Legal Practitioner and Senior Partner at AB& David Africa, David Fosu-Dorte has called on African governments to domesticate purchases and procurement processes to boost Intra-African trade strategizes and minimize the negative economic impact of the COVID-19 pandemic. “We could see Africa and some countries in Africa becoming an alternative base of supply chain of some items. We may have to as African countries coordinate our response to COVID in such a way that COVID becomes an impetus for increasing intra African trade rather than decreasing it,” he said. Speaking on the Eye on Port Panel discussion on how national and international Trade and regional Protocols have been frustrated by the COVID-19, the lawyer, said the global consequences of COVID-19 should teach African nations a lesson to boost intra-African trade because the reliance on the West and Far East has obviously proven not to be the best sustainable option. AfCFTA Implementation He also indicated that the COVID-19 has significantly impacted the establishment of the African Continental Free Trade Agreement in various ways, including uncertainty surrounding the level of commitment of governments, and the closure of borders indicating a substantial reduction of intra-African trade volumes since the pandemic. “Businesses on the continent are having stresses so you don’t expect them to ramp up production especially at a point they can’t export. So in the absence of open borders, in the absence of free movement, definitely, all these are going to affect the ability to produce and even when the restrictions are lifted...

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The Covid-19 outbreak has transformed life. We can feel the economic and health impacts in Kenya, the UK and across the globe. Good people are working hard to support their communities – including those with day jobs who now have little income. Others are shamelessly trying to exploit the situation. Many of us with office jobs have been able to work from home, where we have become adept at conference calls, trying to keep a routine and balancing the demands of childcare and exerting extreme willpower not to snack on unhealthy foods. It has been decades since we have faced a peacetime challenge like Covid-19. The UK stands with Kenya as one of our strongest partners. By working together, we will reduce the impact of the virus for both our nations – saving lives, protecting development gains, supporting the economy and helping Kenya bounce back quickly so those most in need reap the benefits. The G20’s decision on April 15 to freeze debt payments has given 76 economies some breathing space – including some of Kenya’s debt. On April 12, the UK announced a global support package of Sh26 billion to UK charities and international organisations to slow infections and save lives globally, including in Kenya. The total amount of UKaid committed to the global fight against Covid-19 is Sh97 billion, making the UK one of the biggest donors to the international response. An equally distributed vaccine will be the best defence. In Kenya, leaders, businesses and communities are leading...

As the COVID-19 virus continues its gallop across the world, we are forced to constantly reassess our expectations of both the human and economic costs that it will bring. Indeed, the world is now reaching a point where unilateral decisions by food exporters and falling national revenues could have devastating effects for food-insecure countries, compounding health problems for already vulnerable citizens. Earlier this year, when the virus was more or less limited to China and a few of its neighbours, analysts were more focused on disruptions to global manufacturing value chains, foreign direct investment, and the likely impact of the Chinese economy’s slowdown on global GDP, given the weight of China in the global economy. Consequently, at the beginning of the pandemic, little emphasis was placed on food security, given the expectation that food markets would be well supplied, as cereal stocks would reach their third highest level on record and that, as a result, export availabilities for wheat, maize, rice and soybeans would easily meet anticipated demand. Food Security Devastating effect on food security It is now feared that the COVID-19 pandemic could have a devastating effect on food security if major cereal exporters adopt trade barriers or export bans, as experienced during the 2007-2008 food crisis, or if coronavirus’ effects on the labour force and logistics become important. In addition, for countries that strongly rely on food imports, food security is vulnerable to revenues lost as a result of slowing economic activity caused by COVID-19. Developing countries, particularly...

Just when Africa was preparing to roll out the African Continental Free Trade Area (AfCFTA) COVID-19 struck. Policy and advocacy think tank, AfroChampions has provided a detailed report of how the global pandemic could disrupt this beautiful plan which would have changed the face of trading among African countries. The AfCFTA was described as the game-changer for Africa's socio-economic development by the Macroeconomics and Governance Division, Economic Commission for Africa (ECA). The March 2020 opening and operationalization of the Accra AfCFTA Secretariat has delayed. AfCFTA Secretary-General has been sworn in but is without the full complement of secretariat teams due to disruptions to recruitment and staffing. The AfCFTA, which is headquartered in Accra would have provided the opportunity for Africa to create the world's largest free trade area, with the potential to unite 1.3 billion people, in a $2.5 trillion economic bloc and usher in a new era of development. AfroChampion in their report said that the continent as a whole had a commitment and readiness level of below 50 per cent arguing that, Africa that was looking forward to opening its borders to a new trade revolution starting July 2020, now has almost all of its borders shut in order to fight the pandemic. They believe with this pandemic, it is likely some more countries will lose interest in AfCTA and that could have a negative impact on the policy. They also predicted that COVID-19 could plunge some companies into serious financial stress. “COVID-19 is already destroying much of...

The Managing Director, International Monetary Fund (IMF) Mrs. Kristalina Georgieva has advised Africa not to deviate from its plans to enforce the African Continental Free Trade Agreement (AfCFTA). She described the initiative as a catalyst for enhanced growth. Georgieva said this recently at the just concluded Virtual Spring Meetings of the IMF/ World Bank in Washington. Responding to a question on how badly the pandemic has affected African economies, she said: “Sub-Saharan African had a lot of countries stepping up over the last years and it is so tragic to see that momentum being stopped and then a number of countries that have even before the coronavirus had been experiencing very dramatic difficulties, conflicts and natural disasters. “Sub Saharan Africa ought to be the center of our attention and it is. We now have more than 30 countries applying for emergency financing. We are prioritising and rapidly responding to this request recognising how critical this lifeline is for them.” She further added: “We need to think beyond that and we need to think about recovery. We need to make sure that the African continental free trade agreement doesn’t get derailed because of the coronavirus and that means engaging with the leadership in Africa and making sure of that we are putting not only financial resources, but also opening up trade channels and making sure that we support the industries in Africa that depend on trade and the revival of trade.” “We are going to have an extraordinary session with President...

Trading within the African Continental Free Trade Area (AfCFTA) is set to begin on 1st July 2020, just over two months from now. So far, only 29 member states out of 55 have ratified the agreement. More countries need to ratify it if the projected boost of 52 per cent in intra-African trade should be attained by 2022. However, Covid-19 could slow things down a bit. While the full effects of the virus remain to be seen, a gloomy economic picture is emerging that AfCFTA will have to contend. There is a unity of expert opinion that the continent is about to go into recession because of the virus. The question is by exactly how much. One could start with the recent African Development Bank (AfDB) analysis entitled "Impact of the coronavirus on the Africa economy". Before the onset of the pandemic, AfDB had projected the continent-wide gross domestic product (GDP) growth to reach 3.4 per cent this year. The GDP will now shrink in the negative to between -0.8 and -1.1 per cent in 2020. In sub-Saharan Africa, estimates by the World Bank are bleaker with a predicted economic contraction of between -2.1 and -5.1 per cent for 2020. The International Monetary Fund forecasts a dip of -1.6 per cent in the region south of the Sahara. Though a country like Rwanda will fare relatively better with a projected growth of 5.8 per cent, the average negative growth in the continent suggests the trading in AfCFTA will not start...

Institutional capacity in public healthcare systems, law enforcement and regulatory agencies, as well as the capacity of the state to commandeer production of essential goods and services, have become decisive interventions in this pandemic. British Prime Minister Boris Johnson, whose conservative government had for years underfunded the public sector, confirmed this unequivocally when he thanked the National Health Service (NHS) for saving his life after he was hospitalised with the virus. We have President Cyril Ramaphosa to thank for his leadership in mobilising national, continental and global public and private resources to enhance our capacity to tackle this pandemic. The admirable collaboration between public and private healthcare institutions has laid an important foundation for a well-resourced and -run National Health Insurance (NHI) system. We can learn from Britain’s NHS about what works and what doesn’t, so we can build our NHI on a firmer footing. Post-pandemic socio-economic restructuring There is no wisdom in hankering after the old socio-economic development models that brought us to the multi-layered global crises (climate, health and socio-economic) we face today. Post-pandemic socio-economic restructuring has to go beyond traditional notions of privatising state-owned enterprises and a smaller government. The entire global socio-economic system we have relied on has been exposed as fragile and a threat to both rich and poor in our society. No economy can prosper while excluding the energies and talents of the majority of its youthful population — as we have done since 1994. We need to transform our economic and social relationships...

The domino effect of the coronavirus pandemic will plunge many economies into recession and means the African Continental Free Trade Agreement (AfCFTA) is now needed more than ever to ensure that member states are trading with each other and supporting one another at this time, according to Banji Fehintola, senior director and head of treasury at the Africa Finance Corporation (AFC). He says South Africa has a very important part to play. It is the most industrialised and diversified economy on the continent and is one of the only financial markets that is sound enough to be tapped for infrastructure projects. “Trade finance and infrastructure finance are incredibly important in the creation of growth across Africa. However, since the global financial crisis of 2008/2009, some global banks have retreated from emerging markets, including Africa. These means credit capacity from global banks for African Financial Institutions (FI) has reduced considerably, constraining their ability to serve clients’ needs,” he tells Fin24. No amount of policy change or cuts in taxes will truly make Africa competitive when the physical hinderances are ignored, according to Fehintola. He says the AfCFTA is not just a dream, but there is a long way still go before it becomes a tangible reality. The next phase comprises a new set of challenges as the ratifying countries commence implementing the AfCFTA with the goal of truly unlocking Africa’s potential through the free movement of goods, services and people. He points out that the elimination of tariff and nontariff barriers...

The Coronavirus pandemic (COVID-19) has become a fully-fledged global economic crisis with governments now issuing Level 4 – Do Not Travel advisories, instituting curfews, partial and full lockdowns. These lockdowns that started from Wuhan, China - the epicentre of coronavirus outbreak - are fast turning in to the safest way of life with Italy, Spain, India, South Africa, Uganda, Kenya, and Rwanda among countries administering shutdown doses. The lockdowns mean that factories and private companies cease most economic activities. Therefore, disposal incomes for both people and companies is reduced in sectors of the economy including the health, manufacturing, retail, trade, transport, tourism, entertainment, education and many others. Conservative estimates indicate that the global economic aftermath of COVID-19 pandemic could last at a minimum of one year. The Organisation for Economic Co-operation and Development (OECD) estimates annual global GDP growth is expected to drop to 2.4% in 2020, from an already weak 2.9% in 2019. World exports are forecast to decline by more than 5% to US$1.28 trillion in 2020. Further, the United Nations Conference on Trade and Development (UNCTAD) reports that the number of container cargo ships from China, reduced by 30 percent, in January 2020 alone from 540 ships to 370 ships per day. A March 10, 2020 Baker-McKenzie report highlights that many African countries face a “twin supply-demand shock,” due to a decrease in imports of manufacturing inputs and supplies from China and reduced demand from exports in key sectors in various export markets. Reports from the Uganda...