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South Africa ships prepaid meters and mining products under AfCFTA (City Press)
South Africa has exported four shipments of prepaid electricity meters, household appliances, and mining products for ore milling to other African countries since the end of January under the African Continental Free Trade Agreement (AfCFTA), which aims to promote intra-continental trade. The Department of Trade, Industry and Competition states that the goods were exported to Kenya and Ghana, and it is awaiting confirmation from more businesses that want to export to take advantage of the benefits under the AfCFTA.
SA’s agricultural trade surplus rockets, surpasses $3b in Q1 (Food For Mzansi)
South Africa’s agricultural sector has demonstrated robust performance in the first quarter of 2024, with recent trade data revealing a substantial trade surplus, driven by a surge in exports. Wandile Sihlobo, chief economist at Agbiz, highlighted that the sector recorded a trade surplus of $1.4 billion, marking a notable 20% increase from the same period last year.
He underscored the pivotal role of efficient logistics in maintaining this growth trajectory. “Efficient logistics are the lifeblood of SA agriculture and other exporting sectors of the economy,” he said, stressing the need for ongoing collaboration between Transnet, organised business, and agricultural stakeholders to enhance port efficiencies. He referenced challenges faced by the deciduous fruit industry earlier in the year at the Port of Cape Town, affirming the necessity for continuous improvement.
Probably more diamond industry uncertainty now than at any other point (Engineering News)
While the diamond sector probably has more uncertainty now than at any other point, participants also probably have a bigger opportunity than ever to shape what the future will look like. “One thing’s for sure, the way the industry has operated over the last decade is not going to be the way it operates in the next decade.
“It’s going to require quite a lot of close analysis and assessment and strategy to chart the industry into a new era,” Gemdax co-founder and partner Anish Aggarwal emphasised in a Zoom interview with Mining Weekly.
Structural issues need to be addressed, alternative business models are under consideration, major contemplation is being devoted to future marketing, eyes are on what will become of De Beers, a trophy South Africa-grown asset now being guided into new ownership, the rough diamond sales model is coming under new evaluation, and midnight oil is being burnt on how more value can be extracted and how more upside can be created.
Nigeria’s free trade fruit rots on the vine (Businessday NG)
Nigeria is not making the most of opportunities to earn scarce dollars by tapping free trade agreements to which it is a signatory, falling behind regional peers who are seizing the chance to boost non-oil exports.
After 24 years of the African Growth And Opportunity Act (AGOA) which allows over 6,000 products to be exported to the US, duty-free, till 2025, Nigeria is yet to raise its export substantially to the world’s biggest economy. Nigeria’s export was mainly dominated by crude oil and its non-exports have remained stagnant, primarily comprising a few agricultural products and handicrafts.
Obiora Madu, an export consultant and the director-general of the African Centre for Supply said Nigeria’s failure to maximise free trade benefits is based on its non-export culture and capacity. Read also: US Mission in Nigeria is particular about the future of Africa trade – Julie Le Blanc “We have failed to utilise our free trade agreements to grow our non-oil exports because we have never been intentional and have no export culture,” he said. Madu stressed the need for the government to build an export culture and capacity needed to boost non-oil exports and harness opportunities in its free trade agreements.
WTO to support Uganda on AfCFTA to work better (New Vision)
The Minister of Foreign Affairs Jeje Odongo has held a bilateral meeting on with Dr Ngozi Ikonjo-Iweala Director-General of the World Trade Organization at the WTO Headquarters in Geneva. Odongo was accompanied to the meeting by the Permanent Representative of Uganda to the UN in Geneva, Amb. Marcel Tibaleka and officials of the Mission.
Inquiring about opportunities for WTO to support the African Continental Free Trade Area (AfCFTA), Odongo said that Uganda believes it presents one of the greatest opportunities for impactful technical cooperation with Africa, and asked what more the WTO could do to support the AfCFTA and regional economic integration in general.
On her part, Dr. Ngozi emphasized the importance of diversifying the economy to make the AfCFTA work better because trade within the continent is just 15% and external trade is just 3%. She noted that Uganda was on the road to starting producing fossil fuels but said there were also opportunities in renewable energy such as green hydrogen.
IFAD, FlexiPay campaign eases remittances to Uganda (The Independent)
Ahead of the International Day of Family Remittances on Sunday, the UN’s International Fund for Agriculture Development (IFAD) has launched a new program to ensure easier transmission of money from other countries into Uganda. In a partnership with FlexiPay, a digital payment platform of Stanbic Bank, and regional remittances operator, Upesi Money Transfer, aims to enable customers to send and receive money from abroad with ease
In its recent reports, the World Bank indicates that Uganda registers about 1.43 billion dollars (5.32 trillion Ugandan Shillings) annually from the estimated 2 million Ugandans working abroad.
According to David Berno, Remittances and Inclusive Digital Finance Officer at IFAD, remittances play a crucial role in reducing poverty and enhancing food security in developing countries. He said that they joined the campaign to facilitate remittances because money remittances enable families to meet their basic needs, such as food, shelter, and education, and can also contribute to local economic growth through increased consumption and investment.
Ministry Looks To Excise Stamps To Boost Tax Revenue, Curb Illicit Trade (The Reporter Ethiopia)
Officials at the Ministry of Finance have introduced a new excise stamp management directive in a bid to combat illicit trade and enhance tax collection. The directive mandates the use of digital or physical excise stamps on a range of goods, including alcoholic beverages, tobacco products, and bottled water, as officials look to ensure proper tax compliance. They hope to create a robust excise assurance system that will facilitate the enforcement of excise tax laws, enhance transparency and accountability, and track and trace the production and distribution of excisable goods.
The Ministry is hoping that the implementation of excise stamps will contribute to the proper collection of excise tax and prevent illicit trade. According to the directive, excise stamps must be affixed to compounded spirits, alcoholic and non-alcoholic beer, wines, fortified wines, ready-to-drink alcoholic products, cigarettes, tobacco products, bottled water, and non-alcoholic, carbonated beverages, including sugar-sweetened beverages, with the mandate to retain the right to specify additional goods requiring excise stamps in the future.
The directive outlines specific requirements for excise stamps including the incorporation of a Unique Identifier (UI) to deter counterfeiting, facilitating the tracking of stamps and excisable goods along the supply chain, and enabling the verification of stamp authenticity. “The stamps must comply with the ISO/IEC 15459-2:2015 standard and should be designed to allow the recording of movements of excisable goods throughout the supply chain,” it reads.
Sea freight charges up 500pc on delays, longer routes (The East African)
An acute container shortage in China is driving global freight charges high, prompted by ships taking the longer route around the Cape of Good Hope instead of the Suez Canal, where Yemeni fighters, Houthi, have disrupted marine transport. Traders in Kenya have raised concerns over the sharp increase in sea freight charges, paying some shipping lines Ksh1,113,500 ($8,500) for a 40ft container from China to Kenya, from Ksh222,700 ($1,700) in April – a 500 percent rise.
Shippers Council of Eastern Africa acting Chief Executive Officer Agayo Ogambi warned of serious cargo supply disruption: “Ocean carriers are skipping ports or decreasing their time at port and not picking up empty containers, in an effort to keep vessels on track for delivery.” This has affected Kenyan exports, with tea and coffee piling up at warehouses. Exporters in Mombasa say about a quarter is held up due to delays in shipping schedules for 2-3 weeks due to longer routes.
“Ship turnaround time has remained a challenge as some shipping agents with contracts with tea exporters have either delayed picking up tea at the Mombasa port or suspended their trips. This has seen the volumes of the tea exported to Russia and neighbouring countries such as Kazakhstan, Kyrgyzstan, Uzbekistan and Azerbaijan significantly dwindle,” East African Trade Association managing director George Omuga said.
China loans delay plunges Eacop partners in crisis (The East African)
More than a year since Chinese financiers and the developers of the East African Crude Oil Pipeline (Eacop) entered negotiations to bankroll the project’s debt, a massive hole remains in the financing structure as the loans amounting to about $3 billion are not imminent, forcing shareholders into emergency measures to raise additional equity funding.
TotalEnergies executives said last month that the project’s physical works were at 33 percent, as at the end of April. Thermally insulating the line pipes, stringing and laying of line pipes, and building pump stations, are all to be done before the first oil target late next year.
With the $2 billion equity funds raised by Eacop shareholders depleted, the project developers are faced with a cash crisis to plug the funding gap, which threatens to see ongoing physical works on the project stall by July 1, officials said.
High taxes and debt threaten EA growth (Nation)
East Africa’s finance ministers on Thursday tabled a raft of measures for expanded expenditure plans for the 2024/2025 fiscal year with a keen eye on debt repayment and reliance on domestic revenues to run government operations. These measures effectively set the stage for increased taxation, which will potentially choke economic growth in the region.
East Africa’s economic growth is projected to pick up from 3.5 percent in 2023 to 5.1 percent in 2024 and 5.7 percent in 2025, according to the African Development Bank, buoyed by infrastructure development and increased regional trade. But tax experts and industry players warn that the heavy taxation policies will hurt household and business spending and stifle the projected economic growth rates.
In their budget speeches, the region’s finance ministers allocated substantial amounts to key sectors of the economy -- roads and rail infrastructure, energy, health, security, education and agriculture -- to help sustain fragile economies weighed down by domestic and global shocks.
Download the Budget Speeches delivered on 13 June 2024:
Northern Corridor truckers mull shift to Dar over tax (The East African)
The cost of transporting cargo on the Northern Corridor is set to increase in the next financial year if Kenya’s proposed motor vehicle tax of 2.5 percent of the vehicle’s value is implemented. Vehicle owners will be required to pay tax on each vehicle at the time of issuance of insurance cover with a minimum of $39 (Ksh5,000) without a cap, based on make, model, engine capacity and year of manufacture. Already, key Mombasa port users have raised concerns over the tax, and are mulling seeking cheaper services in the neighbouring countries.
“We gave our recommendations on the Finance Bill but we were shocked to see the motor vehicle tax not scrapped. I will not pay the tax, so I am planning to relocate to Tanzania,” said Hussein Abdi, a truck owner. Transporters, shippers and clearing and forwarding agents also said they will seek shipping services in Tanzania, which is considered more business-friendly. The port users argue that the Dar es Salaam port charges less than two percent import declaration levy and traders are exempted from transport charges, which have been introduced in Kenya.
The Shippers Council of Eastern Africa (SCEA) and Kenya Transporters Association (KTA) said the increase of Import Declaration Fees (IDF) and proposed 2.5 percent circulation tax on vehicle value would lead to reduced competitiveness of Kenyan exports. Transporters using the Northern Corridor have been bearing high costs.
Burkina Faso: IMF Executive Board Concludes 2024 Article IV Consultation (IMF)
Burkina Faso faces multiple development challenges, including heightened security conditions, climate change, and food insecurity. This complicates efforts to combat food insecurity and forced displacement, while also disrupting economic activity, especially in the agriculture, livestock, and mining sectors. Following a modest GDP recovery of 3.6 percent in 2023, up from 1.8 percent in 2022, growth is projected to accelerate to 5.5 percent in 2024, buoyed by the expectation of improvements in the security situation. However, medium-term growth remains below potential.
In January 2024 the authorities decided to exit the Economic Community of West African States (ECOWAS) but reaffirmed their commitment to their membership in the West African Economic and Monetary Union (WAEMU), which should help support domestic and regional economic stability. The authorities are also committed to a capacity development agenda supported by the IMF and other partners to further enhance fiscal governance and transparency.
Federal Republic of Somalia reaffirms commitment to East African Community integration (EAC)
The Federal Republic of Somalia has reaffirmed its commitment to integrating into the East African Community (EAC), demonstrating strong participation in a pivotal regional meeting currently underway in Nairobi, Kenya. The one-week meeting, attended by EAC Partner State delegates, aims to develop a comprehensive roadmap for Somalia’s integration into the EAC.
Speaking during the opening ceremony, the EAC Secretary General, Ms. Veronica Mueni Nduva, highlighted the historical context and importance of the roadmap for Somalia’s integration into the bloc. “The Federal Republic of Somalia became a full member of the EAC in March 2024, after officially depositing her instrument of ratification of the Treaty of Accession with the EAC Secretary General in Arusha, Tanzania. Today’s meeting signifies a critical milestone in this journey, aligning Somalia’s national processes with regional frameworks to ensure comprehensive integration,” she said.
His Excellency João Manuel Gonçalves Lourenço, President of the Republic of Angola and Chairperson of the Southern African Development Community (SADC) has acknowledged the SADC’s remarkable achievements and called for sustained progress towards the realisation of a strong, industrialised and fully integrated SADC.
To accelerate regional integration, the SADC Chairperson emphasised the need to streamline procedures to ensure the smooth functioning of the SADC Free Trade Area (FTA) with the view to increase intra-regional trade and achieve economic development of the region.
On infrastructure development in support of regional integration, the SADC Chairperson called for the development of robust infrastructure and improvement of already existing infrastructure to allow the interconnectedness among SADC Member States for them to derive the full benefits of regional integration and shared prosperity. He cited the signing of the Lobito Corridor by the Governments of Angola, Democratic Republic of Congo and Zambia as a classic example of cooperation among SADC Member States to facilitate the movement of goods to increase trade and boost economies of the three countries.
Economic Barometer for the Central African Economic and Monetary Community (World Bank)
Growth in the CEMAC region decelerated to 1.7% in 2023, down from 3.1% in 2022, due to a significant decline in oil activity in Equatorial Guinea and lower growth in Gabon, as transport disruptions affected mining and wood production in the country. Conversely, economic activities in the other CEMAC countries expanded, driven by higher oil production and investment in Chad, the non-hydrocarbon sector in Congo, services, manufacturing and agriculture sectors in Cameroon, and higher production of gold and timber and sawn wood production in the Central African Republic.
Lower global oil prices had negative impacts for CEMAC’s trade, fiscal position, and regional reserves, which all deteriorated in 2023. At the same time, public spending increased in most CEMAC countries, reducing the fiscal space and imposing challenges to contain the public debt. Total debt-to-GDP ratio stands above the CEMAC target debt ceiling of 70.0% of GDP in the Republic of Congo and Gabon.
ECCAS and ECA are delving a strengthened partnership around the development of regional value chains (UNECA)
Economic Community of Central African States (ECCAS) Commission Chairperson, Ambassador Gilberto Verissimo, paid a courtesy call to ECA’s Sub-Regional Office for Central Africa in Yaounde, on the sidelines of his participation in the 6th COPIL/CER-AC Council of Ministers Meeting held in Yaoundé, Cameroon, from June 06 to 07, 2024
The rich discussions resulted to critical areas of collaboration with a view to deepening economic integration in Central Africa. It was emphasized that the promotion of industry should play a central role in efforts to regionalize economies. This involves the local transformation of the resources and raw materials with which the 11 economies of the sub-region are richly endowed, the priority value chains being timber, mining, agro-industry and oil-gas. This ambition is in line with the aspirations set out in the Douala Consensus, which the entire subregion adopted in September 2017.
“Central Africa has made commitment for economic diversification, and for us, as for all the endorsers including ECCAS, the Douala Consensus remains the roadmap. Together with ECCAS, we advocate that the transformation of raw materials through regional value chains will crystallize our integration efforts, because without local manufactured products, there can be no real intra-regional trade”, said Jean Luc Mastaki, Director of the ECA Sub-Regional Office.
More than 130 African ministers and experts have virtually convened from June 11 to 13, 2024 for the 2nd Extraordinary session of the Specialized Technical Committee on Communication and ICT to ignite digital transformation across the continent amidst rapid evolutions in the sector fuelled by artificial intelligence (AI) technology and applications. African ICT and Communications Ministers unanimously endorsed landmark Continental Artificial Intelligence (AI) Strategy and African Digital Compact to accelerate Africa’s digital transformation by unlocking the potential of the new digital technologies.
At the opening of the ministerial session, African Union Commissioner for Infrastructure and Energy Dr. Amani Abou-Zeid stated that Africa is resolved to harness new technologies for the well-being of Africans and to develop a Continent-wide approach and a harmonised journey for this revolutionary technology to tackle Africa’s complex and most pressing challenges while minimizing the risks. “For us Africans, Artificial Intelligence presents tremendous opportunities. It is a driving force for positive transformational positive change as well as economic growth and social progress,” said Dr. Abou-Zeid.
The Continental AI Strategy provides guidance to African countries to harness artificial intelligence to meet Africa’s development aspirations and the well-being of its people, while promoting ethical use, minimising potential risks, and leveraging opportunities. Identifying key priorities and actions to ensure that Africa fully benefits from the huge opportunities AI offers, the strategy calls for Africa-owned, people-centered, development-oriented, and inclusive approach to accelerate African countries’ AI capabilities in infrastructure, talent, datasets, innovation, and partnerships while also ensuring adequate safeguards and protection from threats.
16th U.S-Africa business summit: TGI Group advocates sustainable agricultural development (The Guardian Nigeria)
The TGI Group has reiterated its commitment to sustainable agricultural development to boost the sector in the country. The company gave the assurance at the 16th U.S.-Africa Business Summit, attended by over 1,500 public and private sector executives from across continents, where it emphasised its strategic collaborations for sustainable success in various sectors, including agriculture.
The Executive Director and Executive Vice Chairman (Africa) of TGI Group, Farouk Gumel, who participated as a panelist during a session themed: ‘From Food Insecurity to Thriving Agribusinesses: The Case for a U.S. Africa Strategic Agribusiness Partnership,’ emphasised the firm’s comprehensive approach, and company’s involvement in the entire value chain, from the seed to the final consumer.
In a panel session themed: ‘Future of U.S – Africa and Trade Investment: AGOA and beyond,’ Gumel further called for an upgrade of the African Growth and Opportunity Act (AGOA) and fairness in free trade in Africa. He said: “Since the AGOA legislation was renewed almost a decade ago, the dynamics of global trade has changed. The uniqueness of no duty in exporting to the U.S no longer exist because other big players like China, India and the U.A.E. have come into Africa offering the same benefits if not better than what we get from AGOA. To upgrade AGOA, there is a need to see what the other players are doing to make export seamless.”
Four Key Moments: Hearing on the Future of Trade with Sub-Saharan Africa, Haiti, and Other Nations (House Committee on Ways and Means)
Ahead of the 2025 expiration of the African Growth and Opportunity Act (AGOA) trade preference program, the Ways and Means Trade Subcommittee considered potential reforms to help the program better meet the interests of the United States, primarily expanding fair market access for U.S. farmers, and combatting China and Russia’s aggression on the African continent.
Witnesses at the Trade Subcommittee hearing urged the Committee to consider reforms to meet key goals, such as resuming the Trump Administration’s free trade agreement negotiations with Kenya, addressing rules governing when countries become ineligible for AGOA based on per-capita income, and securing U.S. supply chains.
AGOA provides national security and economic benefits to Americans, particularly as China and Russia seek to challenge America’s global leadership. Ways and Means Committee Chairman Jason Smith (MO-08) noted the program’s looming expiration offers a unique opportunity to reform the program to provide more direct benefit to American farmers, workers, consumers, and businesses.
Chairman Smith: ”The AGOA program has a successful track record of encouraging economic development in sub-Saharan Africa and greater access for U.S. agriculture products in that region – something I’ve watched closely over the years having attended an AGOA forum in Gabon back in 2015. Under the program, American taxpayers have invested over $8 billion in trade-related activities in Africa over the past 20-plus years. Reauthorizing AGOA will ensure American taxpayers get a positive return on their investment. It will also strengthen our economic relationship by making sure access to African markets for American exports, especially agriculture, is fair and our trade relationships benefit American workers, farmers, and businesses.”
Annual conference calls for enhanced Africa-Caribbean trade links (Antigua Observer)
The 31st African Export-Import Bank’s (Afreximbank) annual meeting brought together more than 3,000 delegates from across the globe, including Caricom heads of state and presidents of several African countries. The main focus of the gathering – held in Nassau, Bahamas – was to boost and streamline Africa-Caribbean trade. Under the theme “Owning our Destiny: Economic Prosperity on the Platform of Global Africa”, the conference aimed to strengthen economic ties between Africa and the Caribbean. The African diaspora is considered the sixth region of the African Union.
In his opening remarks, John Rolle, Governor of the Central Bank of the Bahamas, urged participants to seize the opportunities for learning, sharing, and networking. He particularly highlighted the potential benefits for the Caribbean in adopting the Pan African Payment and Settlement System (PAPSS) from Africa and expressed his belief that with support from Afreximbank, central banks across Caricom can work towards implementing a similar system.
Following the opening ceremony, a session on “Building Resilience in an Era of Globalisation” featured a keynote address from Dr Roger Ferguson, former Vice Chair of the Federal Reserve. Dr Ferguson stressed the importance of developing adaptable systems to respond to challenges and warned against the risks of inflexibility in the face of shocks.
Moreover, the day witnessed a significant moment as actress Viola Davis signed a memorandum of intent with Afreximbank and the Fund for Export Development in Africa to establish an African film development value chain. She emphasised the power of storytelling in reshaping the African narrative and stressed the importance for Africans to take ownership of their narrative.
See also: Achonu, Denya, others speak on Africa’s economic growth (The Sun Nigeria)
Next steps for the WTO in combating illicit trade (WTO Blog)
Illicit trade harms societies and impedes economic growth and development. As well as undermining legitimate business activity, it fosters corruption and denies governments potential tax revenue needed to invest in society. This is why the WTO Secretariat, under the leadership of Director-General Ngozi Okonjo-Iweala, has been examining how WTO rules help members to address some of the challenges posed by such trade.
In a recent publication on fighting illicit trade in medical products, DG Okonjo-Iweala emphasized that wider efforts are needed to deepen international cooperation and to provide the technical assistance needed to strengthen members’ capacity to combat illicit trade.
Building on this work, the WTO Secretariat has launched a new publication on illicit trade in food and food fraud to address the role the WTO could play in helping to tackle this issue. The publication draws on the expertise of a diverse range of organizations, including the Food and Agriculture Organization of the United Nations (FAO), the International Seed Federation (ISF), SSAFE — a non-profit organization for food safety, the Transnational Alliance to Combat Illicit Trade (TRACIT) and the United Nations Interregional Crime and Justice Research Institute (UNICRI), to examine this issue from various perspectives and to highlight strategies for tackling illicit trade in food and food fraud.
UN Secretary-General António Guterres opened the UN Trade and Development (UNCTAD) Global Leaders Forum, marking the 60th anniversary of the organization. Under the theme “Charting a new development course in a changing world,” over 1,100 participants from 152 countries convened in Geneva for the three-day forum. The event aimed to shape a vision for inclusive prosperity amidst global crises, trade disruptions, mounting debt burdens and the severe impact of climate change on developing countries. Support and recognition came from the leaders of countries reflecting the diversity of the Global South.
UN Trade and Development Secretary-General Rebeca Grynspan highlighted that many of the world’s poorest populations remain vulnerable to economic instability, environmental degradation and growing debt burdens. She voiced the organization’s commitment to supporting developing economies through an open and fair multilateral trading system. Ms. Grynspan emphasized the need to renew trust by amplifying the voices of developing countries.
Analysts examined disrupted global supply chains amidst escalating geopolitical tensions and the persistent asymmetry of the global economy in the digital age. They also explored cascading crises, sustainable industrial policies and the need to revitalize falling foreign direct investment. The consensus was that industrial policies and structural changes should occur in a socially inclusive and sustainable manner to ensure social stability and protect populations of developing countries.
See also: Leading economists take centre stage at UNCTAD’s 60th anniversary (UNCTAD)
Quick links
Africa’s tragedy of displacement rises highest in two-decade period (The East African)
Trade Can Resume Its Role As Driver Of Poverty Reduction (The Reporter Ethiopia)
Africans must own the logistics and shipping space - Executive Chair of McDan Group (MyJoyOnline)
Former Minister of Commerce to Address WTO’s 9th Global Review of Aid for Trade (Liberian Observer)
