ATPPN QUARTERLY NEWSLETTER: Issue Number 2, November 2020

The East African Community will lose $5bn in foreign earnings from agricultural exports due to Covid-19, and trade data shows that maize commodity parity price trends will be near and below average across most markets as a result of Covid-19.

Trade on common beans, mung beans and maize from neighbouring countries have reduced during the period, due to border restrictions and rocketing transport and logistics costs. Agro-food may cross multiple borders before reaching final consumers, creating significant ripple effects for smaller businesses. Even though inter-regional trade is vital in promoting economic development and food security, restrictive trade levies, regulations on food safety measures and non-tariff barriers affect the flow of agro-food products across borders. Thus, we need policies that do not distort trade and limit the benefits that international agro-food markets can deliver for consumers.

1) Support interventions that enable farmers to access inputs at affordable costs.
3) Policies to ensure EAC countries borders (which are interdependent) remain open, facilitating efficient trade flow.

3) As the COVID-19 situation changes rapidly, there is a need to support the national government with evidence to base mitigation policies and measures.

4) New business models to cope with the pandemic, such as investment in capacity building of SMEs to adopt efficient ICT based business models and advisory services should be in place.

Source: https://africanbusinessmagazine.com/sectors/agriculture/covid-19-hits-east-african-agri-value-chains/

The ECOWAS Ministers of Trade (ECOMOT) met virtually on the 22^nd of October 2020 to discuss recent regional and continental trade developments and make recommendations to the ECOWAS Council of Ministers.

Declaring the meeting open, the ECOWAS’ Commissioner for Trade, Customs and Free Movement, Mr. Tei Konzi, highlighted the continuous steps taken by the Commission to assist Member States on regional trade initiatives and the African Continental Free Trade Area (AfCFTA) negotiations, and reiterated the commitment of the ECOWAS Commission to coordinate Member States’ positions in the negotiations in line with the ECOWAS Summit decisions.

Earlier in his opening remarks, the Chair of the Ministerial Meeting and the Honorable Minister of Trade and Industry of Ghana, Mr. Alan Kyerematen, recalled the importance of the 11th ECOMOT Meeting in discussing key regional and continental trade issues, and called on Member States to adhere to the timelines given by the African Ministers of Trade (AMOT) and the African Union Summit.

The issues considered at the 11th ECOMOT Meeting included: Status of ratification of the Agreement establishing the African Continental Free Trade Area (AfCFTA), conclusion of outstanding issues related to Phase 1 of the negotiations, as well as the development of a regional AfCFTA Implementation Strategy.

The Ministers also considered the renegotiations of tariff concession of ECOWAS Member States’ at the WTO, the operationalization of the ECOWAS Trade Information System (ECOTIS), as well as the need to review the draft ECOWAS Common Trade Policy (CTP) in light of recent developments. Other initiatives under development include the West Africa Trade and Competitiveness Observatory; the Trade Component of the ECOWAS COVID-19 response, as well the Regional Non-Tariff Barriers (NTBs) Policy and Strategy.

The Ministers endorsed the recommendations from the Competition Consultative Committee of the ECOWAS Regional Competition Authority (ERCA) for consideration by the Council of Ministers.

Bringing the virtual meeting to a close, Commissioner, Konzi, recalled the major challenges facing the ECOWAS integration agenda, namely, border closures, the multiplication of different trade regimes in the region and impediments to the free movement of people and goods.

In September 2020, the 57th Summit of ECOWAS Heads of State and Government in Niamey – Niger had instructed the ECOWAS Commission to complete with Member States, all outstanding work on Tariff Concession; Rules of Origin and Specific Commitments on Trade in Services.

The leaders called on Member States that have not yet signed or ratified the African Union Protocol on Free Movement to do so.

Source: https://www.ecowas.int/ecowas-ministers-of-trade-ecomot-deliberate-over-recent-regional-and-continental-trade-developments/

Sustainable agriculture is an essential factor to advancing trade within COMESA and the rest of Africa. Over the last two decades, Africa has remained a net food importer, with agricultural accounting for about 60% of Africa’s total trade in agricultural products. Furthermore, agricultural product imports account for around 13% of total imports.

The COVID-19 pandemic has brought agriculture and food security issues to the fore and it presents a formidable threat to trade in agricultural commodities. This has necessitated bringing together experts to discuss and come up with practical recommendations to cushion the sector from pandemic related disruptions.

This is what informed the COMESA Business Council (CBC) webinar on 27 July 2020 themed: “Unlocking Food Security Through Improved Seed Trade in COMESA”. This was a public-private consultative platform on agricultural transformation and improved trade within COMESA and brought together regional seed producers and traders.

Discussions hinged on access to quality and affordable seed; trade facilitation in the movement of seed across the borders during COVID-19, measures to curb illicit trade in seed and policy and regulatory frameworks to facilitate investment and increased seed production and trade among others.

Among the key recommendations of the Webinar was the need to develop harmonized legislation across the region and one stop shop to provide relevant permits for the seed industry. Participants noted that some of the authorities are not based at one place which in turn increase costs and time for getting the necessary documentations. They agree that strong inter-agency regulatory processes and information flows need to be put in place to map out simpler clearances processes at domestic and trans-boundary trade facilitation level.

The meeting also recommended that a peer review be conducted to monitor the authenticity of seed in the region to avoid cases of counterfeit and those found wanting to be penalized. This will be done through strengthening the supply of the volumes of truly certified seeds marketed in the region, as well as information sharing campaigns, which is key in sensitizing farmers on quality seeds.

The CBC was urged to engage local seed companies and governments to strengthen the existing business environment, as this is will motivates companies to make investments in countries that they are operating. It will strengthen dialogue between different actors in the seed sector for the sustainability of the industry.

Further, CBC was called upon to come up with a seed statistics information system. This will address the challenge posed by lack of real-time trade data on seeds, which delays and affects decision making process.

Currently, COMESA is working with Member States to benchmark seed standards and regulations to International accepted standards. This needs involvement of both private and public sector mostly through private-public dialogue so that policies are well informed and also practical solutions can be identified.

Panelists included the Regional Director for Syngenta Foundation East Africa, Mr. Osure George, Regional Head Africa & Middle East at Advanta Seeds, Mr. Ndavi Muia and the Corporate Engagement Lead – Africa for Bayer Crop Science Mr. Jimmy Kiberu. Others were, Dr. John MacRobert, the Acting Chairman for Zimbabwe Seed Trade Association and Mrs. Providence Mavubi, Director, Industry and Agriculture at COMESA. CBC Chief Executive officer Ms. Sandra Uwera moderated the Webinar.

Source: https://www.comesa.int/improved-seed-trade-will-unlock-regional-food-security/

As at 14 August 2020, Africa marked six months since COVID-19 was first detected on the continent. The report provides a short summary on the progression of the pandemic as well as the measures that have been put in place with the support of WHO.

COVID-19 situation continues to rise in some Member States, destabilizing the economies and other systems. The Food and Nutrition situation in the region remains very precarious partly due to COVID-19. The report summarises the 2020 Regional Synthesis Report on Food and Nutrition Security and further provides the short, medium and long term interventions that Member States can put in place to address the dire situation in the region. Transport and Trade Facilitation remains a major challenge. Despite this, there have been remarkable achievements including the Tripartite Guidelines on Trade and Transport Facilitation for Safe, Efficient and Cost Effective Movement of Goods and Services during the COVID-19 Pandemic which harmonize the guidelines of SADC, East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA).

We are at a time in the pandemic where economic recovery is an imperative. Many Member States have resumed economic activity and are at a point of recovery across all sectors due to economic contraction.

The full bulletin is accessible on the following links;

Bulletin 11: SADC Regional Response to COVID-19 ENGLISH

Bulletin 11: SADC Regional Response to COVID-19 FRENCH

Source: https://www.sadc.int/news-events/news/bulletin-11-sadc-regional-response-covid-19/

At the turn of the year 2020, Africa was moving into a landmark year in which the long-awaited AfCFTA would eventually become a reality; with trading under the scheme originally scheduled to begin on 1st of July 2020. However, due to the COVID -19 pandemic, the implementation date has been moved to 1st of January 2021. The Agreement is expected to create the African Continental Free Trade Area (AfCFTA) for goods and services in Africa, liberalize and facilitate the free movement of people, investments and businesses across the continent. The objective of the Continental Free Trade Area (CFTA) is to integrate, diversify and industrialize African economies of about 1.3 billion people with a combined gross domestic product (GDP) of USD 3.4 trillion.

However, the novel Coronavirus disease (COVID-19) seems to undermine these possibilities through the crippling effects that is causing a global economic crisis. On 30 January 2020, the World Health Organization (WHO) declared COVID-19 as a pandemic, formally signaling its threat to every country in the world. This threat is not specific and isolated to international health systems; but also developed and developing economies as weak economies in Africa face the severity of the pandemic amidst the measures taken by governments such as border closure, travel bans and lockdowns that directly hinder activities necessary for economic growth and development.

As of 13 June 2020, the virus has impacted all African countries with 225,126 confirmed cases, 116,163 active cases with 6,051 deaths. The last country in Africa to record an index case of the pandemic is Lesotho on 13 May 2020. More importantly, 62.6% of cases in Africa are in the continent’s key economies such as South Africa, Egypt, Nigeria, Algeria, Morocco and Kenya while 11.6% of the cases are in Ghana, Senegal, Ivory Coast, Ethiopia, Uganda, Rwanda, Tanzania, Libya and Benin that are Africa’s fastest growing economies according to the International Monetary Fund (IMF). The pandemic has driven the global economy into recession which in turn has resulted in significant drop in demand for African commodities; like agricultural products (such as barley, palm oil, sugar, cocoa bean, cotton, and maize), industrial metal (such as copper, iron ore, nickel, lead, aluminum, and zinc), precious metal (such as gold), and energy (such as natural gas, coal and oil) etc. This will also affect demand for trade and services within the aviation, financial, telecommunications sectors. The effect on Africa economies is expected to worsen as supply chains remain disrupted and the value of exports from the region reduces due to drop in demand from international trade partners such as Asia and America who are worst hit by the virus. In addition, poor testing facilities, inadequate Personal Protective Equipment (PPEs) for frontline health workers and congested communal settings could worsen the effect.

However, the pandemic has restricted travels around the globe, having a direct impact on economic integration and intra Africa trade. Therefore, it is important for governments within the region to be prepared for the possible negative impact the virus will have on the implementation of the agreement and seek out ways to convert the pandemic to opportunities for stronger economic and political integration. Some of the negative impacts of the pandemic are highlighted below:

• The border closure and travel bans placed by key and emerging African economies such as Nigeria, South African, Ghana, Algeria, Morocco, Kenya and Ethiopia etc. have impacted on trade within the continent. The demand for essential commodities such as pharmaceutical and agricultural products has weakened export in the face of measures adopted by governments to manage the spread of the virus. By implication, the demand for essential commodities is on the increase resulting in its scarcity, which ultimately results in hike in prices and unhealthy
• Competition amongst producers and exporters. Therefore, rather than strengthen economic integration, economic development in Africa had been undermined. Trade liberalization is expected to improve economic activities with the AfCFTA in terms of trade and investment. Currently, all negotiations on tariff concessions are at a halt due to the pandemic as countries are more focused on saving lives and preserving livelihoods. This creates uncertainties for least developed countries (LDCs) as tariffs form a huge percentage of their revenue. Such uncertainties cannot be negotiated at a pace required to foster trade liberalization as the pandemic has paused all forms of contact and collaborations in negotiating key aspects of Phase I (i.e. RoO and Schedules of Tariff Concession) that are necessary for trading under the agreement to begin.

Source: https://www.pwc.com/ng/en/publications/covid19-and-the-afcfta-agreement.html

“The African Continental Free Trade Area (AfCFTA) will offer an opportunity to sell to over 1.2 billion persons with a collective GDP of US$ 2.5 trillion, but what can Central African countries sell on the new continental market?

“As a result of COVID-19, Africa has not been able to get some of the food supplies it usually imported from other parts of the world. With Central Africa’s vast expanse of arable land and a good mix of agricultural geographies, why not produce these locally instead of importing them?

“With major breakthroughs in battery storage (reaching 500 MW) and the high levels of solar irradiation in Chad and northern Cameroon, why not promote renewable energy, especially solar, to open up development opportunities in Central Africa’s hinterland?

“The Republic of Congo has significant deposits of potash, an essential mineral for the production of agricultural fertilizers, with an in situ value of more than 2 trillion American dollars – so why not locally produce fertilizers and other chemicals necessary for agro production as part of an African-wide value chain which includes natural gas and phosphate producers such as Angola and Morocco, respectively?”

These were teasers for reflection put to an assembly of senior State officials from all the eleven countries of the Economic Community of Central Africa States (ECCAS) by the Director of the Sub regional Office for Central Africa of the UN Economic Commission for Africa (ECA) – Antonio Pedro, Friday.

He noted that 8 out of 11 ECCAS member States had ratified the AfCFTA Agreement, a fact that should be celebrated, but he deplored Central Africa’s low rankings in most regional integration indexes, especially the share of intra Central Africa trade.

Pedro argued that the AfCFTA and COVID-19 supply shock dynamics strengthen the business fundamentals for an inward-looking development agenda. He demonstrated how Central African countries could take advantage of the AfCFTA on the basis of a consolidated Central African Industrialization and Economic Diversification Master Plan (PDIDE-AC, in French), being strung-together with ECA’s support, to develop integrated regional value chains. He called on the captains of the industry in the region and beyond to seize the opportunity.

Source: https://www.uneca.org/stories/time-integrated-regional-value-chains-central-africa

COVID-19 has brought many changes across the world, disrupting North Africa’s connections to global value chains and impacting strategic sources of foreign currency. The pandemic has also triggered a deep reorganization of national strategic priorities, accelerating digitization and generating a strong need for systemic change across the economic fabric.

This webinar will be an opportunity for a team of seasoned experts to examine how new technologies have been used to mitigate the impact of the COVID-19 pandemic on public services and national economies across North Africa. They will discuss how the accelerated transformation of education services has become a necessity due to this crisis, and debate on the role new technologies can play to accelerate North Africa’s economic recovery and facilitate their adaptation to the new, global economic context.

Public institution, private sector and civil society representatives as well as academics from Algeria, Egypt, Libya, Mauritania, Morocco, Sudan and Tunisia will be taking part in this meeting. Discussions will be simultaneously translated into English, French and Arabic to facilitate a dynamic North-African debate on these important issues.

Key recommendations from this webinar will be submitted to the upcoming thirty-fifth Intergovernmental Committee of Senior Officials and Experts (ICSOE) scheduled on November 17th, 2020.

Source: https://www.uneca.org/events/macroeconomics-and-governance-north-africa/innovation-and-new-technologies-north-africa