TRADE
Sino Africa Trade Remains Strong Despite COVID 19
T
rade between China and a number of countries across Africa have reported mixed results in trade figures for the first half of 2020 given the enormous disruption brought about by the COVID-19 pandemic.In some cases, a sharp fall in Chinese imports has been both a blessing and a curse. On the one hand, fewer Chinese imported goods help to narrow the enormous trade deficits that most African countries have with China. This helps when countries don't have to spend as much of their foreign currency on imported products and, in some instances, it's also giving room to domestic producers to help make up the difference. There has been a downside too. Inflation is going up, particularly for goods sold by small businesses, whose inventories are now running dangerously low. Similarly, industrial goods, including Chinese-made chemicals, cement, and machinery, are also in short supply causing widespread economic disruption.
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AFRICAN SHIPPING REVIEW Jan/March 2021
In August 2020 the Kenya National Bureau of Statistics (KNBS) reported that the trade deficit fell by 20% in the first half of the year largely due to a sharp drop in trade with China. Although Chinese imports during this period fell by almost 10%, China nonetheless remains Kenya's largest trading partner. The trade deficit is now at its lowest point since 2016. At the same time the Central Bank of Kenya reported that the country burned through almost $400 million of its foreign exchange reserves last month, largely to repay external debts. With more than $6.4 billion of outstanding loans, China is Kenya's largest external creditor. So far, the two countries have been unable to finalize a debt relief plan. The recently launched initiative that comprise a new Container Freight Station at the Kenya Railways Corporation transit shade will be a big boost to local traders who would like to consolidated and have their goods
cleared and released for either rail or road transport to their destinations. With this facility, traders will not have to pay the $1,000 as container deposits, which will subsequently reduce the cost of doing business. The Kenya Revenue Authority estimates that the transit shade is expected to serve about 7, 500 small traders in Nairobi and its environs and yield about Sh100 million in taxes every month. An additional shade is expected to be constructed to boost its capacity from the current 100-40 foot containers a month to about 300 containers in the post-Covid period and increase its tax yield to Sh1 billion. DR CONGO reported half-year SinoCongolese trade results had increased by 8.2% compared to the same time last year, to $3.11 billion. The DRC is somewhat exceptional though as it's one of the only countries in Africa that has a trade surplus with China, currently $1.52 billion.
