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tralac Daily News
TotalEnergies plans to exit South African offshore gas finds (Engineering News)
TotalEnergies plans to exit its discoveries of gas-condensate off the tip of South Africa to prioritize exploration in other areas closer to Namibia, according to people familiar with the matter. The French giant braved one of the fastest ocean currents in the world to drill off South Africa’s coast, spending at least $400 million to find an estimated 1 billion barrels equivalent of light liquid hydrocarbon at the Brulpadda field in 2019. It had further success at the Luiperd well the following year, but neither discovery has progressed to development.
Uganda locks out Kenyan firms in oil transport deal (The East African)
Uganda will use Kipevu Oil Terminal 2 and the Kenya Pipeline Corporation infrastructure to ferry petroleum products from Mombasa to Kampala. According to the Uganda National Oil Corporation (Unoc), no Kenyan oil marketing company will be involved in the Unoc-Vitol Bahrain deal that target to lower pump prices below the current rates offered by dealers in Kenya.
Next week, Uganda will receive the first two vessels at the port of Mombasa; Navig8 Matines on 2nd July 2024, carrying 58,000 metric tonnes (MT) of petrol and MT Sinbad will dock on 3rd July 2024, carrying 65,000MT of diesel.
According to the Sale and Purchase Agreement (SPA) seen by The EastAfrican, Uganda chose Kenya over Tanzania due to its investment at the port and proximity. On whether Uganda will handle any consignment from foreign OMCs it said, “Unoc is mandated to only transact with Ugandan OMCs and shall therefore not be able to, say, invoice a foreign entity. We have made provision for the Ugandan OMC to process the Products payment through an affiliated entity who will be required to undergo clearance through the know your customer (KYC) document.”
CPPE Tasks FG on Protection of Local Industries Against Liberal Trade Policy (This Day Live)
The Centre for the Promotion of Private Enterprise [CPPE] has tasked the federal government on the need to arrest the deindustrialization of Nigerian economy by ensuring that local industries are protected from liberal trade policies. In a statement, the CPPE commended the federal government’s application of fiscal policy measures to boost productivity of the Nigerian pharmaceutical manufacturing industries.
The Chief Executive Officer of CPPE, Dr. Muda Yusuf, who argued in the press statement that the country’s economy could not afford to submit to a regime of complete trade liberalisation in the light of the challenges faced by domestic manufacturers. Yusuf said: “Fiscal policy measures have proven to be more impactful on real sector performance than monetary policy.
“The real sector of the economy deserves to be effectively protected and incentivised to improve production and ensure sustainability investments in that space. The Nigeria economy cannot afford to submit to a regime of complete trade liberalisation in the light of the challenges faced by domestic manufacturers.
“We need to stem the tide of deindustrialisation of the Nigerian economy, the exit of foreign direct investors and the rising mortality rate of domestic industries. We believe that stepping up fiscal policy interventions would facilitate the realisation of this objective. But we must be ready to trade off some revenue in the short term.
According to him, “the recent Executive Order removing import duties, VAT, excise duty on pharmaceutical raw materials, intermediate products, medical diagnostic equipment and machineries,” was a commendable development.
Kenya Expands Global Tea Reach with New Trade Centres (Business Day Africa)
Kenya is establishing international buying centres for its teas in various overseas markets to expand the reach of its commodity and diversify its export destinations. The East African nation has launched the China-Kenya Tea Trade Centre in Fujian province to facilitate the distribution of Kenyan tea in China. A buying centre is also being set up in the United Arab Emirates to serve Middle Eastern countries. Additionally, plans are underway to establish warehousing facilities for value-added tea in countries like Ghana and the Democratic Republic of Congo.
Last week, President William Ruto launched Chai Gold, an international trademark for trading Kenyan tea abroad. The first market to benefit from this initiative will be China, with one million bags of tea to be shipped by the end of this month. Tea is a crucial foreign exchange earner for Kenya, which is the world’s top exporter of black tea and hosts the second-largest tea auction in Mombasa. Earnings soared to Ksh180.5 billion ($1.27 billion) in the review period, a significant increase from the previous year’s Ksh138 billion.
To reduce dependence on major buyers, who currently account for 85% of total export volumes, the Tea Board of Kenya (TBK) is actively exploring new markets to diversify revenue sources for this key commodity.
Tanzania zooms ahead with new electric trains, express service (The East African)
Tanzania has taken a major leap forward in its railway modernisation efforts with the arrival of two new electric multiple-unit (EMU) trains from South Korea. The trains boast eight carriages each and will be deployed on the new standard gauge railway route connecting the commercial hub Dar es Salaam and the capital Dodoma. The service is scheduled to begin on July 25.
An express train is set to be launched on Friday between Dar and Morogoro, easing the travel time from four hours by bus to just one hour 40 minutes. The express train will leave Dar at 6 am and return at 7.10 pm. From Morogoro, the train will depart at 6.20 am and return at 7.30 pm. The trains bring to four daily SGR trips on the route.
Ethiopia and Djibouti will boost the EAC (The Observer)
The East African Community (EAC) is considering the admission of Ethiopia and Djibouti into the bloc. This comes on the heels of Somalia joining the bloc, an indicator that regional leaders view the integration expansion as one of the strengths that the region can leverage on.
The admission of Ethiopia and Djibouti could potentially unlock new opportunities for economic growth and cooperation, positioning the bloc as a more influential player on the African continent. However, the likely accession of the dual could bring new challenges and opportunities to the EAC.
Over the past few years, the EAC economy has experienced an average growth rate of over five per cent, positioning it among the fastest-growing regions in sub-Saharan Africa. Its enormous potential for economic and industrial growth can be attributed to the presence of a good business environment, and deeper trade among member states. The move to integrate the Horn of Africa into the EAC bloc will create a broader market of nearly 800 million people. This could deepen regional integration, enhance market access, and stimulate intra-regional trade, given their strategic location in the Horn of Africa.
Furthermore, their participation could bolster infrastructure development, spur investment opportunities, and promote cross-border cooperation in areas such as energy, transportation and telecommunications. Uganda stands to benefit significantly from the potential accession of Ethiopia and Djibouti to the EAC.
Africa’s exports decline by 5% as global trade nears $32 trillion (The Guardian Nigeria)
The United Nations Trade and Development (UNCTAD), yesterday, said global trade was on the way to recovery, and might hit $32 trillion before the end of 2024 as the first half of the year showed positive results. It, however, said the development in Africa remained pessimistic as the continent’s exports decreased by five per cent amidst stagnated growth in Europe.
UNCTAD in an update on trade yesterday, noted that the positive trade dynamics for the United States and developing countries, particularly large Asian developing economies, was responsible for the growth. The trade growth added approximately $250 billion to goods trade and $100 billion to services trade in the first half of 2024 compared to the second half of 2023.
The report noted that trade in developing countries and South-South trade increased by about two per cent in both imports and exports during the first quarter. In comparison, the report noted that developed countries saw flat imports and a modest per cent rise in exports. “Every year, however, South-South trade fell by five per cent when comparing the first quarter of 2023 to the first quarter of 2024. Trade growth varied significantly across sectors, with green energy and AI-related products experiencing stronger increases,” the report said.
ECOWAS mulls ‘special summit’ for regional integration (Premium Times Nigeria)
The President of the Economic Community of West African States (ECOWAS), Omar Touray, says the bloc is planning a special summit on the future of regional integration to address the subregion’s multifaceted challenges. Mr Touray announced this at the 52nd Ordinary Session of ECOWAS Mediation and Security Council (MSC) on Wednesday in Abuja. He said the summit was necessitated by the challenges of development and the rapidly changing geo-strategic and geo-political environment, which complicate regional cohesion and integration processes.
“As we commemorate the 49th anniversary of our collective regional integration project, our region is still confronted with multiple interlocking threats, including existential ones, posing significant challenges. “The Sahel faces climate and man-made crises, leading to terrorism and violent extremism, while the Gulf of Guinea faces illegal fishing, drug trafficking, and dumping of toxic waste; thus, affecting livelihoods. “Governance deficits and marginalization have strained social contracts, engendering bitter political rivalries, resource competition, organised crime and violence.
tralac on the heel of Africa’s Agenda 2063 with new guide (Namibia Economiict)
tralac (Trade Law Centre), a public benefit organisation based in South Africa has developed a technical guide to Africa’s transformation through the African Continental Free Trade Area, or AfCFTA for short. Update in May this year, the guide focuses on the architecture of the AfCFTA agreement and what it covers. This edition includes an update on the Guided Trade Initiative as well as tariff negotiations for trade in goods, rules of origin, trade in services, Phase II and Phase III negotiations, dispute settlement, institutions, committees and other AfCFTA initiatives.
It also covers AfCFTA as a framework for Africa’s industrialisation, focussing on areas such as the expertise required and capacity generation in trade governance across Africa.
“For the AfCFTA to be a facilitator of trade-driven industrialisation it has to meaningfully impact tariff and non-tariff barriers and so improve intra-African market access. Logistics and border challenges must also be resolved.” Adding to that statement, it advocates for value-chain driven industrialisation, where the production chain stretches across several countries, permitting specialisation and the development of country and regional competencies and competitiveness in designated industrial sectors.
Africa is set to benefit from improved customs technologies to boost intra-African trade. The African Development Bank and the Korea Customs Service (KCS) have signed an Aide Memoire on Facilitation of Customs Reforms and Modernisation that will tap Korean customs expertise and systems to enhance Africa’s trade processes, potentially increasing intra-continental commerce and supporting regional integration efforts.
Through the Aide Memoire, the collaboration aims to promote trade facilitation among Bank Group Regional Member Countries by supporting customs reforms and modernisation, focusing on transparent operations and enhanced border management to increase revenues.
Key areas of cooperation include capacity-building and technical assistance for Customs modernisation, national and regional seminars on electronic clearance systems, site visits for African Customs officers to experience KCS’s digitalisation efforts, technical support for establishing electronic clearance and origin management systems in Africa, collaboration on trade and transport facilitation along African corridors and border posts, dissemination of best practices on trade facilitation, and joint studies on Customs modernisation policies for Regional Economic Communities in Africa.
Commonwealth, UNCTAD and Partners Advocates for Strategic Trade Reforms to Empower Least Developed Countries (The Commonwealth)
Last week, the Commonwealth Secretariat, The United Nations Conference on Trade and Development (UNCTAD), and the Permanent Mission of Nepal in Geneva co-organised a session at the World Trade Organisation’s (WTO) 9th Global Review of the ‘Aid for Trade’ initiative.
The event focused on strategic approaches in three areas. First was addressing LDCs’ unique and complex vulnerabilities through targeted support that helps position trade as a driver of growth, structural transformation and sustainable development in LDCs. Second was enhancing productive capacities in LDCs to provide a foundation to diversify their economies and exports, ensuring they are better positioned to deal with potential trade-related challenges before and after graduation. The third focus was on effective support for LDCs transitioning out of the LDC category, ensuring a smooth and sustainable graduation. This includes granting flexibility, transition periods, and assistance in capacity-building and institutional arrangements to maintain development momentum.
Mr Paul Akiwumi, Director, Division for Africa, LDCs and Special Programmes at UNCTAD noted that the old commodity-dependent development model has not worked for LDCs and called for more targeted policies and strategies to build diversified productive capacity, including through gap assessments.
Revisit rulebook on food and agriculture, DG Okonjo-Iweala urges workshop participants (WTO)
WTO Director-General Ngozi Okonjo-Iweala on 2 July urged members to revisit the organization’s rulebook on food and agriculture. She made her remarks at a two-day workshop for members and external experts dedicated to examining contemporary challenges in the agriculture sector in the context of WTO negotiations.
“There is an urgent need to ensure that trade in food and agriculture contributes to ensuring everyone can access sufficient, safe, and nutritious food at all times,” the DG said in her opening remarks to participants. While the Agreement on Agriculture has underpinned five-fold growth in agricultural trade since the start of the century, the challenges facing the sector have evolved significantly, she said.
Agricultural markets remain highly distorted, while UN figures indicate that around 9 per cent of the world's population faced hunger in 2022 — with climate change among the factors that are exacerbating existing challenges. Policy-makers need to rethink how existing policy frameworks affect the sustainable management of land and water resources, the DG said.
Aid for Trade session addresses Comoros’ and Timor-Leste’s post-accession strategies (WTO)
At the 9th Global Review of Aid for Trade on 26 June, representatives from Comoros and Timor-Leste outlined strategies for the implementation of their WTO accession commitments and preparation for WTO membership. The two least developed countries (LDCs) also underlined the need for technical assistance and capacity building support from WTO members and development partners to achieve their objectives.
Steering Committee of the WTO Fish Fund moves towards making the Fund operational (WTO)
At its second meeting held on 3 July, the Steering Committee of the WTO Fish Fund endorsed several framework documents that will govern the Fund’s operations once the Agreement on Fisheries Subsidies enters into force. The Fund was created to support developing and least-developed country members’ (LDCs) implementation of the Agreement on Fisheries Subsidies.
The Steering Committee also endorsed the Fish Fund Secretariat’s work for the rest of the year, including drafting a strategy for the Fund, preparing for the initial “Call for Proposals” when the Agreement enters into force, and drafting a communications, outreach and engagement plan. The Steering Committee, the governing body of the Fish Fund, includes eight WTO members that donated to the Fund and eight developing and least-developed country members that have deposited their instruments of ratification and will benefit from the Fund.
Quick links
AGOA and AfCFTA: Unlocking Business Potential Between United States and (Business Post Nigeria)
Africa’s Trade Potential: Navigating Opportunities Amidst Global Transformations (Polity.org.za)
Will the Emerging Global South Institutions Challenge Western Hegemony? A Case Study of BRICS (Modern Diplomacy)
Boosting local food systems from emergency aid to sustainable development (Devex)
