Last month, one of the world’s largest trade accords, the African Continental Free Trade Area (AfCFTA) covering more than a billion people and with a GDP of greater than $3-trillion, went live. Experts predict that removing tariffs alone could boost trade between African countries by 15% ($50-billion) to 25% ($75-billion) by 2040. As governments, corporations and SMEs grapple with implementation to capitalise on the expected increase in interregional trade, it is important to ensure the benefits of expanded trade between nations on the continent positively impact more Africans. The answer may lie in a digital payment revolution sweeping across the continent. Financial inclusion is essential for democratisation of access to opportunity among Africans seeking to benefit from the AfCFTA. A Senegalese microentrepreneur working in the leather industry needs to have a way of accepting payments from local or regional off-takers of her products, in order to participate in the new opportunities that the trade pact brings. Approximately 350-million Africans do not have access to a financial services account and according to Mastercard, 95% of transactions on the continent are still done in cash. This reduces the scope for cross-border payments and trade. Thankfully, Things Are Changing Quickly. The Covid-19 Pandemic Accelerated The Adoption Of Digital Financial Services As Consumers Embraced E-Commerce And Contactless Payments, and governments and NGOs across the continent leveraged digital wallets to make palliative funds transfers to their most vulnerable citizens. Ghana’s central bank eased know-your-customer (KYC) regulations in March 2020 for an initial period of three...

SUMMARY SEZs first appeared in industrialized countries in the 1950s, helping drive growth, economic diversification, and job creation. They were instrumental in speeding China's transformation and breakneck development beginning in the early 1980s. In 1986, the International Labour Organization (ILO) reported 176 zones in 47 countries. By 2019, that number had soared to 5,383 active sites worldwide. What's so special about special economic zones (SEZs)? These are demarcated areas with their own, unique rules of business. They provide private firms with quality, cost-effective, and reliable infrastructure, efficient customs services, regulatory predictability, and even fiscal incentives. SEZs first appeared in industrialized countries in the 1950s, helping drive growth, economic diversification, and job creation. They were instrumental in speeding China's transformation and breakneck development beginning in the early 1980s. In 1986, the International Labour Organization (ILO) reported 176 zones in 47 countries. By 2019, that number had soared to 5,383 active sites worldwide. Africa has also embraced the promise of SEZs — but with varying degrees of success. Some have attracted investment, but others have not. Mauritius, South Africa, Egypt and Morocco are among the places where SEZs have flourished on the continent, supporting growth. In Kenya, the development blueprint Vision 2030 identified SEZs as a way to support industrialisation and attract private sector investment. The country's Special Economic Zones Act 2015 was designed to boost domestic manufacturing and services by ensuring regulatory and administrative predictability, quality industrial infrastructure, and market access, with special emphasis on the textiles and apparel, leather and...

The African Development Bank (AfDB) flagship entity is providing advisory services and investment support to creative players. According to Africa Investment Forum Senior Director Chinelo Anohu, digital platforms in Africa should scale up to take advantage of the continent’s surging demand for creative content. Anohu was speaking at a virtual meeting with Afreximbank President, Benedict Oramah, and Dean Garfield, Netflix Vice President of Public Policy. The meeting, titled The New Face of African Collaboration, was organized by the Africa Soft Power Project. It was moderated by Omar Ben Yedder, Group Publisher and Managing Director of IC Publications. The dialogue was held against the backdrop of the recent launch of the African Continental Free Trade Agreement (AfCFTA). This year is the African Union’s year of arts, culture and heritage. Discussions focused on the role of infrastructure and connectivity in advancing Africa’s creative industries, including film, textiles and design. Oramah, speaking at the virtual meeting said, “Afreximbank set up a Ksh. ($500 million) fund in January 2020 to support Africa’s creative industries. The continent faces a challenge to effectively monetize its creative output. Once it does so, innovation will follow.” Netflix’s Garfield agreed with Anohu, stating that AfCFTA would help address a number of the challenges to boosting Africa’s creative output, including uneven intellectual property protections. Improving fragmented payment systems and inadequate human capacity in creative industries. The Africa Investment Forum was initiated by the African Development Bank and its founding and institutional partners. The Forum works to accelerate the closure of...

The government will continue engaging neighbouring countries, especially DR Congo, under bilateral and regional frameworks to ensure continued flow of cross border trade, especially after the initial Covid-19 induced border closures exempted only big trucks with transit goods. James Tayebwa, a cross-border trade policy specialist at the Ministry of Trade and Industry (MINICOM), noted this as he explained how challenges facing small or informal cross-border traders during the Covid-19 pandemic are being addressed. A report jointly published Wednesday by the UN Economic Commission for Africa (ECA), TradeMark Africa (TMA) and the African Economic Research Consortium (AERC) called for "urgent policy action from the EAC Partner States", to address the challenges facing informal cross-border traders. The outbreak of Covid-19 early last year came with a number of restrictions, including cross-border movement. During the initial restrictions for only big consignments, Tayebwa said, the government "encouraged the small-scale cross border traders to aggregate their goods under groups mainly transporting the goods across the border by hiring motorized tricycles." The groups, Tayebwa noted, are not only for the big formal cooperatives but even small traders in the same line of business can team up and trade as one unit. Trade between neighbouring countries conducted by vulnerable, small and often unregistered traders who move marchandise between markets close to the border forms a significant part of intra-EAC trade. It contributes income, provides jobs and empowers women in some of the most fragile and impoverished communities on the continent. This is why experts see any threat...

Local and regional exports have recovered to pre-Covid-19 levels following a sharp decline in April 2020 as a result of the Covid-19 pandemic according to a report by the United Nations Economic Commission for Africa, TradeMark Africa and African Economic Research Consortium (AERC). The report showed that by the end of the third quarter, a majority of East Africa Community countries, exports had surpassed 2019 levels. In Rwanda, exports had grown by 13.6 per cent in comparison to 2019, statistics from the Ministry of Trade and Industry show. The report’s authors noted that recovery of exports was largely driven by non-traditional exports as well as value addition. “Aggregate exports from the region declined to their lowest values in April 2020. However, they started recovering in the ensuing months. In fact, in the third quarter of 2020, most of the EAC Partner States’ exports surpassed their 2019 level,” the report noted. Jonas Munyurangabo, Director General for Planning, Monitoring and Evaluation at the Ministry of Trade and Industry, said that Rwanda had experienced the same trade with exports growth driven by non-traditional exports, minerals and re-exports. He noted that while previously, exports were driven by tea and coffee, in 2020 exports relied on products such as milling products, vegetables, flowers among others. Munyurangabo noted that among the lessons that were picked from the 2020 pandemic experience is the need to increase attention to intra-regional trade which had proved to be more resilient during the slump. According to the report, Intra-EAC trade exhibited...

Manufactured products remain key in driving Kenya's long-term post-Covid recovery on trade, a report launched yesterday indicates, even as it paints a gloomy picture for commodity exports. Called 'Waving or drowning– impact of the Covid-19 pandemic on East African trade, the report by TradeMark Africa, United Nations Economic Commission for Africa and African Economic Research Consortium, notes Kenya recorded strong performance in trade in the last quarter of 2020, buoyed by manufacturing. Increase was mainly noted in industrial supplies (non-food) and capital equipment. This came with a rebound on intra-East African Community trade as Kenya recorded the biggest export volumes on trade with her regional peers. Total volumes shipped from Kenya (exports) to the region were valued at Sh165 billion in quarter three (October-December) 2020, picking up from slow performance of Sh130 billion in the second quarter when the impact of Covid-19 was rife on regional economies. Pre-Covid, the volumes were valued at Sh175 billion (January-March), the report released this week indicates. Heightened dependence on commodity export, such as tea for Kenya, is however worrying, the survey notes, as tea prices remained depressed last year. Uganda, a key trading partner with Kenya, had the second-highest volumes valued at Sh137.4 billion. Exports from Kenya to Uganda are mainly palm oil and its fractions, iron or non-alloy steel, petroleum oils and salt, among other goods. Intra-EAC trade hit a negative 110 in April when countries closed their borders to slow the spread of the virus. It started picking up in May in three countries (Kenya, Uganda and Burundi). UNECA director of Africa (sub-regional office -...

In the latest episode of Connecting Africa, CNN International’s Eleni Giokos explores how data and technology are transforming transport infrastructure across the continent. First up, Giokos visits the Kenya Standard Gauge Railway (S-G-R) to see how it is benefitting the import and export industry. Since it was launched in 2017, the S-G-R has moved more than four million tons of cargo along a vital transportation corridor connecting Naivasha and Nairobi with the Port of Mombasa. Abhishek Sharma, Senior Director of Transport at TradeMark Africa, tells Giokos how the railway has impacted trade at the port, “Our whole transport system has been realigned. For the longest time, very little cargo was moving by rail, up to 95% of the cargo was moving by road. Suddenly, there has been a massive shift where for containerised cargo from Mombasa to Nairobi 60% of the imports are moving by rail. So, it's a whole different way in which things are being done.” In a region with many landlocked countries, logistics costs can add up to 60% on the consumer price of imported basic commodities. Sharma speaks about the positive impact the S-G-R has had on reducing these costs, “Any intervention which reduces the cost of logistics in our region, makes a big difference to what the people in our region can achieve in terms of their health outcomes and educational outcomes, as well as, you know, to be able to save a bit more.” In the future, the S-G-R project is planned to connect...

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East African Community (EAC) member states have been urged to continue ring-fencing crucial export sectors from lockdown measures because the pandemic is far from over. This advice is contained in a research report produced by the United Nations Economic Commission for Africa (UNECA), in partnership with TradeMark Africa (TMA) and African Economic Research Consortium (AERC) that was launched last week. Titled; "Waving or Drowning? The Impact of the COVID-19 pandemic on East African Trade”, the report notes that whereas EAC economies have so far been resilient against the effects of the COVID-19 pandemic, they are “not out of the woods”. This is because of the pandemic’s rapidly evolving nature and its spillover effects, which may still present a significant threat to trade and commerce within the region over the coming years. Speaking during the launch of the report last week, TMA chief executive officer Frank Matsaert alluded that the pandemic is going to be around for some time, thus the need to draw lessons and support countries to fully recover. Matsaert explained that the report provides a good starting point for governments, private sector and other stakeholders to think about how to respond to the pandemic and its impact on trade, in the medium and longer-term, adding that evidence-based interventions are crucial for robust policymaking and programmatic responses. Stable exports According to the report, EAC exports have recovered to pre-crisis levels, despite the earlier sharp decline posted in April 2020, with most EAC member states’ exports surpassing their 2019 levels...

When the COVID-19 pandemic crisis started; most people were extremely pessimistic. They thought that the the region would drown in terms of trade declining catastrophically. But in actual fact the the East Africa Community economies (Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda) have, by global standards, proven to be relatively resilient. The newly launched joint report by UN Economic Commission for Africa (UNECA), TradeMark Africa (TMA) and African Economic Research Consortium (AERC) entitled 'Waving or Drowning? The Impact of the COVID-19 Pandemic on East African Trade' notes that declines in imports broadly reflected the adverse trade performance of the EAC's main trading partners during the early phases of the pandemic in April and May 2020, but the imports of all the EAC Partner States subsequently recovered to pre-pandemic levels by the second half of 2020, after governments' lockdown restrictions were eased and a broader global trade recovery started to take place. Nonetheless, despite showing resilience, COVID-19 has reversed some of the gains made in trade facilitation. Immediately after COVID-19 outbreak, the ship dwell time at Mombasa port increased by 48% and Berth time increased by 52% . Cargo transit from Mombasa Port to Malaba (the border between Kenya and Uganda) increased from 7 days to 11 days by the second quarter of 2020. The time taken to transport goods via the Mombasa-Busia route was nearly three times higher. On the Central Corridor, the transit time from Dar-es-Salaam to various cities in the neighbouring countries more than doubled. The marked...