ATPC DAILY DIGEST 26 AUGUST 2020

 

Today’s Topics:

African businesses shifting towards new technologies in response to COVID-19 pandemic – (UNECA)

Amina Mohamed: ‘The WTO needs to be reformed, it’s credibility is at stake’ (The Africa Report)

Post-pandemic global services trade recovery hinges on digitalization – (GTR)

‘Rules as data’ – the 21st century answer for trade facilitation? – (Trade4DevNews)

Op-Ed: The effects of the Covid-19 pandemic on small businesses and global value chains(ITC)

AU, World Tourism Foundation Institute to grace Africa Digitization Conference – (Ghana Web)

Post COVID-19: Rebuilding Africa and strengthening its resilience against future economic shocks(AfDB)

Saving lives, economies and livelihoods campaign launches in Africa – (AU)

Financing Africa’s energy transition – (African Business)

How Women-led Agribusinesses are Boosting Nutrition in Africa(IPS)

Egypt discusses increasing exports to $100B annually – (Egypt Today)

Covid-19: Lessons for EAC integration – (The Observer)

East African Business Council Urges EAC Partner States To Fast Track Admission Of DRC Into The Bloc  - (Capital)

Covid-19 hits EAC trade hard(Daily Monitor)

Ghana, Ivory Coast create joint body to coordinate cocoa policies-  (Ghana Web)

Undiversified economies, low intra-trade constrain SADC industrial drive(tralac)

 

IMPORTANT ANNOUNCEMENT

African businesses shifting towards new technologies in response to COVID-19 pandemic The Economic Commission for Africa, jointly with International Economics Consulting Ltd, released the report of the second comprehensive survey on the COVID-19 pandemic and its economic impact across Africa. The online survey was conducted from 16 June to 20 July to provide insights into the effects of the pandemic on economic activity for businesses across Africa, identifying the challenges they face as well as their responses.

The results of the survey show that the top three challenges faced by companies are: a) reduced opportunities to meet new customers; b) drop in demand, and; c) lack of cash flow. Companies have faced serious disruptions in both supply and market due to COVID-19, with unfair pricing seen as a major concern. Feedback from companies about government assistance is mixed with nearly two-thirds of the respondents indicating from moderate to no satisfaction. As a consequence, 50% of the respondents approached financial institutions from which 25% got positive responses; among the latter, 42% were not satisfied with the service due to high interest rates, delays and/or collateral requirements.

When it comes to their performance, companies are currently working at about half their capacity. Company revenues are expected to drop by about 18% in 2020 (as compared to 2019) and lay-offs to increase by 20% in the next three months. Still, the situation could have been worse if a significant share of employees (27%) had not been able to work remotely. It is worth noting that remote working options proved more challenging for Micro, Small and Medium Enterprises (MSMEs), particularly those dealing with goods, whose performance has been relatively more negatively affected than larger-sized companies and more generally those involved in services. Moreover, women are more at risk of being laid-off than men, which is consistent with the fact that, from interviewed companies, women tend to be employed more in MSMEs in which their primary business is related to goods. (UNECA)

Key Words: UNECA, COVID-19, Business

 

INTERNATIONAL

Amina Mohamed: ‘The WTO needs to be reformed, it’s credibility is at stake’- A former foreign minister and a veteran of the UN system, Kenya’s Amina Mohamed says she has practical knowledge of the beleaguered World Trade Organization and the political world in which it must operate. Having mastered the technical details of the WTO after chairing many of its top committees, Mohamed advocates a thorough-going reform of the organization. She sees the role of the next director-general job at the WTO as energising the organization, encouraging the uptick in trade facilitation and rejection of the trade restrictions introduced in the early days of the pandemic this year. After months of discreet campaigning by contenders for the director-general job at the WTO, Mohamed is one of three front runners in elections for the post next month. All are women, the other two are Nigeria’s ex-finance minister Ngozi Okonjo-Iweala and South Korea’s Trade Minister Yoo Myung-hee. Ngozi Okonjo-Iweala: “If we didn’t have the WTO we would have to invent it.”

Mohamed’s big political challenge is to win support from both the United States and China, now locking horns in a trade war, as well as the majority of Africa’s 54 states. To do that she has to convince members that she has a plan to unlock the WTO’s paralysis, caused by the US’s refusal to nominate representatives to its Appellate Body, its main dispute-resolution mechanism, which Washington says has over-reached its mandate. Chairing the WTO’s ministerial meeting in Nairobi in 2015, gave Mohamed direct experience of the high-stakes negotiation over matters such as agricultural subsidies, e-commerce, and intellectual property rights. (The Africa Report)

Key Words: Global Trade, WTO, Africa

Post-pandemic global services trade recovery hinges on digitalization As Covid-19 lockdown measures have forced employees to work from home and companies to upgrade their tech, demand for digital services globally has boomed. At the same time, demand for other service sectors, such as transport and tourism, has tumbled. According to a new report, the post-pandemic recovery and growth of cross-border trade in services, estimated to contribute more than half (55%) of all global trade flows, is expected to rely on digitalisation and the adoption of new technology. Despite being more difficult to visualise than the trade of physical goods, and often overlooked because of this, trade in services increased by around 50% between 2010 and 2019 – double the pace of growth recorded in merchandise trade, according to the report by Western Union and Oxford Economics. “Often little recognised, or grossly undervalued, the growing dominance of services industries over the past three decades has reshaped the global economy. Services now account for over two-thirds (68%) of global GDP and nearly half (49%) of all employment,” reads the report titled The global services trade evolution.

While some services still require face-to-face interaction, many services today – especially given the development of broadband networks and video conferencing – no longer necessitate physical proximity to be carried out. This became evident during the height of the pandemic in Q2, as lockdowns and travel restrictions meant working from home was adopted swiftly across the globe. “Technologies that ease remote work have quickly grown in popularity, and millions of new customers have been introduced to online services including mobile banking, telemedicine, food delivery, online education, e-commerce, digital streaming services and social media,” reads the report. The value of overall services trade is expected to increase by US$1.9tn between 2019 and 2025, taking its value from US$6.1tn to US$8tn. The report finds that business-to-business (B2B), ICT and financial services will contribute the majority (62%) of this growth. It notes that in the long term, the cross-border outsourcing of B2B services will hasten as geographic location becomes less relevant to who undertakes these tasks. Furthermore, digitalisation will enable financial service providers in particular to increasingly deliver their products remotely, with little or no human interaction and at lower cost. In trade finance, parties have turned to digital solutions, such as electronic signatures and fintech platforms which offer digitised documents, to ensure their trade finance deals and papers can be virtually inked. (GTR)

Key Words: Global Trade, COVID-19, Digitalization

‘Rules as data’ – the 21st century answer for trade facilitation? Traditionally, trade facilitation reform has not been sensitive to the realities of firm size and small businesses have become increasingly reliant on access to information via the internet. Further research from UNCTAD indicates that small enterprises benefit most significantly from ‘soft infrastructure’ for cross-border management via information and communications technology (ICT). Given this paradigm, novel collaborations are moving forward between governments, lawyers, academics, businesses, ‘legal hackers’, technology communities, chambers of commerce, international organisations and standards bodies to express regulations in computational form so that anyone can automate their application. Over existing networks, ‘rules as data’ can be published by authorities or private entities and utilised by point of sale, transportation/ports, national single window systems and other platforms. Ultimately, connectivity that arises helps entities to disrupt administrative and expertise barriers to trade. Rule sets expressed, exchanged and applied in this manner lead to the materialisation of an Internet of Rules for universal accessibility of the rules/data relevant to any transaction.

For importers, exporters and intermediaries, compliance with rules across goods codes and jurisdictions becomes based on agnostic commercial data. By expressing computational rules and publishing them online, required data elements found in trade documents and the results of calculations (based on the rules) can be returned to authorities at the consent of buyers and sellers. This would help people to fulfill disparate paper-based and ‘digital document’/paperless environment compliance requirements while allowing for controlled and auditable payments. A transparent and predictable Internet of Rules will modernise the experience of accessing information and engaging in international trade. Businesses and consumers would be able to quickly determine the total cost of goods, including tariffs/taxes. Governments could generate revenue in real-time and transportation/performance issues could be more precisely diagnosed. It’s also simple to author a rule in this form – an algorithm: it involves constructing ‘control tables’ in parallel to new and/or existing text versions of policies. (Trade4DevNews)

Key Words: Global Trade, COVID-19, Development

Op-Ed: The effects of the Covid-19 pandemic on small businesses and global value chains by Dorothy Tembo, ITC Executive Director ad interim.  The lasting effects of the pandemic are as yet unknown, but it has disrupted supply chains, reduced international travel by about 70%, crashed commodity prices - particularly of oil and metals - and reduced exports of skins and leather products, footwear, vehicles and clothing by over 20%. China, the European Union and the United States account for over 63% of supply chain imports and 64% of supply chain exports and are major importers of raw materials, parts and components, meaning that their lockdowns had global ramifications. The strengthening of the US dollar, which rose by 9.5% against emerging-economy currencies in the three months to April 2020, has further affected developing economies by increasing the costs of trade priced in dollars.

At the same time, surging domestic demand for medical and personal protection equipment, sanitisers, sanitary products and food resulted in 93 countries applying export bans or restrictions on certain products, severely limiting access for the most vulnerable. Governments have been encouraging MSMEs to manufacture sanitisers and masks, although there is a need to ensure conformity of these products to prevailing standards, particularly in developing economies. The ITC survey revealed that the pandemic has strongly affected nearly two-thirds of micro and small businesses - compared with about 40% of large companies - with 20% of MSMEs fearing that they would shut down permanently within three months. Two-thirds of African businesses reported being strongly affected, of these, 75% had reduced sales and 54% had difficulty accessing inputs. Service companies - particularly those in food and accommodation - have been particularly hard hit and it is notable that many women-led firms operate in this sector, as well as in retail and wholesale.

Still, even when the distribution of gender across sectors is taken into account, women-led businesses have been disproportionately impacted, with 64% of them declaring that their business has been strongly affected by the pandemic, compared to 52% of male-led businesses. Youth-led and informal enterprises were also found to be more at risk of closure. (ITC)

Key Words: Global Trade, COVID-19, GVC

 

PAN AFRICA

AU, World Tourism Foundation Institute to grace Africa Digitization Conference The World Bank projects that Africa’s economic growth will decline from 2.4 percent in 2019 to between -2.1 percent and -5.1 percent in 2020. This is expected to be the first recession in 25 years. The decline could largely be attributed to Africa’s export of commodities whose prices have crushed on the world market. Africa’s exports to other continents stand at a whopping 80 percent while trade among itself is just a little above 16 percent.  The setting up of the Africa Continental Free Trade Area (AfCFTA) will facilitate trade further and create opportunities among Africans especially since this will be the largest in the world.  While looking at the trade figures, the continent’s international tourism receipts totaled 36.2 billion USD in 2016, comprising only 3% of global tourism receipts. Based on these statistics the African Union hopes to use tourism as one of the major drivers for intra-African Trade. Looking at these issues amidst COVID-19, the Chamber for Tourism Industry Ghana (CTI Ghana) – with support from the Africa Open Data Internet and Research Foundation (AODIRF) – will lead a digital conversation on how African economies could take advantage of the current crisis through online platforms to boost tourism and trade. The virtual one-day event is dubbed the Africa Digitization Conference On Tourism & Trade (ADCOTT), coming up on Tuesday, August 25, 2020.

The African Union will lead the discussion in the Opening Plenary session with Beatrice Chaytor, Senior Expert – Trade in services, looking at issues such as how digitized trade and tourism can offer a solution to reduce the cost of air travel in Africa. The international trade lawyer will also answer questions on strategies the African Union is adopting to solve the rigid visa requirements slowing down the movement of goods and people on the continent. Indeed, what role can digitization play in offering a healthy balance between relaxed visa policies and keeping corruption in check? Fergus Maclaren from the Economic Innovation Institute for Africa, who possesses a wealth of experience in International Tourism, will look at Africa’s technological state and how the continent can leapfrog despite the COVID-19 pandemic. Simon Alangde from Google will focus on Technology Tourism and Cybersecurity. (Ghana Web)

Key Words: AU, World Tourism Foundation, Development

Post COVID-19: Rebuilding Africa and strengthening its resilience against future economic shocks By Charles Leyeka Lufumpa, Acting Chief Economist and Vice President for Economic Governance and Knowledge Management at the African Development Bank Group.    To counter the fallout of the coronavirus pandemic, Africa needs robust policy responses from every country on the continent, paired with strong support from Africa’s development partners. In the short term, African countries should prioritise healthcare spending for the provision of essential personal protective equipment (PPE) and materials, acceleration of local production of medical supplies including PPE and vaccine and drug discovery. Targeted cash transfers and subsidies for vulnerable households as well as subsidies and tax relief for businesses should be high on the agenda. Central banks must inject liquidity into the economy, turning to unconventional policy tools such as quantitative easing if necessary. In the longer term, countries should seize the imperative of building resilience to future crises. As good times return and economies get back on track, it should become a priority to build domestic and external buffers against any potential exogenous shocks. More money should be earmarked for scientific, economic and social research. Countries should pursue global and continental partnerships to prepare for eventualities. Private sector growth and revamping education and labour markets for the future of work are also key.

The role of development partners - At the onset of the coronavirus pandemic, multilateral development institutions took immediate action to help Africa’s poorest countries navigate the crisis and help them on the road to recovery. The African Development Bank is playing its part through its USD 10 billion COVID-19 Rapid Response Facility (CRF). The CRF offers immediate relief to African countries to address the crisis by providing additional resources for public health interventions, social protection programs and liquidity and budget support to affected sectors of their economies. Civil society and think tanks have a useful role to play by helping to build trust, solidarity and uptake of COVID-19 prevention and containment measures. They can also help to ensure that COVID-19 interventions are carried out equitably and that governments are held accountable for their policies and actions. (AfDB)

Key Words: Africa, COVID-19, Regional Integration

Saving lives, economies and livelihoods campaign launches in AfricaThe Saving Lives, Economies and Livelihoods campaign will facilitate the development of a harmonized strategy to protect borders, travellers, economies, livelihoods, and schools in Africa from the risk of increased COVID-19 transmission as countries begin to re-open their borders. The campaign is being implemented by the Africa Task Force for Novel Coronavirus of the African Union, which includes representatives of the Africa CDC, World Health Organization Africa Regional Office, African Union NEPAD, UNICEF, African Union Member States, public health institutions, and several partners. The objectives are to:

1. minimize the spread of infection within and across borders by creating a unified public health corridor for safe travel within the continent;

2. curtail the impact of COVID-19 on economies and livelihoods through the mutual recognition and acceptance of health information and data across Member States;

3. ensure that schools are reopened safely through the establishment and engagement of a multi-sectoral committee to develop a school opening safety plan.

“In the last two weeks, Africa passed one million cases of COVID-19. Noting that we do not have a vaccine yet, and recognizing the socio-economic effects of the pandemic on Member States, we must continue to be proactive so that we do not lose the precious gains made with the preventive measures. I am therefore proud to announce the official launch of the African Union Africa Against COVID-19: Saving Lives, Economies, and Livelihoods as an effort to use innovative tools, methods and partnerships to prevent further transmission, deaths and socio-economic harm on the continent as economies, borders and schools re-open,” said H.E. Amira Mohammed. “Transport is a catalyst for many of the big initiatives on the continent such as the Single African Air Transport Market and the Continental Free Trade Area, but transport has been halted around the world, affecting most sectors. It is important to work together as a continent to turn this crisis into an opportunity to improve our systems so we can reopen our economies quickly and safely,” said H.E. Dr Amani Abou-Zeid. (AU)

Key Words: AU, AfCFTA, COVID-19

Financing Africa’s energy transition If Africa is going to ramp up its renewable generation capacity to the level of its true potential, it will have to confront the need to dig deep to finance it. Increasing sustainable generation capacity by 2030 will require between €39-€62bn ($44-69bn) of annual financing, mostly for renewable generation, notes the African Development Bank (AfDB). According to the International Renewable Energy Agency (IRENA) Scaling Up Renewable Energy Development in Africa report issued in 2019, to transform Africa’s energy so that it could meet nearly a quarter of its energy needs from indigenous and clean renewable energy by 2030 will require an average annual investment of $70bn, resulting in carbon-di­oxide emissions reductions of up to 310 megatonnes per annum. While declining technology costs have resulted in solar PV plants showing a 20% year-on-year reduction annually in the cost of solar module prices over the past five years – rendering renewable energy a more cost-effective prospect for most – the continent’s governments and private sector developers still face a seismic challenge in capturing the funding needed to get anywhere near the targets outlined by the likes of IRENA.

Improving the investment environment - Meanwhile many utilities are still saddled with sizeable debts and reliant on the sovereign to bail them out – putting them beyond most commercial lenders’ comfort zones.  The result is that in Africa, investment in utility-scale generation and transmission infrastructure remain lower than for any other global region. Lenders are still focused on large, centralised power stations backed by purchase agreements resting on sovereign payment guarantees.  This has reinforced the sense that governments across the continent need to redouble their efforts to create a more attractive investment climate for renewable energy. “One of the biggest challenges for project developers focusing on renewables in Sub-Saharan Africa is that the regulations in some countries have never been clear or consistent,” says Obbie Banda, Underwriter at the Afri­can Trade Insurance Agency (ATI).  “African countries have needed a lot of investment by DFIs to help build capacity at the regulator and utilities level and are now better placed to help attract additional private investors.” (African Business)

Key Words: Africa, AfCFTA, COVID-19

How Women-led Agribusinesses are Boosting Nutrition in Africa Amandla Ooko-Ombaka, economist and associate partner at global management firm McKinsey, told IPS that women face a combination of challenges in starting and running an agribusiness because of their disproportionate access to information and technology to access agronomic advice and payments. She added that women consistently have less access to capital to increase their productivity and are 50 percent less likely than men to own their land. In sub-Saharan Africa, women constitute the highest average agriculture labour force participation rate in the world of more than 50 percent in many countries, especially in West Africa, according to the FAO. “Food systems worldwide are decades behind other sectors in adopting digital technology and innovation,” Ooko-Ombaka added. “The growth of mobile access has been an important unlock for innovation in African agriculture for most of our countries 70-90 percent of land is held by smallholder farmers. If we cannot reach them, the impact in the sector is muted,” Ooko-Ombaka told IPS via e-mail.

Ooko-Ombaka said in sub-Saharan Africa about 400 digital agriculture solutions have come to market — 60 percent of which came to market only in the last two years — serving user needs, including financial services, market linkages, supply chain management, advisory and information and business intelligence.  An analysis by McKinsey notes that the COVID-19 crisis has disrupted food systems in Africa but continues to open the gap for innovation.  Ooko-Ombaka says the agriculture value chain can benefit from innovation, particularly in the COVID-19 era where profound shifts are projected around marketplaces, making it critical for farmers to have access to markets. “With restrictions on movement, interacting with farmers and value-chain partners digitally may become more important,” Ooko-Ombaka said, predicting that food-distribution chains, particularly in urban areas, are very likely to become more digitised.  Farmers may increasingly seek e-advice, digital savings products, or access to government subsidies that might be offered through digital wallets, she said adding that agricultural players can explore digital services, including marketing, extension to farmers, financial products and supply chain tracking.  (IPS)

Key Words: Africa, Agriculture, Business Development

 

NORTH AFRICA

Egypt discusses increasing exports to $100B annually Egypt pays great attention to the export file and the importance of achieving an unprecedented boom in export rates for all sectors, especially the sectors in which Egypt has a competitive advantage, which contributes to achieving the government's plan to reach exports of $100 billion annually, Minister of Trade and Industry Nevine Gamea said Monday. Gamea explained that the ministry is currently studying all proposals related to facilitating export procedures and dealing with all challenges that stand in the way of the flow and flow of Egyptian exports to foreign markets, with a focus on the African market, which represents one of the most important objectives of the ministry’s plan to double exports. This came during the expanded meeting that the Minister held with a number of heads and representatives of export councils regarding the promotion of Egyptian exports to various global markets with a focus on the African market. The minister referred to her visit last week to Sudan accompanied by the Prime Minister, as Sudan is one of the most important Arab and African countries that have distinguished relations with Egypt in all fields. The Sudanese Minister of Industry was invited to visit Cairo during the coming period in order to strengthen industrial cooperation between The two countries and then increasing the rates of trade exchange between the two countries,

 She noted that it was agreed with the Sudanese side to develop an action plan to overcome the obstacles that obstruct the flow of trade movement between the two countries, by facilitating logistical transport and increasing joint investments, especially in areas of common interest, and strengthening cooperation in the field of technical and professional training to meet the needs of the Sudanese industry of qualified workers . Gamea referred to the importance of restructuring the Egyptian-Sudanese Business Council to play a pivotal role in developing economic and investment relations between the two countries during the next stage, noting that the Egyptian and Sudanese sides are currently being formed in coordination with the Sudanese Minister of Industry. For his part, Chairman of the Export Council for Chemical Industries, Khaled Abu Al-Makarem, said that the sector’s exports in 2019 amounted to $ 5.5 billion, of which $ 1.2 billion went to the markets of the African continent, accounting for 22 percent of the sector’s total exports. (Egypt Today)

Key Words: North Africa, Export, Trade

 

EAST AFRICA

Covid-19: Lessons for EAC integration Covid-19 has put regional integration efforts to test, with some realising belatedly that there is no way this war could ever be won by countries acting singly.  It all started in the European Union even before we consider our own East African Community. At the height of the pandemic, around April, countries in Europe, notably Italy and Spain, were experiencing an unprecedented crisis, losing up to 1,000 persons a day.  Apparently many countries had chosen to tackle the pandemic unilaterally. It backfired. It did not occur to them that with free movement of persons as espoused in the EU and other regional blocs including the EAC, the unilateral approach could just not work. Thus EU Commission president, Ursula von der Leyen, had to come out and offer a “heartfelt apology” to Italy for not helping at the start of the deadly coronavirus outbreak. She told the EU parliament that “too many were not there... when Italy needed.” She added, “Yes it is true that no one was really ready for this. It is also true that too many were not there on time when Italy needed a helping hand at the very beginning. For that, it is right that Europe as a whole offers a heartfelt apology.” Ursula is also quoted saying that “Europe has now become the true beating heart of solidarity. The true Europe is now standing up.” The situation was so dire that there were reports of disquiet when some countries decided to block exports of emergency equipment to neighbours in need. Belgian Health minister Maggie De Block was quoted as saying that the state of affairs seemed “deeply against the idea of a united Europe and fundamentally against the spirit of solidarity.”

 Back home in the EAC, we have also had a fair share of our own challenges in addressing the pandemic. Indeed, President Yoweri Museveni has unequivocally continued to remind us of how regional challenges, including Covid-19, can be handled more effectively with combined effort.  “You see how we’re suffering. A simple disease like corona is not easy to control because we are not acting together as East Africa,” the president said recently, after nomination as the NRM flag-bearer for the forthcoming presidential elections. “We need to address the issues of EAC integration as a strategic goal. We need to talk with our brothers and sisters…” he added  The EAC has, however, undertaken the significant efforts in the Covid-19 fight, notwithstanding the aforementioned challenges.  From the onset, even when countries the world over were implementing strict lockdown measures, including the closure of borders, the EAC developed health guidelines to be applied both at regional and national level. (The Observer)

Key Words: EAC, Trade, Regional Integration

East African Business Council Urges EAC Partner States To Fast Track Admission Of DRC Into The Bloc  The East African Community has been urged to fast track the admission of the Democratic Republic of Congo into the regional bloc noting that it sources for goods that the EAC can ably supply, from very distant markets.  A study conducted by the East African Business Council reveals that the value of goods imported in the DRC in 2019, stood at USD 6.6 billion. The study reveals China is the top exporter to the country commanding a share of 31.2 percent, followed by South Africa at 15.8 percent and Zambia 13 percent. However, EAC exports to the DRC in 2018, stood at USD 855.4 million, representing 11.5 percent of total DRC imports. East African Business Council CEO Peter Mathuki says DRC will benefit from the larger EAC Common Market and Common External Tariff framework. He added that the country will also, have access to seaports of Mombasa and Dar es Salaam at competitive rates. “DRC will benefit from the larger EAC Common Market and Common External Tariff framework. It will also have access to the seaports of Mombasa and Dar es Salaam at competitive rates. Their huge population of 81 million people also provides a vast opportunity for SMEs from the EAC region,” Mathuki said. The study finds that non-tariff barriers in DRC have hampered business translating to high cost of doing business in the country. “EABC being the apex body for the private sector in the region will play a critical role in advocating for ease of doing business in DRC which will in turn lower cost of doing business, making DRC competitive, as we prepare to join the African Continental Free Trade Area (AfCFTA),” Dr Mathuki said. The call came a year and two months after DRC applied for admission to join the Community. (Capital)

Key Words: EAC, AfCFTA, Regional Integration

Covid-19 hits EAC trade hard The East African Community is a regional economic bloc comprising Uganda, Kenya, Tanzania, Rwanda, Burundi, and South Sudan. It is important to note that trade within the East African Community (EAC) has not remained the same since the outbreak of coronavirus in the region. Covid-19 is a global pandemic that is suppressing and damaging the social, economic, and political agenda of the EAC. It is sabotaging, frustrating, and obstructing trade within the region. It is greatly affecting trade within the EAC in numerous ways. From within the member states, some trade sectors like those dealing in clothes have been barred from trading. This means that some people are out of business and, therefore, the levels of unemployment have accelerated. Additionally, some traders who earn from hand-to-mouth have run out of capital and, therefore, they are unable to trade again even if the lockdown is lifted since they have used the capital they had to take care of themselves. It has enumerated delay in the clearance of the goods. Currently, Covid-19 has led to the introduction measures meant to prevent the spread of the virus, including testing and waiting for the test results for truck drivers hence raising the non-tariff barriers. Covid 19 is making transportation of goods difficult. The common mode of transport within the East African region has been road transport, yet statistics show that in Uganda, most truck drivers from Kenya and Tanzania are the ones bringing Covid-19 to Uganda. The pandemic is weakening the progress of trade since some people cannot buy certain items due to the lockdown measures put in place.  (Daily Monitor)

Key Words: East Africa, Trade Agreement, Regional Integration

 

WEST AFRICA

Ghana, Ivory Coast create joint body to coordinate cocoa policies – The world’s two largest cocoa producers, Ivory Coast and Ghana have created a joint body to improve coordination in research, price setting and the fight against child labour, the Ivorian government said on Thursday. The two countries, which produce around 60% of the world’s cocoa, have coordinated on some of those issues before, but the new organisation marks a formal step towards closer ties. The Ivory Coast-Ghana Cocoa Initiative (ICCIG) will promote their cocoa industries internationally and defend their collective position in the global market, the Ivorian government said in a statement. The organization will allow the two countries to formalise an agreement started three years ago whereby they both announce farmgate prices at the start of the growing season on Oct. 1, a measure aimed at reducing smuggling across their shared border. Last year they raised the guaranteed price they pay cocoa farmers to around $1.50 per kilogramme for the 2019/20 main crop harvest. They also introduced a minimum price floor to address a perceived imbalance between farmers’ incomes and money made by big commodities traders. (Ghana Web)

Key Words: West Africa, Trade, Regional Integration

 

SOUTHERN AFRICA

Undiversified economies, low intra-trade constrain SADC industrial drive The quest to transform southern Africa into an industrialised region is being hampered by the declining level of intra-regional trade and the lack of diversification of domestic economies, according to an assessment done by the SADC Secretariat. The assessment showed that while economic integration is progressing well in the Southern African Development Community (SADC), “there is still work to be done if we are to effectively promote industrialization and improve economic growth in the region.” “The assessment shows that the structures of SADC economies remain undiversified with a growing dependency on natural resources and export of unprocessed commodities characterized by a stagnant industrial sector,” SADC Executive Secretary, Dr Stergomena Lawrence Tax told the 40th SADC Summit held on 17 August. The assessment revealed that natural resource-based sectors such as agriculture and mining continue to dominate economic activity in most SADC Member States, accounting for on average 25 percent of Gross Domestic Product (GDP). Exceptions are Member States such as Mauritius and Seychelles that are implementing policies to expand certain sectors such as the financial sector. While the contribution of the manufacturing sector to GDP is declining, the financial sector contribution is, therefore, increasing in these two Member States.

After peaking at an average of 16 percent of GDP in 2001, the share of the SADC manufacturing sector to total GDP has been on a downward trend and currently stands at around 13 percent, according to SADC figures. “The assessment further reveals that despite some improvements in intra-SADC trade flows, the total intra-SADC trade, which stood at 19.3 percent in 2018, is significantly less compared to other regions,” Dr Tax said. Figures from the SADC Secretariat show a downward trend in the flow of goods among SADC Member States since hitting a peak of 21.6 percent in 2016. According to the figures, merchandise trade among SADC Member States slowed down to 20 percent in 2017, before declining further to 19.3 percent in 2018. This could be explained by the relatively poor economic performance of the traditional export market South Africa, which has not registered GDP growth higher than 1.8 percent for the past five years. (tralac)

Key Words: SADC, Regional Integration, Trade Laws