The Managing Director, International Monetary Fund (IMF) Mrs. Kristalina Georgieva has advised Africa not to deviate from its plans to enforce the African Continental Free Trade Agreement (AfCFTA). She described the initiative as a catalyst for enhanced growth. Georgieva said this recently at the just concluded Virtual Spring Meetings of the IMF/ World Bank in Washington. Responding to a question on how badly the pandemic has affected African economies, she said: “Sub-Saharan African had a lot of countries stepping up over the last years and it is so tragic to see that momentum being stopped and then a number of countries that have even before the coronavirus had been experiencing very dramatic difficulties, conflicts and natural disasters. “Sub Saharan Africa ought to be the center of our attention and it is. We now have more than 30 countries applying for emergency financing. We are prioritising and rapidly responding to this request recognising how critical this lifeline is for them.” She further added: “We need to think beyond that and we need to think about recovery. We need to make sure that the African continental free trade agreement doesn’t get derailed because of the coronavirus and that means engaging with the leadership in Africa and making sure of that we are putting not only financial resources, but also opening up trade channels and making sure that we support the industries in Africa that depend on trade and the revival of trade.” “We are going to have an extraordinary session with President...

Trading within the African Continental Free Trade Area (AfCFTA) is set to begin on 1st July 2020, just over two months from now. So far, only 29 member states out of 55 have ratified the agreement. More countries need to ratify it if the projected boost of 52 per cent in intra-African trade should be attained by 2022. However, Covid-19 could slow things down a bit. While the full effects of the virus remain to be seen, a gloomy economic picture is emerging that AfCFTA will have to contend. There is a unity of expert opinion that the continent is about to go into recession because of the virus. The question is by exactly how much. One could start with the recent African Development Bank (AfDB) analysis entitled "Impact of the coronavirus on the Africa economy". Before the onset of the pandemic, AfDB had projected the continent-wide gross domestic product (GDP) growth to reach 3.4 per cent this year. The GDP will now shrink in the negative to between -0.8 and -1.1 per cent in 2020. In sub-Saharan Africa, estimates by the World Bank are bleaker with a predicted economic contraction of between -2.1 and -5.1 per cent for 2020. The International Monetary Fund forecasts a dip of -1.6 per cent in the region south of the Sahara. Though a country like Rwanda will fare relatively better with a projected growth of 5.8 per cent, the average negative growth in the continent suggests the trading in AfCFTA will not start...

Institutional capacity in public healthcare systems, law enforcement and regulatory agencies, as well as the capacity of the state to commandeer production of essential goods and services, have become decisive interventions in this pandemic. British Prime Minister Boris Johnson, whose conservative government had for years underfunded the public sector, confirmed this unequivocally when he thanked the National Health Service (NHS) for saving his life after he was hospitalised with the virus. We have President Cyril Ramaphosa to thank for his leadership in mobilising national, continental and global public and private resources to enhance our capacity to tackle this pandemic. The admirable collaboration between public and private healthcare institutions has laid an important foundation for a well-resourced and -run National Health Insurance (NHI) system. We can learn from Britain’s NHS about what works and what doesn’t, so we can build our NHI on a firmer footing. Post-pandemic socio-economic restructuring There is no wisdom in hankering after the old socio-economic development models that brought us to the multi-layered global crises (climate, health and socio-economic) we face today. Post-pandemic socio-economic restructuring has to go beyond traditional notions of privatising state-owned enterprises and a smaller government. The entire global socio-economic system we have relied on has been exposed as fragile and a threat to both rich and poor in our society. No economy can prosper while excluding the energies and talents of the majority of its youthful population — as we have done since 1994. We need to transform our economic and social relationships...

The domino effect of the coronavirus pandemic will plunge many economies into recession and means the African Continental Free Trade Agreement (AfCFTA) is now needed more than ever to ensure that member states are trading with each other and supporting one another at this time, according to Banji Fehintola, senior director and head of treasury at the Africa Finance Corporation (AFC). He says South Africa has a very important part to play. It is the most industrialised and diversified economy on the continent and is one of the only financial markets that is sound enough to be tapped for infrastructure projects. “Trade finance and infrastructure finance are incredibly important in the creation of growth across Africa. However, since the global financial crisis of 2008/2009, some global banks have retreated from emerging markets, including Africa. These means credit capacity from global banks for African Financial Institutions (FI) has reduced considerably, constraining their ability to serve clients’ needs,” he tells Fin24. No amount of policy change or cuts in taxes will truly make Africa competitive when the physical hinderances are ignored, according to Fehintola. He says the AfCFTA is not just a dream, but there is a long way still go before it becomes a tangible reality. The next phase comprises a new set of challenges as the ratifying countries commence implementing the AfCFTA with the goal of truly unlocking Africa’s potential through the free movement of goods, services and people. He points out that the elimination of tariff and nontariff barriers...

  Since the creation of the Continental African Free Trade Area (AfCFTA) endorsed at the African Union Summit in Niamey on July 7, 2019, we have been pushing forward the idea that a common market for and by Africans is possible and create a single market for goods and services to facilitate the free movement of people and investments and lay the foundations for a continental customs union. We continue to promote this economic integration among Heads of State and Government, emphasizing the sharing of economic benefits over historical rivalries and relative gains. This study is part of this process. It provides an overview of all the local and international challenges likely to increase or hinder the implementation of the agreement. It thus enlightens African decision-makers by providing them with objective figures to guide them in their decision-making. For the prerequisite for the implementation of the AfCFTA remains the political will to advance intracontinental trade relations. This will require stakeholders to coordinate and harmonize trade policies at the national, regional, continental and global levels. Rethinking government revenue sources The AfCFTA calls for the elimination of 90 per cent of tariffs on intra-African trade, which for some countries dependent on these taxes could represent a drop-in government revenue and thus an obstacle to the success of the agreement. However, according to data from the study, intra-African tariffs are low relative to tariffs between Africa and the rest of the world. About 1.5 per cent of Africa’s GDP or $37 billion comes...

The Coronavirus pandemic (COVID-19) has become a fully-fledged global economic crisis with governments now issuing Level 4 – Do Not Travel advisories, instituting curfews, partial and full lockdowns. These lockdowns that started from Wuhan, China - the epicentre of coronavirus outbreak - are fast turning in to the safest way of life with Italy, Spain, India, South Africa, Uganda, Kenya, and Rwanda among countries administering shutdown doses. The lockdowns mean that factories and private companies cease most economic activities. Therefore, disposal incomes for both people and companies is reduced in sectors of the economy including the health, manufacturing, retail, trade, transport, tourism, entertainment, education and many others. Conservative estimates indicate that the global economic aftermath of COVID-19 pandemic could last at a minimum of one year. The Organisation for Economic Co-operation and Development (OECD) estimates annual global GDP growth is expected to drop to 2.4% in 2020, from an already weak 2.9% in 2019. World exports are forecast to decline by more than 5% to US$1.28 trillion in 2020. Further, the United Nations Conference on Trade and Development (UNCTAD) reports that the number of container cargo ships from China, reduced by 30 percent, in January 2020 alone from 540 ships to 370 ships per day. A March 10, 2020 Baker-McKenzie report highlights that many African countries face a “twin supply-demand shock,” due to a decrease in imports of manufacturing inputs and supplies from China and reduced demand from exports in key sectors in various export markets. Reports from the Uganda...

Africa is lagging behind in the lucrative global digital economy, worth around $12tn globally. With the African  Continental Free Trade Agreement in force, it is time to launch a continent-wide digital revolution to keep pace with the rest of the world. By Thierry Zomahoun On 30 May 2019, the African Continental Free Trade Area (AfCFTA) officially came into force. Like most African leaders and a large proportion of informed observers, I remain convinced that the AfCFTA is an opportunity for the development and integration of our continent. A free trade area that includes nearly a billion consumers will surely prove to be a powerful driver of economic growth in the sectors that can ensure our continent emerges. One of these is the digital economy. Africa is still lagging behind in this area. You might even think that Africa has resigned itself to sitting out this competition that is already shaping tomorrow’s world. There is a digital re-colonisation looming over our continent. Perhaps you have heard about what we call ‘unicorns’. These are online micro-enterprises that started from nothing and built a stellar empire within a few years. Take note – of the 575 known unicorns across the world, only three of them came out of Africa. This African lag can be explained by a number of factors, one of which is an inadequate infrastructure, not to mention the shortage of requisite skills. These are real challenges holding back the growth of innovation and the emergence of industries linked to new technologies. Such barriers...

Residents of Budalang'i in Busia County have started feeling the effects of a  government order to close the border to human traffic. Locals said they depend heavily on food brought in from Uganda, thus the travel restrictions could result in some families sleeping hungry.“If the government is ready to distribute relief food, that will be good for us in Budalang’i," said Rael Akumu, a cereals trader who was unable to replenish her stock with grains from across the neighbouring country. Following the order to close the border to human traffic from Port Victoria in Budalang’i to Malaba, only heavy commercial vehicles are being allowed across. On Tuesday, police chased away traders who operate in Kenya's Sofia area, which borders the country's no-man's land with Uganda.Jane Atieno said she has been crossing the border for the last seven years to buy fruits, onions, tomatoes and vegetables in Sofia, Uganda. "Our bread basket is Uganda. We source foodstuff from there and since the closure of the border, it has been hard for us to cross," she said.Kenya National Chamber of Commerce and Industries Busia vice chairman Sylvanus Abungu warned that the directive will have far-reaching negative economic effects. Mr Abungu said Kenya imports millet, maize, cassava, sweet potatoes, fish, milk, eggs and sugar from Uganda.Other commodities include sugarcane, charcoal, timber and cereals, which are later transported across the country."Informal cross-border trade is the worst hit. Busia is the gateway to markets outside the region and it is already affected. If the government...

The EAC member state has presented opportunities to European investors Trade between Uganda and European Union has over the years been critical in terms of creating jobs and strengthening the economies for the two parties. This opportunity is expected to be sustained evidenced by the recent inaugural two day Uganda – Europe Business Forum that was held at Speke Resort Munyonyo. More than 1,000 delegates from selected participating countries attended the Forum. The first ever Forum happened at a time the EU was firming its trading ties with other countries following Britain’s exit from the 27member bloc at the end of January 2020. Minister presents big opportunities   Speaking during the Forum, the Minister of Trade Industry and Cooperatives, Amelia Kyambadde said that Uganda and EU were good trading partners and that the relationship should be kept strong. She listed Uganda’s trading partners within the EU as Netherlands, Italy, Belgium, Germany, UK and Denmark on the import side. Uganda exports to Europe food and live plants/animals, crude materials, inedible and more. She said that Uganda exports on average $60.7million out of the $100bn of EU’s annual average imports. Uganda’s major imports from the EU are machinery, transport equipment, chemical and related products, miscellaneous manufactured articles and manufactured products. Kyambadde said, Uganda’s exports are not as diversified as her imports from the EU because it exports mainly primary unprocessed products and imports manufactured industrial products. In terms of foreign direct investment, inflows into Uganda increased from the $543.9million in 2010 to...

With border closures announced to contain the spread of the corona virus pandemic, the road transport sector has been hardest hit. The road transport accounts for over 60 percent of goods movement from ports of entry to the region. Besides shutting of the borders, more checks have been introduced to minimize exposure and curtail export of the virus. Logistics experts have predicted business could reduce by more than half going forward, with players calling for measures to minimize disruption and provide a critical service. Kagure Wamunyu, Africa region chief executive officer at Kobo 360, said logistics business will drop by 50 percent since borders trucks are spending up to two days before they cross the border due to the stringent checks. Kobo, a freight logistics firm, connects and supports cargo owners, truckers, drivers and importers. “The logistics sector has been disrupted by the pandemic and will suffer the sharpest blow. Developing a supply chain response to the coronavirus outbreak is extremely challenging, given the scale of the crisis and the rate at which it is evolving,” Ms Wamunyu told Shipping & Logistics in a phone interview. She said since road transport plays a crucial role in linking industries with the ports where raw materials are delivered, there is need for quick solutions to the current challenges. Kenya’s borders with Uganda and Tanzania have been shut, with minimal truck movement. This has led to delays in delivery of goods within the region. Mombasa is the gateway to East African countries of...