Will air travel shake off the blow it has taken, will it be willing to pocket less profit to attract business or will it hike prices to capitalize the anticipated initial high demand post the pandemic?  How individual industries will raise from the ashes of the pandemic is anyone’s guess but should recovery of global economies, especially of vulnerable third world countries like those in Africa be left to the invisible hands of commerce or should concerted regional and continental strategies be tabled?  Dare I say, it seems that the continent has again been stooped into the ill fated philosophy of individualism; it has again been divided and is again on the verge of been conquered. Just like they took individual course of action when the pandemic befell the continent, countries are destined to make individual response strategies, prioritizing self over whole.  Already this autonomy approach to the pandemic has rendered regional blocs asunder. Hard...

East African Community finance ministers have agreed on measures to protect and enhance the competitiveness of the regional manufacturing industry ahead of the conclusion of a comprehensive review of the Common External Tariff (CET) that has dragged on for more than three years. In his budget speech on Thursday, Kenya’s Finance Minister Ukur Yatani said the new measures on Customs duty were agreed on at the regional level at the EAC Pre-Budget Consultations meeting for the 2020/2021 fiscal year. Customs taxation measures will take effect on July 1, 2020, and regional governments have agreed to maintain a 35 per cent import duty rate, with the corresponding specific rates on a wide range of iron and steel products for another year, to protect the metal and allied sector from competition from cheap imports. DUTY-FREE IMPORTS In addition, all inputs for the manufacture of baby diapers will also be imported duty free under the EAC Duty Remission Scheme to support the local manufacturing of these products. Inputs used in the textile and apparel sector will be imported duty free under the scheme to promote local production of new clothing and apparel including fashion and design. “I have proposed at the regional level, measures aimed at promoting local manufacturing and also measures to ensure that locally manufactured products are competitive,” said Mr Yatani.   EAC Finance ministers have also agreed that inputs for assembly or manufacture of mobile phones be imported duty free under the EAC Duty Remission Scheme to enhance innovations particularly...

As Covid-19 caseload surpassed 225,105 on Saturday across the African continent, 43 African countries are now under full border closure due to the rapid spread of the coronavirus. The death toll from the pandemic has reached 6,040, while some 102,846 people have recovered, according to the latest data from the Africa Centres for Disease Control and Prevention (Africa CDC). The Africa CDC said that the northern African region is the most affected area across the continent both in terms of positive Covid-19 cases and the number of deaths. HIGHLY AFFECTED The highly affected African countries include South Africa, Egypt, Morocco, Djibouti, Nigeria, and Algeria, said the specialized healthcare agency of the African Union (AU) Commission. Some countries on Saturday reported new records for their daily increases in Covid-19 infections. Egypt registered 1,677 new Covid-19 cases in the last 24 hours, the highest daily surge so far, raising the national count to 42,980, the Egyptian health ministry said. The country has also reported a record single-day increase of 62 in Covid-19 deaths, taking the death toll to 1,484, said Khaled Megahed, the health ministry's spokesman. Ethiopia, Africa's second most populous nation with a population of about 107 million, reported 268 new cases on Saturday, the highest daily increase so far, taking the country's tally to 3,166, the Ethiopian Ministry of Health said. WORST HIT South Africa, the worst-hit country on the continent, has registered a total of 65,736 cases and 1,423 deaths so far, according to Johns Hopkins University's latest tally....

Kenya’s exports to its three leading markets in the six-nation East African Community fell by Sh3.51 billion in the first full month following adoption of Covid-19 containment measures, official data shows. Earnings from goods sold to Uganda, Tanzania and Rwanda amounted to Sh5.61 billion in April, a drop of 38.47 percent compared with similar period in 2019, according to leading trade indicators published by the Central Bank of Kenya (CBK). Delays have rocked cross-border trade after partner States locked borders and ordered Covid-19 testing for truck drivers, with results taking 48 hours on average. Kenya, Uganda and Rwanda early May reached a deal for testing of truck drivers for Covid-19 at the point of departure to ease tailbacks at border points after each nation initially insisted on separately conducting mandatory testing. Delays threatened to renew long-standing trade disputes between Nairobi and Dar es Salaam mid-last month before the ministers for transport intervened. The provisional CBK data shows Kenyan traders trucked goods worth Sh2.03 billion to Tanzania in April, a 34.16 percent drop compared to a similar period in 2019. Exports to Uganda contracted 39.16 percent to Sh2.69 billion, Rwanda's orders plunged the sharpest at 44.82 percent to Sh890 million. The exports to Uganda, Tanzania and Rwanda fell by nearly half in April, or 48.82 percent, compared with the monthly average of Sh10.97 billion in the January-March 2020 period. During the first quarter of 2020, exports to the three countries were estimated at Sh32.91 billion, a growth of 18.15 percent over...

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...

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