As the Covid-19 crisis has escalated, stay-at-home orders have led to a surge in online purchases – of everything from groceries to medicines to household essentials – by consumers in the advanced economies. Africans facing similar movement restrictions will not enjoy the same convenience – or the safety it affords. Over the last decade, a growing middle class and rapid progress in mobile and Internet penetration have supported the view that African countries are ripe for e-commerce success. Consumer spending across the continent is projected to reach $2.1 trillion by 2025, by which time mobile-phone penetration in Sub-Saharan Africa is likely to stand at 50 per cent. Yet, so far, companies have largely failed to tap Sub-Saharan Africa’s e-commerce potential, owing to logistical challenges and inefficiencies. Nigeria, the continent’s largest market, ranks 110th out of 160 countries when it comes to logistical efficiency, according to the World Bank. It can take three times as long to import an auto part through Lagos, Nigeria, than through Durban, South Africa. And it can cost up to five times more to transport goods in Sub-Saharan Africa than in the United States, based on 2015 estimates. Across the continent, a lack of integration means that companies face smaller markets and considerable red tape when crossing borders. When Alibaba was building and scaling its e-commerce ecosystem in China in 2003, it took advantage of relatively advanced urban infrastructure – the result of significant government investments in the 1990s. Thanks to that physical infrastructure, as well...

If African airlines are to survive the covid-19 pandemic onslaught, then the immediate injection of cash is needed to avoid insolvency or bankruptcy of the airlines. Carriers on the continent are expected to lose US$ 8.1bn in revenues this year in the severe and an unprecedented event which is forcing players under the African Airlines Association (AFRAA) to seek more avenues for support to the industry. The Afreximbank has however assured that there are existing opportunities for African airlines under the bank’s Pandemic Trade Impact Mitigation Facility (PATIMFA). Covid-19 pushes Kenya’s luxurious hotel out of business AFRAA’s Secretary-General, Abdérahmane Berthé notes that the impact of the pandemic is enormous and it could lead to insolvency or bankrupting African airlines in 2020. The continental airlines’ body headquartered in Nairobi has proposed setting up an aviation sectorial covid-19 recovery fund for the support of the airline industry. “We will continue to seek more avenues for support to the industry from development finance institutions, country development partners and international donors as we navigate through these tough times,” added Berthe. On June 2, AFRAA released an analysis of the impact of the pandemic on the airline industry in Africa which reveals an estimated revenue loss of US$ 8.103 billion this year. The analysis is the first in a series of studies that will be published by the Association examining the toll of the pandemic on Africa’s air transport sector. The impact assessment analysis further shows a 90.3 per cent year on year passenger traffic...

The building of the Berbera Corridor is bound to turn around trade links between Somaliland and Ethiopia. Somaliland President Muse Bihi opened the first completed 12-kilometre phase the project, the second major infrastructural project the country building after the expansion of the Port of Berbera by the Dubai Ports World (DP World). The 72 kilometre-road is an ambitious and strategic road project that will also enable Somaliland to benefit greatly from the winds of change blowing across the Horn of Africa. The project is worth US$400m and once complete with link Ethiopia’s border town of Togochale to Berbera Port in Somaliland which is strategic to landlocked Ethiopia. It is estimated Somaliland imports to Ethiopia is worth over US$800m annually and the Berbera-Togochale corridor will be instrumental in facilitating import-export trade for Ethiopia’s economy. The road projects are being funded by the Abu Dhabi Fund for Development. Eng. Tahir Mehmood of Nael $ Bin Harmal Hydaro-export Establishment (NBHH) the firm tasked with the construction of the Berbera Corridor reiterated the firm ‘s commitment of completing the highway within the stipulated timeframe. Minister of Transport and Highway Development, Abdilahi Abokor Osman said the road has been made to last for ages. “We are here to open part of the Berbera Corridor, which is a 12 KM stretch that has been completed. I would like to point out that this road is different from the earlier road which was built to handle 6 tonnes,  the new road can now handle 40 tonnes and...

NAMANGA, Kenya — They haul food, fuel and other essential supplies along sometimes dangerous roads during tough economic times. But Africa's long-distance truckers say they are increasingly being accused of carrying something else: the coronavirus. While hundreds of truckers have tested positive for the virus in recent weeks, the drivers say they are being stigmatized and treated like criminals, being detained by governments and slowing cargo traffic to a crawl. That has created a challenge for governments in much of sub-Saharan Africa, where many borders remain closed by the pandemic, on how to strike a balance between contagion and commerce. Countries are struggling to reach common ground. “When I entered Tanzania, in every town that I would drive through, they would call me, ’You, corona, get away from here with your corona!’” said Abdulkarim Rajab, a burly Kenyan who has been driving trucks for 17 years and recalls when drivers were being accused of spreading HIV during that outbreak. Rajab and his load of liquefied gas spent three days at the Kenya-Tanzania border, where the line of trucks waiting to be cleared stretched into the distance and wound around the lush hills overlooking the crossing at Namanga. Tanzania closed the border there this week, protesting Kenya's efforts to re-test all incoming truckers, including those who even had certificates showing they had been tested in the previous 14 days. It was the second time the frontier was closed in less than a month and was taken after many Tanzanian truckers with...

United Nations Economic Commission for Africa (Addis Ababa) Nairobi — The African Continental Free Trade Area (AfCFTA) is still the agreement with great potential to foster regional economic integration and economic growth, and take Africa to the next level, even in the midst of a crippling coronavirus crisis, panellists on a COVID-19 Recovery Mechanism and AfCFTA webinar agreed Thursday. The panelists agreed the AfCFTA was a crucial move towards removing the continent's heavy reliance on commodity and agricultural exports leading to exponential growth in the manufacturing sector, export diversification and creation of quality jobs if its full potential to be transformational for all Africans is tapped. Regional Integration Division Director at the Economic Commission for Africa, Mr. Stephen Karingi, in his remarks said a lot of empirical work had been done by ECA showing what the AfCFTA means for Africa. "One of the things we have been able to demonstrate empirically is that the AfCFTA has the potential to deepen not only the regional integration of the continent but also to allow us to do more value addition in our production processes," he said. This, added Mr. Karingi, presents an opportunity not only to create economic resilience but also create quality and more valuable jobs compared to jobs that are not based on industry. "We know what the AfCFTA means for this continent. COVID-19 has exposed that had we implemented the AfCFTA earlier, we would be in a better position than we are now," he said, adding the ECA's analytical...

Of all the legacies of colonialism, one of those which has most hampered economic growth and the alleviation of poverty is fragmentation – neighbours with different currencies, regulations enabling trade with Europe but not with other Africans, and a neglect of intra-African transport and infrastructure links to facilitate this trade. In good times, with Europe accounting for around 30% of African trade, there has been little appetite to upset the status quo. In times of economic unease, African nations, like many around the world, have tended to withdraw into themselves rather than pursue broader trading options. Repeating this pattern for a generation, African nations have historically ceded economic power to external actors, remaining price-takers and struggling to develop their own solutions at times of crisis. Change is in the air A confluence of factors is lining up to shift Africa from the old way of doing things and drive the continent towards greater prosperity and resilience. The rise of China as an economic force and major partner (19% of Africa’s trade) has given African leaders experience in opening new trade routes and the benefits this brings. At the same time, regional trading blocs like SADC, EAC, COMESA or ECOWAS have grown in strength as countries became more adept at spotting gaps in their neighbors’ markets and adjusting areas of specialization to meet demand. Building on a decade long trajectory towards greater continental integration and more diverse trading relations, the ratification of the African Continental Free Trade Area (‘AfCFTA’) now has the capacity to...

The African Import-Export Bank (Afreximbank) and International Trade Centre (ITC) team up to help businesses make the most of the African Continental Free Trade Area (Cairo/Geneva) − Afreximbank is teaming up with ITC to train small business owners and young entrepreneurs in Africa to trade with other African countries as part of the new African Continental Free Trade Area (AfCFTA). The training programme, How to Export within the AfCFTA, is being launched as the new free-trade area comes on stream and amid the economic strain of climate change and the coronavirus pandemic. The training will give business owners the knowledge and skills they need to engage effectively in cross-border trade under terms of the emerging free-trade area for Africa. Intra-African trade is structurally low at 15% (compared to Europe at nearly 70%, for example), and the AfCFTA will open a market of 1.2 billion people. 'Against the backdrop of the current COVID-19 health and economic crisis, African micro, small and medium enterprises (MSMEs) need support to take full advantage of the continental market,' ITC acting Executive Director Dorothy Tembo said. 'Through this partnership, African businesses will have the opportunity to learn, plan and succeed in growing their business by taking full advantage of the AfCFTA.' Kanayo Awani, Managing Director of Afreximbank's Intra-African Trade Initiative, said that the initiative was necessary because promoting intra-African trade through increased exports of goods and services by small and medium-sized enterprises (SMEs) was the cornerstone of the AFCFTA. It signals an optimal strategy to aid businesses...

The Economic Commission for Africa has reported that between 300,000 and 3.3 million people on the continent could lose their lives to COVID-19. It has the opportunity to implement systems to support its nations through coronavirus, and into the future. These include free trade, regional value chains and infrastructure investment. The African Continental Free Trade Area was launched two years ago at an African Union (AU) summit in Kigali. It was scheduled to be implemented from 1 July 2020. But this has been pushed out until 2021 because of the impact of COVID-19 and the need for leaders to focus on saving lives. Studies by the International Monetary Fund (IMF), the United Nations Economic Commission for Africa and others state that the free trade area has the potential to increase growth, raise welfare and stimulate industrial development on the continent. But there are concerns. Some countries, particularly smaller and more vulnerable states, could be hurt. For example, they could suffer revenue losses and other negative effects from premature liberalisation. The impact of COVID-19 will only worsen these structural weaknesses. The Economic Commission for Africa has reported that between 300,000 and 3.3 million people could lose their lives if appropriate measures are not taken. There are several reasons for this level of high risk. These include the fact that 56% of urban dwellings are in overcrowded slums, 71% of Africa’s workforce is informally employed and cannot work from home and 40% of children on the continent are undernourished. Free Trade has the potential to increase growth and...

  | FAIZEL ISMAIL | The African Continental Free Trade Area was launched two years ago at an African Union (AU) summit in Kigali. It was scheduled to be implemented from July 1, 2020. But this has been pushed out until 2021 because of the impact of COVID-19 and the need for leaders to focus on saving lives. Studies by the International Monetary Fund (IMF), the United Nations Economic Commission for Africa and others state that the free trade area has the potential to increase growth, raise welfare and stimulate industrial development on the continent. But there are concerns. Some countries, particularly smaller and more vulnerable states, could be hurt. For example, they could suffer revenue losses and other negative effects from premature liberalisation. The impact of COVID-19 will only worsen these structural weaknesses. The Economic Commission for Africa has reported that between 300,000 and 3.3 million people could lose their lives if appropriate measures are not taken. There are several reasons for this level of high risk. These include the fact that 56% of urban dwellings are in overcrowded slums, 71% of Africa’s workforce is informally employed and cannot work from home and 40% of children on the continent are undernourished. Africa is also more vulnerable to the impact of COVID-19 because it is highly dependent on imports for its medicinal and pharmaceutical products and on commodity exports. The latter include oil, which has suffered a severe collapse in price. Other contributing factors are high public debt due to higher...

The COVID-19 pandemic is expected to hit African economies extremely hard. According to the World Bank biannual Africa’s Pulse report, as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020, depending on the success of measures taken to mitigate the pandemic’s effects. This means that the region will experience its first recession in 25 years. The decline will be primarily due to large contractions in South Africa, Nigeria, and Angola driven by their reliance on exports of commodities whose prices have crashed as well as other structural issues. This will inevitably affect Africa’s participation in trade and value chains as well as reduce foreign financing flows. Given the limited regional market, trade with the rest of the world is vital for Africa. Before the pandemic, Africa’s trade with the rest of the world has been showing good momentum. According to UNCTAD’s Economic Development In Africa 2019 report, in the period of 2015-2017, total trade from Africa to the rest of the world averaged $760 billion in current prices, and the share of exports from Africa to the rest of the world ranged from 80% to 90% in 2000 –2017 in Africa’s total trade. The only other region with a higher export dependence on the rest of the world is Oceania. However, intra-African trade, defined as the average of intra-African exports and imports, was around 2% during the period 2015–2017, and the intra-African exports were 16.6% of...