Rwanda and Uganda have recorded a reduction in trade flows in April and May 2020, according to the latest report from the COMESA Statistics on ‘COVID 19 Impact on Trade’. The report was prepared in the first two months in which COVID-19 spread to the region. Imports into Rwanda declined by 32 % in April compared to March. Rusumo and Airport borders posts recorded declines in imports of 35% and 16% respectively. In Uganda a drop in imports were recorded at 30% in April compared to March. Malabo, Busia and Entebbe border posts recorded declines in imports of 35%, 28% and 24% respectively. Imports for the month of May were projected to decline by 20%. Exports for Rwanda also declined by 8% in April compared to March 2020 while Uganda recorded a decline in Exports by 15% in April compared to March. According to the report, reduction in customs duties are listed as among the critical challenges faced by the Rwanda Revenue Authority. Customs duty receipts declined by 55% in April compared to March. Rusumo, Kagitumba and the Airport border posts recorded declines in customs duty receipts of 52%, 71% and 41% respectively. For Uganda, a reduction in customs duties was listed among the critical challenges faced by the Uganda Revenue Authority with declines of 42% recorded in April compared to March. Malaba, Busia and Entebbe recorded declined duties of 43%, 36% and 21% respectively. Both countries have however put in place measures to respond to the COVID-19. In Rwanda for...

Findings of the 2019 African Regional Integration Index indicate that regional integration in Africa remains low with the continent recording an average index score of 0.327 out of a possible 1. The latest index, published late May by the United Nations Economic Commission for Africa, the African Union, and the African Development Bank, builds on the first edition published back in 2016. It provides up-to-date data on the status and progress of regional integration in Africa. The ARII uses 16 indicators, grouped into five dimensions – free movement of people, trade, productive capacity, infrastructure, and macroeconomic policy – to measure how well each country and region is integrated with its neighbors. It shows the continent is still particularly poorly integrated on the productive and infrastructural dimensions, which are key aspects of the foundations of regional integration while free movement of people is the strongest dimension. Although 20 countries score above average, no African country can be considered well integrated with its region, the report said. Much more needs to be done to link regional economies to make them more resilient to shocks such as the current COVID-19 pandemic, it said. “The present COVID-19 pandemic has reopened the question of whether enough is being done in advancing regional integration as a means to help Africa withstand systematic shocks such as the one being experienced today,” said Stephen Karingi, Regional Integration Division Director at the ECA. By the metrics, the East African Community is ranked the best integrated among the eight Regional Economic Communities in Africa, while the Southern...

Shamim Sserunjogi and her brother Moses were forced to become digital entrepreneurs when COVID-19 restrictions in Uganda forced everyone to remain at home. "He had a motorcycle, I had a plan. That's how we started," 32-year-old Shamim told DW. Before the COVID-19 pandemic, Shamim sold tilapia and Nile perch from nearby Lake Victoria. But when coronavirus lockdown measures were implemented, her clients stayed away. To keep her business running, she thought she could connect with her clients via Facebook, WhatsApp, and other online social media platforms. Shamim is now able to sell her goods with the help of her brother Moses, who makes about eight deliveries a day on his motorbike, navigating Kampala city traffic. Her new business model was so successful, it even brought her more clients than she had before the pandemic hit the east African nation. Jumia CEO Juliet Anammah (center) celebrates on the floor of the New York Stock Exchange. Jumia is the first African tech startup company to be listed on the NYSE Shamim's story resonates in many African countries. While the pandemic severely restricts people's movement, online trade is picking up fast. Small, medium, and large entrepreneurs alike are now doing business online. The Ivorian online fashion label Afrikrea told DW that orders have doubled since February, resulting in a 53% increase in turnover. Every third order includes hand-sewn protective masks. Nigerian online retailer Jumia – which has been struggling with heavy price losses since its US IPO a year ago – also reported its highest earnings in...

Kenya has initiated fresh talks with the private sector and neighbouring user countries to agree on the stalemate over the use of the Naivasha Inland Container Depot A meeting between the transport ministry and the private sector led by the Kenya Private Sector Alliance (Kepsa), held on Monday, agreed to address the concerns raised over the use of the facility for transit and cargo destined to Western Kenya region. Transport Cabinet Secretary James Macharia last month directed that all transit cargo, effective June 2, be railed to Naivasha ICD before being cleared to neighbouring countries, with the facility targeted as the main collection centre. “Naivasha will be a transshipment centre,” Macharia told the Star in an interview on May 27,“This is our position and we are going to implement.” The move was however met with protests by Uganda , the biggest destination for transit cargo through the Port of Mombasa, with both its government and private sector seeking optional use of the facility. “Our considered opinion remains that the use of Naivasha ICD should remain optional,” Uganda's Works and Transport minister Edward Katumba said in a letter to his Kenyan counterpart, dated June 4. Mukwano Industries, one of Uganda's biggest importers through Mombasa, cited contractual obligations between shippers, importers and shipping lines that would be breached if its cargo is forcefully railed to Naivasha. “If our port of discharge is Mombasa and on carriage is on consignees' risk and account, I wonder how you can unilaterally rail our containers to Naivasha without...

Kenya and her neighbour are at loggerheads again, but this time over use of the inland container depot in Naivasha. Whereas the former wants to make the facility viable after months of inactivity, the latter wants to protect its multi-billion-shilling investments at the port of Mombasa. Uganda is not amused by a directive issued by the Ministry of Transport to have all cargo destined for landlocked countries cleared at Naivasha, saying, it is putting at stake their interests at the Coast. This comes even as Uganda’s largest business conglomerate, Mukwano Industries, has warned of suing Kenya should it incur losses by being forced to use Naivasha. REGULAR USERS “We have been regular users of the Port of Mombasa for the last 35 years and have never experienced such an act. You and your staff are aware of the contractual carriage obligations that exist between the shipper, consignee and shipping lines,” reads a letter Mukwano Managing Director Alykhan Karmali signed. “We are, therefore, requesting you to observe the above contractual obligations in place and failure to do so shall leave us with no option but to seek legal recourse and hold you liable for all losses, delays and damage that we may suffer as a result of your act,” he added last week. In an interview with Smart Company chief executive officer of the Shippers Council Gilbert Langat said Ugandan businesspeople have invested a lot in Mombasa and their worry would be to lose that business “or be forced to relocate...

The European Union and COMESA have signed 8.8 million Euros Contribution Agreement to increase private sector participation in sustainable regional and global value chains through improved investment/business climate and enhanced competitiveness in the COMESA region. The funds will be used to implement the Regional Enterprise Competitiveness and Access to Markets Program (RECAMP), focusing on agro-processing, horticulture and leather products. RECAMP will also support pre-selected value chains based on the potential to generate value addition, job creation and attraction of investments to the region. The EU Ambassador to Zambia and Permanent Representative to COMESA, HE Jacek Jankowski and Secretary-General to COMESA Chileshe Kapwepwe signed the Agreement. RECAMP will address critical issues, such as the provision of business information, facilitating market linkages, harmonizing regional industrial policies and creating a conducive business environment to attract investments. It will strive to ensure collaboration with activities of national trade support institutions and business development and service organizations in the Member States as they provide services to value chains as part of their mandate. These include product development; facilitate technology transfer, provision of business intelligence and connection to buyers. The program will identify champions or lead firms within the selected value chains that have both backward and forward linkages with SMEs and other intermediary firms in order to enhance effect coordination reduce coordination failures and improve competitiveness. In her remarks, Ms Kapwepwe said the program will make efforts to enhance the capacities and skills of Micro, Small and Medium Enterprises to make them capable players in...

As lockdowns and curfews are being gradually eased across Africa, the continent faces turbulent times ahead as the COVID-19 pandemic continues to impact the global economy. Already, the harsh economic fallout of stringent lockdowns seems to have been felt more keenly by families across the continent than the disease itself, pushing people with little or no savings and limited access to government support either back or further into poverty. The World Bank forecasts the African continent will experience its first recession this century and some report a potential 3% GDP contraction. The impact on jobs will be huge. McKinsey estimates  that between 9 million and 18 million formal jobs will be lost across Africa, and 100 million informal jobs (of which women make up 75%) are vulnerable to loss of income. Development gains undone Many businesses that were booming and families that were thriving just a few weeks ago now face incredibly challenging times. Failure to protect jobs will have major ramifications for the continent’s resilience and long-term sustainable development. This alone risks undoing many of the development gains that have been hard won over the last decade. These issues are compounded by a perfect storm of declining commodity prices and reduced export volumes, as well as depleting foreign exchange reserves and triggering huge capital outflows. International and local responses to the crisis have mostly focused on immediate and medium-term needs, channelling much-needed support to cash-strapped governments and launching or expanding social safety nets to protect the most vulnerable from the impacts of lengthy lockdowns. But the economic impacts of this public...

Trade is emerging as a remedy that could reduce the Covid-19 pandemic’s adversity through flow of essential goods such as food, medical supplies and other hygiene products. This is according to a report dubbed Covid-19: Time to reboot Intra-Comesa Trade released last week. The report authored by experts Benedict Musengele and Jane Kibiru states: “The relaxation of the free movement of essential goods in the region will enhance their production and boost intra-Comesa trade during this pandemic period.” Experts further cite the implementation of the digital trade facilitation and other instruments as core in mitigating vulnerability to shocks such as Covid-19 pandemic. The report also identifies pharmaceutical products as among the top intra-Comesa traded products, which could immensely grow as the import origin markets namely EU, India, USA, China and UK are among the hard hit by Covid-19. The five contribute 45 per cent, 19 per cent 6 per cent 4 per cent and 3 per cent of the source market for pharmaceutical product to Comesa. According to an International Trade Centre report (ITC, 2020), some of these countries, UK, US, China and India have imposed export restrictions in some pharmaceutical products, which may affect their importation, yet these are critical in the fight against Covid-19. Comesa is a net importer of pharmaceutical products with exports amounting $ 442.53 million in 2018 and imports worth $ 6,451.03 million respectively. The intra- COMESA exports of pharmaceutical products constituted 32 per cent of the exports. “This shows that pharmaceuticals are a major...

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...