The East African Community (EAC) is likely to see a sharp decline in Foreign Direct Investments (FDIs) this year owing to the current Covid-19 pandemic that continues to ravage economies across the globe. According to the latest World Investment Report 2020 by the United Nations Conference on Trade and Development (Unctad) FDIs in East Africa declined by nine per cent to $7.8 billion in 2019, from $9 billion in 2018. The report forecasts FDI inflows to the continent will fall by 25 to 40 per cent in 2020, exacerbated by low commodity prices. “Although all industries are set to be affected, several services industries including aviation, hospitality, tourism and leisure are hit hard, a trend likely to persist for some time in the future,” said James Zhan, Unctad director of investment and enterprise. The decrease, according to the report, comes after the continent recorded a 10 per cent decline in FDIs flows to $45 billion in 2019 from $46 billion in 2018. Alternatively, the expected transformation of international production also brings some opportunities for development, such as promoting resilience-seeking investment, building regional value chains and entering new markets through digital platforms, the report reads in part However, capturing these opportunities will require a shift in development strategies. According to Mukhisa Kituyi Secretary-General of Unctad, export-oriented investment geared towards exploiting factors of production, resources and low-cost labour will remain important. But the pool of such investment is shrinking, and the first rungs on the development ladder could become much harder to climb. He...

Cross-border travel after COVID must be safe and predictable and shouldn’t require excess disclosure of personal health information. Developing such crossing experiences will take cooperation between the health sector as well as aviation, travel and tourism sector stakeholders. Timing is of the essence to prevent further harm to economies and make travelers comfortable with travel. When the six nations of the East African Community opened to essential trade in June, COVID-19 testing created kilometers of backed up trucks along the borders as truck drivers waited for hours to get test results. By working together to share test results in a harmonized system, border crossing and regional integration was later accelerated within East Africa. We need this kind of coordination and harmonization on a global scale. Unfortunately, that is not the current trajectory of COVID-19 era border crossing. COVID brought a patchwork of closed borders and complex border entry requirements as reopening countries attempted to balance the urgent need to restart travel and cross-border economic activity against the imperative of protecting their population’s health. Such disparate efforts are slowing travel and halting a range of industries such as tourism. Without intervention, these efforts will lead to fragmented policies and procedures and make international travel confusing and uncertain long into the future. Image: IATA The need: Safe, dynamic borders that respect private data For cross-border traffic to resume fully, travelers need border crossing experiences that are safe, predictable and do not require excess disclosure of personal health information. Such policies are not universally in place....

A report by United Nations Conference on Trade and Development said despite steps taken to develop the country into a regional e-commerce hub, the digitalization of government services is advancing and the government is investing resources into enhancing the overall business environment. “Despite this, Tanzania has yet to adopt a stand-alone e-commerce policy or strategy and e-commerce is not mainstreamed into the national or sectoral trade development strategies. E-commerce development is not currently on the agenda of existing inter-ministerial or public-private dialogue platforms,” the Tanzania’s Rapid eTrade Readiness Assessment report said. The report further noted that with a large and growing population, a competitive mobile network operators (MNOs) market and increasing mobile service delivery, the trajectory of growth of mobile Internet users is positive. “Building the National ICT Broadband Backbone (NICTBB), connected to the region’s main submarine cables, has resulted in lower mobile data prices for end-users. By the end of 2018, 3G and 4G networks covered around 61 per cent and 28 per cent of Tanzania’s population, respectively. This remains considerably lower than the 2G coverage of around 90 per cent,” the report noted. The UNCTAD report stated that although mobile data prices are reasonably low, they remain unaffordable for segments of the population that mostly reside in rural areas which has resulted in a large gap in Internet use between urban and rural areas. “Also, fewer women than men access and use the Internet. Given that most Tanzanians access the Internet through their mobile phones, the low Internet...

Efforts to speed up cargo movement in the region received a major boost Tuesday after the European Union signed a deal with the Trademark East Africa (TMA) to fund safe clearance at the ports and border points. Under the Sh602 million (€5 million) emergency trade programme, mobile testing labs will be provided at Mombasa port and key border crossings, including Busia and Malaba. The programme to be rolled out under public-private partnership will also provide personal protective equipment to port and border point workers to cushion them from Covid-19 spreading at these trade hubs. “This (fund) grant is very important and will complement the government’s efforts that ultimately cushion not only large enterprises but especially also the MSME who rely greatly on the flow of supply chains as most cannot maintain large inventories,” said Trade Secretary Betty Maina. The funds from the European Union will fund the Kenyan component of the programme, making the bloc the largest donor to the programme. “I am, therefore, happy to support this Safe Trade Emergency Facility in Kenya not only as a donor but also by drawing on the EU’s knowledge and experience. This action will support Kenya as the gateway to the EAC by making certain that all supply chains stay open,” said EU Ambassador to Kenya Simon Mordue. Source: Business Daily

The pilot phase of a regional Covid-19 surveillance system for trucks and their crew starts today, Monday, June 15, before its full implementation next week, an official has told The New Times. Towards the end of last month, East African Community partner states adopted the Regional Electronic Cargo and Drivers Tracking System that will be hosted at the EAC Headquarters in Arusha, Tanzania. This came after a consultative meeting chaired by President Paul Kagame on May 12 this year, brought together four East African Community (EAC) leaders and discussed regional efforts to tackle the COVID-19 that has ravaged the world. At the time, the leaders directed concerned regional ministers to "finalise and adopt an EAC digital surveillance and tracking system for drivers and crew on COVID-19 for immediate use by partner states." "Today (Monday) we are doing piloting and next week all goes live," Eng. Daniel Murenzi, the Principal Information Technology Officer at the EAC Headquarters in Arusha, Tanzania, said. "The system delayed to be implemented immediately after the Ministers had approved the system to be used; this was because we had to first do direct integration to the national laboratories." According to Murenzi, last week, a technical test was "done successfully." "And now we are starting piloting this week since we have agreed with transporters. Also, we have finished purchasing equipment through support of Trademark EastAfrica that will be used for screening: these are tablets that will be having an application on." Murenzi noted that each country has assigned a national focal person...

Towards the end of last month, East African Community partner states adopted the Regional Electronic Cargo and Drivers Tracking System that will be hosted at the EAC Headquarters in Arusha, Tanzania. This came after a consultative meeting chaired by President Paul Kagame on May 12 this year, brought together four East African Community (EAC) leaders and discussed regional efforts to tackle the COVID-19 that has ravaged the world. At the time, the leaders directed concerned regional ministers to "finalise and adopt an EAC digital surveillance and tracking system for drivers and crew on COVID-19 for immediate use by partner states." "Today (Monday) we are doing piloting and next week all goes live," Eng. Daniel Murenzi, the Principal Information Technology Officer at the EAC Headquarters in Arusha, Tanzania, said. "The system delayed to be implemented immediately after the Ministers had approved the system to be used; this was because we had to first do direct integration to the national laboratories." According to Murenzi, last week, a technical test was "done successfully." "And now we are starting piloting this week since we have agreed with transporters. Also, we have finished purchasing equipment through support of Trademark EastAfrica that will be used for screening: these are tablets that will be having an application on." Murenzi noted that each country has assigned a national focal person and "we are closely working together." The new system is considered to be another valuable tool to help mitigate the disruption of domestic, regional and global supply chain...

Commencement of trade under the African Continental Free Trade Agreement (AfCFTA) has been pushed to a tentative date in January next year. The African Union Commission’s original date of July 1 is considered untenable due to the Covid-19 pandemic. AfCFTA’s Secretary General Wamkele Mene said African governments are currently focusing on the fight against the pandemic, saving lives and livelihoods. Mr Mene said the market at the moment is not conducive for the launch considering more than 42 countries out of 55 countries in the continent are in lockdown and the containment measures are complicating intra-trade as observed in borders where trucks queuing for more than 50 km waiting to deliver essential goods. WIDE CONSULTATION Addressing private sector players in a webinar organised by Africa CEO’s Forum on Thursday, Mr Mene said the decision to push the date forward was made after wide consultation. “Suspension of the implementation of AfCFTA from July 1 was not my decision but that of African Union Heads of States. I advised the assembly on the reality, facts, science and data on the ground on the situation of Covid-19. The decision of the new date, which also depends on how quick the pandemic is contained, was widely consulted and involved the private sector,” said Mr Mene. The secretary general, appointed by the AU in March to oversee the implementation of the agreement also said the postponement was as the result of the pending negotiations which were halted by the pandemic.   “The Covid-19 crisis was...

The UK government announced on Tuesday it was merging its Foreign Office and development aid offices, in a new strategy it says will help strengthen London’s influence abroad. Prime Minister Boris Johnson told the House of Commons the UK was now facing an increasingly “competitive world” and needed to make changes in government structure to suit the times. It means the Department of Foreign and International Development, which pumps about £100 million (about Ksh13.3 billion) a year into Kenya, will be dissolved in September. “We have a responsibility to ask whether our current arrangements, dating back to 1997, still maximise British influence,” PM Johnson said. Created in 1997, the Department of Foreign and International Development (DFID) had been a separate organ of the UK government charged with managing foreign aid abroad. In Kenya, it spent £98 million last year on hunger safety net programme, regional economic development for trade and investment, as well as other programmes on security, governance and humanitarian work.   Mr Johnson said the department, while successful, having been formed after the Cold War era, was now facing competition as other countries manage aid as a foreign policy issue. The UK foreign policy has traditionally been managed under the Foreign and Commonwealth Office, which was created in 1968 after the merger of Foreign and Commonwealth departments. “This is exactly the moment when we must mobilise every one of our national assets, including our aid budget and expertise, to safeguard British interests and values overseas,” Mr Johnson said...

The trend of declining foreign direct investment (FDI) to Africa is set to exacerbate significantly in 2020 amid the dual shock of the coronavirus pandemic and low prices of commodities, especially oil. FDI flows to the continent are forecast to contract between 25% and 40% based on gross domestic product (GDP) growth projections as well as a range of investment specific factors, according to UNCTAD’s World Investment Report 2020. “Although all industries are set to be affected, several services industries including aviation, hospitality, tourism and leisure are hit hard, a trend likely to persist for some time in the future,” said UNCTAD’s director of investment and enterprise, James Zhan. Manufacturing industries intensive in global value chains are also strongly affected, a sign of concern for efforts to promote economic diversification and industrialization in Africa. Overall, there is a strong downward trend in the first quarter of 2020 for announced greenfield investment projects, although the value of projects (-58%) has dropped more severely than their number (-23%). Similarly, as of April 2020, the number of cross-border merger and acquisition (M&A) projects targeting Africa had declined 72% from the monthly average of 2019. Hope for recovery However, two distinct factors offer hope for the recovery of investment flows to the continent in the medium to long run. The first is the higher value being assigned to ties to the continent by major global economies, promoting investment in infrastructure, resources, but also industrial development. Investments from these countries, which have varying degrees of political...

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...