Author: tradeuser

COVID-19 accelerates greater trade coordination in East Africa

It took a traffic jam of a couple thousand trucks at the Malaba border between Kenya and Uganda to fully visualize both the health and trade issues at stake when borders operate at optimum. The COVID-19 crisis has revealed both hairline fractures along borders in East Africa and the potential to solve them through better regional coordination. The East African Community (EAC) to date has been a grand experiment in more than just free trade between Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. It also seeks to transform the region into a single market that allows free movement of goods, people, services, labour and capital, and create a single investment area. The coronavirus pandemic has curtailed this dream in the short-term but the experience has been a learning curve, and UNCTAD, TradeMark East Africa (TMEA) and other regional partners have used the moment to help the region’s national trade facilitation committees (NTFCs) improve their skills and work more effectively by offering them ground-breaking online training. “It’s a complicated situation due to the necessity of imposing health controls and measures to manage COVID-19 on one hand, while still ensuring trade flows, especially of essential goods, on the other,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics. “The situation has been extremely challenging for everyone from policymakers to customs officials; truck drivers to traders,” she added. “Training is one of the solutions to this challenge.”   [caption id="attachment_54331" align="aligncenter" width="640"] Trade facilitation in East Africa is critical during COVID-19[/caption]...

LOOKING INWARDS Coronavirus: The pandemic doesn’t mean AfCFTA is on lockdown

The African Continental Free Trade Area (AfCFTA) is one of the greatest examples of Pan-Africanism since the creation of the African Union (AU). The agreement has acquired the signatures of 54 of the AU’s 55 member-states, bringing together an impressive domestic market of more than 1.2 billion people with a collective GDP of $2.6tn. The logic behind the deal is sound. Africa is, by most standards, the least integrated continent, where internal trade currently accounts for just 16 percent of its total trade volumes. The potential benefits of liberalised trade across the continent, from the Atlantic to the Indian Ocean, Cape Town to Cairo, could be substantial. Evidence suggests the removal of tariffs, supplemented by trade facilitation initiatives, could boost intra-African trade by 52.3% or $34.6bn by 2022. However, the benefits are far from guaranteed, and the continent now faces the task of implementing the agreement. The deal stipulates signatories eliminate tariffs on 90% of goods and address a plethora of non-tariff barriers (NTBs), which will in turn tackle the comparatively high cost of trade across the continent. High cost of trade in Africa This latter point is crucial to Africa’s success. Recent studies published by the United Nations Conference on Trade and Development (UNCTAD)   and the World Bank suggest that NTBs prove more of an impediment to trade than tariffs do. In fact, the UNCTAD says that by tackling NTBs, African countries as a group could see gains of $20bn each year. Higher levels of internal trade will help wean Africa off its reliance on...

FEAFFA lobby for joined logistics approach and cost-effective measures to tackle Covid-19 pandemic

Logistics industry stakeholders in the East African Community (EAC) have renewed push to contain further spread of the novel coronavirus by adopting containment measures, while ensuring that the region continues to get vital supplies and inputs through the Central and Northern transport corridors. This follows emerging data that revealed that long distance truck drivers are a weak link in the fight against Covid-19 after several of them tested positive at various border crossing points.  With TMEA’s support, The Federation of East African Freight Forwarders Associations (FEAFFA), the umbrella body of the region’s clearing agents has played a central role in the ongoing multi-agency efforts to tackle Covid-19 and enhance trade being employed in the region. Continuously, FEAFFA, Kenya Transporters Associations (KTA), Regional Lorry Drivers and Transporters Association (RLDTA), Transporters Association of Tanzania (TAT) and Tanzania Truck Owners Association (TATOA) held consultative meetings to develop recommendations which were presented to National Covid-19 Taskforces in the East Africa Community Partner States. This will inform the ongoing debate and shape the policy measures being pronounced.  The recommendations by the logistics representatives and players were guided by years’ of experience the agencies have on handling of cargo at various border crossing points. The basis of the recommendations was as follows: The agencies appreciated the plausible measures the EAC states pushed to adopt, for example deployment of relay driving where truck drivers swap with their counterparts in transit countries at the borders. And, drivers mandatory testing at borders. Additionally, the use of delivery of cargo...

How to Make Trade Safe in Africa

Frank Matsaert and Erastus Mwencha On February 27th, 2020 Nigeria confirmed the first case of COVID-19 in Sub-Saharan Africa. Since then, the COVID-19 virus has spread to all corners of the Continent with the number of infections increasing exponentially, according to the World Health Organization (WHO) Regional Director for Africa, Matshidiso Moeti. Even before the first cases were recorded, COVID-19 was already having an impact on international demand for exports in key sectors such as textiles and floriculture, have severely threatened businesses and fuelled unemployment. Flower exports are down by more than 90% and tourist arrivals have ground to a halt. In the largest economy in East Africa, the Kenya National Bureau of Statistics reported that imports have dropped by more than 20% in the first two months of 2020, with Chinese imports plummeting around 37%.  As the pandemic continues, the projected losses grow. Trade volumes in the East African Community (EAC) are down by up to 25% since the beginning of 2020, with even worse reductions in the informal sector.  African countries, conscious of the fragility of their public health systems and limited intensive care capacity, have had to move quickly to try and protect their people by instituting strict measures to stem the spread of the virus. However, in doing so they are faced with a dilemma. For many in the region their livelihood depends on being able to move about freely. There is no work from home option for the hundreds of thousands of small-scale traders that...

Great benefits when Africa becomes a single market

Africa took a giant stride along the path of increased economic co-operation, with the launch of the Africa Continental Free Trade Area (AfCFTA) in March 2018. The move was widely hailed as a major milestone towards the long-standing goal of creating a unified continental market. AfCFTA is hailed as one of the most exciting new developments on the continent, with the potential to connect African countries from the Atlantic to the Indian Ocean, and from Cape Town to Cairo. By liberalising trade, AfCFTA will help countries grow economies and create jobs. If fully implemented, AfCFTA would see the creation of the world’s largest free trade area since inauguration of the World Trade Organisation in 1995, boasting a domestic market of more than 1.2 billion people, and a collective gross domestic product of $2.6 trillion. Effective implementation of AfCFTA would be transformational. The African Development Bank has forecast that elimination of bilateral tariffs on goods and services would increase intra-African trade by 15 per cent. Yet significant barriers remain beyond tariffs. Without a focus on implementation, we could see a trade agreement that is largely unusable. Many African countries are members of several regional economic communities — the East African Community, the Common Market for Eastern and Southern Africa, the Southern African Development Community and the Economic Community of West African States — applying different rules of origin, trading standards and cross-border procedures, all making it costly to trade. The World Bank Doing Business report for 2020 shows that while it...

E-commerce for green trade in Africa

[vc_row css=".vc_custom_1579853773155{margin-bottom: 10px !important;}"][vc_column][rev_slider alias="e-commerce-for-green-trade"][/vc_column][/vc_row][vc_row][vc_column][vc_column_text] On 23rd January 2020, over one hundred delegates convened in Nairobi for the Second two-day Epower Forum aimed at driving the E-commerce agenda in Africa. Through funding from the Netherlands Ministry of Foreign Affairs, TradeMark East Africa (TMEA) partnered with Amari Consulting to convene women traders who shared their experiences on cross border trading and how they can leverage on the envisioned benefits of the Africa Continental Free Trade Area. Speaking at the event, TMEA Director for the Women in Trade Programme, Gloria Atuheirwe said, “Ecommerce is a platform that gives women-owned enterprises, both formal and informal, and opportunity to expand their business in the East African Community and beyond.” Reflecting on the master class held on day one that provided participants with insights on ecommerce penetration, adoption and applicability, Abigail Bundi, Chief Executive Officer of Amari Consulting Limited said, ‘’Last year ecommerce traded US$ 3.5 trillion worldwide proving that it’s an increasingly lucrative option for businesses. It’s no longer a question of whether we should sell online or not, it’s HOW.” TMEA’s ICT for Trade programming contributes to reducing barriers to trade and cost of doing business within the East African region through automation of key trade processes and systems. Through various interventions, cross cutting benefits are accrued which include eliminating periods of process inaction occasioned by manual activities when acquiring trade documents; reducing transactional costs in acquiring trade regulatory documents; and increasing process transparency therefore stakeholder confidence and trust in the management of...

The time is ripe to fully unlock the UK and Africa’s trade potential

[vc_row][vc_column][vc_column_text]The road to Brexit has been both long and winding, and over the past three and a half years we have heard arguments from both sides as to what this historic change will mean for Britain, and the wider international community. The UK-Africa Investment summit taking place today is a clear indication that despite concerns, the UK will fall behind with international trade, the Government is taking seriously the very real opportunity Brexit provides to expand and improve its trade relationships with one of the most culturally diverse, innovative and fastest developing continents in the world – Africa. For too long, Africa has been overlooked and undervalued as a trading partner. Previous administrations have focused their attentions on developing strategic economic partnerships with countries likes of China, Japan, Germany and India, at the expense of both regional and a continent-wide economic framework in Africa. Bilateral trade between the UK and Africa totalled £28.7 billion in 2016. The UK imported £12.7 billion in goods and services from Africa in 2016. In fact, the value of UK-Africa trade in 2018 remained largely unchanged from a decade before. At the time of former Prime Minister Theresa May’s Africa tour in 2018, the entire African continent accounted for just three per cent of all UK good and services exports, by stark contest Europe took the lion’s share – 54 per cent. Compared to other trading partners the UK is lagging far behind. The US, China, Germany and Japan have all established specific trading initiatives...

You inspired us to take charge of change

[vc_row][vc_column][vc_column_text]We are profoundly saddened at the death of Ali A. Mufuruki, the founding Board Chairperson of TradeMark East Africa (2015 – 2018). Ali passed away in South Africa on 8th December 2019. Ali was one of the most remarkable Africans of his generation, an inspirational leader who made great contributions to industrialisation in Africa, to technology and research; to innovation and technology, entrepreneurship, business and to private and non-profit sector governance. He also established the Africa Leadership Initiative that has played a key role in developing ethical leaders across the Continent.  Ali was deeply committed to his country, to the economic integration of East Africa, and to Africa as a whole. He was an ardent champion of African Continental Free Trade Area and fiercely advocated for the involvement of private sector. Ali had an immediate positive impact when he joined TMEA’s first Governance body in late 2012. He went on to leading formation of a talented TMEA Board in 2015, on which he served with distinction until 2018. He was a popular and highly engaged Chairperson, always ready to provide advice and perspective on leadership, governance, transformative economic models and industrialisation in Africa. Ali co-authored an influential book on Industrialisation in Tanzania in 2017, which helps to guide TMEA’s work. He also co-led a review of the UK’s work on supporting trade in Africa with Lord Green and the UK All Party Parliamentary Group on Trade in 2016. After standing down we continued to work with Ali and the Afro-Champions...

Simulations forecast far-reaching economic benefits for Eastern Africa from AfCFTA

TradeMark East Africa and United Nations Economic Commission for Africa Brief History of Integration in Africa The push for greater economic integration in Africa is not a new phenomenon by any means. Efforts to achieve some level of continental integration can be traced as far back as 1960, also nicknamed “the year of Africa” due to the heightened spread of Pan-Africanist sentiments, culminating into the independence of the largest number of African countries of any other year in history. Arguably, no period in this almost-70-year span has presented a more dire need for integration – and the global economy provides grounds for this assertion. Events such as the ongoing Sino-American trade war and Brexit are an indication of an impending reversal in the expansion of world trade. In fact, in the World Trade Organization’s (WTO) recent estimation, the volume of global merchandise trade grew by just 3 percent in 2018, down from 4.6 percent in 2017. By contrast, according to Afreximbank’s Africa Trade Report 2019, intra-African trade has been increasing steadily and it further accelerated in 2018, growing by 17 percent to reach US$159.1 billion. If anything, this provides a great premise for adopting growth strategies that leverage the regional markets more aggressively., The African Continental Free Trade Agreement (AfCFTA), signed by 44 countries (now 54) in Kigali in March 2018 is the perfect opportunity in the pursuit of this goal. The Case for Intra-Regional Trade in Eastern Africa There are several reasons why Eastern Africa stands to benefit considerably...

Annual Symposium, a Fruit Bowl of Research, Policy and Practice on Inclusion of Women in Trade

We at TradeMark East Africa were pleased to recently launch a series of annual events we call Sustainable and Inclusive Aid for Trade (SIAT) symposia.  Our first event, organised in partnership with the University of Portsmouth, brought together over 300 delegates from around the world to learn and share practical experiences and policy approaches to the Inclusive Participation of Women in Trade for Sustainable Development. One of our communications team members shared the experience on social media, calling it “a fruit bowl of research, policy and practice.’’  That phrase stuck with me as an apt way to describe what we had hoped to achieve in designing the symposium. Plenary sessions provided a platform for high-level discussions focusing on emerging issues, building new ideas and sharing lived experiences.  Break-out sessions were interactive, where presenters engaged with a small group of participants in discussing evidence on the conference sub-themes. On the day before the main conference, a Master Class comprised practical, hands-on knowledge sessions hosted by subject matter experts to a select audience of practitioners and policy makers. My enviable task at the end of the programme was to sum-up this amazing fruit bowl!  It was a challenge to do so. We had covered so many interesting topics and we had traversed from macro-level ideas—from the opportunities demonstrated globally to the potential of the African Continental Free Trade Area (AfCFTA), and regional economic integration—to national level experiences in policy and practical experiences on the ground from individual cross-border traders.  Throughout the event, academicians and practitioners presented robust...

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