Slow Covid-19 testing result in long queues such as this on Bungoma-Malaba highway, and costly delays. FILE PHOTO | NMG As the East African economies re-open after many months of hiding from coronavirus, Covid-19 tests have become the latest non-tariff barrier to regional trade. The EastAfrican reported that Rwandan cross-border transporters are losing money as the impasse over Covid-19 testing of drivers continues to hold up the movement of goods from the port of Dar es Salaam to Kigali. Rwanda too does not accept Tanzanian Covid-19 certificates presented by Tanzanian truck drivers, preferring to do its own tests. Uganda and Kenya are holding their noses, and looking away pragmatically. They accept anyone’s certificates. But even with the system “working”, it is still very slow compared to the pro-pandemic times — which themselves were actually quite shambolic. These Covid-19 penalties, say economists, are now the biggest source of the increase in prices of goods and services in the region. With projections of vaccines getting to the region at the end of 2021, we are in for some bleak times unless enlightenment descends upon governments soon. There are ways out if there are people bold enough in East African executive mansions to seize on them. Beyond the health concerns, there is some narrow nationalism, and a sense that competitive advantages might somehow be extracted through this Covid-19 tests politics. But if that can be overcome, technology offers a path to speed everything up. First, to manage the politics and save face, let...

Summary Rwanda is banking on the quality of tea it produces as the one value proposition to help it weather the falling global prices. The first eight months of this year saw a sharp drop in tea prices on the international market, but the country performed well at auctions. According to the latest data from the National Agriculture Export Board (NAEB), the country generated more than Rwf90 billion ($93 million) in 2019/2020, a 12 per cent growth in revenue from Rwf80billion ($83 million) recorded in 2018/2019. “This was driven by a combination of quality and good prices at auctions. We focused on ensuring we produce the best quality and it paid off,” said Cynthia Uwacu, the export market development and innovation manager at NAEB. Despite the high numbers, the demand on the international market has not yet fully recovered from the effects of Covid-19. Export volumes increased by seven per cent from more than 30,500 tonnes in 2018/2019 to more than 32,600 tonnes in 2019/2020,. Last year, the government came up with a policy in which farmers earn at least 50 per cent of the price that a kilogramme of processed tea is sold on the international market, an incentive that is boosting production. Tea exporters are however still reeling from falling prices. Bela Nyirahuku, the sales and marketing manager at Rwanda Mountain Tea, said tea prices are irregular. “The market is responding by bidding at lower rates and buying sparingly, therefore prices are low and tea stocks are comparatively...

The African Union has amplified action to tackle non-tariff barriers and increase small businesses’ use of the tradebarriers.africa tool through its new online platform The African continent is about to become the world’s largest free trade area. If not addressed, non-tariff barriers (NTBs) may slow down this effort. Although the negative impact of NTBs on intra-regional trade is recognized, so far there has been limited success in addressing them. “The success of the AfCFTA depends in part on how well governments can track and remove non-tariff barriers,” said Ambassador Albert Muchanga the African Union Commissioner for Trade and Industry. A new campaign to spotlight and remove non-tariff barriers (NTBs) in intra-continental trade launches this week. The #TradeEasier campaign aims to promote the uptake and use of the African Union’s tradebarriers.africa, a non-tariff barriers reporting mechanism tool. The tool, developed by the African Union in partnership with UNCTAD, supports efforts to make continental trade easier and less costly by helping African businesses report such barriers and supporting their elimination with the help of governments. NTBs slow down the movement of goods and costs importers and exporters billions of dollars annually. They also stand in the way of the success of the African Continental Free Trade Area (AfCFTA). “If we want the AfCFTA to thrive, we have to ensure operational barriers are dropped and businesses and traders, especially small ones; don’t suffer from undue limitations placed on them as they try do the basic thing that makes economies work – trade.” Trade...

By Andrew Mold and Anthony Mveyange from Brookings institute  At the beginning of the COVID-19 pandemic, such was the scale of the economic disruption caused by lockdown measures that there was much talk of the collapse of global trade. In the midst of the lockdowns, in April, the World Trade Organization estimated that the decline would amount from anywhere between 13 and 32 percent. In a similar vein, UNCTAD was forecasting a 20 percent decline in global trade for 2020. However, recently released trade statistics across the world reveal that those forecasts may have been overly pessimistic and underestimated the relative resilience of the global trading system. In fact, in June, after several months of sharp declines, trade volumes recorded their biggest monthly rise on record, with a 7.6 percent increase. East Africa may be shadowing these global trends. Kenya, the largest regional trader, is a good barometer of broader East African trends. The country was initially hit quite hard in terms of the decline in trade volumes, with a 19 percent drop in total trade volumes in April. As warned in our earlier Brookings policy brief, re-exports to the rest of the region were hit extremely hard, with a 83 percent decline in April. Since June, though, total trade volumes have begun to recover rapidly, with a 9 percent increase in June and a 12 percent increase in July (Table 1). Moreover, the story is a similar if the analysis is undertaken using year-on-year percent changes. Table 1. Kenyan trade, percent monthly change, January-July 2020 Total exports Re-exports...

The OPEC Fund for International Development (the OPEC Fund) (www.OPECFund.org) has signed a US$20 million term loan in favor of East African Development Bank (EADB). EADB will use the loan to support small- and medium-size enterprises (SMEs) and infrastructure projects in East Africa. EADB is an important regional development institution for delivering key development objectives across the East Africa region. It enjoys a high level of commitment from member states Kenya, Uganda, Tanzania and Rwanda, as well a diverse shareholder base that includes multilateral and bilateral development institutions and international financial institutions. SMEs account for more than half of EADB’s portfolio. They play an important part in development, driving economic growth and employment opportunities in East Africa and in developing countries more generally. The bank is expanding its resource mobilization activities to meet the growing financing needs of SMEs. “We are very pleased to support private sector development in East Africa, which goes to the core of our mandate,” said OPEC Fund Director-General Dr Abdulhamid Alkhalifa. “We have partnered with EADB since 2001 and we appreciate the opportunity to strengthen our relationship. SMEs are critical to achieving progress toward Sustainable Development Goal (SDG) 8 on decent work and economic growth. Efficient infrastructure, as part of SDG 9, improves access to social services, reduces business and production costs, supports trade, and will ultimately provide East Africa with a more competitive business environment.” Vivienne Yeda, the Director General of EADB, said: “We are pleased to receive a line of credit of US$20...

Barcelona, September 24, 2020.- The global pandemic of the Coronavirus Covid19 remains, increases its expansion in many countries and does not have a near end. Its economic consequences are unprecedented in the last 100 years. However, we have to learn to live with this situation and conjuncture. The transport and logistics sector is one of the most important to keep us alive. The Freight News South Africa’s publication has highlighted some keys to the proper functioning of the global supply chain: Globally, movement restrictions, health screening, and border controls and closures – put in place to ward off the virus that caused Covid-19 – had led to an estimated 18% average decline in annual turnover for goods transported by road, Hügel said Unlike anything before it, the Covid-19 pandemic has underlined the importance of harmonising legislation governing the transport of goods across borders. This was the message from all four speakers at the second webinar hosted by the Southern African Transport Conference (SATC) earlier this month. The webinar explored Covid-19’s impact on freight and logistics, and was addressed by Transnet group chief executive Portia Derby, TradeMark Africa senior director of transport Abhishek Sharma, and International Road Transport Union senior advisors Jens Hügel and Kazeem Asayesh. The view of every speaker was that harmonising the legislation that governs cross-border good transit would bolster economies by reducing transport and warehousing costs, and thus increase individual countries’ resilience in the face of economic crises. Sub-Saharan Africa had taken several hard knocks due to...

“Investment and Trade for Africa’s Economic Development” – a public webinar held on Wednesday – targeted opportunities for cross-border collaboration between Africa and Germany. The African Export-Import Bank announced its plans to sign a Memorandum of Understanding with German car manufacturers to establish an automotive industry in Africa. The Germany-Africa Business Forum (GABF), Africa Oil & Power and the African Energy Chamber co-hosted the webinar, as part of a GABF cooperation-focused series. Berlin, 24th of September, The Germany-Africa Business Forum (GABF) hosted its second installment of its German-African cooperation-focused webinar series on Wednesday, aimed at outlining the opportunities for sustainable FDI between Germany and the African continent. The panel comprised H.E. Günter Nooke, Africa Envoy to German Chancellor Angela Merkel; NJ Ayuk, Executive Chairman of the African Energy Chamber; and Rene Awambeng, Global Head Client Relationship at the African Export-Import Bank (Afreximbank). Anchored by the theme of investment and trade for African economic development, the opening keynote was delivered by H.E. Nooke, and outlined four key success factors in driving Africa’s economic development: investment and business climate, transport, energy and technological infrastructure, available workforce, and access to markets. Digitalization and green energy were advanced as two of the critical sectors for facilitating Africa’s economic and social development. Africa contains a young, tech-savvy population, noted H.E. Nooke, translating to smooth technological adoption and enhanced opportunities for both consumers and businesses. Highlighting efforts to expand global market reach, H.E. Nooke noted the anticipated benefits of the recently adopted African Continental Free Trade...

In recent months, the U.S. began negotiations for a bilateral free trade agreement with Kenya. These negotiations are aligned with the current administration’s vision for trade reciprocity rather than unilateral trade preference programs. Although these negotiations could produce the first bilateral trade agreement between the U.S. and a sub-Saharan African country, a shift from regional preferential trade agreements to bilateral free trade agreements could undermine the growth of smaller countries, who may not be of enough economic interest to the United States. Bilateral agreements could also undermine efforts to create a regional economic bloc through the African Continental Free Trade Area (AfCFTA). When President Bill Clinton signed the African Growth and Opportunity Act (AGOA) in 2000, African countries were given a competitive edge by providing unilateral duty-free exports for 6,500 products from Africa to the United States. Twenty years after AGOA was first adopted, we see that it has created long-term, sustainable growth by stimulating the private sector and creating jobs in a region where many countries are battling high unemployment, thereby addressing structural challenges the region faces. Additionally, in choosing a regional approach for the trade agreement, Clinton empowered both big players like South Africa and smaller players like Lesotho. In many ways, this approach aligns with the “trade not aid” mantra. Although AGOA has been extended twice, most recently until 2025, it has come under threats over the last four years, as tariffs were imposed on key steel and aluminum products and duty-free access was suspended for apparel...

Governments in Africa are being urged to harmonise trade policies to ensure the continent strikes the right balance between tackling coronavirus and keeping trade flowing. In a report the Economic Commission for Africa (ECA) said inefficiencies and disruptions to cross-border trade risk holding back the continent’s development goals, though innovations such as a common African Union (AU) Covid-19 test certificate for truck drivers were a step forward. Read original article

THE 2020 Africa Agriculture Trade Monitor (AATM), published by the International Food Policy Research Institute (IFPRI), has recently been released, providing an analysis of continental and regional trends in African agricultural trade flows and policies. According to the AATM report, the third in a series of flagship reports, policy reactions among the world’s leading food and agricultural producers during the coronavirus pandemic since the beginning of the year have caused disruptions in world supply chains and threatened food-security systems in food import-dependent countries. Furthermore, measures to contain the virus have magnified the negative impact of the crisis on intra-continental trade flows and the livelihoods of millions of people across Africa. But opportunities lie in the crisis, as the foreword to the report points out. Among these is a strong political will to improve intra-African integration with the ratification of the African Continental Free Trade Area (AfCFTA) agreement. This agreement, launched in July 2019, aims to eliminate tariff and non-tariff measures on goods, improve continental integration, and speed up customs procedures that remain a serious barrier to trade performance in Africa. According to the report, countries should not let the pandemic stop progress towards economic integration. It said that agreements like the AfCFTA could provide not only a solid basis for long-term economic development, but also a means of effectively fighting future pandemics by facilitating the cross-border trade of food and medical goods. According to the report, virtual negotiations on the AfCFTA could begin in the coming days and set a...