22 July 2020 (ECA) - At a time when global trade seems so uncertain because of COVID-19 pandemic crisis, a recent paper strikingly highlights that Kenya experienced a significant improvement in exports in early months of 2020 together with the moderation of imports, leading to a marked decline in the trade deficit. The paper published by Brookings and written by Andrew Mold, Senior Economist at UN Economic Commission for Africa and Anthony Mveyange Director of Research at TradeMark Africa used Kenyan trade data published up through May 2020 to provide a preliminary evaluation of the impact of the COVID-19 crisis on regional trade in the East African Community (EAC). According to the paper, the curfews, lockdowns, and cross-border disputes linked to the crisis provoked a sharp decline in intra-regional trade, with a dramatic fall in Kenyan exports to Uganda, Tanzania, and Rwanda. These trends are worrisome because Kenya is the major exporter and importer of the East African Community (EAC), accounting for around 46 per cent of exports and 41 per cent of imports for the whole region. Recent trade evidence from East Africa Kenyan textile exports to the United States and flowers and shipments of vegetables to the European Union were severely affected, largely due to both suspensions of international flights and the collapse of demand in target markets. The paper notes, however, that despite these disruptions, not all supply chains were affected. Kenyan tea exports peaked at just under 58,000 tonnes in April – a record high. Similarly,...

This paper uses Kenyan trade data published up through May 2020 to provide a preliminary evaluation of the impact of the COVID-19 crisis on regional trade in the East African Community (EAC). Paradoxically, given the prevailing pessimism surrounding the prospects for global trade, Kenya actually experienced a significant improvement in exports in the first quarter of the year, together with a moderation of imports, leading to a marked decline in the trade deficit. While the initial shock to Kenyan trade caused by the COVID-19 crisis initially looked dramatic in terms of the declines registered, this paper reveals that i) the shock is not so alarming when seasonality is taken into account; ii) re-exports and imports have been the primary foci of impact; and iii) domestic exports have actually performed extraordinarily well under the circumstances, with incremental growth since 2019. Notably, not all supply chains were disrupted by the crisis, with some Kenyan exports like tea and fruit surpassing levels of years past. Rather, imports have been the principle victim of the crisis, declining by a quarter over the three months since the crisis began (between March and May 2020). Capital goods imports have declined markedly—a trend which, if sustained, could have implications for longterm economic growth. However, the fall in imports of consumer goods could also set the scene for a revitalization of national and regional industry, as local producers step up to fill the void created by the sharp lull in imports. At the same time, Kenya’s EAC neighbors—especially...

Smart24 TV will on July 29 broadcast virtual discussion focusing on how trade and investment in Africa can be fostered post-Covid19. Experts say viewers will get market insights, perspectives and practical tips to help them invest, transform strategy, processes, technology and people to drive growth. The value of intra-trade among East African Community (EAC) partner states increased to $5.98 billion in 2018 from $5.46 billion in 2017, accounting for a 9.4 per cent growth. This could be boosted further but it remains stifled by persistent trade disputes on rules of origin, non-tariff barriers, inadequate value addition to the agricultural sector and competition from other producers and regional blocs that benefit from export subsidies. On average, EAC countries source 6% of their total imports from the region, and supply 20% of their total exports to the region. According to the EAC Trade and Investment Report 2018, formal trade among the EAC partner states largely constitutes of chemicals, textile, iron and steel. Agricultural commodities also form a large portion with significance in food items like rice, maize, sorghum, coffee, tobacco, wheat and other cereals. However, manufactured goods such as cement, petroleum, textiles, sugar, confectionery, beer, salt, fats and oils, paper, plastics and pharmaceuticals are also traded across the Region. At this event, which is being organized by SSCG Consulting Webcast, expect to gain latest updates, perspectives, strategies and best practices as experts discuss investment and business opportunities in the region, trade relations and facilitation issues at both the regional and the continental...

Truck drivers also applauded the interventions the NCTTCA secretariat has put in place so far including the real-time quick response. Stigma along the Northern Corridor and delays at Malaba border crossing point are the biggest challenges facing transit truck drivers. The chairman of Kenya Long Distance Drivers and Conductors Association (LoDDCA), Mr Roman Waema said that truck drivers are not allowed to stop at designated areas in some counties in Kenya such as the Machakos for fear that they will spread the coronavirus. “Sometimes we are forced to drive for over four hours without stopping, going as far as 400km, just because people do not want us to stop in their neighbourhoods,” Waema said. The drivers said that they had been facing stigmatization in different places due to misinformation by the public with some being treated suspiciously even by very close family members. He was speaking during the launch of the sensitization campaign against the spread of COVID-19 and stigmatization along the Northern Corridor when the Northern Corridor Transit Transport Coordination Authority (NCTTCA) did a one week-long exercise of distributing 10,000 masks and reflective jackets to long distance truck drivers. The exercise was carried out in Mombasa and at the weighbridges- Busia, Webuye, Mariakani, Athi-River and Gilgil. Truck drivers also applauded the interventions the NCTTCA secretariat has put in place so far including the real time quick response through a WhatsApp group dubbed “Northern Corridor Stakeholders Forum”. “We appreciate the Northern Corridor Secretariat for their solidarity with the drivers and...

The European Union on Thursday offered to support Kenya fast track results of the COVID-19 testing for the long-distance truck drivers in Busia and Malaba border points. Currently, it is taking longer than is comfortable for these drivers to get their COVID-19 results at the border points connecting Kenya and Uganda. The EU Ambassador to Kenya Mr Simon Mordue said they have come up with a regional electronic cargo driver-tracking system which will help track the COVID-19-status of truck drivers electronically. “In the next two weeks, the App will be up and running and will be linked to all Covid-19 testing Centres across the country. The technology will at the same time make it possible to follow the trajectory of the trucks and help the detection of short-landing,” he said. The EU envoy made the revelation at the Busia One-Stop Border Post where the EU donated equipment including re-usable boots and masks, washing points, hand sanitizers, liquid handwashing soap, disinfectant sprays and protective PPEs to border frontline health workers, customs operators and women organizations in Kenya and Uganda. “The EU through TradeMark Africa (TMA) will also establish safe trade which will allow close space zone for women small scale traders to continue operating their businesses as the border remains closed due to Corona Virus pandemic,” he added. Kenya’s Ministry of Health Chief Administrative Secretary, Dr. Rashid Aman said they will use the App to link up with their laboratory testing systems to facilitate detection of truck drivers’ Covid-19 status at...

Summary Business experts have already warned Kenya to be cautious considering she is entering into an agreement with a superpower. American Chamber of Commerce-Kenya chief executive Maxwell Okello said investment by US companies in Kenya will greatly benefit SMEs. The framework will also support development and competitiveness of key agricultural value chains in Kenya. Kenya’s need to export value-added agricultural products dominated the first round of talks with America after its formal launch on Wednesday last week. On the negotiation table, the US will be pushing its document with 24 chapters to be adopted so as to get access to almost all Kenyan economic sectors including State-owned enterprises. Kenya will, on the other hand, present its 14 areas which seek to provide safeguards to secure its industrial and agricultural sectors to avoid dumping America products in the country. In its objectives document, Nairobi wants to enter negotiation cautiously to make sure that the free trade agreement provides safety nets and exceptions to protect Kenya's economic interests. The US is seeking unfettered access to the Kenyan market in the proposed free trade agreement, which could have far-reaching implications on Kenya’s critical agricultural sector and its growth plans RIGHT REGULATIONS How can I make a successful pitch to a potential employer? In a virtual dialogue, the Kenyan team led by Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina, said there was need for agricultural value added products to be allowed in US market while America pushed for the right regulations to...

The COMESA bloc has developed an online portal for member states to exchange information on availability of essential products within the region as part of its strategy to lessen the impact of the Covid-19 pandemic. According to COMESA Secretary General, Chileshe Kapwepwe, the platform will connect buyers to suppliers of essential goods thereby promoting and fostering intra-COMESA trade. It is a platform largely meant to support regional trade, during the Covid-19 pandemic. Mwangi Gakunga, Head of Corporate Communications at the COMESA Secretariat, on Monday, July 20, told The New Times that the new tool "will enable suppliers in one country link up with buyers in another by uploading the products they have on the platform." Gakunga explained that for it to work, suppliers must be registered companies in their home countries. He said: "They will register on the platform and open an account and this will be vetted by the governmental focal points mainly in the ministry that coordinates COMESA activities who will approve and activate the account or advise otherwise." "This is to ensure the integrity of the companies allowed to post on the platform. Once the supplier account is activated, he or she can post the products on the platform." The platform will also help small-scale cross-border traders and SMEs to have access to market information and will link producers, sellers and buyers. It comes as the regional bloc noted that measures being implemented by member states such as closing borders to prevent the spread of the Covid-19...

In Summary Waema says there are over 150 drivers being held in two quarantine facilities in Busia county, some beyond 14 days. Ten others were recently transferred to Lodwar from Nandapal, the border between Sudan and Kenya, after staying in a quarantine facility for over two months. Long-distance truck drivers have complained of being held in quarantine facilities longer than necessary. Kenya Long Distance Truck Drivers and Allied Workers union chairman Roman Waema on Tuesday told the Star there are over 150 drivers in two quarantine facilities in Busia county, some have been there beyond 14 days. Ten others were recently transferred to Lodwar from Nandapal, the border between Sudan and Kenya after staying in a quarantine facility for over two months. Muhktar Hassan, a truck driver, said at the Sudanese quarantine facility, their test results kept fluctuating from positive to negative, raising doubts about the effectiveness of the kits. “After two months, they brought us to a quarantine facility in Lodwar behind the university and told us we will go for home-based care. But they are still holding us here,” Hassan said on the phone. He said the 10 have families who depend on them and have been suffering for the last two months. Waema said truckers are increasingly getting frustrated by government officers. “If you keep a driver at a facility for longer than required because they asked questions, what do you expect their families to eat?” he posed. Isaac Kirwa and Jacob Kamau are two of the...

Diminishing demand for fresh produce in the European market has seen freighters cut down on their weekly flight frequencies to the continent. High seasons in the European market are always between September and May after which the demand for fresh produce goes down as summer kicks in. Europe is a major buyer of Kenya’s horticulture crops, with over 60 percent of the produce finding its way to the continent. During summer, most of the countries produce their own crops with many people going for holidays, cutting down demand. “We have witnessed a declining demand because of the low season in Europe, which is normally a tradition around this time of the year,” said Sanjeev Gadhia, the chief executive officer of Astral Aviation. Freighters are now doing more flights on intra-Africa routes. However, Kenya Airways is still servicing Asian market, mainly to China with three cargo flights slated for this week. Astral Aviation, which has been operating five flights a week to Europe, has now cut the number to four with a likelihood of reducing further depending on demand. The carrier is at the moment doing 20 intra-Africa flights a week, which is an increase from 14 it operated at the same time last year. Mr Gadhia said the traffic within Africa is good and the rates favourable basing on what they are charging at the moment. Fresh Produce Association of Kenya chief executive officer Ojepat Okisegere said a rise in demand in Europe might come earlier than expected because of...

In Summary The first berth completed in August 2019, the other two are completed while work to be finished soon on their yards. The three will be ready for commissioning but that won't happen soon, officials waiting for the worst of Covid-19 to pass. Construction of all three Lapsset berths is complete. The three worth Sh48 billion will be commissioned after the worst of the Covid-19 pandemic passes but that is not expected anytime soon. The first berth was completed in August 2019. Construction of the second and third berth, which are 1.2 kilometers long and about 18 metres wide, started in Kililana area in 2016. The Lamu Port is part of the Sh2.5 trillion Lamu Port South Sudan-Ethiopia Transport (Lapsset) Corridor that will open up northern Kenya and is expected to contribute 1.5 per cent to Kenya’s GDP. The port is a government initiative to develop a second deep sea port along the Coast. Speaking on Tuesday, Lapsset Corridor Development Authority director general and CEO Silvester Kasuku said the container yards for the last two berths will be completed shortly. “We want to officially announce construction of the second and third berths is done. We are working on the yards and then we shall be ready to launch,” Kasuku said. The first berth was to have been commissioned by President Uhuru Kenyatta in November last year but the event was postponed. The President said completion of the first three berths will present a strong case for private sector involvement...