IMPORTANT ANNOUNCEMENT

Launch of ARII 2019 website for deeper understanding of Africa’s performance in regional integration – Following the release of the African Regional Integration Index (ARII) 2019 Report, ECA launches a dedicated website to enable a deeper understanding of the performance of the continent, Regional Economic Communities (RECs) and African countries in regional integration and assist African countries in making the most out of the African Continental Free Trade Area (AfCFTA) and boosting intra-African trade (BIAT) action plan. The Index evaluates regional integration on the basis of five dimensions – trade integration, productive integration, macroeconomic integration, infrastructural integration, and integration in terms of free movement of people – for 54 African countries and for the eight RECs recognised by the African Union. ARII 2019 ranks African countries’ level of integration within their respective RECs and also with the rest of the continent. The objective of this dedicated website is to enable in-depth understanding of integration across its various dimensions presented in ARII 2019. The website has features that allow access to customized maps, graphs, tables and the underlying raw data.

Africa’s overall score in regional integration from ARII 2019 is relatively low, suggesting considerable room for improvement. However, if we look closely into the scores across the five integration dimensions, it becomes apparent that Africa’s relative poor performance is due to the low scores in two specific areas: productive integration and infrastructural integration. If we go another layer deeper and look at the scores of indicators within dimensions, low trade in intermediate products tends to explain the relatively weak performance in productive integration, while inadequate infrastructure networks drive poor performance in infrastructural integration.

The five dimensions of integration in ARII 2019 are so closely interrelated that Africa’s overall performance in regional integration would improve significantly and allow African countries to make the most out of the AfCFTA if regional value chains are strengthened, thereby improving the continent’s productive integration, and the infrastructure network is enhanced. ECA has provided training to Member States on the collection and use of the information contained in ARII 2019 for policy analysis and policy development. The dedicated website can be accessed here.  (UNECA)

Key Words: ATII 2019, COVID-19, Regional Integration

INTERNATIONAL

WTO report examines impact of COVID-19 pandemic on small businesses – The report notes that supply chain disruptions can have a particularly severe impact on MSMEs because sourcing from new suppliers or absorbing price increases is more challenging for a smaller firm with limited supply options and capital.   The report looks into a wide range of measures taken by governments to support MSMEs. These include measures to address cash flow issues, to expand trade opportunities for MSMEs and to make them more resilient. According to the report, 44 WTO members had introduced such measures by the end of April 2020.  The note describes how international trade provides MSMEs with opportunities to diversify revenue streams and better navigate the COVID-19 crisis. It outlines that work at the WTO can support small business by promoting the importance of transparency, facilitating the exchange of best practice, highlighting the need for increased access to trade finance and encouraging full implementation of the WTO's Trade Facilitation Agreement. The report can be found here.

Key Points

• Micro, small and medium-sized enterprises (MSMEs) are the backbone of many economies, representing 95 per cent of all companies worldwide and accounting for 60 per cent of employment. Many MSMEs depend on international trade for their activities, either because they export their products through direct or indirect channels, or because they import inputs to manufacture the products that they sell domestically. They are major employers of women and young people, and a key driver of innovation.
• MSMEs are particularly exposed to the COVID-19 pandemic’s economic impact because of limited financial resources and borrowing capacity, and because of their disproportionate presence in economic sectors affected by social distancing measures and transport disruptions. MSMEs are also particularly exposed to trade restrictions on agricultural products.
• Where MSMEs are highly integrated into global value chains (GVCs), supply chain disruptions can create an existential risk for MSME importers and exporters, either because of shortages of necessary parts, or through shocks to demand.
• The pandemic-related challenges add on to the existing, well-known trade obstacles encountered by MSMEs, and therefore undermine progress towards more inclusive trade.
• Governments have primarily introduced urgent stimulus and backstop measures for MSMEs, such as liquidity support to address cash flow issues, with the aim of preserving jobs and ensuring business continuity, as well as measures to expand trade opportunities for MSMEs. A few governments have also introduced measures aimed at developing the resilience of MSMEs and building their capacity to overcome future shocks to demand and supply chains.

 (WTO)

Key Words: WTO, COVID-19, Businesses

Countries Can Take Steps Now to Rebuild from COVID-19 – The coronavirus (COVID-19) pandemic and the economic shutdowns are dealing a severe blow to the global economy and especially poorer countries. Developing countries and the international community can take steps now to speed recovery after the worst of the health crisis has passed and blunt long-term adverse effects, according to analytical chapters released today from the World Bank Group’s Global Economic Prospects report.

Short-term response measures to address the health emergency and secure core public services will need to be accompanied by comprehensive policies to boost long-term growth, including by improving governance and business environments, and expanding and improving the results of investment in education and public health. To make future economies more resilient, many countries will need systems that can build and retain more human and physical capital during the recovery – using policies that reflect and encourage the post-pandemic need for new types of jobs, businesses and governance systems.

The analysis has been released ahead of the June 8 issuance of the full report, which will include the Bank Group’s latest forecasts for the global economy. “The scope and speed with which the COVID-19 pandemic and economic shutdowns have devastated the poor around the world are unprecedented in modern times. Current estimates show that 60 million people could be pushed into extreme poverty in 2020. These estimates are likely to rise further, with the reopening of advanced economies the primary determinant,” said World Bank Group President David Malpass. “Policy choices made today – including greater debt transparency to invite new investment, faster advances in digital connectivity, and a major expansion of cash safety nets for the poor – will help limit the damage and build a stronger recovery. The financing and building of productive infrastructure are among the hardest-to-solve development challenges in the post-pandemic recovery. We need to see measures to speed litigation and the resolution of bankruptcies and reform the costly subsidies, monopolies and protected state-owned enterprises that have slowed development.”

Deep recessions associated with the pandemic will likely exacerbate the multi-decade slowdown in economic growth and productivity, the primary drivers of higher living standards and poverty reduction. Adding to the inequality problem from slow trend growth, the poor and vulnerable are among the hardest hit by the pandemic and economic shutdown – including through infection, school closures and lower remittance flows.  Measures needed to protect public health have undercut an already fragile global economy, causing deep recessions in advanced economies and emerging market and developing economies (EMDEs) alike. EMDEs that have weak health systems; those that rely heavily on global trade, tourism, or remittances from abroad; and those that depend on commodity exports will be particularly hard-hit, the analysis notes. In the long-term, the pandemic will leave lasting damage through multiple channels, including lower investment; erosion of physical and human capital due to closure of businesses and loss of schooling and jobs; and a retreat from global trade and supply linkages. These effects will lower potential output – the output an economy can sustain at full employment and capacity – and labor productivity well into the future. Pre-existing vulnerabilities, fading demographic dividends, and structural bottlenecks will amplify the long-term damage of deep recessions associated with the pandemic. (World Bank)

Key Words: World Bank, Trade Policy, COVID-19

Urgent Implementation of ICAO COVID-19 Guidelines Needed – The International Air Transport Association (IATA) urged governments to quickly implement the International Civil Aviation Organization’s (ICAO’s) global guidelines for restoring air connectivity. Today, the ICAO Council approved Takeoff: Guidance for Air Travel through the COVID-19 Public Health Crisis (Takeoff). This is an authoritative and comprehensive framework of risk-based temporary measures for air transport operations during the COVID-19 crisis.

“The universal implementation of global standards has made aviation safe. A similar approach is critical in this crisis so that we can safely restore air connectivity as borders and economies re-open. The Takeoff guidance document was built with the best expertise of government and industry. Airlines strongly support it. Now we are counting on governments to implement the recommendations quickly, because the world wants to travel again and needs airlines to play a key role in the economic recovery. And we must do this with global harmonization and mutual recognition of efforts to earn the confidence of travelers and air transport workers,” said Alexandre de Juniac, IATA’s Director General and CEO. Takeoff proposes a phased approach to restarting aviation and identifies a set of generally applicable risk-based measures. In line with recommendations and guidance from public health authorities, these will mitigate the risk of transmission of the COVID-19 virus during the travel process.

These measures include:

• Physical distancing to the extent feasible and implementation of “adequate risk-based measures where distancing is not feasible, for example in aircraft cabins”;
• Wearing of face coverings and masks by passengers and aviation workers;
• Routine sanitation and disinfection of all areas with potential for human contact and transmission;
• Health screening, which could include pre- and post-flight self-declarations, as well as temperature screening and visual observation, “conducted by health professionals”;
• Contact tracing for passengers and aviation employees: updated contact information should be requested as part of the health self-declaration, and interaction between passengers and governments should be made directly though government portals;
• Passenger health declaration forms, including self-declarations in line with the recommendations of relevant health authorities. Electronic tools should be encouraged to avoid paper;
• Testing: if and when real-time, rapid and reliable testing becomes available.

“This layering of measures should give travelers and crew the confidence they need to fly again. And we are committed to working with our partners to continuously improve these measures as medical science, technology and the pandemic evolve,” said de Juniac.

Takeoff was one element of work of the ICAO COVID-19 Aviation Recovery Task Force (CART). The CART report to the ICAO Council highlighted that it is of “paramount importance to avoid a global patchwork of incompatible [aviation] health safety measures.” It urges ICAO Member States to “implement globally- and regionally-harmonized, mutually accepted measures that do not create undue economic burdens or compromise the safety and security of civil aviation.” The Report also notes that COVID-19 risk mitigation measures, “should be flexible and targeted to ensure that a vibrant and competitive global aviation sector will drive the economic recovery.” (IATA)

Key Words: ICAO, COVID-19, IATA

Policy Research Papers: Winners and Losers from COVID-19 Global Evidence from Google Search – As COVID-19 continues to wreak havoc across the world, researchers are attempting to quantify the economic fallout from the pandemic as it continues to unfold. Estimating the economic impacts of a prevailing pandemic is fraught with uncertainties about the epidemiology of the disease and the breadth of disruption of economic activities. This paper employs historical and near real-time Google search data to estimate the immediate impacts of COVID-19 on demand for selected services across 182 countries. The analysis exploits the temporal and spatial variations in the spread of the virus and finds that demand for services that require face-to-face interaction, such as hotels, restaurants and retail trade, has substantially contracted. In contrast,

demand for services that can be performed remotely or provide solutions to the challenges of reduced personal interactions, such as information and communications technology (ICT), and deliveries, has increased significantly. In a span of three months, the pandemic has resulted in a 63 percent reduction in demand for hotels, while increasing demand for ICT by a comparable rate. The impacts appear to be driven by supply contractions, due to social distancing and lockdown measures, and demand shocks as consumers shelter in place, with the latter dominating for most services. The magnitude of the changes in demand varies considerably with government responses to the pandemic. (World Bank Group )

Key Words: World Bank, Trade Policy, COVID-19

COVID-19 crisis: How South-South cooperation can support economic recovery – A blueprint for international coordination - Cooperation among countries of the South cannot substitute for the actions required by the wider international community but it can bring a degree of relief and support with recovery. As important, it can provide a blueprint for the kind of international coordination and cooperation that will be needed to recover better than after previous crises. With this in mind, a South-South cooperation agenda needs to build around three broad objectives: scaling-up financial resources; enhancing policy space; and building resilience. Southern development banks are in a stronger position than a decade ago, thanks to new arrivals, high equity to loan ratios, and continued access to international capital markets.

The New Development Bank and Asian Infrastructure Investment Bank, along with the Islamic Development Bank, have all begun redirecting their lending programmes towards health-related investment projects.  In addition, UNCTAD estimates that a prudent lowering of the equity-to-loan ratios by the sub-regional development banks, in Latin America and the Caribbean, Asia and Africa could expand their loan portfolios by nearly $25 billion. Southern countries could also use existing southern-based funds to expand much-needed liquidity. The BRICS, for example, could extend their $100 billion Contingent Reserve Arrangement (CRA) to other developing countries facing acute liquidity shortages and use their large foreign reserves to expand the CRA substantially. In addition, long-established regional liquidity funds such as the Arab Monetary Fund, the Latin American FLAR and the Chiang-Mai Initiative could be other sources of scaled-up liquidity, especially for smaller countries with few or no alternatives.

Need to adapt trade and industrial policies. The massive financial subsidies being rolled out in the North to sustain businesses during the pandemic and justified as emergency support in the face of exceptional circumstances will, nonetheless, have a distortionary impact on the international trading system. Such support cannot be matched by developing countries. Instead, they will need to adopt strategic trade and industrial policies to support essential sectors and preserve jobs. South-South trade agreements, especially at the regional level, can provide diversified markets to leverage export opportunities. But given the exceptional circumstances, a temporary Peace Clause covering all areas of WTO legislation that could hinder the use of trade and industrial policies is urgently needed. (UNCTAD)

Key Words: UNCTAD, Trade Policy, COVID-19

PAN AFRICA

Rising from a crisis – A more self-reliant Africa after coronavirus? – COVID-19 presents an opportunity for African countries to accelerate the shift towards a single market and for the continent to make a paradigm shift to be able to fend for itself and reduce its dependence on food imports. This will open up continental trade routes and economic opportunities in the long-term, but presents an even greater short-term advantage: it allows African countries to keep their food systems alive to avert what could be one for the worst food crises in its history. The question is, how can countries do this? Lowering intra-regional import tariffs facilitates the movement of agricultural products that will help address the immediate concern around the possibility of low food supplies and general food insecurity, while laying the foundation for long-term policies. Africa’s agricultural exports comprise mostly cash crops like cocoa, coffee and spices, which have relatively limited markets in Africa, while basic food products are imported, indicating the need to prioritise a more diverse trade basket of goods. Governments must also build buyer-supplier networks, connecting small and medium scale producers, including smallholder farmers, to buyers locally and regionally. A large part of this step is the removal of discretionary constraints such as import and export restrictions that distort trade, to connect these producers to their markets.

It is essential to remove non-tariff barriers like transport and logistics bottlenecks, which have long been a deterrent for the efficient movement of goods and services between African countries. Finally, governments must implement policies to support local production. These policies must seek to develop regional value chains, strengthening national food production capacities and linkages to regional markets, which in turn provide a strong basis for countries to export and boost inter- and intra-regional trade in the long-term. AfCFTA provides a viable platform for import substitution, promotion of regional agricultural value chains and more diversified supply chains, and local production and consumption of goods and services. This is a golden opportunity to expedite the launch of the AfCFTA in phases to mitigate the food-system and economic effects of the COVID-19 pandemic. Regulatory bodies must ensure that governments do not use trade-related measures such as import and export restrictions irresponsibly, keeping the spirit of the agreement at the forefront of its implementation. The circumstances are unfortunate and the stakes are high, but if handled properly, Africa could emerge from the shadow of COVID-19 a stronger, more self-reliant continent. (Ghana Web)

Key Words: AfCFTA, COVID-19, Regional Integration

AfCFTA to be continent’s main post-pandemic ‘stimulus’ lever - The African Continental Free Trade Agreement (AfCFTA) represents the only realistic stimulus option available to resource-constrained African governments for reigniting growth in response to the Covid-19 pandemic, AfCFTA secretary-general Wamkele Mene avers. The global response to the virus had already disrupted trade and supply chains across the continent, while triggering a slump in the price of key commodities produced by African countries. It had also exposed weaknesses in international trading rules, with export restrictions imposed by several developed and developing countries currently hampering Africa’s access to essential products such as pharmaceuticals, medical equipment and personal protective equipment. The World Bank is forecasting that the sub-Saharan Africa economy will contract by between -2.1% and -5.1% in 2020, from an expansion of 2.4% in 2019, plunging the region into its first recession in 25 years. Speaking during a virtual colloquium on Covid-19 and its impact on AfCFTA, Mene said African governments simply did not have the fiscal or monetary policy space to provide significant economic relief for the damage being caused by the pandemic.

“Africa does not have those tools and so for us . . . the only economic relief package is the AfCFTA and implementing it in such a way that we significantly boost intra-Africa trade,” Mene said during the event, organised by the Nelson Mandela School of Public Governance and which coincided with Africa Day. Intra-Africa trade currently stood at between 15% and 18%, which was far below intraregional trade levels enjoyed in other territories, while regional value chains remained largely under developed or absent. “[Increased intra-Africa trade] is really the only way that we can ensure that we have a stimulus package for Africa to drive economic growth and get Africa back on track for growth of above the 4% projected ahead of the pandemic.” Nevertheless, Africa’s Heads of State and Government had agreed to delay the July 1 implementation date set for trading under the AfCFTA, owing to the fact that the pandemic had led to lockdowns or partial lockdowns across Africa and had delayed the finalisation of negotiations on the rules of origin. The AfCFTA Summit scheduled for South Africa on May 30 had also been postponed.

Mene insisted that the delay should not be perceived as a signal of weakening of political support for the AfCFTA, but rather as a necessary adjustment to allow government to prioritise immediate strategies aimed at “saving lives and livelihoods”. In his Africa Day statement, President Cyril Ramaphosa, who is also chairperson of the African Union, the continent must move ahead with operationalising the AfCFTA soon, describing it as the most ambitious step towards pan-African integration. Mene said that the global trade and investment response to the pandemic had again underlined the urgency of industrial development in Africa and the need to leverage the AfCFTA to help develop manufacturing capacity and regional supply chains. (Engineering News)

Key Words: AfCFTA, COVID-19, Regional Integration

Diaspora Remittances Critical for Covid-19 Recovery – Remittance flows to Sub Saharan African countries will drop by 23.1% from $48 billion in 2019 to $37 billion in 2020 in the wake of the Covid-19 economic crisis, according to the World Bank. Globally, the top remittance recipients’ countries, last year were, India ($79 bn), China ($67 bn), Mexico ($36 bn), the Philippines ($34 bn), and Egypt ($26.7 bn) among other countries. In COMESA region, the leading recipients of remittances were Egypt (US$ 26,791 million), Kenya (US$ 2,819 million), Tunisia (US$ 1,912 million), DR Congo (US 1,823 million) and Zimbabwe (US$ 1,730).  In terms of contribution of remittances to GDP, Zimbabwe led with 13.5%, Comoros (11.5%) and Egypt (8.2%). Further, the World Bank estimates that foreign direct investment will drop by around 35% due to travel restrictions, disruption of international trade and decline in the stock prices of multinationals. Thus, diaspora remittances will remain crucial to many countries in the region.

COMESA Director of Trade and Customs Dr Christopher Onyango observes: “Diaspora remittances are a key source of investments and enabler of economic growth and sustainable development. They have multiplier effects in the economy through savings, investments, fiscal and debt sustainability.” In his report on the impact of COVID-19 on diaspora remittances, he notes that affluent countries such as the USA, France, United Kingdom, Italy and China, which account for up to a quarter of all funds remitted to African countries are among the worst hit by the pandemic.“Migrants in the diaspora have lost jobs and taken pay-cuts amidst the corona virus outbreak and subsequent lockdown leading to the drastic fall in remittances. Thus, many countries have suffered a double blow more so those that remittances constitute a significant share of the GDPs,” he says.

Further, the COVID-19 pandemic has tremendously constrained mobility and travelling across countries, and this may reverse the gains already made in promoting greater openness and flexibility in migration.  This is because a range of professionals and semi-skilled workers are needed to provide various services. Dr Onyango adds: “About 13% of essential workers, including ICT technicians, teachers, health professionals, sports men and women, cleaners, drivers and other general workers in Europe are immigrants. Stringent immigration policies are therefore likely to close out immigrant workers and therefore reduce diaspora remittances.”

The other challenge has been the high cost of sending remittances. According to the World Bank’s Remittance Prices Worldwide database, the global average cost of sending $200 stood at around 7% in the first quarter of 2019. No wonder the reduction of remittance costs to 3% by 2030 is a global target under the SDGs. For many countries in Africa and the small islands in the Pacific, the costs are above 10% thus encouraging the use of informal channels or even illegal transactions, including money laundering. In addition, actual data is not captured in most cases leading to under estimations. The report identified banks in Africa as the most expensive remittance channels, charging an average fee of 11% in the first quarter of 2019. Post offices were the next most expensive, at over 7%. Remittance fees tend to include a premium where national post offices have an exclusive partnership with a money transfer operator. Within Africa and by extension COMESA, Dr Onyango says the commitments to remove restrictions on the movement of persons across the region specially professionals and other essential workers is now paramount. Restrictions hinder productivity and growth of both migrant source and destination countries and subsequently the associated remittances. (COMESA)

Key Words: COMESA, Trade, COVID-19

African equity capital markets activity see downward turn, but increase in domestic investors - Making Finance Work for Africa partnership and PricewaterhouseCoopers (PwC) Nigeria –  Data presented from  the PricewaterhouseCoopers (PwC) Nigeria 2019 African Capital Market Watch(link is external), which reviewed the performance of Africa’s capital markets between 2010 and the first quarter of 2020, shows that African equity capital markets activity have seen a downward trajectory over the past three years as major economies on the continent are faced with fiscal challenges due to growing debt levels and slow economic growth. The Making Finance Work for Africa (MFW4A) partnership and PwC Nigeria co-hosted a webinar to explore the impact of COVID-19 on African capital markets last month.

Capital market value in 2019 was the lowest seen over the past decade, with the volume of deals lower only in 2012. African economies now face the unprecedented challenge of the COVID-19 pandemic, which has severely impacted global financial markets, according to Andrew Nevin, PwC Nigeria’s Chief Economist, and Alice Tomdio, the firm’s Director Capital Markets, who presented the data. Commenting on the data and the potential impact of the COVID pandemic, Geoffrey Odundo, CEO of the Nairobi Securities Exchange said: “Capital markets in East Africa have taken a hit, with a 20% decrease in trading volume since the beginning of COVID-19.” On the positive side, there was increased activity from domestic investors, he added.

Daniel Ogbarmey Tetteh, Director-General, Securities and Exchange Commission (SEC), Ghana, said that market activity on the Ghana stock market had remained  robust, with an almost threefold increase in trading volumes between January and April 2020, compared to the same period in 2019. Again, a good proportion of these trades originated from domestic investors. Speakers also stressed the important role of African capital markets in supporting the post-COVID recovery. For this to happen, African markets need to be deepened  and provide avenues for investment of the significant pools of local capital currently tied up in “dead” assets. Expanding the range of available asset classes should also include measures to attract and support new listings. The panel agreed that the increased engagement of local investors in the current environment was a positive sign, and that developing a deep pool of domestic investors is essential for African capital markets to play their full role in supporting the post-COVID economic recovery. For more details on the webinar series and to listen to recordings visit: https://www.mfw4a.org/news-events(link is external) . The next session (in English) is scheduled for June 18th and will explore Financing SMEs in the COVID era. (AfDB)

Key Words: Investment Policy, Africa COVID-19

Digital banking is key to firms successfully managing Covid-19 fallout – While digital banking growth in Sub-Saharan Africa had mostly been propelled by the need to improve access to the financial ecosystems of the unbanked through use of smartphones and mobile money, the advent of Covid-19 brings with it a new stimulus to large and small businesses to increase their use of digital banking in an effort to better cope with the pandemic. The pandemic will act as an unforeseen accelerant of the adoption of, and improvements to, banking technology for Africa’s corporate banks and their business clients, which will become increasingly necessary to sustain their business activities.  Africa still has high utilisation of physical cash, with an equally high physical bank branch network, concentrated in developed cities with limited reach to rural outskirts. And because some domestic and cross-border transactions, particularly those related to regulatory documents, are still being processed manually due to limited client bank systems and technology adoption, it has resulted in clients having to physically present themselves at branch networks.  But this is expensive, inefficient, much less secure and now, most importantly, presents a greater danger of transmitting Covid-19 as money is passed from person to person.

In most African countries, a number of fintech service providers have enabled mobile money or e-money offerings. E-money is an electronic store of money typically on a cellphone that can be used for making payments and for person to person value transfer. From mobile payments, people are gaining access to mobile banking and other services as they open savings accounts, buy insurance, borrow and invest with a few taps of their mobile phone. They can even finance electricity usage. But to date, corporate or business e-money usage has been limited, operating on “closed loop systems” and limited to person-to-person transfers, which means payment can only be transferred within service providers’ limited partners with which they have agreements. However, increasingly banks will be required to step in and provide systems that will allow all e-money fintech service providers and users to make and receive payments from business to person, and person to business, dramatically widening the scope use of e-money.

Banks in Africa have mostly viewed these new players in the financial sector as a threat to their survival, but the emergence of mobile money through fintechs and cellular network companies has lowered the costs of financial value transfers and enabled greater access and inclusion of remote communities. Banks have to make critical decisions about whether to partner with fintechs, buy the fintechs for exclusive integration, or contract at arm's length with them to enable an integrated service that will help the banks reach higher customers numbers and use their platforms. All of these options have cost, risk and benefit implications to the banks in the medium to long term. Corporates are likely to increase their need for e-commerce solutions as the general public increasingly wants to order goods and services through online channels. (Business Day)

Key Words: Digital Banking, Africa COVID-19

Guidelines on Movement of Goods and Services in COMESA Region – In order to facilitate the cross-border movement of relief consignments, essential food supplies and pharmaceuticals and medical equipment, Member States are urged to:

1. Coordinate and ensure cooperation in the activities of government agencies at national and regional levels with the objective of speeding up the movement, release and clearance of relief goods and essential food products.

2. Ensure the facilitation of movement of essential products, food supply, pharmaceuticals and medical equipment, including Personal Protection Equipment into and within the Common Market and control of their quality.

3. Prioritize the cross-border clearance of essential products and relief consignments through the development of priority processing channels   and provide for free movement of transport drivers and assistants after suitable health screening.

4. Provide for the lodging of a simplified Goods declaration or of a provisional or incomplete Goods declaration and deferred final clearance based on risk management. 5. Provide for pre-arrival processing of the Goods declaration and release of the goods upon arrival essential food supplies and pharmaceuticals and medical equipment and relief consignments.

6. Apply risk management and perform inspections on essential food supplies and pharmaceuticals and medical equipment and relief goods only if deemed high risk.

7. Encourage coordination of inspections by the Customs Authorities and other government agencies, if possible, carried out at the same time.

8. Advocate for or support the waiving or suspension of import duties and taxes for essential food supplies and pharmaceuticals and medical equipment relief items as well as raw materials used in the production of the essential goods including pharmaceuticals and medical equipment.

9. Provide information materials (leaflets, banners, posters, electronic slides, etc.) on COVID-19 measures for distribution to citizens arriving or departing as well as on official websites.

10. Facilitate and encourage use of e-commerce and electronic payments platforms, such as, mobile money to significantly reduce the use of cash to curb the spread of COVID-19.

11. Adopt the latest edition of the WCO HS classification reference for COVID-19 medical supplies to facilitate its movement across the border.

12. Ensure that implementation of COVID-19 mitigation measures does not lead to the emergence of unnecessary obstacles to trade on the trade supply chain.

13. Create conducive environment for entrepreneurs to access trading opportunities and to do business while ensuring public health, safety and security. (COMESA)

Key Words: COMESA, Regional Integration, COVID-19

NORTH AFRICA

North Africa Regional Integration Strategy Paper (RISP-NA) 2020-2026 – The North Africa Regional Integration Strategy Paper (RISP-NA) 2020-2026 has been designed to support the efforts of six regional member countries (RMCs) of the African Development Bank Group, namely Algeria, Egypt, Libya, Mauritania, Morocco and Tunisia.

RISP-NA 2020-2026 has gone through an unusually long process given the Bank's experience in the area. Several factors have delayed the RISP-NA finalisation process. Internal reasons, particularly the revision of the Regional Integration Strategic Framework (RISF) 2018-2025, also contributed to delays in RISP-NA preparation as well as the decision in 2019 to adopt a bespoke approach before favouring a formal RISP which incorporates it as a cross-cutting theme. However, the new strategic framework provides a better response to North Africa’s regional integration challenges and issues. The proposed approach is pragmatic, progressive and geometrically variable for open regionalism. It is based on the private sector and will enable the Bank to concurrently support North Africa regional integration and integration between North Africa and Sub-Saharan Africa, which the six North African countries have included in their recent priorities. 

The principles which guided the preparation of this strategy are in line with those described in the new RISF 2018-2025, as well as with the priorities described in the Country Strategy Papers (CSPs), at different levels of intervention. It should be noted that RISP-NA 20202026 has been prepared using a participatory process and conducting national and regional consultations with the Authorities, civil society, development partners, and the private sector. Over the 2014-2019 period, the Bank organized and participated in several workshops with all regional stakeholders, as well as the Economic Commission for Africa, COMESA and representatives of subSaharan African countries. 

This strategy is built around two pillars and a cross-cutting theme: (i) Integrating North Africa through the promotion of regional infrastructure connectivity, (ii) Enhancing inter and intraregional trade and investment through private sector promotion, and (iii) Building the capacity of existing support structures and developing high-level policy dialogue based on a pragmatic vision of North Africa regional integration. This strategy is built around: (i) the development priorities of the North African countries, (ii) the operational priorities of the AU (Agenda 2063 and PIDA) and COMESA which has three member countries in North Africa (Egypt, Libya and Tunisia) and (iii) the High Five operational priorities of the Bank. Furthermore, the Bank will intensify dialogue with civil society and the private sector in the region so as to support its investments in the sub-region and in the rest of Africa, with the implementation of the African Continental Free Trade Area (AfCFTA).  (AfDB)

Key Words: North Africa, Regional Integration, AfCFTA

EAST AFRICA

Covid-19: How new EAC electronic truck drivers tracking system will work-  East African Community (EAC) partner states have adopted a Regional Electronic Cargo and Drivers Tracking System that will be hosted at the bloc’s headquarters in Arusha, Tanzania. The system will share the truck driver’s information leveraging on that which is already managed and operated by Revenue Authorities in the region, and the existing health information systems in the six EAC countries. An official explained that the development of a regional Covid-19 surveillance system for trucks and their crew is another tool to help mitigate the disruption of domestic, regional and global supply chain systems serving the region.

On Monday, June 1, Daniel Murenzi, the Principal Information Technology Officer at the EAC headquarters, took The New Times through “the technical functionalities of the system” which allows users to share information across borders in a transparent manner. Murenzi said: “The system will work in all EAC Partner States. It will be interlinked to EAC Ministries of Health and accredited laboratories for the accurate information. “The system will bring on board the truck owners or companies so that information can be shared across. In case a truck driver is tested positive in another country the system will notify the Ministry of Health of the driver’s originating country.”

The EAC is collaborating with Trademark East Africa in the development, implementation and operation of the surveillance system. Explaining what they hope will be achieved, Patience Mutesi, TMEA country director, noted that lately, the new coronavirus has been spreading between countries largely through land borders which economies rely on for key supplies, thereby threatening trade. “We have also seen stigmatization of drivers across the region, and long queues of trucks at borders due to challenges in regulations that countries have imposed to control the spread of the virus,” she said.  (The New Times)

 Key Words: EAC, COVID-19, Regional Integration

WEST AFRICA

Implement ECOWAS Veterinary Pharmaceutical Protocol in livestock sector – The Women in Poultry Value Chain (WIPVaC) has called for the speedy implementation of the Economic Community of West African States (ECOWAS) Veterinary Pharmacy Protocol in the country. The group, which is an umbrella organisation of women poultry value chain actors, believe that supporting the implementation of the ECOWAS Veterinary Pharmaceutical Protocol will allow Ghana's livestock sector actors to prioritise action that safeguards the development of the livestock value chain. The National President of the apex body of Women in Poultry Value Chain (WIPVAC-Apex), Mrs. Victoria Norgbey said the government's agricultural productivity programmes such as the Rearing for Food and Jobs stand to increase its impact following the implementation of the protocol. "Animal health is human health; hence the speedy implementation of the protocol is paramount to the health of consumers and the time is now," she said.

She explained that as the world was increasingly inter-connected, emerging and re-emerging animal diseases in one country can potentially constitute a threat to global health security and therefore the lack of appropriate policy response mechanisms makes the sector vulnerable to morbidity and mortality and puts pressure on health systems. It will also lead to significant economic loses to countries by way of losing animal trade, travel and loss of economic opportunities. During its 65th Ordinary Session of the Council of Ministers held in 2010, the ECOWAS created and set rules, establishing Community Procedures for Management of Veterinary Drugs and Biologicals. The directive on ECOWAS Veterinary Pharmacy and Regulation appreciates the fact that handling of veterinary drugs and biological issues is not homogenous in the region and there was the need to harmonise legislations and regulations in the region to properly address animal production and health challenges.

Seven countries in the Sub-Region, Burkina Faso, Cote D'Ivoire, Liberia, Mali, Sierra Leone, Senegal and Togo, have gazetted the harmonized regulations on Veterinary drugs and biologicals quality control. Three other countries; Gambia, Niger and Ghana, are in the process of gazetting the harmonized regulations. In Ghana, the Protocol was presented to Parliament June 13, 2017 and was ratified on February 1, 2018 but implementation has since delayed due to key recommendations made by Parliament to be carried out, including; the enactment and update of animal production and veterinary laws to align with the protocol. (Business Ghana)

Key Words: West Africa, ECOWAS, Regional Integration

CENTRAL AFRICA

Cameroon: Bilateral Cooperation - Cameroon, South Korea Revisit Economic Ties – Cameroon and South Korea have enjoyed fruitful economic ties since 1977 when the Global Economic and Trade Agreement was signed. It is in this light that the out- going South Korean Ambassador to Cameroon, Her Excellency Bok-ryeol Rhyou, on June 2, 2020, came to bid farewell to Alamine Ousmane Mey, the Minister for the Economy, Planning and Regional Development, MINEPAT. The diplomat, has been in the country since 2018, during which she recorded a number of achievements. They include the organisation of the first Cameroon-South Korea Economic and Energy Forum that was co-organised by MINEPAT and the Embassy on May 8, 2019. There was the inauguration of the Trainers' Training Centre in May 2019. Also to her credit is the training of more than 1,000 Cameroonian officials in South Korea under the Capacity Improvement and Advancement for Tomorrow, CIAT. For now, cooperation between Cameroon and South Korea is through the Korean International Cooperation Agency, KOICA and Eximbank Korea. It offers loans under the Economic Development and Cooperation Fund, EDCF. Generally, bilateral cooperation is in the domain of health, governance, agriculture, infrastructure, energy, education, and Information and Communication Technology, ICT. One of the most noticeable South Korean achievements in Cameroon is the construction of the Yaounde Emergency Centre, CURY. (Cameroon Tribune)

Key Words: Central Africa, Bilateral Cooperation, Economic Ties

SOUTHERN AFRICA

Cautious collaboration for the subsistence of SME's post Covid-19 – In South Africa, the Minister of Trade, Industry and Competition has introduced regulations that provide block exemptions to the healthcare, banking and retail sectors. These regulations allow for collaborations that would otherwise be in contravention of section 4 (which prohibits cartel conduct between parties in a horizontal relationship) and section 5 (which prohibits anticompetitive practices between parties in a vertical relationship).  However, collaboration is limited to agreements that take place at the request of, and in coordination with, either the Department of Health, the Minister of Finance or the Department of Trade, Industry and Competition. To this end, businesses in other sectors of the economy have not been given the go ahead to collaborate, either to address demand constraints as a result of the pandemic or to ensure solvency in the months to come. Certain collaborations during the crisis may result in pro-competitive benefits that could bring about the subsistence of businesses post-Covid-19.  For instance, joint purchasing or joint production agreements would allow SMEs to save on transactional costs and exploit economies of sales. 

Other initiatives could include: the sharing of know-how and information on best practices to drive efficiency; pooling of resources to mitigate the disruption of supply, to increase utilisation of assets and ensure operation at optimal capacity; and coordination activities aimed at facilitating supplies (for example logistics for input materials). Such collaborations, if approached cautiously, will not give rise to anti-competitive concerns, especially if concluded between firms that do not have a significant degree of market power. The Competition Act strictly prohibits price fixing, collusive tendering and market allocation agreements between competitors, and the imposition of minimum resale prices on downstream parties. 

The mere existence of such arrangements is sufficient to warrant prosecution by the authorities and no pro-competitive justifications can be advanced to remedy the anti-competitive effects of the conduct. SMEs and HDPs are, therefore, not immune to the application of the Competition Act, even if collaborative efforts result in long-term solvency and market participation. In the absence of a block exemption, firms looking to undertake cooperative projects must do so with vigilance and first seek professional competition law advice. The following practical guidelines may aid in navigating horizontal and vertical collaborations and may minimise, but not necessarily eliminate, the risk of antitrust prosecution.

Ensure that the collaboration falls within the scope of initiatives that would ordinarily lead to pro-competitive outcomes. Particularly, collaborations must enhance efficiency and consumer welfare in the market. Any agreements designed to raise or stabilise prices, manage output, or allocate markets will attract allegations of cartel conduct.  Initiatives must be for a limited duration. Short-term collaborations aimed at responding, rather than entrenching market power, are less likely to raise competition concerns.  Collaboration should not concern the sharing of commercially or competitively sensitive information. Any information regarding pricing, customers or business strategies is regarded as commercially and competitively sensitive and must be kept confidential and not shared. (IOL)

Key Words: SA, COVID -19, Trade