Africa Newsletter 05-09-20

East Africa Update

The Window To Import Maize From Outside EAC At Reduced Tariff To End On 30th May

Many millers are not happy that the window to import maize will not be extended. Shipments from Mexico containing 40,000 metric tons of non-GMO maize were forced to find other destinations as they would not have made it to Mombasa before the cut-off point.

The reduced tariff of 14% on white maize and 10% on yellow maize was an opportunity for millers and animal feed producers to import maize from outside of the EAC from the usual 50% tariff. It would require 60-70 days from ordering a vessel of grain from Mexico to it arriving at the port of Mombasa.

Uganda Extends Lockdown

The government in Kampala extended the nationwide lockdown to 18th May as it battles to contain positive cases coming into the country mainly from Kenyan and Tanzanian truck drivers. The authorities in Kampala have been supported by the Kenyan government’s recent announcement that all drivers from Kenya must undergo testing before they depart. The Ugandan government hopes this will slow down the number of positive cases in the country.

Maize is still trading circa UGX 1,050 kg in the Kampala area. The new crop is expected from June/July. Beans are available at UGX 3,800 per kg.

AfCFTA Launch Postponed

The launch of the Africa Continental Free Trade Area on 1st July has been postponed as member states focus on the fight against the coronavirus. The $3.4 Trillion trade pact upon implementation will open borders and increase intra-Africa trade to create one of the world’s largest single trade areas.

Free trade agreements are designed to cut trade tariffs among member countries, help make a country’s exports cheaper, and get easier access to other markets. They remove border taxes or trade barriers, get rid of quotas so that there will be no limit to the amount of trades one can do, and so on. These tariffs are usually in the form of taxes.

For more information on how Covid-19 is affecting the global supply chain please see our reports Hot Commodities at panxchange.com/hot-commodities