MSME Day, 27 June

The Organisation of African, Caribbean and Pacific States (OACPS) is celebrating MSME Day on 26 June by hosting a webinar – “Addressing the negative impacts of the Covid-19 pandemic on ACP MSMEs” – along with a series of online activities.

And for MSME Day, the International Trade Centre organised an interactive WebTV programme, “The Great Lockdown and its Impact on Small Business”, live on Facebook: www.facebook.com/internationaltradecentre. The programme featured 40+ diverse speakers around the world, shared engaging testimonials to prepare for a “new normal”. 24 June, 14:00-15:30 CET.

EU-Trademark East Africa (TMEA): an agreement to promote trade

The Kenyan Government has received additional funding for KSh40 billion towards mitigating the effects of COVID-19 pandemic in the trade sector (KBC, 17 June). The funding is an agreement between Trademark East Africa (TMEA) and the European Union to have the latter channel resources through TMEA to support the Safe Trade Emergency Facility (STEF) being implemented by the East African Region. The STEF is being rolled out by TMEA in the wake of COVID-19 to complement East African Governments’ efforts to keep safe trade flowing. Trade Cabinet Secretary Betty Maina noted that the grant will complement government efforts that ultimately cushion not only large enterprises but also SMEs: “Most of these enterprises cannot maintain major inventories and therefore we are grateful that through this grant we will further boost trade at the borders.” The EU Ambassador to Kenya, Simon Mordue, said that this contribution will support Kenya, which is the gateway to the EAC markets, to keep its supply chain open in ensuring that food and other critical supplies reach their destinations during the pandemic. Specifically, in Kenya, the STEF will fund a range of short- to medium-term measures to protect critical supply chains and keep borders open, thus preventing job losses and protecting livelihoods. As well as providing mobile testing labs and PPE, the programme will also introduce a tracking application linked to the Regional Electronic Cargo Tracking System (RECTS) platform to monitor trucks and their drivers, in line with health and sanitation protocols.

AUDA-NEPAD and Ecobank – ‘100,000 MSMEs by 2021’

AUDA-NEPAD (the African Union Development Agency) and Ecobank Group are committing resources to Africa’s MSMEs (Logistics Update Africa, 13 June). A second virtual workshop on 11 June provided an opportunity to reaffirm the importance of sustaining market access and strengthening capabilities for MSMEs. During this session, high-level representatives from the African Union Commission, regional development banks, development financial institutions, international organisations and commercial banks from the continent, agreed to put in place the AUDA-NEPAD “100,000 MSMEs by 2021” programme.
The AUDA-NEPAD MSME programme will have five pillars:

• AUDA MSME Academy
• MSME Financing Support Programme
• MSME Marketplace
• MSME Micro-health insurance Scheme
• MSME digital platform.

Governments have committed to support MSMEs at the national level. The AUDA-NEPAD programme will pool African resources, capabilities, financing, market access and technology, to help achieve a continental response to MSMEs.

Coronavirus: Impacts on AfCFTA

An op-ed in The Africa Report (9 June) believes that although COVID-19 has thrown up additional challenges for Africa when it comes to implementing the African Continental Free Trade Area (AfCFTA), “through a strong focus on trade facilitation measures that promote safe trade, there is a huge opportunity to lay strong foundations for the AfCFTA in the coming weeks and months, while also supporting the continent’s response to the pandemic”.

The deal stipulates that signatories eliminate tariffs on 90% of goods and address a plethora of non-tariff barriers, which will in turn tackle the comparatively high cost of trade across the continent. Evidence suggests the removal of tariffs, supplemented by trade facilitation initiatives, could boost intra-African trade by 52% or $34.6 billion by 2022. Higher levels of internal trade will help wean Africa off its reliance on the external markets, so exposed by the pandemic.

Yet COVID-19 has brought additional challenges. The agreement demands the free movement of goods, services and people, which the virus has temporarily rendered impossible. The treaty’s original start date of 1 July has been postponed until at least January 2021. However, this should be used as an opportunity for countries to address the challenges presented by COVID-19, while better preparing for AfCFTA implementation to expedite its introduction.

Digital solutions also have an important role to play, driving efficiency and reducing the need for physical human contact. In Kenya, telecommunications firm Safaricom has already implemented a fee-waiver on its M-Pesa product to encourage the use of mobile money. And TradeMark East Africa’s (TMEA) Safe Trade Emergency Facility aims to introduce a tracking application linked to the Regional Electronic Cargo Tracking System (RECTS) platform so that monitoring of the truck and driver will be possible. Read the full report here.

AGRA: The need for an integrated and coordinated response

A new policy brief from the Alliance for a Green Revolution in Africa (AGRA), “Towards an Integrated and Coordinated Response to the COVID-19 Pandemic in the Agricultural Sector”, points out that the agriculture and food sectors are often not linked sufficiently to other parts of government, even in “normal” times. The institutional capacity for governments to deal with large shocks such as the COVID-19 pandemic could be enhanced by better coordination among sector silos. AGRA suggests that:

• COVID-19 response plans need to be aligned and integrated to existing sector priorities, even if those priorities need to be updated to respond to COVID-19.
• Agriculture ministries and institutions should be supported to strengthen their capacity to collaborate with other sectors such as health, education, trade, industry and finance.
• COVID-19 response coordination should be integrated within established agricultural sector coordination platforms, while maintaining close links with COVID-19 national response coordination structures.
• African governments should forge partnerships with local think tanks, international organisations such as the International Food Research Institute (IFPRI) and others to ensure tailor-made and “close to” real-time information to guide policy decisions for the sector.
• Institutional capacity should be strengthened to deal with current and emerging shocks.

SADC calls for effective coordination

The effects of COVID-19 on the global economy are projected to lead to a significant contraction of the Southern African Development Community (SADC) economies, and threaten trade and industrial development (Southern Times, 5 June). This comes at a time when intra-regional trade in SADC is very low, operating below 20% of normal trade volumes and hindering member states from realising their economic potential. SADC Secretariat Executive Secretary Dr Stergomena Lawrence Tax said the decline in the global economy due to the pandemic will result in a decline in commodity prices and increased in debt this year. In a bid to maintain and promote intra-regional trade, in April the SADC Council of Ministers approved the SADC Guidelines on Harmonization and Facilitation of Movement of Essential Goods and Services across borders during COVID-19 pandemic. However, the regional bloc highlighted that the movement of goods and services across borders has encountered obstacles that increase the costs of doing business and negatively affect trade, including non-compliance and non-recognition of regional legal frameworks and coordination mechanisms; lack of harmonisation and synchronisation of policies and procedures among and between Member States; unilateral decisions outside agreed frameworks; uncoordinated operations at the port of entry among border agencies; and different approaches to dealing with epidemiological challenges. Dr Tax urged member states to embrace a coordinated approach in the area, as the region is moving to a post-lockdown period where facilitation of movement of all goods and services, not only essential goods, is needed to boost SADC intra-trade and stimulate production.