Business in Africa

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Kenya's flower exporters are enjoying a good year, despite problems caused by the restrictions imposed to contain the spread of coronavirus.

The value of exports like cut flowers reached $1.1bn (£845m) between January and October, almost 9% more than the same period last year.

Kenya's Horticultural Directorate said there was an increase in global demand, despite concerns that the coronavirus pandemic would hit the industry.

Earlier this year the industry was alarmed at disruption caused by airlines being grounded and so unable to fly flowers as cargo to customers in Europe.

Business may have picked up recently but the sector is now growing concerned that the second wave of Covid-19 in Europe is creating uncertainty about demand for flower exports in the coming months.

Alongside exports of tea, horticulture is a major earner of foreign exchange for Kenya, which is the world's fourth biggest exporter of flowers - after the Netherlands, Colombia and Ecuador.

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A pan-Africa free-trade zone will be launched in January despite the coronavirus pandemic, although some temporary arrangements will need to be put in place, as not all of the customs infrastructure will be ready in time.

The African Continental Free Trade Area aims to bring more than a billion people together in an economic bloc worth about $3tn (£2.3tn) a year and - by reducing barriers to trade - improve living standards.

The continent-wide free-trade zone was supposed to take effect in July, but according to its secretariat, that will happen on 1 January 2021, even if it means creating a system to credit traders retroactively for lower customs duties, which should start immediately.

This week, negotiations resumed between countries to deal with final sticking points around rules of origin and market access.

However the revised January launch date may be optimistic given that 30 of the 54 countries that have signed up for the free-trade zone have yet to ratify the deal.

Africa's biggest economy, Nigeria, ratified it last week, but the country's borders remain closed to nearly all trade, amid efforts to stop smuggling.

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The election of a new US president gives countries in Africa a chance to press the reset button on economic ties with the United States, according to Stephen Hayes, a former president of the Corporate Council on Africa, a body in Washington DC that encourages American businesses to invest in the continent.

He thinks that Joe Biden will adopt a new approach and breathe new life into US-Africa relations.

“I think there’ll be an upgrading and far more activity towards Africa, because people who come in are far more highly attuned to Africa than anyone was in the Trump administration,” he told me.

But what about countering China’s economic influence in Africa?

“I don’t anticipate Biden making it China versus US, but making it a stronger relationship between the US and Africa on business and politics.

“I think the opportunities are going to be strong in health, certainly agriculture, those are areas where we can play a role and information technology also.”

Observers of global trade will know that many countries in Africa have enjoyed the benefits of the Agoa deal, which gives their exports preferential access to the US market.

The trade agreement is due to expire in 2025 and Mr Hayes agrees with my view that Washington has been allowing the accord to wither on the vine, highlighted by President Trump’s policy of seeking individual trade deals with certain countries, like Kenya.

“If Africa is moving towards a continental free-trade agreement,” says Mr Hayes, “then we’ll probably move to multi-lateral agreements as well.

"A clean slate is needed and that will be welcomed by most African countries.”

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