[vc_row][vc_column][vc_column_text] According to the United Nations Conference on Trade and Development, global trade is predicted to fall by a record 27 per cent in the second quarter of 2020. In this episode of Doing Business in Rwanda, we take a look at the impact COVID-19 has had on trade and the establishment of cross border cargo transit logistics platform to curb the spread of the virus and facilitate smooth trade between neighbouring countries…. Watch video here: Source: CNBC Africa[/vc_column_text][/vc_column][/vc_row]

Things are getting ugly at the borders as truck drivers test positive for Covid-19 in large numbers. Tanzania is angry that 53 truck drivers were denied entry into Kenya this week because they tested positive. In a tit-for-tat move, Tanzania banned all Kenyan trucks from crossing the border. In Uganda, a mob attacked a Muslim truck driver from Kenya who had left his cab to do his prayers. And there are long tailbacks at all borders as truck drivers seek clearance to cross into neighbouring countries. Last month Germany donated mobile testing labs to East Africa, including two to Kenya, through the Community Secretariat. A key function of the East African Community is to facilitate free trade in the common market yet member nations are still reluctant to fully embrace free trade. The Secretariat needs to sort out this mess by ensuring that long-distance truck drivers get tested before reaching the borders. The Secretariat should create a special Covid-19 passport for travellers to show that they have been tested and found negative in the previous week. A Covid-19 passport would help repair East African integration. Quote of the day: "He has money. She will wear the mask he needs." Source: The Star

Many African countries are all too familiar with the social and economic upheaval posed by outbreaks of infectious diseases. Recent experiences with Ebola are fresh in peoples’ minds across West and Central Africa, as are those with TB and HIV/AIDS in Southern Africa. As a result, African countries understand the need for regional coordination in overcoming public health challenges. The World Bank Group has responded swiftly to each of these health emergencies – often through a regional response designed to counter immediate threats while also strengthening countries’ capacity to be proactive in detecting and responding to outbreaks. There are important lessons to draw from these experiences as we combat the coronavirus pandemic (COVID-19). First, leverage existing regional networks and operations to catalyze an immediate, large-scale response. Helping countries strengthen cross-border collaboration for detection and response to outbreaks is a long-standing priority of the Bank Group’s regional integration efforts in Africa. Large-scale investments, strong networks, and a joint vision among stakeholder countries are already in place. They are now being activated and scaled up quickly in response to COVID-19. The Regional Disease Surveillance Systems Enhancement Program (REDISSE) – a $670 million operation across 16 countries of West and Central Africa – has quickly mobilized over $193 million to help 13 countries with entry-point surveillance, reinforced laboratory testing capacity, infection prevention and control, access to essential medical equipment and materials, and risk communication. Having responded to Ebola in the last few years, REDISSE has provided countries with early and immediate access to financing so...

COVID-19 and the African trade dynamics Just like other countries in the world, African states were not prepared for the spread of the novel coronavirus. Interestingly and as expected, two powerful African states, Egypt and Nigeria, recorded the first cases of the virus in Africa and sub-Saharan Africa. Of 54 countries in Africa, 53 countries have recorded cases of the virus and only Lesotho is yet to record any. This record in Lesotho has perhaps been linked to a lack of testing materials and not that the country is indeed free from the virus. Source: Wikipedia Trade in Africa has primarily been a case of a producer exporting raw materials to foreign countries for production and the original producer importing the finished products. This situation has seen Africa contribute so much to global trade than it is given credit for. Indeed, Africans have a penchant for foreign goods, without necessarily producing the same goods. Producers who have made what can be referred to as “Made in Africa” products have not reaped much profit as much as their foreign counterparts because the African market is saturated with foreign products. For instance, 75% of the world’s cocoa is sourced from Africa yet Africa imports most of its chocolates. The oil-producing states in Africa contribute significantly to global crude but almost all petroleum products in Africa are imported. Source: World Bank The Economic Development in Africa Report 2019 suggests that the total trade record from Africa to the rest of the world was about US$760 billion between 2015 and 2017 and contributed between 80-90%...

With the current fast-changing developments, policy makers need to know what is happening to the economy in real time, but they often must settle for data telling them what happened many weeks ago. And international trade, which links countries through a complex web of supply chains, is an area where timely information is especially valuable from a global perspective. Most trade takes place by sea, and – for navigational safety purposes – virtually all cargo ships report their position, speed, and other information many times a day. A new IMF methodology using these data can help better inform us how international trade is affected by the COVID-19 pandemic. Building on machine-learning techniques, we can provide better answers to simple questions such as: How big is the drop in trade activity? Should it be attributed mostly to exports or to imports? A new approach Using over one billion messages from ships over a period of five years, the newly-developed methodology closely replicates official trade statistics for many countries and for the world in aggregate. It is available at a daily frequency in real time, while official statistics are typically delayed by many weeks. At the global level, our indicators built from ships’ radio signals closely approximate monthly official trade statistics (with a correlation of nearly 0.9 in levels, and around 0.4 in quarter-on-quarter growth rates). The top panel of our Chart of the Week shows a dramatic fall in Chinese exports in the wake of initial lockdown measures to contain the spread of the...

Mr Wamkele Mene was recently appointed Secretary General of the African Continental Free Trade Area Secretariat. The effects of Covid-19 have halted free trade in member countries. In this interview with Africa Renewal’s Kingsley Ighobor, Mr Mene explains the way forward, and how increased intra-African trade can help lift post-Covid-19 economies. These are the excerpts: Describe the impact of Covid-19 on African Continental Free Trade Area (AfCFTA) so far? The African economy was set to grow at about 3.4 per cent in 2019 and projected to increase to 3.9 per cent in 2020, but Cocid-19 has had a very negative impact. We know that over 53 per cent of Africa’s exports go to countries, particularly Europe, that are themselves suffering from the pandemic. That has had a subdued effect on our export markets. Our services sector is set to fall by between 20 per cent and 30 percent, particularly travel and hospitality. We must find ways to mitigate the effects of the pandemic, but the primary focus for now is to save lives. Given the current situation, any idea when free trading can begin? We have recommended to the African Union Assembly of Heads of State, which is the body with the authority to delay the trading date, that given the current public health crisis and the need for some technical work to be concluded, we cannot meaningfully trade [under AfCFTA] on July 1. Does this mean free trading will not begin until the pandemic is defeated? We are exploring...

Continuity East Africa (CEA) will invest more than Sh500 million in the next three years to expand its facilities in the region. This comes as the uptake of business continuity services grow fuelled by what it called favourable business operating environment. CEA, which is a joint venture of Internet Solutions Kenya & ContinuitySA, invested Sh150 million in the phase one of the projects that have seen the expansion of sitting capacity from 110 to 260 seats at United States International University-Africa complex. Speaking while commissioning the new recovery site, Internet Solutions managing director Richard Hechle said the new facility fits into businesses workplace decongestion plans in the wake of the coronavirus. “Covid-19 has definitely changed the way organisations conduct their daily operations, engage with employees, partners and conduct business. We are helping existing clients carry out providing critical business functions whilst meeting social distancing requirements,” said Mr Hechle. The second phase of the project will see the facility’s sitting capacity expanded to at least 800 seats in Nairobi. Similar setups will be put up in Kampala and Dar es Salam within the next three years. Source: Business Daily

East African countries have borrowed nearly $2.3 billion new loans in less than three months since reporting the first Covid-19 positive case, adding to the region’s mounting debts at a time of shrinking tax revenue. The biggest chunk of the loans, taken to fund the region’s response to the Covid-19 pandemic and cushion the economies against disruptions caused by the virus, have come mainly from the International Monetary Fund (IMF). Kenya has borrowed the most out of the six East African Community (EAC) members, having signed an estimated $1.5 billion since reporting the first Covid-19 positive case on March 13. Uganda has added $540.2 million to its debt load, while Rwanda has borrowed $223.65 million. President John Magufuli has called for cancellation of Tanzania’s foreign debts, but Dar es Salaam together with Burundi and South Sudan is yet to announce any new loans during this period. The estimated $2.26 billion new debt accumulated in less than three months adds to the more than $110 billion loans that EAC countries were holding at the onset of the pandemic. “The impact of this new debt on the economies is going to be huge. Export earnings and diaspora remittances are in trouble. Local currencies are going to be under a lot of pressure and when they depreciate then our debts, which are largely denominated in foreign currency become very expensive. That is a big issue,” said Nikhil Hira, a director and tax consultant at Kenya-based law firm, Bowmans. The EAC agreement on debt...

The UN Economic Commission for Africa is helping to bring unique African products and their promoters to the platform in a practical COVID-19 response move Imagine using one second to sell three thousand (3000) bags of a coffee produce which lay fallow hitherto in storehouses in Rwanda for months due to freighting stand-stills caused by the COVID-19 global lockdown! This is what happened on 14 May 2020 during a livestream by coordinated by the Alibaba Business Group to position small-scale world brands on the Electronic World Trade Platform (eWTP), a the six-year-old initiative which facilitates business-to-consumer (B2C) sales. The UN Economic Commission for Africa is helping to bring unique African products and their promoters to the platform in a practical COVID-19 response move. The sale was made by the Rwandan brand known as Gorilla's Coffee whose CEO, Mr. David Ngarabe, rejoiced at the feat following months of slack business as the COVID-19 lockdowns ruptured the supply chains especially to cafés and hotels. The cash-in is explained in terms of the wide reach to customers especially in China via the eWTP whose huge demand, in terms of economies of scale, would now lower overall freighting costs for the supplies. Ms. Vera Songwe, Under-Secretary-General of United Nations and Executive Secretary of the Economic Commission for Africa (ECA), who addressed participants of the livestream from Addis Ababa, said the Commission was taking action to getting many more small brands from Africa with distinct products to access the platform and make sales during and after the current health crisis....