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South Africa to impose VAT on low-value parcels to help clothing industry compete (MyJoyOnline)
Importers of low-value parcels destined for South Africa will soon pay value added tax, the country’s tax authority said, as an interim measure to protect a clothing industry facing fierce competition from international e-commerce players such as Shein. The move follows other countries, including the European Union, which is discussing abolishing its duty-free limit as part of a customs reform.
The South African Revenue Service said on Thursday that it “noted legitimate concerns that have been expressed in the importation of several goods, especially clothing, via e-commerce by a number of importers who have not been paying the obligatory customs duties and VAT.” This situation, it added, has resulted in “unfair competition.”
Due to a high volume of e-commerce imports, SARS said it had earlier implemented a “concession” for goods valued at less than 500 rand ($27.25) which meant importers paid a flat rate of 20% in lieu of customs duties, and no VAT of 15%. To address competition concerns and to provide clarity for e-commerce importers, SARS said it will introduce VAT in addition to the current 20% flat rate on low-value parcels on Sept. 1 as an interim measure. Other changes include reconfiguring the 20% flat rate into the World Customs Organisation regime with appropriate duty rates by Nov. 1, it added.
Zimbabwe: 1st Half Tobacco Export Earnings Rise 23pc, As Farmers Demand Incorporation in Value Addition (The Herald)
The tobacco sector continues to rule the roost with export earnings rising 23 percent from US$450 million for the period January to June 2023 to US$553 million in the comparable period this year. This improved performance is not in tandem with farmers’ welfare that has been deteriorating over time.
The recent half year trade statistics released by the Zimbabwe National Statistics Agency (ZimStats) for 2024 show that the country exported tobacco products worth US$553 092 834 up from US$450 155 264 in 2023. Raw tobacco accounts for 91 percent of all the earnings, with cigarettes containing tobacco coming second on seven percent, a far out cry from the 30 percent target.
“The grower needs to get benefits out of that increase and this can be achieved through their engagements in the value-addition chain. “Our participation in value addition can be direct or indirectly through being incorporated by merchants,” said the ZTGA chair.
Farmers contend that the current beneficiaries of this increased earnings were middlemen, merchants and tobacco buyers as there was no participation of the grower in between. The huge gap between what ends in the farmer’s pocket and exporters is a big anomaly that needs to be addressed, farmers contend.
Zimbabwe: Import Substitution Policy Saves U.S.$78m in Crude Oil, Seed Imports (The Herald)
Building on last year’s feat of saving over US$103 million in crude oil and seed imports, the country has continued its impressive streak by saving an additional US$78 million in the first half of this year. This comes as Government adopted a raft of measures to revive the economy, which included accelerating import substitution through increased local production.
Statistics released by the Zimbabwe National Statistics Agency (ZimStats), however, show that oil seed product imports declined 55 percent from US$139 372 897 in the first half of 2023 to US$61 740 399 in the comparable period this year. In volume terms it dropped 13 percent from 126 769 095 to 109 738 035 kilogrammes. The average cost price also helped the cause by declining 49 percent from US$1, 10 to US$0, 56 per kilogramme.
The Confederation of Zimbabwe Industries (CZI) recently hosted a post-harvest oilseed indaba were stakeholders noted the need for increased soya bean production initially for stock feed self-sufficiency. Oil Expressers Association of Zimbabwe (OEAZ) representative, Mr Roderick Musiyiwa said: “The country requires around 250 000 tonnes of oilseeds to meet the annual demand of soya meal. This output can be achieved by producing soya been on 125 000 hectares at an average yield of two tonnes per hectare.”
Trade Minister Says Efforts Afoot to Remove Barriers to Trade (Foroyaa Newspaper)
Mr. Baboucarr Joof, the Gambia’s Minister of Trade and Employment, has told the National Assembly that they are engaging the government of Senegal, to remove all barriers to trade between the two neighbouring countries. He said this while responding to major concerns raised by legislators, during the adjournment debate at the National Assembly
The Trade Minister told the plenary that recently, he and the Commissioner General of the Gambia Revenue Authority (GRA), Yankuba Darboe, each led a team comprising key stakeholders to discuss trade promotion, adding, “We are engaging the Senegalese government to remove all tariff barriers to trade and we are hopeful that our effort will yield the desired outcome.” He expressed hope that his ministry would dismantle all barriers to trade between Banjul and Dakar.
Egypt’s Green Transition: Major Advances In Sustainable Industry And Renewable Energy (SolarQuarter)
Dr. Rania A. Al-Mashat, Egypt’s Minister of Planning, Economic Development, and International Cooperation, underscored the crucial role of green industrial development in fostering sustainable growth and combating climate change. Speaking at the “Industry and Environment Towards Green Development” conference, Al-Mashat emphasized that integrating environmental, social, economic, and technological aspects into industrial policies aligns with Egypt’s broader sustainable development goals.
Al-Mashat highlighted that sustainable industries are vital for economic growth, enhancing the competitiveness of Egyptian exports and creating new job opportunities. She stressed that the Ministry is actively working with relevant bodies to incorporate environmental and climate considerations into Egypt’s Vision 2030, aiming to increase green public investments and promote a comprehensive and sustainable ecosystem.
The ministry’s strategic approach includes enhancing infrastructure, investing in human capital and innovation, and supporting green transitions. Currently, Egypt is managing 32 projects worth over $3 billion, focusing on areas such as infrastructure development, industrial localization, human capital development, and green technology adoption. A key initiative discussed was the launch of the “HAFIZ Platform for Technical and Financial Support to the Private Sector,” which aims to bridge information gaps and facilitate connections between private sector players and development partners. The platform will offer access to financial tools, technical support, and other resources to support industrial development.
British Chamber of Commerce launches in Uganda to promote trade, investment (Nile Post)
A significant milestone has been reached in Uganda’s business landscape with the official launch of the British Chamber of Commerce Uganda (BCCU). The organisation aims to promote better trade links between the UK and Uganda. It will act as a collective voice and use the business community’s influence to engage on trade policy, reduce barriers to entry and increase trade and investment, ultimately fostering economic growth.
The British Chamber of Commerce, which is currently operational in a number of other African countries, will be a catalyst for business success by providing a range of business support and trade promotion services.
The UK private sector is a major investor in Uganda’s development and has the knowledge, experience to help drive Uganda’s economic growth. The British Chamber of Commerce will be a powerful tool that will drive relationship forward and build a better future for both countries.
Somalia, Ethiopia to resume talks on port deal under Turkey mediation (Reuters)
The Foreign Affairs ministers of Somalia and Ethiopia will meet in Ankara next week to discuss disagreements over a port deal Addis Ababa signed with the breakaway region of Somaliland earlier this year, Turkey’s Foreign Affairs Minister Hakan Fidan said. Turkey is now mediating talks between the neighbours, whose ties became strained in January when Ethiopia agreed to lease 20 km of coastline from Somaliland, in exchange for recognition of its independence. Mogadishu called the agreement illegal and retaliated by expelling the Ethiopian ambassador and threatening to kick out thousands of Ethiopian troops stationed in the country helping battle Islamist insurgents.
Somali and Ethiopian Foreign ministers met in Ankara last month along with Fidan to discuss their disagreements and agreed to hold another round of talks. At a news conference in Istanbul, Fidan said a second round of talks between Somalia and Ethiopia will take place in Ankara next week.
“We discussed these issues with Prime Minister Abiy in detail,” Fidan said. “Tensions between Somalia and Ethiopia would come to an end with Ethiopia’s access to the seas through Somalia as long as Ethiopia’s recognition of Somalia’s territorial integrity and political sovereignty is secured.”
In a bid to position Nigeria as a hub for global digital trade and innovation, the Federal Government has launched an initiative to establish Digital Free Zones in the country. Chaired by President Bola Ahmed Tinubu GCFR, a steering committee has been inaugurated to oversee the establishment of these digital free zones, designed to attract and support tech, finance and service-oriented businesses, in a conducive environment tailored to the 21st-century digital trade and technological age.
The Initiative for the Promotion of Digital Free Zones in Nigeria (DiFZIN) serves as the private-sector stakeholders’ representative and technical advisers on the committee. DiFZIN, a non-profit advocacy and policy research organisation, is supported by a consortium of private sector development-focused and advisory institutions, including Africa Finance Corporation, PwC Nigeria, Charter Cities Institute, Future Africa, and Itana. The mission is to develop Nigeria’s free zones ecosystem into Africa’s primary hub for global technology, finance and service businesses.
Businesses operating within the zones will benefit from modernized free zone regulations, including tax, banking, and immigration incentives, simplified government compliance processes, and a stable regulatory environment. The strategic goals include boosting foreign direct investment, creating employment opportunities, and facilitating foreign exchange inflow through an innovative approach to the free zones ecosystem.
The Board of Directors of the African Development Bank Group has approved a $40 million transaction guarantee facility to support Dashen Bank’s trade finance activities in Ethiopia. The Facility will provide support to Small and Medium Sized Enterprises (SMEs) and local corporates’ import and export trade finance requirements. It will also support intra-Africa trade, thus directly contributing to the successful implementation of the African Continental Free Trade Area (AfCFTA) agenda.
Following the approval, the African Development Bank’s Director General for East Africa, Nnenna Nwabufo said: “Supporting Trade in Africa is a key priority at the African Development Bank. Trade finance is an important driver of economic growth and is critical for cross-border trade, particularly in emerging markets. We are delighted to work with Dashen, a strong partner with extensive knowledge and network in Ethiopia, on a shared ambition to support the region’s Trade.”
Afreximbank to double intra-African trade financing to $40 billion by 2026 (Afreximbank)
African Export-Import Bank (Afreximbank) plans to double its financing of intra-African trade from US$20 billion in 2021 to US$40 billion by 2026, Mr. Haytham ElMaayergi, Afreximbank’s Executive Vice President, Global Trade Bank, has said.
Mr. ElMaayergi was addressing participants and guests in Abuja at the African Caucus Meeting of the World Bank Group and the International Monetary Fund (IMF), from August 1 – 3, 2024 where he represented Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank. Attended mainly by ministers of finance and Central Bank Governors from across Africa, the meeting had the theme “Facilitating Intra-African Trade: Catalyst for Sustainable Development in Africa”, and was aimed at identifying key challenges facing Africa in achieving full integration and at engaging in strategic dialogues to engender sustainable solutions.
Mr. ElMaayergi said that Afreximbank had been a champion in facilitating intra-African trade since its founding and that it had committed US$1 billion to support the funding of the AfCFTA Adjustment Fund and a US$10-million grant to facilitate the establishment and operationalisation of that fund. “The Bank is also partnering with the AfCFTA Secretariat and the African Union Commission (AUC) to ensure a successful implementation of the Pan-African Payments and Settlements System, the African Trade Gateway and the Afreximbank African Collaborative Transit Guarantee Scheme,” he continued.
Artificial Intelligence: African Union council approves AI adoption in public and private sectors in Nigeria, others (Nairametrics)
The African Union (AU) Executive Council has approved the “Continental Artificial Intelligence (AI) Strategy,” which proposes the adoption of AI in the public and private sectors among member states, including Nigeria. This was disclosed in the Continental Artificial Intelligence (AI) Strategy document published on the AU website on Friday, August 9, 2024. The AU Strategy on Artificial Intelligence (AI) was adopted by the AU Executive Council during its 45th Ordinary Session held between July 18 and 19, 2024, in Accra, Ghana.
The strategy was unanimously endorsed by the African ICT and Communications Ministers of the AU in June 2024, among others. Nairametrics previously reported that over 130 African ministers and experts virtually convened between June 11 and 13, 2024, for the AU’s 2nd Extraordinary Session of the Specialized Technical Committee on Communication and ICT. They eventually endorsed a Continental AI Strategy that will guide African countries to harness artificial intelligence to meet the continent’s development aspirations and the well-being of its people.
Key Recommendations of the Endorsed Strategy: – Develop Africa-owned AI infrastructure: An AI infrastructure is an integrated environment of hardware and software designed specifically for AI and machine learning workloads, paving the way for data processing and deployment. – AI Regulation: The strategy recommends guidelines that will moderate the boundaries of AI usage on the continent. – Funding for AI-based Research: The strategy calls for financial support aimed at enriching the knowledge base of Africans on AI capabilities and functionalities.
pdf Continental Artificial Intelligence Strategy (2.45 MB)
As Africa sets out to spearhead a transformative digital revolution, the African Digital Compact (ADC) emerges as the continent’s unified voice in this ambitious journey. Adopted at the 45th Ordinary Session of the African Union Executive Council held in Accra, Ghana on July 18-19, 2024, the ADC was pronounced as Africa’s common position on digital transformation by the continent’s ministers.
This bold initiative is designed to harness the transformative power of digital technologies to drive sustainable development, foster innovation, and ensure digital inclusivity across Africa. ADC brings together governments, businesses, and civil society in a concerted effort to bridge digital divides, protect digital rights, and create a secure and equitable digital environment for all Africans.
By aligning with the Global Digital Compact, while addressing Africa’s unique challenges and opportunities, the ADC is committed to building a digitally empowered Africa where technology fuels economic growth, societal well-being, and a prosperous future for everyone.
ADC is an initiative anchored in Agenda 2063 and the AU Digital transformation Strategy built believed to shaping a connected and resilient Africa, poised to lead the digital revolution with inclusivity and innovation at its core.
pdf African Digital Compact (12.52 MB)
TradeMark Africa and Rwanda Government Set to Host Landmark Trade Development Forum in Kigali Propelling Pan-African Digital Trade Initiatives into a New Era (TradeMark Africa)
The Government of Rwanda and TradeMark Africa (TMA) will co-host the Trade Development Forum, bringing together Heads of State and Government Officials, Development Partners, Academicians, Multilateral Organisations and Private Sector from 14 TMA countries of implementation and beyond. Under the theme “Digital Trade”, this 2-day forum will take place in Kigali, Rwanda; from 2 December to 3 December 2024.
This year’s forum will spotlight innovative digital trade practices and technologies including the interoperability of digital payments, the use of distributed ledger technology (DLT) and Artificial Intelligence in trade processes, and how automation can support green trade initiatives. Discussions will address leveraging technology to streamline trade facilitation and enhance policy frameworks across Africa. Sessions will explore the convergence of digital advancements with green trade initiatives.
David Beer, CEO of TradeMark Africa, expressed his enthusiasm about the forum, stating: “Africa’s economic prosperity is our business. TradeMark is driven entirely by generating practical results to remove trade barriers and drive-up exports within and from Africa. While we have seen serious progress from a range of trade facilitation interventions in the last decade, such as reduced transport times by about a third across the Northern Corridor in East Africa, there is another big step forward to take. The 2024 forum will focus on propagating digitisation successes more widely and introducing cutting-edge technologies. We look forward to sharing lessons and presenting innovative ideas to help Governments and the private sector further drive down the cost and time of trade.”
Impact of Emerging Risks on Financial Stability (COMESA)
Financial stability is increasingly being tested by emerging Cyber, Fintech and Climate Change risks. These come amidst increased technological innovations in the financial sector to provide financial services efficiently, especially to the financially excluded. Moreover, the entry of non-financial firms into the financial space is increasing competition in the financial sector, reducing the market share of financial institutions and is introducing viability risks.
In response, the COMESA Monetary Institute has embarked on a capacity building initiative to help the regional apex banks navigate through the risks by organizing trainings. The latest was on 29 July – 2 August 2024 conducted virtually, themed: “Impact of Fintech, Cyber and Climate Change Risks on Financial Stability.”
In his address, the Director of CMI, Dr. Lucas Njoroge, observed that the gains in enhanced financial inclusion have predisposed financial services providers to fraud and cyber-attacks. “This has increasingly exposed consumers of financial services to fraud and predatory services, undermining their income growth and ability to meet their financial obligations,” he noted. At the same time, climate change has increased physical and transition risks, and financial institutions are increasingly being held accountable for the consequences of their financial intermediation activities on the environment.
EAC retail traders decry laws stifling investments (People Daily)
Challenges in the distribution networks across the East African Community (EAC) are affecting the operations of the retail and wholesale business for Kenya, a sector that is among the largest revenue earners and providers of employment. According to the Retail Trade Association of Kenya (RETRAK), a lack of harmony in regional laws is a major hindrance to the well-being of the sector. The devolved units in Kenya are now contributing further to this challenge.
“Even before distribution reaches the country borders, they have gone through a lot of internal barriers, levies, and fees,” said CEO Wambui Mbarire. “Regional traders are now being confronted with multiple taxes while traversing counties in Kenya, being forced to pay identical charges and levies in each of these counties,” she added. This is part of the reason why Tanzania reported Kenya to the EAC last year, citing the introduction of non-tariff barriers (NTBs) through the levies charged by the counties in total disregard of Kenya’s obligations in the EAC. During a meeting of stakeholders from the EAC distribution sector convened in Nairobi, Kenya was urged to address challenges facing the sector and make plans to overcome the barriers affecting the sector in the region.
The Lobito Corridor: A U.S. Bet on Africa’s Critical Mineral Development (United States Institute of Peace)
Demand for critical minerals is expected to skyrocket in the decades ahead. These minerals — such as copper, cobalt and lithium, among others — power the electronics we use every day and are essential for transitioning to greener energy technologies. The U.S. is increasingly working with African partners to develop the continent’s abundant critical minerals, an effort that is vital to advancing U.S. economic and national security interests. It also will have major implications for African countries: How these critical minerals are developed will significantly impact the continent’s economic future and beyond, even affecting peace and stability. This increasing U.S. policy focus comes against the backdrop of intensifying U.S. geopolitical competition with China, which dominates many African mining sectors.
The Lobito Corridor project is the flagship U.S. effort in the important but challenging critical minerals sector. The project’s performance in promoting mutually beneficial critical mineral partnerships will shape U.S. engagement in the region for the years ahead. The Lobito Corridor project is an infrastructure initiative traversing Angola, the Democratic Republic of Congo (DRC) and Zambia, connecting the Copper Belt of the latter two countries with the Angolan Atlantic Ocean port of Lobito. While focused on the rehabilitation and construction of rail, the project also includes road, water and digital infrastructure. Copper from DRC and Zambia will be shipped from Lobito for global export.
A U.S. and European-backed initiative launched in collaboration with the three countries in 2023 as a “strategic economic corridor,” the project promises to cut transportation times, reduce the slow and environmentally damaging trucking of critical minerals, and spark economic development. “It’s a project that’s about — far from just laying tracks. It’s about creating jobs, increasing trade, strengthening supply chains, boosting connectivity … for people across multiple countries. This is a game-changing regional investment,” U.S. President Joe Biden said last year. This multi-billion-dollar initiative has raised expectations of meaningful U.S. engagement among African partners in the region and even throughout the continent.
To understand international trade and set policy direction it is vital to understand the costs associated with transporting and insuring goods across borders. International transport and insurance costs, which correspond to the value of the transport and insurance services performed to deliver the goods from the border of the exporting country to the border of the importing country, have a direct and material impact on trade patterns and on a country’s competitiveness. Despite their importance, accessing quantitative information on these costs has long been a challenge for statisticians and policymakers alike. This article presents the OECD International Transport and Insurance Costs of merchandise trade (ITIC) database, which helps to deepen our understanding of these aspects of global trade by providing both reported data and estimates on international transport and insurance costs on over 200 economies by partner and product.
Limited data availability presents a key challenge when attempting to quantify international transport and insurance costs in merchandise trade. Transaction-level data on these costs are typically not accessible to statistical offices, and the fact that international merchandise trade is carried out through different delivery terms makes aggregation efforts virtually impossible. However, a viable approach to measuring these costs does exist: evaluating them in relative terms through CIF/FOB margins, which reflect the difference between the Cost, Insurance, and Freight (CIF) and the Free-On-Board (FOB) valuations for the same import flow
Observed data on merchandise imports with both CIF and FOB valuations remains limited. As of today, only around 30 economies make this information available with the required level of product and partner detail. The OECD has been working to fill this data gap since 2016, when the first edition of the International Transport and Insurance Costs of merchandise trade (ITIC) database was released. The ITIC database provides detailed information on CIF/FOB margins, interpreted as the proportion of the CIF value of imports that corresponds to international transport and insurance costs.
QU addresses High-Level Roundtable on Agrifood Systems Transformation in Lesotho (FAO)
FAO Director-General QU Dongyu on Tuesday addressed a High-Level Roundtable on Agrifood Systems Transformation in Lesotho, where he called for immediate critical action amid a steady rise in hunger levels in Africa. Qu addressed the event in Maseru, entitled “Deepening collaboration to accelerate the attainment of Sustainable, Resilient, and Inclusive Food Systems in Lesotho to mitigate future shocks,” on behalf of United Nations agencies working to end hunger and poverty in Lesotho.
The Director-General stressed the importance of coordination, timely delivery, and of not wasting time. He advised that the first step is to build strength, followed by finding innovative solutions and then swiftly taking action. Qu also set out the three components of food security, namely food security, food availability, and food affordability, noting that they presented problems of various levels in every country of the world. He also noted the three categories of food quality, referring to staple food (first level) to meet the basic food security requirements of a nation, followed by nutritional food to address malnutrition, and thirdly healthy food for a balanced life.
His comments follow FAO’s 2024 State of Food Security and Nutrition in the World (SOFI) report, which estimates that more than 730 million people worldwide faced hunger in 2023 and that more than 2.3 billion were moderately or severely food insecure. In Africa, hunger has been steadily rising since 2015, and in 2024 Africa was the region with the largest percentage of the population facing hunger - more than 20 percent. If current trends continue, about 582 million people will be chronically undernourished in 2030, half of them in Africa, according to the report.
Healthy diets remain unaffordable for a third of the world’s population (FAO)
More than a third of the world’s population could not afford a healthy diet in 2022, and some regions have yet fully to recover from the harms wrought by the COVID-19 pandemic, according to an innovative data set published in the 2024 edition of The State of Food Security and Nutrition in the World, the flagship hunger report issued last week by the Food and Agriculture Organization (FAO) and four sister United Nations agencies.
While food prices increased throughout 2022, pushing up the average cost of a healthy diet, this was largely offset by economic recovery and the ensuing positive income effects. As a result, some 35.4 percent of the global population, equal to 2.826 billion people, were unable to afford a healthy diet in 2022. That compares to 36.4 percent and 2.823 billion in 2019. However, this recovery to pre-pandemic levels in 2022 was achieved in an uneven manner across regions.
The share of people in Africa unable to afford a healthy diet was 64.8 percent. In Asia, the figure is 35.1 percent; in Latin America and the Caribbean, 27.7 percent; in Oceania 20.1 percent; and in Northern America and Europe, 4.8 percent. In low-income and lower-middle-income countries, the number of people unable to afford healthy diets grew from 2019 to 2022, an outcome that reflects how post-pandemic economic recoveries were unevenly shared and how more advanced economies were better placed to cope with supply-chain shocks and worldwide inflationary pressure on food commodity prices.
COP29 High Level Dialogue: AU Commissioner Highlights Unlocking Finance for Energy in Africa (AU)
The COP29 Presidency convened its second high-level consultation meeting on energy transition in London, United Kingdom. The second dialogue focused on securing the necessary financing for renewable energy, with a particular attention to emerging and developing economies. High borrowing costs and various risks are preventing capital from reaching these crucial renewable energy initiatives.
Representing Africa was H.E. Dr Amani Abou-Zeid, African Union Commissioner for Infrastructure and Energy – who reiterated her pivotal statement made in the first high-level consultation meeting held in Paris in May 2024: “The Climate Agenda is our Development Agenda” – underscoring the transformative potential of integrating climate action into Africa’s development agenda. Commissioner Abou-Zeid also welcomed the inclusion of longstanding African priorities at the highest level of discussion. “For years, The African Union has been heralding and championing issues of grids and clean cooking as well as turning our critical minerals into development minerals and It is gratifying to see these issues gaining such prominence,” she noted.
Commissioner Abou-Zeid urged governments, financial sector actors, and industry to collaborate in scaling up bankable renewable energy projects. “Governments play a crucial role in providing effective leadership and creating a conducive environment through long-term policies and transparent tendering processes. Financial sector actors, including Development Finance Institutions (DFIs), should focus on reducing debt costs and reassessing risk perceptions. Industry actors should innovate to lower the costs of low-carbon technologies and prioritize technology transfer and capacity building”, she said.
Quick links
Kenya to benefit from economic partnership agreement with EU (The Standard)
What can Rwanda do to reduce its trade deficit? (The New Times)
Urgent reforms needed to tackle mounting debt crisis in Africa (Business Daily)
Study reveals how the Global North drives inequality in international trade (Phys.org)
