Search News Results
tralac Daily News
Country-related news
Cutting red tape to enhance growth (SAnews)
Work is underway to cut red tape in an effort to enhance the business environment and create much-needed jobs in South Africa. Delivering the State of the Nation Address (SONA) on Thursday night, President Cyril Ramaphosa said there are too many regulations in the country that are unduly complicated, costly and difficult to comply with. “We are therefore working to improve the business environment for companies of all sizes through a dedicated capacity in the Presidency to reduce red tape. If we are to make progress in cutting unnecessary bureaucratic delays for businesses, we need dedicated capacity with the means to make changes.”
“The red tape team will identify priority reforms for the year ahead, including mechanisms to ensure government departments pay suppliers within the required 30 days.
South Africa’s maritime industry requires better structures, collaborative efforts (Engineering News)
There are considerable opportunities for South Africa’s maritime industry to capitalise on; however, it is critical that a concerted effort be undertaken by all stakeholders, to ensure that the issues facing the sector are addressed and circumvented, speakers said during a question and answer session hosted by industry organisation the Maritime Business Chamber’s on February 9. Women’s International Shipping & Trading Association (Wista) board member Nomcebo Msibi said one of the issues that needed to be dealt with is for ports to be more effective and efficient. Current obstacles include infrastructure, technology, safety and security and competing corridors.
Manufacturing output showed recovery in 2021 (Engineering News)
Manufacturing production decreased by 0.1% in December, compared with December 2020, but total manufacturing production for 2021 increased by 6.4% compared with 2020. Statistics South Africa reports that the largest negative contributions to December’s manufacturing output was made by motor vehicles, parts and accessories and other transport equipment, declining by 8% and contributing -0.5 of a percentage point.
Platinum firms want export tax deferred (The Herald)
Platinum miners are seeking extension of the grace period on the 5 percent tax on export of semi-processed platinum to give them time to invest in value addition plants. In efforts to nudge miners to invest in value addition, the Treasury in 2020 suspended the 5 percent tax to give the miners latitude to invest in value addition and beneficiation facilities. The concession was granted for a period of two years after which the tax incentive would come into effect. In a letter to Treasury chief, Finance and Economic Development Minister Prof Mthuli Ncube by Platinum Producers’ Association of Zimbabwe, chairman Alex Mhembere, said, “Can Treasury reconsider the policy and further defer the tax as this will allow the producers more time to invest in the beneficiation facilities while building sufficient feedstock.”
“The Treasury is analysing the matter and its implications, we will get back to them once we have concluded our analysis and reached a decision,” Minister Ncube said. Platinum miners have made “significant progress” towards value addition facilities, Mr Mhembere said.
After Zambia, Kenya explores possibility of a digital currency (TechCrunch)
Kenya’s central bank has called on the public to share their views, before May 20th, on the possibility of adopting a digital currency, just one day after it emerged that Zambia is also testing its viability too. Nigeria became the first country in Africa to pilot its central bank digital currency (CBDC), dubbed the eNaira, in October last year while Ghana is said to be at an advanced stage of launching its e-cedi. The Bank of Zambia is also carrying out research on digital currencies. The CBDCs, unlike cryptocurrencies like Bitcoin and Ethereum, are developed by central banks and pegged on countries’ fiat currencies. The Central Bank of Kenya (CBK) has today issued this document as the basis for a public discussion, noting that cost reduction, interoperability, and enhanced cross-border payments would be the main drivers for the digital currency’s adoption in the country. The CBK said that mobile money (e-money), which East Africa’s biggest economy pioneered in 2007, has already helped the country to enhance access to financial services — one of the value propositions of digital currencies. “The trend in Kenya’s domestic payments indicates the existence of a digital currency (e-money) that is robust, inclusive and highly active. Therefore, the consideration to introduce a CBDC in the payments system in Kenya would not majorly focus on enhancing access to financial services given the existing and growing penetration of mobile money,” said the CBK.
Manufacturers call for export-led industrialization for sustained economic growth (Capital Business)
Manufacturers have called on the government to prioritize export-led industrialization for sustained economic growth. This was said during the rollout of the annual Kenya Association of Manufacturers (KAM) Manufacturing Priority Agenda (MPA), themed, “Manufacturing sector recovery and sustained growth for Kenya’s shared prosperity.” Speaking during the launch, Cabinet Secretary, Ministry of Industrialization, Trade and Enterprise Development Betty Maina noted that Government continues to engage the business community to improve competitiveness. “Following engagements with businesses over the years, we have made tremendous strides in enhancing our trade and industrialization capacity as a nation. One of the key initiatives has been preferential procurement for locally manufactured goods by Government to increase consumption of Kenyan goods and services,” said Maina.
Kenya-Tanzania trade at $905.5 million - official (The Star, Kenya)
Kenya-Tanzania bilateral trade hit $905.5million (Sh102.8billion) in 2021 for the period January to November 2021, according to the Central Bank of Kenya.The details were presented at an East Africa Business Council (EABC) trade facilitation forum at Namanga border. “Kenya imports from Tanzania stood at $501 million (Sh56.8billion) and exports $403.9,” said EABC Chief Executive Officer, John Kalisa. He hailed Presidents Samia Suluhu and Uhuru Kenyatta for resolving some of the Non-Tariff Barriers leading to better trade ties. The Namanga border station manager said they clear 250 trucks daily, a three-fold increase from May last year. Freight forwarders called for the separation of the Import Declaration Forms from the Integrated Customs Management System and the setting up of a permanent cargo scanner at the border to facilitate trade.
A new dawn for Uganda’s Tourism as a new destination brand is launched (Travel Daily News International)
As the world starts to recover from the effects of the pandemic and opening up borders and skies to global tourism, Uganda, has refreshed its tourism destination brand promise, with the unveiling of a new brand identity that promises both domestic, regional and global tourists, an adventure of a lifetime. The brand identity - Explore Uganda, The Pearl of Africa, was unveiled on Friday, 21st January 2022, by the country’s president, H.E Yoweri Kaguta Museveni in Kampala, Uganda’s capital city
Uganda Tourism Board Chief Executive Officer, Ms. Lilly Ajarova said that the new brand promise seeks to reemphasise Uganda’s rare and precious range of tourism attractions to the world, thereby earning destination Uganda competitive market share. “Uganda is no doubt beautiful. Beautiful beyond measure. Yes, everyone knew that Uganda is and has always been the Pearl of Africa, - but there was a lack of clarity and consistency on, if Uganda is the Pearl of Africa- what pearls does it have to offer for each of the various travel segments and preferences,” she said, adding: “To win the marketplace; to achieve our Number One objective of “Sustainably Promoting Uganda as a Competitive Tourism Destination for Inclusive Development” it was therefore important that all stakeholders are aligned on what makes us the Pearl of Africa and how do we unpack that to the various travel markets/segments around the world.”
CFAN says Nigeria losing N60b yearly from income differential on cocoa (The Guardian, Nigeria)
President of the Cocoa Farmers’ Association of Nigeria (CFAN), Adeola Adegoke, has said the country is losing about N60 billion yearly as a result of refusal to collect Living Income Differential (LID) for cocoa producers. Adegoke, who disclosed this yesterday, in Abuja, during a workshop organised by Agricultural Policy Research in Africa (APRA), in conjunction with the University of Ibadan, said there is the need to follow international best practices that support the production of cocoa in the world. LID is a cocoa pricing agreement first launched in Côte d’Ivoire and Ghana to help cocoa farmers escape from poverty by adding a premium to the prevailing market price. According to Adegoke, the foreign exchange deficit being experienced at the moment can only be solved by the cocoa economy. He said in the nation’s economic indices, cocoa is next to crude oil in terms of percentage as revealed by its potentials adding that the liberalisation business and the ‘all comers affairs’ syndrome has contributed in sinking the country to where it is at the moment. In the programme themed “Cocoa commercialisation in Nigeria: Issues, prospects and policy requirements”
Nigeria has key market role in AfCFTA, expert says (Daily Trust)
The Africa Continental Free Trade Agreement (AfCFTA) provides a new opportunity for Nigeria to play the deserving role as the central market for the continent, especially within the West Africa coast, a financial expert, Dr Lizzie Kings-Wali has said. This is especially so in West Africa, where the country should serve as the natural pivot for economic activities and prosperity of the sub-region. According to Kings-Wali, boosting entrepreneurship and attracting investments requires creating the right environment.
Why is Ghana’s sovereign debt is raising eyebrows? (The Africa Report)
A darling of western investors, Ghana, may be losing some lustre. The country of about 32 million has long been viewed as an economic gateway to West Africa (alongside Nigeria) with many investors happy to overlook its high level of public debt, which is estimated at 81% of GDP at the end of 2021, according to Fitch Ratings. Tech companies were happy to come to Ghana with Google opening its first AI centre in the Ghanian capital of Accra in 2019. Twitter followed suit with its first African office in 2021. Manufacturing followed a similar path with German automobile maker Volkswagen opening an automobile assembly facility in Accra in 2020, which was the company’s fifth African assembly location (after Kenya, Nigeria, Rwanda, and South Africa). Toyota opened a similar plant in Tema in 2021. South Korean carmakers Hyundai and KIA also announced plans to open plants in the country by the end of 2022. Lastly, the AFCFTA opened its secretariat in Accra in August 2020, which put the country at the centre of the world’s biggest free trade area calculated by the number of participating countries.
Egypt among top 10 investment destinations in Africa (Egypttoday)
Business Insider, the American online platform, nominated Egypt in its list of the top 10 investment destinations in the African continent, as the list included Egypt, along with the countries of Nigeria, South Africa, Algeria, Morocco, Kenya, Ethiopia, Ghana, Angola, and Cote d’Ivoire. This came according to a report issued by the Information and Decision Support Center, quoting the Business Insider report that Egypt’s economic growth rate increased by 9.8 percent in the first quarter of the fiscal year 2021-2022, according to the latest statistics published by the Reuters
It stressed that these statistics also show that Egypt is one of the richest countries. Africa in terms of GDP for the year 2021, as it has the second highest gross domestic product (GDP) in the African continent with a value of $394 billion.
The report indicated that despite the negative economic effects resulting from the spread of the “Coronavirus, Egypt’s GDP achieved growth in 2021, thanks to the country’s enjoyment of a diversified economy that depends on fossil fuel exports and agricultural and tourism activities, describing the Egyptian economy as an “ideal economy for investors.” .
Sudan export highway blockaded as protests stoked by trade woes (Reuters)
Hundreds of truck drivers are stuck in a blockade of a major export route out of Sudan into Egypt, hampering exports of camels and other livestock as opposition to a military takeover has fuelled festering grievances over trade. The blockade of the route known as the Northern Artery by the protesters, using waves of rocks and other barriers to barricade the road, began last month after Sudan sharply raised electricity prices for farmers. By late January some 1,500 drivers were stuck as they tried to return to Egypt, an Egyptian trucking union said, giving the latest numbers available, with no signs of the protests waning.
“These are the fruits of our country passing through this road, this is why the Sudanese people must unite and hold a position,” protester Rashid Abuzeid said. The blockade shows the vulnerability of Sudan’s economy, already mired in crisis, to political tumult. It follows weeks of protests that stopped shipping at Port Sudan, the country’s main trade hub, late last year. Traders who share the sentiment of those blocking the highway say they lose out because Egyptian truckers dominate transport within Sudan, while internal restrictions hamper livestock exports, especially of camels, which can be a lucrative business in the region. “They come into the country and our trucks have to stop at the border,” said Abdelhameed Mustafa Ismael, a trucking manager for livestock in Omdurman, which adjoins the capital, Khartoum.
African trade
African countries must expand and diversify their participation in international trade and global value chains to reduce poverty on a large scale and transform their economies, says a new World Bank book released today. The continent must go beyond trade in raw materials and link its production and trade to the global economy to take advantage of the unlimited demand and innovation along the supply chain. This requires comprehensive and dynamic efforts that bolster Africa’s export market access and diversifies its markets to new regions and new products while also strengthening regional trade, says the ‘Africa In the New Trade Environment: Market Access in Troubled Times’ book. “The global economy is a source of growth that African economies cannot afford to ignore. While African exports of goods and services have seen their fastest growth in the past decade, the volumes remain low at just 3 percent of global trade. The time is ripe for policymakers to expand their thinking beyond traditional approaches and traditional markets if they want to play an active role in international trade in the 21st century,” said Ousmane Diagana, World Bank Vice President for Western and Central Africa.
Namibia, Kenya, Botswana, Rwanda and Ghana need rules of origin that will allow participation and further development of the automotive industry by new players in the sector. This request was made recently during the eighth meeting of the African Continental Free Trade Area (AfCFTA) council of ministers responsible for trade in Ghana, where Namibia was represented by trade minister Lucia Iipumbu. According to the council briefing, a number of countries such as South Africa, Morocco, Sudan and Nigeria aim to include a higher level of value addition on a number of tariff lines under this chapter. The briefing noted that negotiators did not reach an agreement on a number of tariff lines under this chapter.
“A strict rule of origin will, therefore, allow few countries in Africa to dominate this sector and as a result, trade under this sector would be skewed. There is a need for the ministers to provide guidance that will allow countries with semi-knockdown automotive industries to trade under this agreement, and to be allowed sufficient time of between 10 to 20 years to move to a higher level of value addition,” stated the briefing.
AfDB to Close Infrastructure Gap in Africa with Approved PPP Frameworks (Energy Capital & Power)
Development finance institution, the African Development Bank (AfDB), has approved its first strategic framework for the development of public-private partnerships (PPPs) in an attempt to address and close Africa’s investment gap, which is estimated at over $100 billion a year. According to banking and financial experts, PPPs offer the potential to increase private sector investments while promoting efficiency in the development and operation of infrastructure projects in Africa, thus promoting higher standards of living and global competitiveness. “This eagerly awaited strategic framework will go a long way to enabling the Bank to provide much required assistance for the development and implementation of public-private partnerships in our regional member countries, and we look forward to its success,” stated Bank Group President, Akinwumi A. Adesina, adding that the strategic framework will provide a foundation for the AfDB’s engagement in the infrastructure sector.
To achieve its development goals, the AfDB is already engaged in a number of key PPPs, most notably in several key transport and energy sector projects and will root its framework in three pillars that streamline the Bank’s efforts across various departments, providing financial and resource assistance.
“The current global and African context, widening infrastructure gap and limited fiscal space, due to the Covid-19 pandemic, among other factors, builds a strong case for the Bank to scale up its support for public-private partnerships, to crowd in more private sector investment in both economic and social infrastructure, and provides a foundation for the Bank to become a leading voice and financier of public-private projects in Africa.” Solomon Quaynor, Vice President for Private Sector, Infrastructure and Industrialization at the AfDB, stated.
Serving as a key driver to support progress across Africa, infrastructure development will be a critical enabler in the facilitation of productivity and economic growth in the continent, thus contributing to human development, improved standards of living, a reduction in poverty, and the attainment of sustainable development goals.
Mobilizing financing for Africa’s accelerated economic recovery, development and integration (Sun Nigeria)
Africa urged to speedup AU financial institutions’ formation (New Business Ethiopia)
African countries need to speedup the efforts of the African Union Commission which has been working for the establishment of central bank of Africa, African monetary fund, Pan-African stock exchange, and African investment bank, says African Union Commission (AUC) Commissioner.
Briefing Journalists this morning on the side-lines of AU Summit Ambassador Albert Muchanga AU Commissioner for Economic Development, Trade, Industry and Mining stressed the need to speed the efforts to enable the continent self-finance its development projects and improve productivity and benefit from intra-Africa trade regime. “…Improving productivity and financial independence is crucial in building robust and resilient economies that are not being held back by high an unsustainable debt burden,” he said. “Accelerating the establishment of the African Union financial institutions namely, the African investment bank, African monetary fund, African central bank, and the Pan-African stock exchange remain strategic growth to build the continent’s financial autonomy that will facilitate self-financing development projects and programs as well as caution the continent against huge shocks.”
AfCFTA Secretariat and Afreximbank sign an agreement for the management of the AfCFTA Adjustment Fund (Afeximbank)
The African Continental Free Trade Area (AfCFTA) Secretariat and African Export-Import Bank (Afreximbank), today in Cairo signed an Agreement relating to the management of the Base Fund of the AfCFTA Adjustment Fund. The Fund will support African countries and the private sector to effectively participate in the new trading environment established under the AfCFTA.
The AfCFTA Secretariat and Afreximbank were mandated by the African Union (AU) Summit of Heads of State and Government and the AfCFTA Council of Ministers responsible for Trade to establish the AfCFTA Adjustment Fund to support AfCFTA State Parties to adjust to the new liberalised and integrated trading environment established under the AfCFTA Agreement. The Adjustment Fund consists of a Base Fund, a General Fund and a Credit Fund. The Base Fund will consist of contributions from State Parties, grants and technical assistance funds to address tariff revenue losses as tariffs are progressively eliminated. It will also support countries to implement various provisions of the AfCFTA Agreement, its Protocols and Annexes. The General Fund will mobilise concessional funding, while the Credit Fund will mobilise commercial funding to support both the public and private sectors, enabling them to adjust and take advantage of the opportunities created by the AfCFTA.
Africa’s transport sector to strongly benefit from continental free trade area (How we made it in Africa)
The African Continental Free Trade Area (AfCFTA) is expected to increase intra-African trade in transport services by nearly 50%, according to the latest estimates by the Economic Commission for Africa (ECA). The estimates on, ‘Implications of the African Continental Free Trade Area for demand for transport, infrastructure and services’, released by ECA at the fifth African Business Forum on February 7, indicate that with AfCFTA in absolute terms, over 25% of intra-African trade gains in services would go to transport alone; and nearly 40% of the increase in Africa’s services production would be in transport.
The research conducted by experts in the Energy, Infrastructure and Services Section of ECA unpacks AfCFTA investment opportunities in the transport sector.
2nd Continental Report on the Implementation of Agenda 2063 (AUDA-NEPAD)
Agenda 2063 is Africa’s development blueprint to achieve inclusive and sustainable socio-economic development over a 50-year period. The continent aims to achieve this objective through the realisation of five ten-year implementation plans. The First Ten-Year Implementation Plan of Agenda 2063, spanning 2014 to 2023, outlines a set of goals, priority areas and targets that the continent aims to achieve at national, regional and continental levels. Against this background, the African Union Commission (AUC) and the African Union Development Agency (AUDA-NEPAD) were tasked by policy organs of the African Union to coordinate and prepare continental-level biennial performance reports to track progress made towards the goals and targets of Agenda 2063.
This second continental-level report consolidates progress reports from 38 of the 55 AU Member States. The report analyses progress made on the implementation of Agenda 2063 against 2021 targets.
At aspirational level, Africa recorded a positive upward trend in respect of all seven aspirations vis-à-vis the 2021 targets. The continent made significant progress in the attainment of Aspiration 2 “An integrated continent politically united and based on the ideal of Pan-Africanism and the Vision for Africa’s Renaissance”. The strong performance of 84% was realised mainly through progress in the signature and ratification of the African Continental Free Trade Agreement (AfCFTA) which came into effect on 1 January 2021, and the establishment and operationalisation of a well-functioning AfCFTA Secretariat in Accra, Ghana. During the period under review there was significant progress in this domain, evidenced by improvements in road networks, air transport, electrification and ICT.
Africa achieved low progress for Aspiration 1 “A prosperous Africa based on inclusive growth and sustainable development” with an overall score of 37% against the 2021 targets. This can be attributed mainly to a decrease in GDP per capita from USD3,170 in 2019 to USD2,910 in 2021 and high employment rates. Notwithstanding the moderate performance under this aspiration, there was commendable progress in access to electricity and internet. Furthermore, there were substantial gains in health-related goals including increased access to sexual and reproductive health services and reduced maternal mortality.
Africa needs smarter investment in digital infrastructure: Strategies for enticing the private sector (Brookings)
Weak infrastructure is widely accepted as a fundamental limitation to growth in Africa. Governments in the region struggle to meet the basic needs of residents, including access to food, education, health, and livelihoods, much less invest in critical, reusable infrastructure that could provide long-term solutions to social problems.
By design, private sector solutions must be commercially sustainable in order to deliver at scale and long-term. We would be better served as a global community to entice, encourage, and de-risk private sector engagement in the infrastructure challenge by channeling existing ODA, private philanthropy, and government resources towards creating an enabling environment for the private sector to innovate, deliver, and employ.
Developing and managing secure digital solutions requires extensive knowledge across issues like data privacy and security, interoperability standards, franchise management, biometric tokenization, device security, and more. This knowledge resides with the private sector companies that are investing billions to continually innovate, to prevent fraud, and to prevent bad actors from accessing personal data. However, four fundamental challenges to private sector engagement in fragile contexts persist:
There is too much reliance on sub-standard, expensive products; There are too few entities at the last-mile servicing rural communities; Sustainable commercial models are lacking; and The regulatory landscape for digital transactions in emerging markets is nascent, murky, and complex
SADC embarks on policy dialogues to ease trade and movement of goods and services across the Region (SADC)
The Southern African Development Community (SADC) is convening policy dialogues to ease trade, transportation and movement of goods and services across the Region to facilitate regional integration. Regional integration helps SADC countries overcome divisions that impede the flow of goods, services, capital, people and ideas. These divisions between countries created by geography, poor infrastructure and inefficient policies are an impediment to economic growth. The policy dialogues are among the activities under the SADC Dialogue Facility (SDF) which is a programme funded by the European Union to the tune of €3 million as part the cooperation and support to SADC regional integration agenda. The SDF is expected to aid regional integration goals so that the citizens of the SADC Region will benefit from stronger, equitable and sustainable economic growth, increased collective leverage in global platforms and enhanced social opportunities.
COVID-19: CSOs call on EAC heads to ease cross border trade (New Vision)
Civil society organisations (CSOs) have called on the East African Community (EAC) heads to fast track the free movement of people for seamless trade to take place in the wake of the COVID-19 pandemic. CSOs comprised of EASSI, SEATINI and CEFROHT said that although the EAC heads of state committed themselves to free movement of goods, persons and services, this hasn’t been materialised. They added that the situation has been made worse at the recently opened border between Rwanda and Uganda, where traders still find it hard to freely cross over to carry out trade. The situation has been made worse with COVID-19 standard operating procedures, where traders are required to be tested every time they cross the border of which results are valid for only 72 hours. Sheila Kawamara-Mishambi, the executive director of the Eastern African Sub-Regional Support Initiative for the Advancement of Women (EASSI) added that such a situation is likely to discourage cross border trade, especially for women.
New EAC trade watchdog now expected April (Business Daily)
A new regulator or ombudsman for regional trade disputes is now likely to be in place by April after missing an earlier December target, a regional bloc official has said. East Africa Community (EAC) Secretary-General Peter Mathuki told the Business Daily the Trade Remedies Committee (TRC) could be in place by end of the first quarter or beginning of the second quarter. The body will assist businesses in the bloc’s five-member States when they have concerns over unfair trade deals from foreign rivals. It will have powers to investigate and address unfair trade practices and subsidies. TRC will investigate any complaints and make recommendations to government ministers for corrective anti-subsidy or anti-dumping measures that could be imposed to address any injury caused to the domestic industry in question.
NTBs removal bolsters trading across borders (IPPmedia)
John Bosco Kalisa, chief executive officer for the East African Business Council (EABC) said yesterday that Kenya’s imports from Tanzania stood at $501m and exports reached $403.9m, on the basis of EAC customs data. At an EABC trade facilitation forum at the Namanga one-stop border post (OSBP) he applauded presidents Samia Suluhu Hassan and Uhuru Kenyatta for eliminating the nauseating barriers, at the forum supported by the German development cooperation group GIZ, which operates the ‘Supporting East African market-driven and people-centred integration’ (SEAMPEC) programme.
EAC Council approves DRC admission (The East African)
The East African Community Council of Ministers has now approved the admission of the Democratic Republic of Congo into the regional bloc. The approval follows negotiations held between the EAC and the DRC from January 15th to 24th in Nairobi. The EAC Negotiations Team was led by Dr. Alice Yalla, Integration Secretary at the Ministry of EAC and Regional development and Prof Serge Tshibangu, special envoy of DRC President Felix Tshisekedi. “As you are aware the DRC delegation was in Nairobi in the last week of January 2021. The negotiations with the DRC have been concluded and a negotiation framework matrix jointly adopted,” said Adan Mohamed, Cabinet Secretary, EAC and Regional Development soon after an Extra-ordinary Council meeting virtually on 8th February, 2022. “We have now recommended to the summit to consider admitting the DRC into the Community in accordance with Article 3 of the EAC Treaty.”
The Council has now directed the EAC secretariat to develop a draft roadmap for the integration of the DRC into the community and submit it to the Council for consideration.
Africa forum to discuss place of tech in health transformation (Business Daily)
Health and technology stakeholders will be converging in Nairobi for this year’s East Africa Edition of the Africa Healthcare Supply Chain Dialogue. Ministers of Health from five East African countries, the EAC secretariat, tech leaders, multilateral agencies, financial sector and donor organisations will discuss ways technology can be used to leverage healthcare delivery through partnerships between private sector and public institutions. “Healthcare is one of the sectors hardest hit by supply chain challenges during the Covid pandemic. Stakeholders in health service provision including governments and industry players can leverage technology to mitigate against risk, build efficiencies and resilience moving forward, and this forms the core objective of this event,” Xetova chief executive officer Bramuel Mwalo said.
The African Development Bank on 9 February approved a $750,000 grant to drive reforms that will deepen the West African Monetary Union (WAMU) regional financial market and make it more competitive and attractive to investors. The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the African Development Bank and financed by the Luxembourg Ministry of Finance and the Netherlands Ministry of Foreign Trade and Cooperation. Under the second phase of the African Development Bank’s Regional Financial Market Development Support Project, the grant funding will cover the development of a monetary and financial code for the WAMU region. It will also promote the deepening of mortgage and securitization markets through capacity building and the overhaul of relevant legal and regulatory frameworks. The project is expected to define an operational framework for setting benchmark rates in close alignment with international best practices as set out by the International Organization of Securities Commissions.
Harmonisation of standards will grow organic agriculture in West Africa —ECOWAS (Tribune Online)
The Head of Agriculture Division, ECOWAS Commission Abuja, Mr Ernest Aubee says harmonisation of Organic Agriculture standards in West Africa will help grow trade in the region. Aubee made the assertion during an online presentation on the `Benefits and Opportunities of Organic Agriculture’ organised by Journalists Go Organic Initiative. He said that there is a need for harmonised Organic Standards for Participatory Guaranteed System (PGS) activities in West Africa to encourage quality regional trade. “The standards will enhance the visibility of organic agriculture and market driven development of the sector in the whole region. “Key in this regard are diversity of produce, simplicity of the process, empowerment of farmers, development of sustainable agriculture, easy access to standardised produce and products. “This will also lead to awareness of health benefits of organic products, easy access in sharing of practical experience, the possibility of an expanded market and premium for producers.”
Customs laments impact of insecurity in West Africa on cross border trade (Business & Financial Times Online)
A Deputy Commissioner of the Customs Division of the Ghana Revenue Authority in charge of Ethics and Good Governance, Alhaji Seidu Iddrisu Iddisah, has bemoaned the growing spate of political insecurity in the West African sub region, hinting that they may have a dire impact on cross border trading.
Speaking on the Eye on Port program, he said, the ongoing political upheavals add up to existing security threats such as maritime piracy and kidnapping, extremism, illegal bunkering, drugs and arms trafficking, and cyber security threats.
According to him, the total impact of these security threats is sabotaging regional integration efforts. “West Africa as a subregion is an economic unit. Certain protocols have been passed and rules, procedures put in place to facilitate trade. Normally, when there are coup d’états, countries pay attention to regime survival rather than implementing some of these protocols. For instance, the coup in Mali has made ECOWAS suspend the country. This suspension means all the cooperation that existed will end. And with goods not destined for Mali, but using the corridors of Mali, trade would be affected,” Alhaji Seidu explained.
EU earmarks 150 billion euros for investment in Africa (Reuters)
The European Union has earmarked over 150 billion euros ($170 billion) for investments in Africa under a global fund launched to offer an alternative to Chinese money, the European Commission said on Thursday. The investment would take up half of the EU’s 300-billion-euro Global Gateway scheme, which that was launched in December with the aim of strengthening Europe’s supply chains and fighting climate change in sectors including health, energy and transport. read more It comes as many European states seek to reduce illegal migration from Africa, driven in part by poverty and joblessness, and as fossil fuel producers in Africa bristle against the strict carbon reduction goals set by richer nations to reduce global warming.
Towards a renewed partnership between Africa and the EU (EU Reporter)
Africa and the EU must establish a new partnership as equals, focusing on people’s needs and adjusting to the needs of a post-COVID world, World. African and European societies face common issues and shared challenges, such as the coronavirus pandemic and climate change, creating the need for closer and more equitable collaboration. On 25 March 2021, MEPs approved Parliament’s proposals for a new EU-Africa strategy laying the foundation for a partnership that reflects the interests of both sides and gives African countries the means to achieve sustainable development
The EU-Africa relationship “must move beyond the donor-recipient relationship”, according to the Parliament report, emphasising the importance of supporting Africa’s domestic production through sustainable investment. It also proposes boosting intra-African trade through the continental free trade area, investment in transport infrastructure and better access to global markets. Public-private partnerships and funding small and medium enterprises are considered essential, as these smaller firms represent 95% of businesses in Africa and the private sector is expected to be decisive in the post-Covid recovery. All agreements should be compatible with human rights, labour and environmental standards and in line with UN Sustainable Development Goals, said the report. The report also calls on international lenders, such as the International Monetary Fund and the World Bank, to do more to relieve the debt burdens of African countries, which have been exacerbated by the pandemic.
Global economy
WTO members, international organizations outline Aid for Trade activities amid COVID-19 (WTO)
An overview of recent Aid for Trade activities was given by WTO members, international financial institutions and observer organisations at a session of the Committee on Trade and Development on 8 February dedicated to the Aid for Trade initiative. A workshop organized by the Committee on 7 February explored how the COVID-19 pandemic has accelerated the shift towards the digital economy and the constraints that developing countries face.
Participants discuss work plan for new trade and environmental sustainability talks (WTO)
WTO members taking part in a new initiative on trade and environmental sustainability met on 7 February to review a proposed 2022 work plan and exchange views on priorities for discussion. Representatives from international organizations and civil society groups also offered their views on the focus for work in the coming year.
Not a moment to lose, in race to meet Sustainable Development Goals: Guterres (UN News)
“The well-being of people around the world, the health of our planet, and the survival of future generations depend on our willingness to come together around a commitment to collective problem-solving and action”, said UN chief António Guterres. “We don’t have a moment to lose”. He urged those attending the first of five thematic consultations at UN Headquarters, the first devoted to Accelerating and Scaling up the Sustainable Development Goals (SDGs), to “make progress on the substance and the search for consensus, as much as possible this year”.
Noting that “there is no one-size-fits-all social contract”, Mr. Guterres reminded that Our Common Agenda proposes an intergovernmental World Social Summit in 2025 to “coordinate action and create momentum on a global scale” towards reaching the goals, while taking stock of efforts to renew the social contract. “The ending of poverty in all its forms everywhere is not just the objective of SDG 1, but the primary objective of the 2030 Agenda itself”, he stated. “Poverty is not only the absence of income”, he said, advocating for a global economy that works for all, including safeguarding public health, reforming the world’s financial system, and protecting the environment.
Related News
tralac Daily News
Country-related news
Cyclone Batsirai: Exports to Madagascar on the line (Food for Mzansi)
As a strategic trade partner to South Africa, Madagascar’s dealing with Cyclone Batsirai could have an impact on local exports to the island country. But although it is unclear at this stage what the extent of potential value chain disruptions will be, experts are far more concerned about food security in a neighbouring country significantly reliant on South African imports.
Madagascar is currently dealing with the aftermath of Cyclone Batsirai, which moved through the southeastern parts of the island on Friday, 4 February 2022. This was less than a month after Tropical Storm Ana slammed into the country in January. The latest figures around the human toll stand at 55 000 people displaced and at least 50 people dead. It is reported that Madagascar’s agricultural sector has been badly affected by the two weather events, particularly in the rice industry as Madagascar’s biggest export commodity. Concerns are also growing over food shortages and food security
South Africa must turn to renewables, Scatec GM emphasises (Engineering News)
South Africa’s problem is one of a “fossil fuel dependency crisis”, rather than an “energy crisis”, renewable power producer Scatec sub-Saharan Africa GM Jan Fourie posits. He says the country’s energy shortfalls, primarily driven by poor performance at an ageing fleet of coal-fired stations, are addressed in South Africa’s Integrated Resource Plan of 2019, which commits to a shift away from coal, with a proposed 25% of South Africa’s total power to come from renewables by 2030. “The country’s abundant sunlight and wind resources make renewables the obvious panacea. Renewables-based projects are now quick to establish and fully cost-competitive with fossil-fuel-based ones. “And with programmes like the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) and Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) well under way, there is no shortage of investor backing or State support,” says Fourie.
Sugar organisation calls on government to honour local commitments (Engineering News)
It is vital that, in this year’s State of the Nation Address, President Cyril Ramaphosa announces action on government’s commitments under the South African Sugarcane Value Chain Masterplan, including that government departments and State entities only procure locally produced sugar, industry organisation SA Canegrowers chairperson Andrew Russell says.
He says last year’s address saw the President encourage the South African government, business and organised labour to buy local. While this was actioned upon by the private sector, which has been supporting the local sugar industry, government seemed to be lagging behind.
Kenya protests South Sudan new entry, exit vehicle fees (Business Daily)
Kenya has protested a move by the South Sudan government requiring all the vehicles entering the country to pay $100 annual fee and further $30 for every entry and exit per vehicle. Through the Ministry of Trade and the Kenya Transporters Association (KTA), Kenya said the fee will increase the cost of transport and hamper the free movement of goods along the Northern Corridor.
According to a letter by the Kenyan government to South Sudan, the introduction of the new entry digital border security control tag meant to enhance data collection of traffic movement in and out of its territory will make logistics business in Juba unviable.
Sh1.8bn yard to help ease truck congestion at Malaba border (Business Daily)
The traffic congestion at the Malaba border is expected to ease considerably once construction of the Sh1.8 billion marshaling yard is completed. The yard, whose construction has started, will remove the trucks on the road where they currently park, improve efficiency at the border point while improving the welfare of the drivers. The facility is being constructed by the Kenya Ports Authority (KPA).
Currently, the trucks have to park on the roadside as they await clearance from the border officials, creating huge traffic that inconveniences other motorists.
Kenya closer to unlocking Djibouti miraa market (Business Daily)
Djibouti’s Trade minister will lead a delegation to Nairobi this month to discuss the khat (miraa) market that Kenya has been eyeing after Somalia closed access of the stimulant to Mogadishu.
Kenya is targeting to export at least 20 tonnes of miraa to Djibouti daily, which is nearly half of what was being sold to the Somali market every day.
The planned visit by the delegation will come as a boost to Kenya after the Djibouti officials who were expected in the country last year in August failed to show up.
Djibouti is getting most of its khat supply from Ethiopia, but there is a huge deficit for the stimulant as Addis Ababa is unable to meet the country’s total demand. The Djibouti market is an initiative of the County Government of Meru, which through the ministry of trade is pushing for access.
South Sudanese Oil to Unlock Development in Northern Kenya (Energy & Capital Power)
Landlocked South Sudan is bordered to the north by Sudan, to the east by Ethiopia, to the south by Uganda and Kenya, and to the west by the Democratic Republic of the Congo and Central African Republic. As the only major oil producer in East Africa, its 3.5 billion barrels of proven oil reserves remain of strategic importance to a region in short supply of both energy and infrastructure. However, domestic oil production has largely been viewed in isolation, with the vast majority exported as crude petroleum to China. As the country unlocks a new chapter in its history, South Sudan is repositioning itself as a gateway to East African energy development, specifically through the creation of regional, integrated supply chains and export-driven growth. In neighboring Kenya, for example, the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor project aims to foster connectivity among East African countries through the establishment of large-scale transport and logistics infrastructure.
While the South Sudanese Government has been lukewarm on the project to date, citing concerns over cost and viability in light of COVID-19 and fluctuating oil prices, its participation is set to play a vital role in the growth of the wider region. In addition to boosting South Sudan’s own oil exports, the new pipeline will drive socioeconomic development within marginalized northern Kenya by spurring local job creation and integrating rural and isolated communities into regional supply chains through key export and trade infrastructure. In addition to the crude oil pipeline, the LAPSSET Corridor project comprises a railway line, road network connecting Lamu, Garissa, Isiolo, Moyale and Turkana, a dam along Tana River, airports and associated industrial areas. The newly-constructed Lamu Port, which was launched last May, is intended to connect landlocked East African economies with global trade routes and complement Kenya’s existing industrial hub in Mombasa, with a view to establishing a special economic zone.
Rwanda: Top locally made products that became popular in 2021 (The New Times)
Over the past years, the Made in Rwanda initiative has contributed both to Rwanda’s economic growth and the trade balance in particular. The development has seen a number of products increasingly become popular in the local market. Apart from the traditional items such as agaseke baskets, imigongo, themed outfits, beads, wall baskets and banana leaf bags, the five-year campaign has reduced the number of imports in the country. In 2021, these are some of the items that rose to popularity in the local market.
Zim exports hit record high (The Herald)
Zimbabwe recorded its highest ever foreign currency receipts in 2021, boosted by strong commodity prices and increase in international remittances, official figures show. Foreign receipts amounted to US$9,7 billion from US$6,3 billion in 2020, according to the Reserve Bank of Zimbabwe (RBZ)’s 2022 Monetary Policy Statement released on Monday. Exports increased by 66,6 percent to US$6,2 billion while diaspora remittances grew by 42,7 percent to US$1,4 billion. Imports amounted to US$4,9 billion.
Egypt Economic Monitor, December 2021: The Far-Reaching Impact of Government Digitalization (World Bank)
The Egyptian economy continues to show the resilience it has displayed throughout the COVID-19 pandemic, due to the macroeconomic and energy sector reforms it has implemented in recent years, along with measures taken to ease monetary conditions, provide selected sectoral support, and mobilize external financing. Real GDP growth and foreign income activities started recovering in Q4-FY2020/21. However, global COVID-related challenges and an uneven recovery across the world continue to restrain the rebound.
Egypt is expected to resume pre-pandemic growth in FY2021/22 under the baseline scenario that the COVID-situation gradually improves. Further advancement of structural reforms is critical to sustain recovery, drive productivity growth, and generate high-earning job opportunities. The Focus Chapter of this monitor is dedicated to the topic of government digitalization. Egypt has reached a relatively elevated level of government digital transformation, according to international indices, such as the United Nations E-Government Development Index, as well as the newly constructed World Bank GovTech Maturity Index.
Egypt, Courted By China & Russia, Sees Exports Rise (Silk Road Briefing)
Egypt is being wooed by both Beijing and Moscow as a desirable trade partner and access point to the African continental market. The Egyptian President Abdel Fattah el-Sisi was one of the 40 World Leaders who attended the opening of the Beijing Winter Olympics, after which he held meetings with Xi Jinping. Xi commented afterwards that “China and Egypt “Share similar visions and strategies in defending their own interests.” Their comprehensive strategic partnership is a model of “China-Arab, China-Africa, and China-developing world solidarity.” Xi said, with the meeting coming as el-Sisi’s government is seeking closer ties with China as it distances itself from the United States and other Western nations critical of its human rights record. Egypt is a member of the Belt and Road Initiative and is a key partner – as the Suez Canal is the only maritime connection between Africa and Asia on one side and Europe on the other.
Egypt is also a member of the African Continental Free Trade Agreement (AfCFTA) which commenced from January 1st 2021 and which has largely abolished intra-African trade tariffs. This means it is now possible to source products from across Africa, process them and mix them with duty free imported products from elsewhere, and then either resell the completed item back onto the African domestic market or reexport them. That requires an Export Processing Zone with Bonded warehousing facilities. Both China and Russia are developing these at Port Said, near the Suez Canal. Bilateral trade between China and Egypt is currently running at about US$2 billion per month and rose about 18% in 2021.
African trade
At ABF 2022, African countries call for the transformation of air transport and tourism sectors (UNECA)
The Economic Commission for Africa (ECA), in collaboration with Google Africa and Africa 24, held the fifth Africa Business Forum on the margins of the thirty-fifth ordinary session of the African Union Assembly of Heads of State and Government. Delegates from the public and private sectors met in person and virtually to discuss how best to tap into that vast potential and meet the growing demand unleashed by the African Continental Free Trade Agreement. What are the roadblocks and how can they be removed, were critical questions for the session, themed: Investing in Multimodal Transport Infrastructure to Optimize the Benefits of the African Continental Free Trade Area: A Focus on Air Transport and Tourism.
The Executive Secretary of the ECA, Vera Songwe in welcoming delegates, outlined how critical transport was to make the most of AfCFTA. Pointing to ECA research, she stated, “the continent would require close to 2 million additional trucks, over 100,000 rail wagons, 250 aircraft, and more than 100 vessels by 2030, if the Free Trade Area is fully implemented.” Essentially, Africa’s immense potential for trade, travel and tourism is languishing virtually untapped. The potential for improving transport infrastructure and services across Africa depends on “economic policies had to be recentered to include transportation. That included ships, boats, trains, planes and automobiles,” said President of Sierra Leone H.E. Julius Maada Bio.
Supporting the development of transport infrastructure and services for the full realization of the benefits of the AfCFTA requires a lot more, according to delegates. It requires reducing nationalistic sentiments to make way for an open market, promoting intra-African tourism through the Single African Air transport Market (SAATM) and recentering economic policies. The President of Sierra Leone, H.E. Julius Maada Bio, said “economic policies had to be recentered to include transportation. That included ships, boats, trains, planes and automobiles.” More emphasis on financing growth and embracing digital transformation was also called for. Google’s CEO, Sundar Pichai, said, “Africa was on the brink of a digital transformation - one which would be crucial to the transport and tourism sectors.”
Africa: Bringing supply chains to life across the continent (Lexology)
Organizations that rely on supply chains in Africa are looking at ways to strengthen pandemic-impacted chains. Many effective treatments aimed at boosting the health of ailing chains are being implemented, including those that rely on digitization, sustainability standards, and improving infrastructure and manufacturing capacity.
The pandemic caused massive damage to global supply chains, with challenges including route congestion and blockages, manufacturing shutdowns, a deficit of skilled labor, a global shortage of key logistics components including shipping containers, lack of space in warehouses, a spike in transportation costs and substantially increased demand for goods around the world, post-lockdown. The World Trade Organization recently noted that these global supply chain challenges would last longer than originally thought, possibly into next year, and that developing economies would be persistently marginalized by weak links in global supply chains. As a result, businesses have been looking at ways to best protect their supply chains from future disruption. Measures to heal and strengthen ailing chains include digitizing parts of the supply chain, increasing manufacturing capacity in low-cost markets, reducing reliance on single-source suppliers, improving supply chain infrastructure through public and private funding, integrating sustainable practices into supply chain management and carefully monitoring changes in government policy across multiple jurisdictions.
Why Lapsset is stuck on the starting blocks (The East African)
Three years after Kenya and its landlocked neighbours Ethiopia and South Sudan committed to raise funds to build infrastructure linking their economies on the Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) Corridor, not much has happened. Kenya Lapsset Corridor Development Authority Chair Titus Ibui said there was a need to mobilise funds and improve on security to ensure the projects are completed. Speaking at a Lamu stakeholders and leadership consultative meeting in Mombasa on February 3, Mr Ibui said a number of projects have stalled as a result of insecurity after suspected al-Shabaab militants attacked residents and even contractors forcing the project implementers to flee. “We are concerned about the insecurity in Lamu that is crippling progress of Lapsset projects. We have seen contractors suspend works due to insecurity but we are addressing that,” said Mr Ibui.
On funding, Mr Ibui said Kenya has so far used up $1.39 billion in the construction of roads and other infrastructure from its coffers.
Lapsset is meant to link the three states via rail, airports, roads and oil pipelines. If successful, Lamu would become eastern Africa’s largest seaport with 23 berths.
SADC: Legal frameworks key for deeper integration (sardc.net)
The SADC Executive Secretary Elias Magosi has called on Member States to pass national laws to support regional integration as all legal instruments are critical in deepening integration and promoting sustainable development in the region.
The slow pace by some SADC Member States to advance these regional laws from being stated intentions to actual application has affected integration, resulting in most people failing to achieve maximum benefits of belonging to a share community in southern Africa.
SACU strengthens regional co-operation to implement HS 2022 (WCO)
In pursuit of strengthening regional co-operation, the Southern African Customs Union (SACU) continued its work towards greater coordination of policies and activities in the area of the Harmonized System (HS) and tariffs. On 24 January 2022, the SACU Technical Working Group on HS, Tariff, Origin and Valuation held a virtual meeting to discuss the progress in the implementation of the new edition of the HS. The meeting brought together 30 experts representing the five Member States of the SACU and the SACU Secretariat.
In its presentation, the SACU Secretariat focused on the Roadmap for Migration from HS 2017 to HS 2022. The Roadmap lays out all the main steps, phases and action required to ensure a timely and well-coordinated implementation of HS amendments by the Customs Union and its Member States. It had been developed in cooperation with the WCO, in the framework of the EU-WCO Programme for HS in Africa (HS-Africa Programme), funded by the European Union, and validated at previous meetings of the Working Group.
The Working Group expressed satisfaction at having achieved most of the milestones set by the Roadmap. It was stressed that the Roadmap rendered simultaneous implementation of HS amendments by all SACU Member States achievable, ensured meaningful participation in the process of business representatives, and made the collaboration between all the stakeholders involved in the migration process more transparent and efficient. As a result, all the Member States successfully migrated to the HS 2022 version of the SACU Common External Tariff.
Private firms behind the endless EAC trade wars, reveals PS Desai (The Standard)
Private companies are to blame for constant trade wars between the East African Community (EAC), a top government official has said. In an interview with The Standard, the EAC and Regional Development Principal Secretary Kevit Desai said although there have been tremendous efforts to harmonise non-tariff barriers (NTBs) to ease the tensions, some private companies have wanted to play monopoly at the expense of others. “We have had instances where individual interests and unfair market play have provoked individual member States to impose bans on some exports or imports. This has solely been to protect the local markets,” said Mr Desai. The PS said although such tensions will always prop up, the EAC member States must ensure the challenges are dealt with in cooperation with the private sector.
EAC needs to do more on non-tariff barriers (The Citizen)
A recent dialogue between major business stakeholders from both the public and private sectors of the economy established that trade barriers are still a major challenge within the East African Community (EAC). The event, which was conducted at the Mutukula border crossing between Tanzania and Uganda, was jointly organised by the East African Business Council (EABC) and Trade Mark East Africa (TMEA), and brought together some 50 participants.
What with one thing leading to another, the dialogue definitively concluded that both tariff and non-tariff trade barriers (TTBs and NTBs) continue to be a real barrier not only to cross-border trade, but also to intra-regional investment flows within the six EAC member countries of Tanzania, Kenya, Uganda, Rwanda, Burundi and South Sudan.
Enhance local govts capacities, EAC urged (Dailynews)
THE East African Community (EAC) partner states have been urged to enhance the capacity of local government authorities in realising the envisaged African Union (AU) Agenda 2063. The Chairperson of the Commonwealth Local Government Forum (CLGF) Reverend Mpho MW Moruakgomo said on Monday that the six EAC members had a noble duty of capacitating regional local government authorities, arguing that they were the anchors of development. Rev Moruakgomo, who was speaking at the beginning of the 7th East African Local Governments Association (EALGA) conference noted that most African countries were still lagging behind in achieving Agenda 2063 as a result of the ever declining pace of local government authorities.
The CLGF Chairperson further warned that it will be difficult to realize the envisioned EAC integration agenda if governments turn a blind eye on local government authorities.
15th EAC Sectoral Council Meeting in Energy currently underway (EAC)
A four-day East African Community Sectoral Council on Energy is currently underway via hybrid format. The overall objective of the Sectoral Council on Energy is to review the progress made in the sector in implementing Council decisions and to consider other issues of regional importance in the areas of New and Renewable Energy, Energy Conservation and Efficiency, Fossil Fuels and Power Sub-sectors.
Among the items on the agenda are consideration of reports on: the Status of implementation of the previous directives/decisions of the Sectoral Council; Centre of Excellence for the East African Centre for Renewable Energy and Energy efficiency (EACREEE); New and Renewable Energy, Energy Conservation and Energy Efficiency, and; Establishment of the East African Centre for Renewable Energy and Energy Efficiency
EA Crude Oil Pipeline enters fundraiser phase (The East African)
After announcing the final investment decision, the shareholders of the East African Crude Oil Pipeline (Eacop) now turn to looking for money to conclude the deal for financing of the project, which is expected mid this year. The Eacop is a key infrastructure project that will transport Uganda’s oil to export markets, hence a major component in the commercialisation of the Lake Albert oil resources. The 1,443km pipeline from Hoima in Uganda to the Indian Ocean port of Tanga in Tanzania, will cost $5 billion – a jump from the original cost of $3.5 billion due to the increase in prices of key inputs such as steel, cost of shipping as well as the cost of loans. “Fully loaded, we are looking at a cost of $5 billion,” says John Bosco Habumugisha, the General Manager, National Pipeline Company.
Africa can bridge digital divide if it scales innovations in e-commerce and agritech (The East African)
Almost two years into the pandemic, Covid-19 has rapidly accelerated the digital transformation of economies globally. For businesses in some parts of the world, such as Pacific Asia, Covid-19 has fast-forwarded digitalisation by more than 10 years. However, not all countries have seen a boost to their digitisation efforts during the pandemic. Many countries in the developing world, including Africa, continue to be challenged by the severe digital divide largely due to infrastructure and cost barriers. Thankfully, it is not all grim. While the digital divide persists, African countries have an opportunity to scale the innovations in the agriculture and e-commerce sectors from the past two years. Scaling these innovations, which are often driven by private sector initiatives, will require policy efforts that focus on regional integration and targeted support towards digital adoption. These silver linings have the potential to boost economies, transform the respective sectors beyond the pandemic, and power new possibilities for the continent in terms of wealth creation and employment.
Digitizing Africa’s informal supply chain with Omnibiz (TechCabal)
Over the years, local and multinational retail chains from Shoprite to Prince Ebeano have emerged in Nigeria. However, they cater to only a small sliver of the population. In Lagos, Shoprite is more of a destination where people explore merchandise and snap pictures than shop.
Rather, 98% of Nigerians shop in the informal retail sector, just like our fictional woman retailer who sold you your bread. Informal retail encompasses a host of outlets that range in size: tabletops, kiosks (managed by mallams), retail stores, mini-marts, and supermarkets. This doesn’t even account for the direct-to-consumer (DTC) channels of hawkers who are, in reality, an extension of informal shops. They often buy goods on credit from retailers and ply a brisk trade of certain items that do well in Lagos traffic
Informal retail is dominant across sub-Saharan Africa. Its size and scale are immense: it contributes $2.6 trillion to the region’s nominal GDP, drives $1 trillion in annual sales, and provides 80% of jobs. Informal retailers sell 80% of fast-moving consumer goods (FMCGs) to African households. According to the United Nations Economic Commission for Africa (UNECA), 90% of retail transactions in Africa happen through informal channels. These informal transactions account for 70% of retail transactions in Kenya, 96% in Ghana, and 98% in Nigeria and Cameroon.
Despite informal retail’s importance in driving commerce and economic activity, it is uncoordinated, fragmented, and unstructured. Multiple players exist in retail supply chains – manufacturers, distributors, sub-distributors, logistics providers, and retailers – but they operate in silos. Supply is disconnected from demand. The breakdown in supply chains results from the difficulty in reaching retailers, and ultimately, customers. Distribution networks – making sure your product is within easy reach of customers – are costly to build. They require warehouses, logistics fleets, and staff.
In Nigeria, proximity to the customer is everything. With their deep pockets, large manufacturers have built their own distribution channels to reach retailers. Multinational FMCG companies, like Coca-Cola, Seven-Up, Unilever, and Nestle, have invested heavily in their own distributor networks. They supply inventory on credit and lease fleets. Yet, given the great expense of direct distribution, even the FMCG giants only sell 30% of their goods via their own networks; the remaining 70% is sold via sub-distributors. This is where informal retail enters a black box.
Africa’s internet economy is under-utilised, can be worth $180bn by 2025 - UN (News24)
Africa’s internet economy has the potential to leapfrog the continent’s trade and logistics capabilities and become a key global player in food security. Vera Songwe, the executive secretary of the United Nations Economic Commission for Africa (Uneca), estimates that the internet economy in Africa can be easily worth US$180 billion by 2025. “Following its full implementation, the African Continental Free Trade Area is expected to boost inter-Africa trade in agri-foods by 42%. Essentially, we can feed ourselves and others accordingly. “In infrastructure, Africa’s internet economy has the potential to reach US$180 billion by 2025, accounting for 5.2% of Africa’s GDP (gross domestic product). This internet economy would be powered by trade,” she said.
COVID vaccines: African countries need to fix their distribution chains (The Conversation)
Sub-Saharan Africa still has too few vaccines for too few people. Delivering more inoculations to the region deserves top priority. But there is another hurdle to overcome to successfully deploy vaccines: the region’s poor trade and logistics quality. Logistics are a network of services that support the physical movement of goods both within and across a country’s borders.
Africa’s score trails all major regions of the world in six key categories of logistics performance, including timeliness and tracking. For more than a decade, its negative impact on the region’s trade has been well documented. For instance, delays at customs are estimated to add 10% to the cost of imported goods, which is higher than the average impact of tariffs in some cases.
After addressing the issue of vaccine supply, closing gaps in logistics performance is critical to changing the course of the pandemic in Africa.
IFC Managing Director Makhtar Diop has concluded a four-day visit to Kenya and Tanzania, where he confirmed to senior public and private sector partners that IFC will expand its commitments in East Africa—and across all of Africa—to support a stronger private sector, help build regional value chains, and speed economic recovery from COVID-19.
A major, crosscutting theme of his visit was how IFC can support African economies to build regional value chains and strengthen inter-African trade across all sectors. In 2021, IFC announced a $2 billion investment in small business and trade to galvanize Africa’s recovery from COVID-19 and support jobs and business activity.
Kenya and Tanzania’s growth both rebounded in 2021 from the COVID19-induced health and economic crisis of 2020. Kenya is expected to grow its GDP by 5 percent in 2022, though strong headwinds are affecting business and social development across East Africa, including low vaccination rates and reduced trade.
Global economy
DDG Ellard: Multilateralism is the solution to challenges of global commons, unilateralism (WTO)
In addressing the role of economic multilateralism, DDG Ellard underlined the role of international organizations in delivering global public goods, addressing challenges of the global commons, and providing a more enduring, equitable and cooperative basis for democratic global governance than unilateral action. DDG Ellard elaborated on the challenges the system faces today, emphasizing the need for engagement by all WTO members to improve the organization and make it more relevant. “While the WTO isn’t perfect, there is no alternative to it,” she said, stressing that it is worth reforming the WTO to make it better fit to meet the challenges of the times.
The Commonwealth and ITC strengthen ties to help countries achieve sustainable & inclusive economic development (The Commonwealth)
The Commonwealth Secretariat and the International Trade Centre (ITC) today signed a Memorandum of Understanding (MoU) to strengthen, promote and support private sector development in Commonwealth countries. At the signing ceremony, Commonwealth Secretary-General, the Rt Hon Patricia Scotland QC, and ITC Executive Director, Pamela Coke-Hamilton, stressed the importance of this MoU.
Executive Director, Coke-Hamilton said: “The pandemic has created a greater divide for vulnerable groups forcing us to creatively consider how we work together for the greater good of humanity. As sustainable development continues to be threatened, greater cooperation is needed to safeguard the gains made while pushing for progress. I am delighted that with the signing of the MOU, both the ITC and the Commonwealth Secretariat will be joining forces around strategic areas.” The MoU highlights four pressing issues for the two organisations to collaborate on, including resilience building in Small Island Developing States (SIDS), women’s economic empowerment, supporting Commonwealth States’ engagement with the African Continental Free Trade Area (AfCFTA) and advancing blue and green economy recovery.
Supply chain winners and losers in 2022 (Investment Monitor)
Global supply chains have been in a state of disruption for the past few years due to a combination of rising trade tensions and the impacts of Covid-19.
Of this double whammy, Damien Bruckard, deputy director of trade and investment at the International Chamber of Commerce in Paris, says: “The collapse and subsequent surge in consumer demand during the pandemic has led to significant shortages of manufacturing components, order backlogs, delivery delays and a spike in transportation costs and consumer prices.”
As the dust continues to settle on the Covid crisis and companies and countries action ever-evolving strategies, Investment Monitor investigates who the winners and losers will be within the world of supply chains in 2022.
OECD: Plugging the SDG Financing Gap (Capital Finance International)
Ensuring Blended Finance can mobilise private finance, particularly in the Least Developed Countries and towards Social Sectors, will require a systemic and transformational approach.
Even before the arrival of COVID-19, the SDG financing gap was significant. The private sector is an important contributor to SDG delivery and has increasingly been mobilised with the support of blended finance approaches. Blended finance has been defined as the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries. In 2018-19, official development finance mobilised nearly $50bn of private sector finance for development. However, this amount is not enough. In particular, in countries where development finance flows, especially ODA, become a critical source to finance social services, the current share falls short from commitments. The impacts of the COVID-19 pandemic on developing countries are increasing financing needs while reducing available resources.
Related News
tralac Daily News
Country-related news
In 2019, SA celebrated its first smartphone factory. Now it is empty and going on auction (Business Insider South Africa)
Towards the end of 2019, President Cyril Ramaphosa described the launch of the Mara smartphone factory outside Durban as “a great moment in South Africa’s drive to be a producer of advanced goods”. That factory is now empty, and on auction.
The sale includes the manufacturing and assembly plant, equipment, and components for smartphones, plus already completed phones in storage. The equipment is said to be state-of-the-art equipment, and is relatively new, Green said.
UN Women Launches Book To Promote African Trade (263Chat)
The United Nations Women last Friday launched a multi-lingual book that aims to promote intra African trade for women by simplifying the African Continental Free Trade Area (AfCFTA). The book titled Understanding Of The African Continental Free Trade Area (AFCFTA) And How it relates to Zimbabwean Women In Trade” was launched in three languages, Shona, Ndebele and English.
Speaking at the launch, Un Women Country Representative, Delphine Serumagaat noted that it is imperative for women to be included in all economic spheres. “Research has demonstrated that increasing women’s human capital is one of the most effective ways to reduce poverty. A slight increase in women’s assets, education and income have immediate positive multiplier effects such as increasing agricultural productivity and economic gains.
“Our intention and hope is that through the process of engaging with Women in Zimbabwe and those in the private and public spaces of Zimbabwe, we will contribute greatly to increasing human capital and reducing poverty,” she said.
Namibia aims for first-ever oil output by 2026 after Shell discovery (Engineering News)
Namibia aims to fast track the development of its first oilfield to have production by 2026 following a significant offshore discovery by Shell, a senior energy official told Reuters on Monday. Shell on Friday said the exploration well off the coast of the southern African country had shown “encouraging” results with the presence of a working petroleum system with light oil.
Rwanda to increase 2021/2022 budget by $608m to service debts, pay Covid bills (The East African)
Rwanda plans to increase its 2021/2022 spending by $608.7 million to $4.2 billion as government plans for debt repayment and Covid-19-related expenditure, including vaccine rollout. The country’s overall budget for the current fiscal year will rise from the initial $3.6 billion under the changes tabled in Parliament for approval Monday. Debt servicing takes a big chunk of the additional spending at $327.6 million. The government has also earmarked $4.7 million additional allocations to expenses related to its Commonwealth Heads of Government Meeting (CHOGM) 2022.
Botswana: 2022 Budget Speech (Mmegi Online)
It is important to recognise that our economy needs deep structural reforms to achieve growth and transformation. The structural reforms needed to increase the growth rate, boost job creation, improve productivity and reduce poverty and inequality were prioritized for the second half of NDP 11 and beyond. The reform agenda has to some extent been disrupted by COVID-19, but the need to implement these structural reforms remains critical. Our economy continues to have a narrow export base, which must be diversified and expanded. We have an external imbalance, with more imports than exports, resulting in persistent balance of payments deficits. Our fiscal revenue base remains concentrated on external sources, from minerals and SACU, with inadequate domestic revenue mobilisation and high levels of spending, and structural budget deficits. As a result, our economy has “twin deficits” that are of great concern, and which are not sustainable. In addition, there is still weak implementation of programmes and projects. Examples include the lengthy delays with the restructuring and privatisation of Air Botswana and the Botswana Meat Commission, which have long been agreed but the results are unsatisfactory and not much has been achieved. It is, therefore, critical to strengthen accountability within Government for the implementation of agreed policies.
US to give update on trade deal with Kenya in coming weeks (The Star, Kenya)
The U.S. government is engaging in robust talks with Kenya as part of its drive to expand equitable and inclusive U.S. trade investment on the African continent. Deputy U.S. Trade Representative Sarah Bianchi told a trade conference that USTR would have more to say on Kenya in coming weeks, but gave no details. “We have been doing a lot of robust engagement with Kenya. We’re exploring ways to deepen our trade and investment relationship there,” she said. “We’ll have more to say on Kenya in the coming weeks, but we do want to keep a really deep engagement going.”
World Bank to give Kenya $200m agriculture loan (The East African)
The World Bank will give Kenya $200 million to support various development projects to improve food security in the country. Vinay Kunar Vutukru, a senior agriculture economist with the bank, said on Monday that the institution is negotiating with the State on the new loan that will be channelled to various agriculture value chains. He said they expect to conclude the talks and have the financial assistance approved within the next two months. “We are currently in talks with the government with a view to continue our support to the agriculture sector to enhance food production,” said Mr Vutukuru. The World Bank is currently funding various projects in the sector valued at $500 million.
Kenya, Ethiopia reach new power purchase deal (The East African)
Kenya has reached a new agreement with Ethiopia in a bid to further expedite purchase of hydro-processed cheap power from Addis Ababa. The new arrangement was reached after an Ethiopian delegation, led by Ethiopia’s State Minister of Finance Eyob Tekalign, visited Nairobi from February 2-4, 2022. The two nations deliberated on previously signed Power Trade Agreements, finalisation and operationalisation guidelines and procedures, as well as interconnection agreements in light of progresses made on each side.
Circular economy: Less than 10% of e-waste is collected in Rwanda (The New Times)
Despite the government’s policy to promote a circular economy, there is a need for improved strategies in collecting electronic waste for recycling according to players in waste management.
Between 10,000 tons and 15,000 tonnes of electronic waste are expected to be collected every year in Rwanda. However less than 10 per cent of that is annually being collected from homes across the country. Experts say that electronic waste is increasing by between 8 percent and 11 percent every year which requires improved efforts in collection and recycling.
World Bank: DRC is Rwanda’s most promising trade partner (The New Times)
The neighbouring Democratic Republic of Congo has great trade potential with Rwanda, with data from recent years showing growing trade and currently is Rwanda’s biggest regional trading partner. The latest World Bank report on Rwanda themed ‘Boosting regional trade integration in the post-Covid era’ observed that DRC is a growing trade opportunity for Rwanda. Exports have grown considerably in the last decade, analysts said adding that Rwanda exports to DRC are more than to East African Community countries combined. By 2019, Rwanda had exported more goods to the DRC than to the EAC. The main exports to the DRC include livestock and crops, but cross-border trade in services, such as finance, transportation, and wholesale trading, are also important, the report noted in part.
Ghana, Rwanda sign MoU to deepen trade relations (Graphic Online)
The government of Ghana has signed a memorandum of understanding (MoU) with Rwanda to deepen bilateral trade relations between the two countries. This is on the back of the Africa Continental Free Trade Area (AfCFTA) agreement which is expected to boost intra-Africa trade. The Minister of Trade and Industry, Mr. Alan Kyerematen, signed on behalf of Ghana, while the Minister of Trade and Industry for Rwanda, Ms. Beata Habyarimana, initialed on behalf of her country. Speaking at the ceremony, Mr. Kyeramaten said he was confident that the MoU would blossom in the very near future into a strong, mutually beneficial relationship between the two countries. He said the MoU was aimed at strengthening and developing trade ties between the two countries, as well as expand and diversify commercial exchanges among the private sector operators.
Freight costs double ahead of Valentine’s (Business Daily)
Airfreight costs have doubled ahead of Valentine’s season, in what could deny the horticulture sector the windfall that comes with the yearly celebrations. The Kenya Flower Council (KFC) said on Monday that insufficient airfreight capacity, high costs and costlier fertiliser are also weighing down the outlook for the sector.
KFC chief executive Clement Tulezi who spoke ahead of Valentine’s Day, celebrated every year on February 14, said the limited capacity and higher freight rates mean more expensive Kenyan flowers when they eventually get to key markets compared to rivals.
Textile export earnings rise by Sh8 billion (Business Daily)
Earnings from textile and apparel accessories grew by Sh8 billion in the nine months to September last year, boosted by higher sales to the United States (US) and the Netherlands.
Data from the Kenya Export Promotion and Branding Agency (Keproba) shows that revenue for textile firms rose to Sh33.7 billion in the review period compared to Sh25.7 billion a year earlier. This represented a 31.1 percentage growth. Keproba’s chief executive officer Wilfred Marube said in the report that the Netherlands and US were Kenya’s largest export markets in the period.
The African Growth and Opportunity Act (Agoa) – the US free trade scheme- allows Kenya to export selected goods at preferential terms to the US, exempting them from paying tax. The initiative, which was expected to end in 2015 after an initial deadline of September 2012, was extended by US lawmakers for 10 years until 2025.
CBN e-Invoicing, e-Evaluator To Worsen Nigeria’s Int’l Trade Process – Analyst (Leadership)
The Centre for the Promotion of Private Enterprise (CPPE) has called on the Central Bank of Nigeria (CBN) to scrap the electronic invoicing and electronic evaluator which it recently introduced, saying, it would further worsen the challenges businesses face in the trade processes in the country. The chief executive of the CPPE, Muda Yusuf, said the e-invoice and e-evaluator policy will only worsen an already bad international trade transactions process. The CBN had recently introduced the e-evaluator and e-invoicing to curb foreign exchange malpractices. However, CPPE boss noted bossp that the policy will increase transaction cost, entrench red tape, increase uncertainty, escalate business disruption, weaken investors’ confidence and heighten corruption risk. “The truth is that there is a strong correlation between red tape and corruption. “The increasing incursion of the CBN into the trade policy space is an aberration in our economic management system and a serious cause for concern to the business community. Issues of import valuation and classification are statutory functions of the Nigeria Customs Service, with the Finance Ministry as the supervising organ.
“The decision of the CBN to now undertake valuation and product price benchmarking of imports and exports is a duplication of the statutory responsibility of the Nigeria Customs Service. It will create an additional regulatory compliance burden and costs for the business community.
Nigeria runs major risk in AfCFTA, says Vitafoam CEO (Businessday)
Vitafoam Nigeria Plc’s Group Managing Director and Chief Executive Officer, Taiwo Adeniyi have identified some structural issues that Nigeria should address in order to benefit from its membership in the African Continental Trade Agreement (AfCFTA). By its formation, AfCFTA aims at reducing tariffs among members and covers policy areas such as trade facilitation and services. The Continental body operates a range of regulatory measures to prevent standards and technical barriers to trade. Prompted by media enquiry, Adeniyi identified the factors that may put Nigeria’s membership of AfCTA at a disadvantage as influx of foreign products which may orchestrate price war against the similar products that are made in the country, porous border and inefficient ports with multiple charges of various government law enforcement agencies
IMF Executive Board Concludes 2021 Article IV Consultation with Nigeria (IMF)
The Nigerian economy is recovering from a historic downturn benefitting from government policy support, rising oil prices and international financial assistance. Nigeria exited the recession in 2020 Q4 and output rose by 4.1 percent (y-o-y) in the third quarter, with broad-based growth except for the oil sector, which is facing security and technical challenges. Growth is projected at 3 percent for 2021. Headline inflation rose sharply during the pandemic reaching a peak of 18.2 percent y-o-y in March 2021 but has since declined to 15.6 percent in December helped by the new harvest season and opening of land borders. Reported unemployment rates (end 2020) are yet to come down but more recent COVID-19 monthly surveys show employment back at its pre-pandemic level.
Trade between Tunisia and Algeria would increase by 1/3 this year (African Manager)
Algeria has undertaken to benefit Tunisian products imported into its market of exemption from the payment of customs duties, according to what was recently announced by the Center for Export Promotion (CEPEX).
The CEPEX said all Tunisian products exported to the neighboring country are eligible for this measure which is part of the agreement of the Great Arab Free Trade Area (French: GZALE), except those on the negative list common to all Arab countries identified by the agreement for many health, environmental, religious and security requirements.
In fact, Algeria has canceled, since January 1, 2022, the negative list relating to products imported from Arab countries that are not covered by the tax benefits granted under the Great Arab Free Trade Zone.
Gambia receives agricultural materials (Farmers Review Africa)
The government of Gambia has received donated agricultural materials like fertilizers and certified rice seeds from Rice Value Chain Transportation Project located at Sapu in Central River Region South of The Gambia. The Ministry of Agriculture revealed the report and said the donation seeks to enhance the nation’s rice self-sufficiency, transform and modernize agriculture for sustained economic growth, food and nutritional security, reduce poverty and create employment opportunities for women and youths Speaking at the ceremony, Honorable Amie Fabureh, Minister of Agriculture announced that the donation saying it aims to transform and modernize Agriculture for sustained economic growth, food and nutritional security, reduce poverty and create employment opportunities for women and youths.
African trade news
The Republic of Cabo Verde became the forty-first (41st) to deposit the AfCFTA instrument of ratification (African Union)
The Republic of Cabo Verde became the forty-first (41st) State Party to deposit the instrument of ratification of the Agreement Establishing the African Continental Free Trade Area (AfCFTA).
To date, the Agreement Establishing the AfCFTA has been signed by 54 AU Member States. Forty-one (41) African Union Member States are also State Parties to the Agreement by virtue of their deposits of the instruments of ratification of the Agreement, demonstrating an unequivocal political will to achieve market integration in Africa.
Under the AfCFTA, African countries have collectively undertaken commitments to substantially liberalise all trade by eliminating tariffs on 97% of tariff lines – over a 13-year period from the start of implementation. So far, the AfCFTA Secretariat 44 countries representing 80% of African Union membership have submitted their tariff offers, with Algeria being the latest. Regarding Trade in Services, so far, the Secretariat has received 46 initial offers submitted by State and non-State Parties, covering the five priority sectors, namely: Business, Communication, Financial, Tourism and Transport services sectors. On Trade in Services, there have been some progress in the implementation of the objectives of the Protocol on Trade in Services. So far, the AfCFTA Secretariat has received 46 initial offers submitted by State and non-State Parties, covering the five priority sectors, namely: Business, Communication, Financial, Tourism and Transport services sectors. Some State and non-State Parties, namely members of CEMAC, EAC, and ECOWAS, have all presented consolidated offers as part of this process.
Africa’s Free Trade Area to boost the creative industry, generate jobs for the youth (Namibia Economist)
Africa’s Free Trade Area (AfCFTA) is expected to be a boon for the creative sector and generate jobs for the youth.
On 1 January 2021, trading under the African Continental Free Trade Area (AfCFTA) kicked off. The trade pact, which seeks to create a single market for goods and services and promote cross-border movement of capital and people, should boost intra-African trade, currently at only 18% and regional integration. It is also expected to be a boon for the creative sector. Key players in the creatives industry said as much when they met in Kigali, Rwanda, in 2019, even before the trade area launched. “We wanted to deconstruct the AfCFTA,” said Josh Nyapimbi, Executive Director of Nhimbe Trust, a pan-African creative civil society organization based in Zimbabwe, adding that the creative and cultural industries can “leverage the agreement to advance our economies.”
Similarly, Wamkele Mene, the Secretary-General of the AfCFTA Secretariat, has emphasized the need for youth involvement in cross-border trade through the creative industry and technology. He says that the active participation of young people in the free trade area could boost jobs creation and catalyze economic development.
Africa’s creative sector is diverse and includes visual and performing arts, crafts, cultural festivals, paintings, sculptures, photography, publishing, music, dance, film, radio, design, fashion, video games, digital animation, architecture, and advertising, according to the UN Conference on Trade and Development (UNCTAD).
Decade of Action: Fixing Africa’s development deficit (Africa Renewal)
Over the past two decades, Africa has remained home to some of the fastest-growing economies globally, despite the negative impact of the COVID-19 pandemic. Since the year 2000 of the top 20 fastest growing economies in the world, Africa accounts each year for anywhere between 3 and 12 countries – a statistic worth celebrating. Africa, however, cannot take a lot of comfort in this impressive statistic given the profound challenges the continent continues to face.
Africa Needs to Focus on Realizing Agenda 2063 to Ensure Peace, Prosperity in Continent: Ambassador (ENA)
Africa needs to focus on accomplishing the goals of the Agenda 2063 to have peaceful, integrated and prosperous Africa, Ambassador of Angola to Ethiopia said. Agenda 2063 is one of the grand development programs of the African Union that aspires a prosperous Africa based on inclusive growth and sustainable development by integrating the continent on the ideals of Pan-Africanism.
In an exclusive Interview with ENA, Ambassador Francisco José da Cruz said Africans are making progress. “It is a long road that we need to remain focused and be proud of what we have accomplished so far.” “We are at the right direction,” he said, adding what is important is to re-engage every day and try to do more based on our experience, especially trying more than ever to work together for the common good and mutual benefit. “We need to be focused on accomplishing the goals of the Agenda 2063 to have peaceful, integrated and prosperous Africa. That is why we need to make an effort working together. By doing so we will be able to mitigate any attempt from outside which intends to undermine our unity and stability,” the ambassador underscored.
He further stated “It is important for us to find not only our own solutions but also have our resources. And that is why we need to overcome the shortage of vaccines by starting manufacturing our own vaccine.” On other hand, Ambassador Jose Da Cruz pointed out that the African Continental Free Trade Area (AfCFTA) is a very important initiative to realizing economic integration in the continent.
Guterres says Africa is ‘source of hope’ for the world (UN News)
António Guterres also argued that, for the last 20 years, the African Union (AU) “has helped to bring this hope to life, in order to enable the continent to realize its enormous potential.”
According to Mr. Guterres, the collaboration between the UN and AU “is stronger than ever”, with the 2030 Agenda for Sustainable Development and Agenda 2063 (Africa’s blueprint for a peaceful, integrated and more prosperous continent) as the central pillars. The Secretary-General argued that “injustice is deeply embedded in global systems”, but it is Africans who “are paying the heaviest price.”
Mr. Guterres said Member States need to ignite the engine of economic recovery by reforming the global financial system. “But the deck is stacked against Africa. Sub-Saharan Africa is facing cumulative economic growth per capita over the next five years that is 75 per cent less than the rest of the world”, he said.
African Union Commission and AeTrade to collaborate on digital capacity building initiatives for trade (Today News Africa)
The African Union Commission Department of Economic Development, Trade, Industry and, Mining, has signed a Memorandum of Understanding with the African Electronic Trade Group (AeTrade), as a framework of cooperation on the implementation of the digital capacity building initiatives in AU member states including the Sokokuu platform, as an enabler for SMEs, women, and youth to access regional, continental, and global markets. The operationalization of the African Continental Free Trade Area (AfCFTA) is an opportunity for Africa to make meaningful economic progress towards electronic trade and the adoption of technological tools to enhance efficiencies in governance with the support and participation of the private sector. The collaboration will enhance efforts to digitalize trade in Africa at a larger scale by encouraging impact investment in small and medium-scale enterprises (SMEs) to create more jobs for the growing youth population and generate wealth across the continent.
“An equal opportunity is availed to all AU Member States to be part of the foundation for Africa’s grassroots digital transformation. All countries are encouraged to indicate their interest to host a country programme through the AU Commission for Economic Development, Trade, Industry and Mining”, stated the Mr. Mulualem Syoum, CEO of the AeTrade Group.
Outlining African Priorities for 2022: the Assembly of the African Union Begins its 35th Ordinary Session (African Union)
The Assembly of African Union Heads of State and Government today commenced its 35th Ordinary session and the first to be held in person following a hiatus in 2021 wherein the Assembly was held virtually due to the Covid-19 pandemic. The opening session was marked with calls for continued African solidarity in addressing the impact of covid-19 on the continent and the urgent need to address the emerging scourge of coup d’états and the threat of terrorism.
On multilateralism, the AUC Chairperson further noted the increased interest in the continent but observed that it has not yet translated into substantial development in favour of Africa. He said any Marshall Plan arrangement would require a surge in the mobilisation of endogenous resources. He called for a revisiting of the Union’s approach to partnerships, saying that such partnerships should focus on concrete, transformative and integrating mega projects in the five priority areas of peace and security, infrastructure and energy, climate change, innovative development financing, and training youth and women’s empowerment.
While noting that the ongoing institutional reform of the Union has improved internal management and efficiency, Mr Moussa Faki pointed to legal and political limits that impact the powers and leadership of the AU Commission on matters of regional and continental importance. He noted in particular the need to clarify the relationship of subsidiarity and complementarity between the Regional Economic Communities (RECs) and the AU, to avoid any detrimental effect on the functioning of the Union’s political and security architecture; and the issue of sovereignty of states, which can act as a protective shield against abuses occurring in a member country, and used as a wall against intervention by the continental organisation. He reiterated that the double handicap was not unrelated to the conduct of the AU Commission in the face of unconstitutional changes of government witnessed in parts of the continent.
African countries must drive own just energy transitions pathways (SAnews)
President Cyril Ramaphosa says a unilateral approach for all African countries in the transition from high to low carbon emissions will not work for the continent.
The President was addressing the Committee of African Heads of State and Government on Climate Change during the 35th ordinary session of the Assembly of the Heads of State and Government of the African Union (AU). “COP26 recognises our right to develop our own development pathways towards shared global objectives, based on our national circumstances and the guiding principles of the [United Nations Framework Convention on Climate Change]. Foremost amongst them is equity, and the principle of Common but Differentiated Responsibilities and Respective Capabilities. “A one-size-fits-all approach to complex issues such as a transition from fossil fuels that disregards the realties on the ground in Africa will simply not work, and is neither just nor equitable. Africa’s Special Needs and Circumstances need to be recognised globally because of our natural resource based economies, and owing to high levels of poverty, unemployment and underdevelopment,” the President said.
It’s Time to Rethink the Oil and Gas Game in Africa (African Energy Chamber)
While international oil companies gradually divest from African hydrocarbon assets, and capital expenditure is redirected towards alternative energy sources, Africa is seeing production declines across key assets.
These Oil and Gas producing countries rely heavily on the exportation of Hydrocarbons to sustain their economies, in some cases like Equatorial Guinea, Oil and Gas represents almost 90% of the GDP. Declining production means a serious impact on the Treasury revenues, this is very unfortunate because the increasing prices of hydrocarbons in the international markets could help tackle the challenges that COVID-19 brought to the Economies of these Nations. People are not aware of the consequences of the anti-fossil fuels narrative in the lives of the people in Africa. It’s unfair, especially if we take into account that Africa is not the region of the planet that pollutes more, but actually Africa is one of the main lungs of the planet. I think we deserve better.
COMESA Signs AU Protocol to Consolidate Relations (COMESA)
Secretary General of COMESA Her Excellency Chileshe Mpundu Kapwepwe has signed the Protocol on Relations between the African Union (AU) and the Regional Economic Communities (RECs) meant to consolidate relations with the mother body.
The Protocol aims to among other things; formalise, consolidate and promote closer cooperation among the RECS and between them and the AU through coordination and harmonisation of their policies, measures, programmes and activities in all fields and sectors in line with the principle of subsidiarity and complementarity.
Experts from EAC Partner States’ National Medicines Regulatory Authorities have convened in Entebbe, Uganda to conduct a joint scientific review to assess the safety, efficacy and quality of 20 medical products. The five-day joint assessment aims at streamlining medicines evaluation and registration procedures in an effort to enhance access to good quality, safe and efficacious medicines in the region. ”As a region, we are now able to facilitate timely assessments and approvals of medicinal product dossiers by the regulatory authorities for pre-marketing evaluation, marketing authorization/registration and post-marketing review through such regional joint assessment sessions,” said Dr. Chepwogen.
“Africa cannot outsource its healthcare security to the benevolence of others” (AfDB)
African Development Bank Group President Dr Akinwumi Adesina has said that the most important lesson of the Covid-19 pandemic for Africa is the need to build a defense mechanism against external shocks, especially in healthcare and financial security. “Investing in health is investing in national security,” Adesina told African leaders on Saturday, at the opening of the 35th African Union Assembly in the Ethiopian capital. “Africa cannot afford to outsource the healthcare security of its 1.4 billion citizens to the benevolence of others.” The Bank chief said the continent needed $484 billion over the next three years to address the socio-economic impacts of the Covid-19 pandemic and support economic recovery.
Speaking about other critical areas for the continent, such as managing debt, Adesina said: “Africa’s public debt, currently estimated at $546 billion, represents one-quarter of the continent’s GDP and is higher than the combined total annual government revenues of $501 billion.”
China-Africa trade reached an all-time high in 2021 (Quartz Africa)
Trade between Africa and China rose to a record high last year, according to recently released data by China’s customs agency. China is Africa’s largest trading partner, and last year’s growth strengthens this position. The value of trade between Africa and China rose by 35% from 2020 to $254 billion last year, mainly due to an increase in Chinese exports to the continent. This rise occurred despite last year’s global supply chain challenges and other interruptions caused by the covid-19 pandemic.
The growth can be attributed to China’s export of essential pandemic goods such as pharmaceuticals, PPEs, masks, hazmat suits, chemicals, and digital hardware, says Zainab Usman, senior fellow and director of the Africa Program at the Carnegie Endowment for International Peace in Washington, D.C. China is a big player and producer in this area, which had sustained demand in 2020 and 2021, she says .”The pandemic might have disrupted trade and economic activity globally, but it did not really dampen demand for essential goods during the pandemic such as pharmaceuticals,” she tells Quartz. Another factor is increased exports to China by African countries. Exports from Libya and Benin, for example, went up by more than 400%. Those for Togo, São Tomé and Príncipe, Sierra Leone, Burkina Faso, Madagascar, and Eswatini doubled.
Despite the increase in trade, China’s exports to China continue to exceed Africa’s exports to the Asian country. There needs to be a “deliberate and concerted effort across the board” to reduce the trade deficit, says Usman. African policymakers, she says, need to pursue and implement productivity-enhancing policies including road, rail, electricity, digital, and other connectivity infrastructure to give African enterprises the opportunity to access export markets including China’s.
The African Continental Free Trade Area: Opportunities for India (Observer Research Foundation)
Unlike in other regions of the world, the value of intra-Africa trade has remained low over the years. Moreover, Africa accounts for just 2 percent of global trade. In 2021, African countries launched the African Continental Free Trade Area (AfCFTA), which aims to create a single African market for the free movement of goods, services, labour, and capital, and increase intra-African trade. AfCFTA may be able to provide Indian firms and investors certain opportunities to tap into a larger, unified, and robust African market. This paper outlines those opportunities, and the concomitant challenges that need to be addressed in order for India to integrate with the African economy.
Biden’s new Africa strategy shouldn’t focus on countering China (Responsible Statecraft)
As President Biden enters 2022, his administration is setting its sights on an Africa strategy. Secretary of State Antony Blinken visited the continent for the first time in November and promised the administration would “do things differently” to engage with African nations on more equitable terms, a commitment made in reference to China’s growing commercial presence on the continent. As Chinese investment in Africa has grown, so too have debates in the U.S. policy community over what, if anything, Washington should do to stop it. But if Biden’s goals for Africa are truly to strengthen democracy and build lasting economic partnerships, confronting China in Africa is not the way to go about it. To avoid making Africa policy into China policy, Biden must take his own rhetoric seriously.
The president appointed former Africa program director at the Center for Strategic and International Studies Judd Devermont to oversee the creation of an Africa strategy late last year, and the Biden administration unveiled a modestly-funded initiative to strengthen U.S.-Africa business. Increasing economic and political engagement equitably is a good instinct — despite high economic growth in most African states and a thriving African middle class, U.S. bulk trade with Africa was halved over the past 10 years. Restoring commercial ties and developing new opportunities for U.S.-Africa engagement ought to be the centerpiece for any long-term Africa strategy. Unfortunately, the new plan looks a lot like the old one.
IFC targets $10bn in Africa investments yearly (Moneyweb)
International Finance Corporation plans to ramp up its new investments in Africa to $10 billion annually in support of businesses that it sees helping to drive economic recovery and growth on the continent. The member of the World Bank Group plans to add about $1 billion to the amount it invests every year until it hits the target, according to managing director Makhtar Diop. It invested and mobilised $6.4 billion in Africa in the 12 months through June. While government spending has helped African nations to cope with the coronavirus pandemic, weather-related disasters and conflict, the number of people in absolute poverty remains high. The IFC, venture capitalists and private equity firms are expanding or starting investments in Africa to create jobs and help boost household incomes.
Relief as Tanzania agrees to approve EU trade deal (Business Daily)
The East African Community could finally sign the new Economic Partnership Agreement (EPA) with the European Union this month as a bloc after Tanzania changed its initial stance. Josep Borrel, the EU Foreign Representative for Foreign Affairs and Security, says Tanzania has agreed to join the rest of the EAC countries in ratifying the deal that will see the region enjoy quota-free and duty-free access to the lucrative European market.
Mr Borrel in an interview with The East African said President Uhuru Kenyatta has indicated that Tanzania is ready to sign the deal following the change of leadership. “President Uhuru Kenyatta told me that, finally, it seems that we could have an agreement for the whole region because the new government in Tanzania is accepting to sign the agreement,” said Mr Borrel.
European Union targeting Comprehensive Partnership with Africa (Modern Diplomacy)
With highly expected symbolism, Russia’s primary focus at the forthcoming November summit in St. Petersburg with African leaders, corporate business directors, representatives from the academic community, civil society organizations and media will largely be renewing most of its unfulfilled bilateral agreements, and making new pledges that will, as usual, be incorporated into a second joint declaration.
Despite the growth of external player’s influence and presence in Africa, Russia has to intensify and redefine its parameters. Russia’s foreign policy strategy regarding Africa has to spell out and incorporate the development needs of African countries. Unlike most competitors, Russia has to promote an understandable agenda for Africa: working more on sovereignty, continental integration, infrastructure development, human development (education and medicine), security (including the fight against hunger and epidemics), normal universal human values, the idea that people should live with dignity and feel protected.
Russia has to set different narratives about its aspirations and intentions of returning to Africa. The approach has to move from rhetoric and mere declarations of interests. Since the basis of the summit remains the economic interaction between Russia and Africa, “the ideas currently being worked out on new possible instruments to encourage Russian exports to Africa, Russian investments to the continent, such as a fund to support direct investment in Africa, all these deserve special attention,” Tkachenko says.
Global economy
2022 Challenges for developing economies (The New Times)
As the new year has started, the global economy continues to face a volatile, uncertain, complex, and ambiguous conditions. Risks abound and are diverse in nature and all countries are being shaped or forced to react by the interplay of several forces. Today we continue to face the strain of Covid and its variants, disrupted trade links, supply-side bottlenecks, soaring energy prices and labour-mismatches. This is the background to a fragile economic recovery which however will not automatically take us back to the pre-pandemic normal.
The developing world faces several key challenges; however, I believe that three stand out: Rising macroeconomic risks, Climate challenges, and Digital disruption.
Bringing the voice of the Least Developed Countries into the G20 policy agenda (UNCTAD)
This report is divided into four sections. Chapter 1 addresses the role of African countries within the G20 decision making processes. Starting with a reflection on the impact of COVID-19 for Africa, the section then focuses on the role and agency of LDCs and African countries in the G20 policy mechanisms. Chapter 2 analyses the role of quality and climate-resilient infrastructure to boost sustainable and long-term recovery and development for LDCs. Chapter 3 focuses on development finance with the aim to reflect on how the G20 can support and identify innovative mechanisms to mobilize financial resources for the LDCs.
G-20 Can Become G-21 by Adding African Representation (Foreign Policy)
From the G-20 to the United Nations, Africa’s agency and decision-making competence are hardly recognized—especially economically. Considered as a region, as Europe often is, Africa is the world’s eighth-largest economy, and by 2063, the continent is aiming to become the world’s third largest. Put differently, that would mean growing to be the world’s Japan right now—and would put the continent ahead of the likes of Germany, France, India, and the United Kingdom in terms of economic might.
This fact has huge implications for the way the global economic decision-making order is structured now and by 2063. In such forums, African countries have often been seen as passive recipients of support or, at most, partners to consult with on specific questions. The idea that Africans might have interests beyond their own region, or a say in the global order, is rare. Hence, the international bodies that could benefit from African voices often exclude or marginalize them. From the G-20 to the United Nations, Africa’s agency and decision-making competence are hardly recognized—especially economically.
The regional representation is highly pertinent for Africa. Like the European Union, the African continent could easily be represented in the G-20 by the elected African Union Commission chair—currently Moussa Faki Mahamat of Chad—and the annually rotating chair of the AU, always an African head of state and is President Macky Sall of Senegal for 2022. The AU representatives could receive their mandate through the annual meetings of African heads of state in Addis Ababa, Ethiopia, which recently concluded. .
Like the EU, the AU through its Agenda 2063 also envisions monetary union, as well as various infrastructural, policy, and cultural integration efforts. With a growing population, estimated to reach 2.5 billion by 2050, Agenda 2063 envisions the continent becoming the world’s hub for manufactured goods in the same way that China is now, albeit with a greener hue. The fact is, the continent has decision-making capacity—and its leaders know best how to harness this capacity, not only for the continent but also for the rest of the world.
Members note work in three environment initiatives and discuss anti-deforestation efforts (WTO)
At the 2 February meeting of the Committee on Trade and Environment (CTE), WTO members received briefings on the three new environmental initiatives launched on 15 December 2021 at the WTO. Members also discussed in-depth the respective efforts of the European Union and the United Kingdom to prevent global deforestation by regulating trade in agriculture.
Related News
tralac Daily News
Country-related news
Policy, admin have a long way to go before ‘open’ energy market can thrive (Engineering News)
While State-owned power utility Eskom is in the process of undergoing major structural changes and making strides to play its part in South Africa’s decarbonisation, some stakeholders believe there is more to be done before a just energy transition can be realised. From a regulatory and policy perspective, Eskom CEO Andre de Ruyter deemed it prudent that government create policy alignment and complementarity between four major policy streams – energy, fiscal, industrial and environmental. “With smart policies, we can also drive additional local content manufacturing, and have a targeted, strategic approach to it, instead of a brute force percentage requirement for project developers,” he explained, adding that government would do well to focus its efforts on giving certainty of demand for longer periods, as well as supporting supply chain development.
WBCG throws weight behind Katima logistics hub (New Era)
The Walvis Bay Corridor Group (WBCG) says it is in full support of the establishment of a fully-fledged logistics hub at Katima Mulilo as this aligns perfectly with Namibia’s Logistics Hub Master Plan, of which the WBCG is the executing agency. The support for the hub comes as cargo volumes along Namibia’s transport corridors have increased significantly since 2016.
Upon enquiry, the WBCG explained to New Era that the Logistics Hub Masterplan has made provision for the development of bypass roads to alleviate congestion, as well as the need for truck stops and warehouse developments. These proposed developments are expected to assist the Ministry of Urban and Rural Development as the line manager of local authorities to justify the submission for decentralisation via Katima Mulilo.
“In addition to the critical projects outlined in the Logistics Hub Master Plan, Namibia also prioritised supplementary projects in the road, rail and aviation subsectors, which are crucial links to neighbouring countries,” he stated.
The overall aim of the Logistics Hub Project is to deepen regional economic integration, implement measures to improve competitiveness and also enhance closer trade and investment linkages.
Kenya mulls over socioeconomic transformation plan (Capital Business)
Kenya is developing a plan that will help accelerate socioeconomic transformation as well as build resilience amid the COVID-19 disruptions, Ukur Yatani, the cabinet secretary for National Treasury and Planning, said on Wednesday at a briefing in Nairobi. Yatani said the plan dubbed the Fourth Medium Term Plan (MTP) will cover the period 2023-2027 and will focus on implementing strategic interventions aimed at driving Kenya’s economy toward a sustainable growth path. “The fourth MTP will seek to continue implementing the Agenda 2030 on Sustainable Development Goals and aspirations of the Africa Agenda 2063,” said Yatani. “The plan will also incorporate strategic programs and projects aimed at addressing climate change, gender equality and plight of the vulnerable groups in the society,” he added.
Zim Sugar Industry Uncompetitive: Report (263chat)
Zimbabwe’s sugar industry is being hampered by a monopoly and a combination of policy and value chain inefficiencies which have rendered locally produced sugar and related products uncompetitive for export market, according to the National Competitiveness Commission (NCC) sugar value chain report. Currently the price of locally produced sugar averages US$738 per tonne, above SADC average of US$500. The NCC is interrogating value chains of strategic sectors to understand the cost drivers with the hope of making local production competitive.
Ghana And Rwanda Sign Agreement To Deepen Bilateral Trade Relations (Peace FM)
The Government of Ghana has through the Trade and Industry Ministry signed a Memorandum of Understanding (MoU) with Rwanda to deepen bilateral trade relations between the two countries. Speaking at the signing ceremony of MoU on trade and economic cooperation at the Africa Trade House on Thursday January 27, the minister of Trade Alan Kyerematen expressed optimism that the agreement signed will develop into a strong and mutually beneficial relationship between the two countries. He noted in his speech the significant role Rwanda has played in some of Africa’s business-oriented policies including the establishment the African Continental Free Trade Area (AfCFTA).
The Minister, whiles acknowledging the seemingly low level of trade between Ghana and Rwanda despite their good relations over the years, indicated that he hoped the signing of the MoU will change that narrative.
GITFiC commences survey on African Continental Free Trade Area (BusinessGhana)
Ghana International Trade and Finance Conference (GITFiC) will soon embark on a survey research primarily to assess the knowledge that the Ghanaian private and government sectors have on the African Continental Free Trade Area (AfCFTA) and the declaration of Accra as the commercial capital of Africa.
A statement signed and copied to the Ghana News Agency in Accra on Tuesday said the survey would further assess the private sector’s readiness towards the implementation of the AfCFTA as well as provide a comprehensive and reliable information source to help the government, local authorities, and private economic sectors to build up socio-economic development plans to improve intra African trade.
”This initiative will generate a diagnostics report which would help to develop practical steps or a road map in addressing the gaps and challenges. The quality of the survey is greatly subjected to the information provided by our experienced field personnel.”
DRC Africa’s next economic frontier (Capital FM)
When businesses are looking to expand internationally, several factors are put into consideration before deciding to invest. However, the decision-making process is usually lengthy because more often than not SMEs and entrepreneurs are cautious and prefer to do their due diligence before making the decision.
Recently, economists and political analysts have described the current DRC government as one that is keen to establish and implement infrastructure and policies that support the modernization and growth of the local economy. The DRC government has also made a formal application to join the EAC and this was approved at the 18th Extra-Ordinary Heads of State Summit making the nation the 7th member of the trade bloc. The application to join the East African Community followed the signing of bilateral agreements with other member states of EAC including Kenya, Uganda and Rwanda aimed at improving infrastructure, transport, mining and security as well as promoting trade and protecting investments.
Nigeria loses $4 billion annually to oil theft – NUPRC (Nairametrics)
The Federal Government has disclosed it is finalizing plans to deal with the issue of oil theft, which forces Nigeria to lose $4 billion annually or 150,000 BPD. This was disclosed in a Bloomberg interview with Gbenga Komolafe, CEO of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). He stated that Nigeria plans to increase its current production capacity to 3 million as it struggles to hit its OPEC production quota.
South Sudan’s oil production plummets due to Covid-19, floods (The East African)
South Sudan’s oil production has reduced from the previous 170,000 barrels a day to the current 156,000 bpd amid negative impacts of Covid-19 pandemic and heavy flooding since 2020, an official said Wednesday. While tabling the 2021/22 fiscal budget before the transitional national legislative assembly, Agak Achuil Lual, minister of Finance and Economic Planning, said the projected reduction in oil production is due to depletion of some oil wells as well as effects of floods. South Sudan earned $1.4 billion in gross oil revenues of which $1.1 billion went to direct transfers and $148 million were paid to neighbouring Sudan as cost for processing, transportation and transit fees. The east African Nation is projected to collect $135 million in non-oil revenues in this fiscal year, an increase of 31.1 percent from the $103 million collected in 2020/21 fiscal year.
“The projected increase in non-oil revenues is on account of the tax administration reforms that we are implementing at the national revenue authority, which include digitisation of tax collections, broadening the tax base and the proposal to fully deploy national revenue authority staff in all the non-oil revenue collecting institutions,” said Mr Lual.
African trade news
Next Africa: The Continent is a Natural Home For Startups (Bloomberg)
Africa’s startup scene is booming. The sector attracted a record $5 billion last year and saw the creation of five unicorns, companies that have achieved a pre-market valuation of more than $1 billion, including Nigeria’s Flutterwave. There were more than 500 early-stage deals in Africa last year, most valued at less than $5 million, setting the stage for a jump in demand for new capital, according to research provider Briter Bridges. This year is looking even more promising. Investment bankers plan to set up a special purpose acquisition company, or SPAC, to target technology companies in Africa and Swedish unicorn founders have committed to a growth fund to back startups across the continent.
Addressing the devastating effects of the COVID-19 pandemic, the increasing threats of insecurity from conflicts and terrorism, the unconstitutional changes of governments in African states and the socio-economic development on the continent, dominated the discussions of the Executive Council session of the African Union. The two-day session of the African Ministers of Foreign Affairs kicked off today, 2 February 2022, at the Headquarters of the African Union in Addis Ababa, Ethiopia, convening physically for the first time since the outbreak of the pandemic in 2020.
The socio economic impact of the pandemic has translated into a recession witnessed for the first time in decades, and has led to rising inflation and debt burden on member states. Speaking at the opening ceremony of the Executive Council, H.E Moussa Faki Mahamat, Chairperson of the African Union Commission (AUC) noted that the continent needs 154 billion dollars to effectively respond to the economic crisis caused by the Covid-19 pandemic. His statement was echoed by the Executive Secretary of the UNECA H.E. Vera Songwe, who highlighted the depressed economic growth, high level of unemployment and the increasing number of states debt distress. She stated “the economic cost of managing the pandemic has been high. Debt to GDP has risen from 40% in 2014 to almost 70% today. While in 2014, only 4 African countries were in high risk of debt distress, today 17 countries are in high risk of debt distress. Already, 4 countries are in debt distress.”
AU Agriculture Commissioner Calls for Transformation of Agriculture Systems of Africa (ENA)
African countries and partners need to transform the agriculture systems of the continent destructed by many factors, including the COVID-19 pandemic, AU Commissioner for Agriculture, Rural Development, Blue Economy and Sustainable Development Josepha Sacko said.
Briefing the press during the 35th AU Summit on Building Resilient Food Systems in Africa Post COVID-19: Call for Action today, Sacko stated that “it is important that we, as a continent, take bold actions to make sure that we not only recover from the impact of the pandemic but also build sustainable and resilient food systems that will reduce vulnerability to future pandemics.” Building resilient food systems requires addressing factors that make Africa’s food systems fragile and vulnerable to shocks, according to the commissioner.
Tough, urgent choices for African leaders as they launch “Year of Nutrition” to help millions of people facing hunger (Oxfam International)
“People are having to skip meals to feed their children, selling livestock and other assets, begging, pulling children out of school, or harvesting immature crops. Over three million people in Somalia have recently migrated, in large part because of hunger, while millions of households in pastoralist communities in Chad, Benin, Niger, Mali and Mauritania say they are having to sell more animals than they otherwise would to pay for more food”, said Kamalingin.
“While the deck seems stacked against Africa, there is a lot more that African leaders can do to improve food security. Instead of allocating 15% of national budgets to the health sector and 10% to agriculture, military spending across Africa rose by over 5% in 2020. African leaders must prioritize food, trade and medicines over bullets, guns and bombs” said Kamalingin. Twenty African countries are today facing insecurity and conflict including seven coups in the last year alone.
Afreximbank’s Fund for Export Development in Africa (FEDA) invests in Ecow-Gas to promote LNG distribution in West Africa (Afreximbank)
Fund for Export Development in Africa (FEDA), a development impact-oriented subsidiary of African Export-Import Bank (Afreximbank), has announced that it has invested into Ecow-Gas B.V. (Ecowgas), a Liquefied Natural Gas (LNG) distribution infrastructure platform in the West Africa region. Due to limited power supply from the grid, the industrial sector in Africa suffers severe energy shortages with attendant high production costs, inneficient operations and reduced global competitiveness, amongst others. Off-grid solutions are required to address these challenges and put Africa firmly on the path to energy sustainability.
FEDA’s investment in Ecow-Gas will support the creation, in partnership with a leading international oil company, of the infrastructure to provide access to cheaper and cleaner fuels for underserved industrial customers across the region using LNG. This will also promote efforts to minimize CO2 emission by replacing environment-polluting fuels currently in use.
Ethiopia, Kenya, Tanzania…East Africa’s recovery growth machine (The Africa Report)
Back in 2019, East Africa housed three of the world’s fastest-growing economies – Ethiopia, Rwanda and South Sudan. Then two major events upset the regional apple cart. While 2020 will be remembered by many as an annus horribilis, for East Africa the stakes were high. First, the Covid-19 pandemic, which by 2 April had entirely shut down both local and international flights. Tourism contributes around 17% to export earnings, accounting for around 10% of regional GDP. And then war broke out in Ethiopia, sending shockwaves throughout the region and the country.
EAC set to establish Regional Consultative Process on Migration (EAC)
The regional meeting on the establishment of the EAC Regional Consultative Process on Migration (RCP) organized by the EAC Secretariat in collaboration with International Organization for Migration (IOM) is scheduled to take place from 14th – 16th February 2022, in Kigali, Rwanda. The overall objective of the meeting is to share experiences on migration governance in the regional and international perspective.
Speaking ahead of the RCP meeting, EAC Deputy Secretary General in charge of Productive and Social Sectors, Hon. Christophe Bazivamo
disclosed that once the EAC RCP is established and operationalized, it will provide an opportunity for EAC Partner States to collectively mobilize resources to expedite the implementation of EAC migration governance such as: harmonization of migration policies, capacity building initiatives, and research on migration concepts to support and achieve safe, regular and humane migration management in the region.
World in brief: AU-EU summit (Chatham House)
The sixth African Union-European Union summit taking place in mid-February faces a fresh set of challenges as the world emerges from the Covid pandemic. Traditionally held every three years, the previous summit was in 2017 in Côte d’Ivoire with this sixth summit being postponed due to the pandemic. The two-day conference in Brussels from February 17 will move forward the debate on vaccine production and licensing, as well as exploring the deepening concerns over debt financing, infrastructure, migration, climate and security in the Sahel. The African continent has been hard hit by the pandemic, with World Bank figures showing levels of debt in sub-Saharan low to middle-income countries reaching $702 billion in 2020, the highest in a decade.
‘Covid is shaping the entire economic and political terrain of African states at the moment and there is a lot of bad blood,’ said Phil Clark, a professor of international politics at the School of Oriental and African Studies in London.
Lopsided EU trade agreements are harming Africa (African Business)
For many nations in Africa, the turn of the New Year was marked by a sense of hope. After a period of economically damaging lockdowns – the only public health tool at most African governments’ disposal owing to a continent-wide dearth of vaccines – economies are now beginning to reopen. We are at last embarking on our respective, though interconnected, journeys to economic recovery.
However, the lingering economic impact of the pandemic is not the only hurdle to our efforts to industrialise. Restrictive trade policies from wealthy, western countries and blocs keep African countries chained to raw materials exports while hampering our efforts to move up the manufacturing value chain. These policies keep Africa prisoner, while making the countries and blocs that implement them wealthier still. It is of course natural that any trading entity should seek terms most favourable to them. But the deals African countries are forced into are unique in just how lopsided they are; and more so in how they are prevented from making any progress to improve their lot.
Moreover, lopsided EU trade agreements see African countries flooded with cheap, subsidised goods while able to export little in return. Africa imports a staggering 80% of its food, despite being a continent dominated by agriculture.
The recent establishment of the African Continental Free Trade Area (AfCFTA) promises some hope in providing African nations for the first time a platform to trade as a bloc and speak with one voice. But if divisive EU trade policies continue to create incentives for struggling, individual African nations to enter into separate and typically unfavourable bilateral agreements, the issue can only persist.
China aspires for strategic influence in the Horn of Africa (ANI News)
China is now trying to gain strategic influence in the Horn of Africa, considered one of the most strategically important regions in the world, located on the main shipping route for the transport of oil from the Persian Gulf to Europe and the United States.
The foreign minister first visited Eritrea, a country that has joined the Belt and Road Initiative (BRI) in November last year. During China’s Foreign Minister visit, both the countries exchanged views on the situation in Horn of Africa and both sides expressed opposition to non-regional forces’ destabilizing and creating conflicts in the region while undermining regional peace and stability.
The visit to Eritrea signalled China’s interest to take a more active role in the Horn of Africa’s security issues. Wang Yi, during his visit to Eritrea, spoke out against US sanctions as an intervention in the domestic affairs of the country, as noted by Hong Kong Post.
Global economy
UNCTAD launches real-time database on trade facilitation (UNCTAD)
UNCTAD has made its database for national trade facilitation committees (NTFCs) available online to provide real-time insights on how countries are implementing their commitments under the World Trade Organization’s landmark Trade Facilitation Agreement.
It launched the online database during the Global Forum for National Trade Facilitation Committees taking place from 1 to 4 February.
The database, which came into being in 2010, incorporates several new features and allows users to explore information on country-based NTFCs and compare statistics globally, regionally and by development groupings.
COVID-19-induced disruptions to trade since early 2020 have highlighted the importance of trade facilitation. “Implementing trade facilitation reforms requires a high level of coordination among parties to simplify, modernize and harmonize import and export processes,” said Shamika Sirimanne, who heads the technology and logistics division of UNCTAD. “That’s where NTFCs come in, with a role to support countries’ efforts to align with the historic Trade Facilitation Agreement of the World Trade Organization,” Ms. Sirimanne added. However, experience shows that establishing and maintaining an NFTC is not as easy as it sounds.
Exports of intermediate goods continue to grow in third quarter of 2021 (WTO)
World IG exports grew by 27 per cent year-on-year in the third quarter of 2021, compared to the 47 per cent rise recorded in the second quarter. Trade in IGs, which are inputs used to produce a final product, is an indicator of the robustness of global supply chains. The product category “Other industrial supplies,” which made up almost half of total IG exports in the third quarter, grew the fastest among all IG categories, rising 38 per cent year-on-year and amounting to US$ 1.225 billion. It comprises IGs such as vaccine products, medical parts and accessories, diagnostic or laboratory reagents, and other medical intermediate goods. The category also includes raw or semi-manufactured metals such as copper cathodes, articles of iron or steel and aluminium. The high growth rate of the category follows a 52 per cent rise recorded in the second quarter.
Small Island Developing States: FAO convenes a global dialogue to update on latest initiatives (FAO)
The massive volcanic eruption and tsunami in Tonga last month, followed by last week’s earthquake and aftershocks, have highlighted the vulnerability of Small Island Developing States (SIDS), a global meeting focused on the countries and convened by the Food and Agriculture Organization of the United Nations (FAO) has heard. In opening remarks at the Global SIDS Solutions Dialogue, FAO’s Chief Economist, Máximo Torero Cullen, underscored “the severe challenge that SIDS face in moving towards the (UN’s) 2030 Agenda for Sustainable Development” and the pressing need to build the resilience of these states to climate change, natural disasters and other external shocks including the COVID-19 pandemic.
Developing countries’ efforts to recover from the COVID-19 pandemic are faltering amid ponderous debt burdens, “vaccine apartheid” and yawning chasms of inequality, said the keynote speaker at the Economic and Social Council’s annual Partnerships Forum today, adding that the wealth of a handful of billionaires is growing exponentially as the world continues to scramble.
“As we enter 2022, we are almost halfway to the Sustainable Development Goals deadline, yet COVID-19 is throwing into reverse so much of the progress we had been making,” said Gabriela Bucher, Executive Director of Oxfam International. Noting that the pandemic created an explosion in inequality which now poses an existential threat to the United Nations 2030 Agenda for Sustainable Development, she said that, even before COVID-19, 3.4 billion people were living on less than $5.50 per day while billionaires amassed incredible wealth. The world’s 10 richest men saw their fortunes double since the pandemic began, while at the same time global poverty rose for the first time in decades.
“The COVID-19 pandemic has turned these cracks and fractures of inequality into chasms,” she said.
Strengthening garment industry vital for least developed countries in Asia graduating from category (UNCTAD)
Asian countries graduating from the least developed countries (LDCs) category need to take measures to bolster the textile and clothing sector as they graduate from this category, particularly in response to the economic impact of COVID-19, recommends a joint report by the World Trade Organization (WTO) and three UN bodies.
The report entitled “The Textile and Clothing Sector in Asian Graduating Least Developed Countries: Challenges and Ways Forward” and published on 1 February focuses on countries such as Bangladesh, Lao People’s Democratic Republic and Nepal, where the textile and clothing (T&C) sector is a major industry and will be significantly impacted by graduation. “This timely study highlights the distinct patterns of insertion of graduating LDCs into the textile and clothing global value chains and discusses how LDC graduation may affect related outcomes, said Rolf Traeger, chief of the LDC section at UNCTAD.
“Given the level of competitiveness of the garment industry, the prospect of losing preferential market access makes the imperatives of diversification and development of productive capacities is critical as ever for graduating LDCs. Hence the importance of their implementing effective industrial policies,” he said.
Related News
tralac Daily News
Country-related news
Investment in SA a boost for economic sectors (IOL)
South Africa will this year continue with concerted efforts to attract new investments into the country to help revive the economy and boost socio-economic development. One of the major events is the fourth South Africa Investment Conference (SAIC) to be hosted in Joburg on March 24, 2022, which forms part of our investment drive to attract R1.2 trillion over five years.
This ambitious investment initiative began in 2018 and has already attracted R770 billion in commitments across a wide range of economic sectors. The government has placed investments at the heart of its efforts to achieve its national goal of economic reconstruction and recovery.
RMB expects 3% domestic growth for 2022 (New Era)
According to Rand Merchant Bank’s (RMB) Markets Research team, Africa’s outlook for the year-ahead includes optimism for growth in Namibia over the medium-term, which will be determined by efforts of both the private and public sectors to increase renewable energy across the country. Said Daniel Kavishe, Africa Economist at RMB: “Prospective investments towards projects like the Southern Corridor Development Initiative will boost Namibia’s growth and development trajectory. In the short-term, mining and agriculture are expected to remain growth-positive and are key anchors for our 2022 forecasts. To a lesser extent, investments in renewable energy infrastructure projects will also support growth in the short to medium-term.”
Zimbabwe targets increased trade with Namibia (New Era)
A Zimbabwean business delegation recently visited Namibia to enhance business linkages and explore opportunities in imports and exports between the two countries. They are also looking at the storage of products at the Zimbabwe dry port. The main objective of the visit was to explore the Port of Walvis Bay and the Walvis Bay Corridors as an alternative trade route. The delegation, which consisted of executives from BAK Logistics, conducted business to business (B2B) meetings, toured the Zimbabwe dry port as well as the Port of Walvis Bay and its facilities. BAK Logistics is one of the largest logistics service providers in Zimbabwe, and has various partnerships that enable it to have an international reach. The delegation was hosted by the Walvis Bay Corridor Group (WBCG), who with key industry stakeholders, conducted a trade mission to Zimbabwe last year in October 2021.
Trade PS calls on Kenyans to supply their produce to the UK (Capital Business)
Trade PS Johnson Weru has called on Kenyans to start supplying their produce to the United Kingdom and to ensure that their products comply with all the requirements of the UK market. Weru who was speaking yesterday during the launch of the Kenya – UK Economic Partnership Agreement Council said that all kinds of products can be exported to the UK, from fresh produce, green vegetables, honey, manufactured goods. Kenya – UK Economic Partnership Agreement ratified last year, allows all companies operating in Kenya to benefit from duty-free access to the UK market. The council is expected to oversee the operationalization and implementation of the agreement in securing Kenya’s exports duty-free quota-free access into the UK post-Brexit. Speaking during the event, UK High Commissioner to Kenya, Jane Marriott said that she expects the council to ensure enhanced trade between Kenya and the UK.
Kenya plans more big projects amid surging cost fears (Business Daily)
Kenya will continue spending massively on infrastructure projects in the five years to 2027, in what will keep the country as a big construction site for the next decade. In its new medium-term plan, the Treasury says it will prioritise spending to upgrade the nation’s rail system, road network and building of new power plants despite mounting concerns of the high costs of the projects that in the past fuelled a controversial debt binge by the government.
“The fourth medium-term plan will prioritise increased investments in improving infrastructure so as to lower the cost of doing business which in turn improves national competitiveness and productivity,” says a concept note presented yesterday by Treasury teams at the start of the budget-making process.
U.S. engaged in ‘robust’ talks with Kenya, more to say in coming weeks - USTR (Reuters)
The U.S. government is engaging in robust talks with Kenya as part of its drive to expand equitable and inclusive U.S. trade investment on the African continent, Deputy U.S. Trade Representative Sarah Bianchi said on Tuesday. Bianchi told a trade conference that USTR would have more to say on Kenya in coming weeks, but gave no details. “We have been doing a lot of robust engagement with Kenya. We’re exploring ways to deepen our trade and investment relationship there,” she said. “We’ll have more to say on Kenya in the coming weeks, but we do want to keep a really deep engagement going.”
Rwanda Economic Update: Regional Integration in Post-COVID Era (World Bank)
Rwanda has achieved a strong economic recovery in 2021, according to the 18th edition of the Rwanda Economic Update (REU18) released today. Gross domestic product (GDP) increased by 11.1% in the first nine months of the year, reflecting a broad-based recovery from the 2020 recession. Industrial production expanded by 16.5% and agricultural output rose to 6.8% in the same year, while traditional exports (coffee, tea, cassiterite, wolfram, and coltan) increased by about 35% in the first nine months of 2021.
In its special focus on Boosting Regional Trade Integration in the Post-COVID Era, the report underscores the importance of sustained growth in trade as a key driver for Rwanda to achieve its goal of becoming an upper-middle-income country by 2035. “Despite important progress, Rwanda has yet to fully achieve its trade potential with regional partners, notably, due to a relatively narrow export product base, discriminatory non-tariff barriers within the region, and persistent regional trade infrastructure gaps,” said Calvin Djiofack, World Bank’s Senior Economist for Rwanda.
New financial facility to boost Ugandan businesses launches (The East African)
A Ugandan company is seeking to increase investment in medium and large enterprises in Uganda by offering business development support and matching others with potential investors for long term growth. The Deal Flow Facility incubated by the Financial Sector Deepening Uganda (FSD-Uganda), a Kampala based company promoting greater access to financial services in the country, is being funded by the European Union in collaboration with the country’s Capital Markets Authority. According to FSD, the new facility seeks to help Ugandan companies become investment ready through providing business development support and exposure to potential investors, which will increase their competitiveness and place them on an accelerated growth path.
DP World signs agreement to develop Angola’s trade and logistics sector (The National)
DP World, one of the world’s largest port operators, signed a preliminary agreement with the Angolan government to develop the country’s trade and logistics sector.
The parties will explore co-operation in the areas of ports and terminals, special economic zones, cross-border trade and finance and marine services, according to a statement from the Dubai Media office on Wednesday. DP World is already active in Angola and is developing the multi-purpose terminal at Port of Luanda with a total investment of $190 million to turn it into a maritime hub along the western coast of southern Africa. “Alongside the multi-purpose terminal, there is still tremendous opportunity to further develop and integrate the country’s logistics and trade infrastructure and unlock more economic benefits,” Sultan bin Sulayem, group chairman and chief executive of DP World, said.
Free-Trade: Togo launches Trade Barriers Africa, an online platform to remove non-tariff barriers (Togo First)
In comparison to previous years, Togo has significantly improved its ranking under the “Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export. In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.
African trade
AfCFTA’s slow take-off exposes Africa’s value addition loopholes (Business Day)
The marginal progress made by the Africa Continental Free Trade Area (AfCFTA) since its commencement in January 2021 is down to poor value addition practices among other loopholes. This was discussed during a panel session focused on how Africa can leverage trade, manufacturing and economic integration to make a significant economic rebound at the ongoing Africa Business Convention 2022 organised by BusinessDay. Kunle Elebute, chairman, KPMG Africa, said African countries have not fully adopted value addition practices, which is detrimental to their trade activities seeing that most countries in the continent are largely based on commodities. “AfCFTA is a great initiative but what can we describe as the underlining economic activity that can be exchanged under trade, Africa is simply the domain for the global economy to take out commodities and process,” Elebute said.
Manufacturing in Africa needs a strong regulatory framework (AUDA-NEPAD)
Success towards resource mobilisation and infrastructural improvements aimed at establishing in-country vaccine production is steadily moving on an upward trajectory in some countries in Africa. New Covid-19 infections have been on the rise, accelerated by low vaccination rates and the emergence of new variants. However, some countries have made concerted efforts to renew their emergency preparedness and response to better address challenges and embrace the opportunities presented by the pandemic. The surge in recent new infections has been predominantly fuelled by subsequent mutations of the coronavirus including the emerging Delta and Omicron variants, which have increased the need for urgent and timeous action.
The African Medicines Agency (AMA) is an initiative that will enable a continental harmonisation of regulations relating to the manufacturing of vaccines and other medical products. The Agency is a collective effort aimed at spurring local pharmaceutical production by establishing a supportive structure in which all member states can work together to respond to current and future emergency health crises such as Covid-19.
The continent experienced notable challenges regarding the timely and equitable procurement of vaccines as compared to high income countries (HICs). During the initial and on-peak stages of the pandemic it relied more on the Covid-19 Vaccine Global Access (COVAX) facility, but since 2020 it has since started getting vaccines through the African Vaccine Acquisition Trust (AVAT). As at 19 January 2022, only 10.09% of the continent’s eligible population had been fully vaccinated owing to the impact of delayed vaccine acquisition. The delays have led to the continent scrambling for available vaccines and importing 99% of its supply from HICs, which have offered them at escalated prices and during times when new infections have already reached their peak. Although the AU has procured an estimated 400-million vaccines through the AVAT for the next year, this supply needs to increase sevenfold if Africa is to ensure the full vaccination of at least 70% of its eligible population by September 2022. Africa should not have to depend on the rest of the world for a timeous and equitable supply of critical vaccines and therapeutics, and that is why collective action by all African states is critical for the establishment and operationalisation of the Africa Medicines Agency through the fast-tracked signing and ratification of the AMA treaty.
The African Development Bank Group has taken a crucial step to further address the infrastructure gap in African countries, with the approval of its first strategic framework for the development of public-private partnerships. This follows approval by the Board of Directors of the Bank Group on 19 January 2022. Africa’s infrastructure investment gap is estimated at more than $100 billion per year, affecting the living conditions of Africans and the continent’s global competitiveness. Bank experts say public-private partnerships offer an additional approach to increase private sector investments and higher levels of efficiency in the development and operation of infrastructure assets in Africa. Bank Group President Akinwumi A. Adesina said the new framework would form the bedrock of the Bank’s engagements in the infrastructure sector. “This eagerly awaited strategic framework will go a long way to enabling the Bank to provide much required assistance for the development and implementation of public-private partnerships in our regional member countries, and we look forward to its success.” Public-private partnerships are already a key feature of infrastructure projects being supported by the Bank, among them several transport and energy sector projects in all the regions of the continent.
Africa: Faster trains to stimulate trade (The Africa Report)
Ever since Abbas the First opened Africa’s pioneering railway in Egypt in the 1850s, the primary mission behind the continent’s railways has been clear – to stimulate trade.
Railways are now being seen as key catalysts for intra-African regional trade and to more efficiently move large numbers of people between key cities. African governments at the national, state and city level are getting behind rail and even competing on the quality and speed of their networks. An ambitious multi-million-dollar AU project christened the “African Integrated High-Speed Railway Network” (AIHSRN) is adding impetus to the rollout of high-speed trains.
UN’s Vera Songwe calls on African leaders to build resilience (Devex)
Leaders in Africa must focus on building resilience to a broad range of issues in the wake of the COVID-19 pandemic, which proved that systems across the continent are inadequate, according to Vera Songwe, the executive secretary at the United Nations Economic Commission for Africa.
The continent faces formidable challenges related to climate change, infectious diseases, conflict, and cybersecurity — exacerbated by depressed economic growth, widespread unemployment, and a shrinking civic space. The economic costs of managing the pandemic have been steep, according to Songwe. In African nations, the ratio of debt to gross domestic product has risen from 40% in 2014 to nearly 70%, she said. While four African nations were at high risk of debt distress in 2014, that number has now risen to 17, Songwe added, noting that four countries are already in debt distress at the moment.
African Experts Argue Prospects for China’s New $300 Billion Agreement (VOA)
A Chinese official in Nigeria says Beijing plans to invest over $300 billion in Africa to increase African exports and help close the large trade gap with China. China’s plans for more investment in Africa have been welcomed by some, but critics worry about Africa’s growing debt with Beijing. The recent signing of a multi-billion-dollar partnership between China and Africa marks a major step in China’s effort to spend more money in Africa in nine industrial sectors, including trade, digital innovation, medical, poverty reduction, culture and peace and security. A Chinese official, China Africa Business Council head Diana Chen, signed a memorandum of understanding with Lagos Chamber of Commerce officials last week in Lagos.
UK Remains Africa’s Investment Partner of Choice, Says UK’s Trade Secretary (This Day)
UK’s Secretary of State for International Trade, Anne-Marie Trevelyan has stated that the United Kingdom (UK) has always been the Africa’s investment partner of choice for green transition. She said this, while hosting a one-day virtual event, which aimed to unlock millions of pounds of new investment, especially in clean energy industries in both the UK and across Africa.
Her Majesty’s Acting Trade Commissioner (HMTC) for Africa, Alastair Long, said: “In 2020, at the UK-Africa Investment Summit, the Prime Minister set out the UK’s ambition to be Africa’s investment partner of choice. Two years on from the UK-AIS, we continue to bring life to this ambition. Last year, we launched an online Investment Deal Room to provide a platform for African projects to be showcased to UK investors. The Deal Room has already published over £350m of vetted and investable opportunities to date. “Clean growth is at the heart of the UK’s trade agenda, and with Egypt hosting COP27, the second Africa Investment Conference is an opportunity to explore inclusive, sustainable and resilient investment opportunities that can serve to help Africa transition to a cleaner and greener growth trajectory.”
A UK-Africa trade deal could be fair wind for African economic unity (Kenya Broadcasting Corporation)
ECOWAS Urges Cooperation to End Illegal Fishing (Africa Defense Forum)
West African officials are saying that the scourge of illegal fishing can only be addressed with a regionally united front. They are calling for greater cooperation on fisheries management, patrols and enforcement in the Gulf of Guinea. Amadou Tall, leader of an Economic Community of West African States (ECOWAS) program to enhance fisheries governance in West Africa, made a plea for greater cooperation in December at the end of an annual conference of the Fisheries Committee for the West Central Gulf of Guinea (FCWC). Cooperation in combating illegal, unregulated and unreported (IUU) fishing would reduce maritime security costs if all countries put their resources together.
ECOWAS promotes organic agriculture, develop markets for better productivity (BusinessAMLive)
The Economic Community of West African States (ECOWAS) Commission, agriculture division, in Nigeria says the ECOWAS administrative sector has in place strategies to enhance the visibility of organic agriculture in the West African region, as well as develop its market for better productivity. Ernest Aubee, head of the division in Nigeria made the disclosure in a presentation titled, “Benefits of Harmonised Organic Standard in West Africa’, at the recently held 5th West Africa Organic Conference (WAOC) in Ghana, said the general assembly of West Africa Organic Network (WAfrONet) had recommended the need for a harmonised organic standard for West Africa.
39th Session of the NEPAD Heads of State and Government Orientation Committee (AUDA-NEPAD)
H.E Mr Paul Kagame, President of Rwanda and Chairperson of the NEPAD Heads of State and Government Orientation Committee (HSGOC), presided over the 39th session of the committee, which provides leadership to NEPAD. “We are on the right path as Africa continues to rise to its challenges. The challenges of the COVID-19 pandemic are still with us, but the pandemic has led Africa to take the opportunity to become self-reliant. I am confident that AUDA-NEPAD will continue to be on the forefront of Africa’s development path,” President Kagame declared in his opening statement.
H.E Mr Félix Tshisekedi, President of the Democratic Republic of Congo and Chairperson of the African Union, stated that, “We have to ensure that we have seamless implementation of Agenda 2063, together with the Regional Economic Communities and development partners for building the Africa We Want. We therefore need to mobilise resources and ensure we accelerate economic integration on the continent, keeping to the goals we set for ourselves, using technology, innovation and investment in human capacity. This 39th session of the HSGOC is key for economic integration of our continent.”
Global economy
WHO, WIPO, WTO heads chart future cooperation on pandemic response (WTO)
The Directors-General of the World Health Organization (WHO), the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO) today reaffirmed their commitment to working closely together to help overcome the COVID-19 pandemic and its devastating human, social, and economic impacts.
They welcomed the impending launch of a trilateral technical assistance platform, which will provide a one-stop shop making available the three organizations’ expertise to governments in a tailored and coordinated way so as best to respond to individual national needs for COVID-19 health technologies. This will include support for the full use of legal and policy options for access to health technologies, including through the implementation of any solution to the COVID-19-related intellectual property proposals currently before the WTO’s TRIPS Council.
The Directors-General welcomed the ongoing efforts by their three organizations to make up-to-date information available, including the series of joint COVID-19 information notes, supplementing and updating the 2020 joint publication “Promoting Access to Medical Technologies and Innovation”.
DDG González: Agricultural trade reform can deliver gains for people, planet and economy (WTO)
Speaking at a seminar organized by the World Bank and the International Food Policy Research Institute (IFPRI) on 2 February, WTO Deputy Director-General Anabel González welcomed the findings of a new report that calls for a fundamental change in agricultural support to make agriculture and food systems more productive and more sustainable.
“The report’s findings are a potential step change, not only in how we think about agricultural support policies, but also in how we think about opportunities for trade cooperation to enable the transformation of agri-food systems,” she said. DDG González noted that the WTO agriculture rulebook is itself structured to encourage a transition from production- or trade-distorting support to non-trade-distorting support. She added that some WTO members have taken steps in this direction by moving towards environmental programmes and other forms of non-trade-distorting agricultural support. Still, a lot of taxpayer money is invested in agriculture with limited returns for farmers, the environment and the economy, she said.
Adapting to the “new normal”: building back better with digital and sustainable trade facilitation (India Education Diary)
Countries across the globe have made progress on digitalizing international trade formalities during the COVID-19 pandemic, but stronger efforts are needed to facilitate trade for small and medium-sized enterprises and other groups and sectors with special needs, according to a report launched today by the United Nations regional commissions. The report is based on the Fourth United Nations Global Survey on Digital and Sustainable Trade Facilitation, jointly conducted by the Economic Commission for Africa, the Economic Commission for Europe, the Economic Commission for Latin America and the Caribbean, the Economic and Social Commission for Asia and the Pacific and the Economic and Social Commission for Western Asia. The Survey covers the trade facilitation measures in the World Trade Organization (WTO) Trade Facilitation Agreement as well as digital trade facilitation measures associated with the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific, a UN treaty that entered into force in February 2021. Based on the 2021 Survey covering 144 countries, the report shows that the global average implementation rate of general and digital trade facilitation measures stands at 65 per cent. Despite the severe impact of COVID-19 on international trade, trade facilitation has made significant progress over the past two years. The overall implementation rate of measures increased by more than five percentage points between 2019 and 2021.
Smart manufacturing spend to reach $950bn in 2030 - ABI Research (Engineering News)
Market intelligence company ABI Research’s ’Digital Factory Data’ report notes that spending on smart manufacturing by factories adopting Industry 4.0 solutions, such as autonomous mobile robots, asset tracking, simulation and digital twins, will grow from $345-billion in 2021 to more than $950-billion in 2030 as manufacturers advance their digital transformation initiatives. “While most of the revenue today is attributed to hardware, a greater reliance on analytics, collaborative industrial software and wireless connectivity will drive spending on value-added services, namely connectivity, data management and enabling platforms, to more than double over the forecast period,” explains ABI Research industrial and manufacturing research director Ryan Martin.
Island States must bolster resilience to existential climate threats (UN News)
The Global SIDS Solutions Dialogue, focused on the “severe challenge” these often impoverished low-lying nations face in being able to reach the goals of the UN’s 2030 Agenda for Sustainable Development, said FAO Chief Economist, Máximo Torero Cullen. It also highlighted the pressing need to fortify their resilience to climate change, natural disasters and other external shocks, including the COVID-19 pandemic.
With around 65 million inhabitants, SIDS account for only one per cent of carbon dioxide emissions, and yet they are most vulnerable to the existential threat posed by the impacts of climate change. SIDS in the Caribbean, the Pacific, and many small islands in the Atlantic and Indian Ocean - together with the South China Sea - depend on food imports. Nearly all SIDS import 60 per cent of their food and 50 per cent of island States bring in more than 80 per cent.
Related News
tralac Daily News
Country-related news
Trade Statistics for December 2021 (South African Revenue Service)
SARS has released trade statistics for December 2021 recording a preliminary trade balance surplus of R30.14 billion. These statistics include trade data with Botswana, Eswatini, Lesotho and Namibia (BELN). The year-to-date (01 January to 31 December 2021) preliminary trade balance surplus of R440.75 billion is an improvement from the R271.57 billion trade balance surplus for the comparable period in 2020. Exports increased by 22.9% year-on-year whilst imports increased by 34.2% over the same period.
The R30.14 billion preliminary trade balance surplus for December 2021 is attributable to exports of R156.30 billion and imports of R126.16 billion. Exports decreased by R6.49 billion (4.0%) between November and December 2021 and imports decreased by R0.79 billion (0.6%) over the same period.
SA needs new agricultural export markets urgently (Food for Mzansi)
When it comes to South Africa’s agricultural sector, the focus for a long period of time was on land reform as an essential policy for enhancing black South African participation in this sector. However, according to Agbiz chief economist Wandile Sihlobo, land reform is not the only issue that deserves our attention.
“The export drive deserves attention too, as do the network industries that enable export activity. The government should take the lead in all these areas but encourage partnerships with agribusinesses and various private sector role-players where business conditions permit,” he writes in a Sunday Times article.
Coal industry must help ‘map a way forward’ – Mantashe (SAnews)
Mineral Resources and Energy Minister, Gwede Mantashe, says while coal production remains a strategic sector for the country, it must innovate and commit to “moving from high carbon to low carbon emissions” as part of the country’s just energy transition.
“Domestically, the commodity will continue to play a role in developing economic energy mix, steel and cement industries but its use will eventually decline as nations and businesses strive to reduce their environmental impact and abide by climate policies. “We must as a sector map out clearly an engagement strategy on the national interests with regards coal. “Coal remains an important commodity as highlighted by the massive reserves. It is upon the coal industry to help map out its future,” Mantashe said.
The Minister said despite challenges rising from the need to reduce carbon emissions, the sector remains an “essential component” in South Africa’s energy mix.
Kenya pumps Sh4.5bn to revive rail lines, eyes more transit trade (Business Daily)
The government will spend Sh4.5 billion to rehabilitate old railway lines in a bid to improve transit of goods to the neighbouring countries. The proposal by the Kenya Railways targets to revitilise 217km Nakuru-Kisumu metre gauge railway (MGR), 77.8km Gilgil-Nyahururu MGR branch line and the 69.05 Kisumu-Butere section which are currently in “dilapidated, vandalised or overgrown with vegetation”.
According to a draft seen by Shipping & Logistics, the parastatal has set aside Sh3 billion for the Nakuru-Kisumu line, Sh537 million for Kisumu- Butere and Sh1 billion for Gilgil- Nyahururu branch line. The three lines will act as main trans-shipment points between the standard gauge railway and road for freight traffic destined for areas beyond Naivasha inland container depot.
Kenyan tech-enabled logistics platform Amitruck raises $4 million, embarks on Uganda, Tanzania expansion (TechCrunch)
The shipping business in Africa has for years been inefficient and costly due to the traditional ways of managing operations – traditional in the sense that a shipper has to physically look for a transporter, sometimes through a middle-man, and often, once goods are delivered, the trucks almost always make the return trip empty. For a continent like Africa, where roads are heavily used to ferry goods, any inefficiencies encountered translate into higher prices of goods for the end-customer. However, over the last one decade, tech solutions are emerging to bring efficiency into the sector and make shipping cheaper, while increasing the availability of options for shippers. Amitruck, a Kenyan tech-enabled logistics platform, is one such provider of solutions that streamline the shipping market. The startup, which has achieved a great take-off in Kenya, is set to strengthen its technical, operations and sales team to lay ground for its entry into Tanzania and Uganda markets, after raising $4 million in seed funding bringing the total funds raised to date to $5 million. The expansion plans come as it looks to be the regional go-to platform for shippers and transporters doing in-country and cross-border business.
Truckers to save millions as Rwanda opens border (Business Daily)
Truck owners are set to save millions of shillings in operation costs following Rwanda’s move to reopen its border with Uganda point closed three years ago. However, passengers will still have to content with longer route to Kigali.
The move comes as a major reprieve because truckers will no longer have to cover long distances in order to reach Rwanda. The border was closed in 2019 following a dispute between Kigali and Kampala. However, Rwanda has restricted the move of passengers saying that they will only allow truckers and not the passage of people at the border point.
Kenyans travelling to Kigali have had to go through Tanzania as the Uganda-Rwanda border at the Gatuna post was closed, adding more pain to passengers who have to pay more because of long distance to be covered.
Tanzania, Uganda to ink EACOP final investment agreement today (IPPMedia)
The project is set to bring to life a 1443km-long heated oil pipeline from Hoima in Uganda to Tanga port, the biggest joint investment in the East African Community (EAC) area so far. The Vice President’s Office said in a statement yesterday that signing the FID will be held at Kololo Stadium in Kampala, with VP Dr Philip Mpango having arrived in Uganda for the ceremony, in place of President Samia Suluhu Hassan.
In April 2021, the two countries signed the host government agreement, shareholder agreement (for the pipeline company) and tariff agreements. The crude oil project is expected to help increase employment for thousands of youths and stimulate joint oil exploration in the region.
Mombasa port to reap from Uganda’s mega projects (Business Daily)
Port of Mombasa is set to benefit from heavy infrastructure investment in Uganda to increase its cargo throughout this year. One of the main developments which will see more Uganda cargo passing through the port is the ongoing oil projects with investors giving a green light to use the Port of Mombasa to ferry all the cargo needed for the projects.
Last week, officials from Total Energy Uganda visited the Mombasa port to familiarise themselves with the facility’s operations and assess its readiness for the clearing of the cargo. In the statement to road users and to the public, Kenya Ports Authority (KPA) said the first consignment is expected to land at the port in March this year.
Shippers Authority resolves chronic transit truck congestion at Elubo – Starr Fm (Starr Fm)
The perennial transit truck congestion at the Elubo border and the haphazard parking of cargo trucks in the Jomoro Municipal Assembly has become a thing of the past with the construction of the Elubo Freight Park. The project which was initiated and funded by the Ghana Shippers’ Authority (GSA) with support from the Jomoro Municipal Assembly was commissioned on Friday, January 28, 2022. The ultra-modern facility aims to make the nation’s western transit corridor attractive to businesses and individuals who haul goods between Ghana and La Cote d’Ivoire and beyond in a bid to boost transit trade volumes. Ghana’s transit trade is estimated to generate GH₵ 134 million annually and the GSA is working hard to meet and even surpass the target in its effort to contribute to the economic growth of the country.
EABC calls for 24hrs pilot operations at Kabanga OSBP to boost trade (IPPMedia)
Each day approximately 100 trucks from Tanzania enter Burundi and 50 trucks from Burundi enter Tanzania via Kabanga / Kabero One-Stop Border Post (OSBP). In 2020, Burundi exports to Tanzania hit $8.5million while Tanzania exports to Burundi reached $77.9 million. Top Burundi exports are Beverages & spirits and fruits. Kalisa said improving infrastructure, promoting consumption made in East Africa goods & services, boosting trade facilitation and product diversification is key to transformation, resilience and growth of the EAC bloc into a middle status economy amid the COVID -19 pandemic. EABC Board Director Amelie Ninganza urged for trade facilitation agencies to permit cross-border traders located near Kabanga / Kabero border to trade without the COVID-19 mandatory testing.
Principal Economist Charles Omusana from the EAC Secretariat said business should be facilitated as EAC integration is people-centered and private sector-led.
Tanzania opens grain stores in DRC, South Sudan to sell surplus harvest (The East African)
Tanzania has opened grain storage facilities in Lubumbashi, DR Congo, and Juba in South Sudan to facilitate the sale of surplus food crops. Agriculture Minister Hussein Bashe on social media last week said that the country also plans to open another facility in Kenya’s coastal city of Mombasa. The Agriculture ministry will not directly involve itself with the business of selling the exported grain but it will assume the role of an initiator, he added. “We have opened grain centres in Juba, South Sudan, and Lubumbashi in the DRC and already delivered 800 tonnes of grains to the two centres. This is all in efforts to enable Tanzanian farmers and traders get good markets for their products,” Bashe tweeted.
Restricted crossing at reopened border as Rwanda, Uganda agree on Covid protocols (The East African)
Rwandans and Ugandans intending to travel to either country using the just re-opened Gatuna/Katuna border will have to wait longer as officials of both countries work out modalities of managing travel in the context of Covid-19. The border, which had been closed since February 2019 amid a diplomatic impasse, reopened Monday, but many who intended to travel could not do so as only cargo, returning Rwandan citizens, and a few Ugandans traveling for essential purposes were cleared to cross into Rwanda. Immigration and customs officials of both countries held a closed-door meeting on the Rwandan side Monday morning, which is understood to have deliberated on necessary measures to facilitate movements in the context of Covid-19.
“Trucks, Rwandan citizens and returning residents are crossing to Rwanda at Gatuna like at other border points, as per EAC Covid-19 protocols. As noted in the communiqué, Rwandan and Ugandan health officials are working on joint Covid-19 protocols, which will enable all to cross on both sides,” Rwanda government Spokesperson Yolande Makolo said in a tweet Monday.
Diversify into oil and gas - Osafo-Maafo (Ghanaian Times)
The Senior Presidential Advisor, Yaw Osafo-Marfo, has urged Republic Bank to diversify its banking services and venture into oil and gas. He said Republic Financial Holdings Limited of Trinidad and Tobago, the mother bank, of Republic Bank, had been instrumental in the development of the oil and gas industry in the Caribbean.
“I urge Republic Bank to consider venturing into this area of operations so that you can leverage your expertise and competencies to further enhance current dynamics in that sector here in Ghana,” he said during the inauguration of the Headoffice annex of Republic Bank in Accra on Friday.
Authorities step up Communication to facilitate operations at Aflao Border (BusinessGhana)
The West African Association for Cross-Border Trade in Agro-forestry-pastoral and Fisheries products and Food (WACTAF) has opened a Trade Information and Border Assistance Desk (TIBAD) at the Aflao border. The trade and information desk among other things seeks to address the issue of inadequate and inaccurate capturing of data, serve as language barrier needs and assist traders, especially women who ply their trade between Ghana, Togo, and other ECOWAS Communities.
Export: Too much regulatory requirements killing business output – Osinbajo (Nairametrics)
The Federal Government warned that too much regulatory requirement hurts Nigeria’s export potential and has called for a rehabilitation of Nigeria’s economic regulatory agencies, to boost investment and economic growth. This was disclosed by Vice President, Yemi Osinbajo on Tuesday after he received a report of an ad hoc committee of the Presidential Enabling Business Environment Council (PEBEC) on agro-export at the Presidential Villa, Abuja. He warned that the over regulatory process leads to slower certification process compared to Nigeria’s neighbours and is leaving Nigerian producers behind.
Go to IMF; E-levy isn’t the solution – Assibey-Yeboah to gov’t (3news)
A former New Patriotic Party (NPP) Member of Parliament (MP) for New Juaben South, Dr. Mark Assibey-Yeboah, has urged the government to go back to the International Monetary Fund (IMF) for financial support due to the economic challenges the country is experiencing. He was commenting on the E-levy proposal in the 2022 budget statement and the difficulties being encountered by the government in getting it passed by Parliament.
The Minority MPs have rejected the proposal despite the decision by the Finance Minister Ken Ofori-Atta to reduce the initial rate of 1.75 per cent to 1.5 per cent. They hold the view that the policy proposal is a disincentive to the growth of digital economy. To that end, their Leader, Haruna Iddrisu said, they would not support it.
Mozambique looks to revive gas deals stalled by unrest (News24)
Global energy giants were quick to halt their Mozambican gas projects when jihadist violence erupted on their doorsteps. After months of calm, reviving those multi-billion-dollar projects is a much slower job. Total Energies CEO Patrick Pouyanne visited Maputo on Monday, saying he was optimistic about the $20 billion (R305 billion) project. “A lot of progress has been done, let me be clear,” Pouyanne said, but added more work was needed to ensure lasting peace. “Security is not only a matter of armed forces,” he said. “It’s also a question to work together with the population. “Vast natural gas deposits were discovered in the northern province of Cabo Delgado in 2010, the largest ever found south of the Sahara. Once tapped, Mozambique could become one of the world’s 10 biggest exporters.
Morocco’s trade deficit up 25 pct in 2021-Xinhua (Xinhua)
Morocco’s trade deficit increased by 25 percent to 22.1 billion U.S. dollars in 2021, the foreign exchange regulator reported on Tuesday. In 2021, Morocco’s imports increased by 24.5 percent year-on-year to 57.9 billion dollars, while its exports reached 35.8 billion dollars, up by 24.3 percent, the report said. Energy imports rose sharply by 51 percent to 8.2 billion dollars, it added. The report also said that the net inflow of foreign direct investments to Morocco recorded an increase of 20.5 percent to 2.19 billion dollars in 2021.
African trade news
African Continental Free Trade Area identifies 850 new products for commerce (Anadolu Ajansı)
The African Continental Free Trade Area (AfCFTA) has agreed to allow the trading of 850 new products pending approval by the heads of state of the African Union. Trading of the products will commence under AfCFTA’s Rule of Origin protocol. Rules of origin are the criteria needed to determine the national origin of a product. Their importance is derived from the fact that duties and restrictions in several cases depend on the source of imports. Before the identification of the 850 new products, AfCFTA had already agreed on 3,800, accounting for 88% of the number of targeted products to be traded among member countries on the continent.
“I am happy to say that this two-year period of work that we had undertaken in 2020 and 2021 identified more than 850 additional products for which rules of origin have been agreed. This package now goes to the heads of states, and if they endorse it, the package becomes the basis for trade to commence,” said Ebrahim Patel, South Africa’s trade minister and chair of the Council of Ministers responsible for trade among African Union member states.
Export potential under the African Continental Free Trade Area is heavily concentrated in three major exporters: Egypt, Morocco and South Africa. The 33 least developed countries in Africa account for only 16 per cent of the export potential.
The least developed countries have comparably greater export potential in agricultural products. Food processing industries also provide an opportunity for value addition and commodity-based export growth among these countries.
Periodic reviews of tariff concessions should allow for policy space for addressing weak productive capacities among the least developed countries and diversifying their imports.
Africa’s economic rebound from pandemic lies in trade, investment (BusinessDay)
The scramble to accelerate economic growth in Africa following the pandemic-induced slump will be swift if countries in the continent utilise local resources, trade, and technological advancement. Top industry experts unanimously agreed Tuesday at the ongoing Africa Business Convention 2022 organised by BusinessDay that the African continent needs to explore emerging opportunities and be updated with global trends and developments to abate the impact of the pandemic, leveraging trade and technology.
Shadrack Kubyane, co-founder, Coronet Blockchain, SA: “It is a lot easier to move things from China and Europe into Africa than it is to move things within Africa, and we need to repair that,” he said. To solve the problem, the blockchain expert said the solution does not revolve around infrastructure rather government policies to probe innovation. “We need a mindset shift for a successful free trade. Africa cannot continue to maintain the ideology that the winner takes all to repair trade in the continent. Countries need a mindset shift; also, blockchain is creating a level playing ground for all players in African trade, especially MSMEs.”
AfCFTA, EU and WCO join forces to support digital transformation of Customs work (WCO)
On 27 January 2022, representatives of the WCO, the AfCFTA Secretariat and the European Commission held a virtual meeting to review the state of play in the implementation of the African Continental Free Trade Area (AfCFTA). The meeting focused on the trade liberalization mechanism envisaged by the AfCFTA Agreement, the management of tariff offers and a possibility of setting up a continental digital platform to handle information on applicable tariff rates covering all African countries.
In opening the meeting, Mrs. Demitta Chinwude Gyang, Head of Customs at the AfCFTA Secretariat, expressed her appreciation for the support provided by the WCO and the EU on the implementation of the Harmonized System (HS) under the EU-WCO Programme for HS in Africa (HS-Africa Programme), funded by the EU. She emphasised that the trade under the AfCFTA had already started from January 2021, and 44 tariff offers had been submitted by AfCFTA signatories already. She explained that the AfCFTA Secretariat intended to create a web-based ‘tariff book’ whereby all the necessary information on tariff offers and applicable tariff rates would be made available in a user-friendly and easily accessible manner.
Simplified Trade Regime Threshold Reviewed (COMESA)
COMESA Secretariat has conducted a study to review the suitability of the current Simplified Trade Regime (STR) threshold which stands at US$2, 000 per consignment, per crossing. Specifically, the study was commissioned to review the current STR threshold value with a view to establishing a suitable level that is capable of effectively facilitating intra-regional trade in Member States already implementing the STR and those that will implement it in future. Director of Trade and Customs at COMESA Secretariat Dr Christopher Onyango stated that the review will also benefit countries that are not yet participating in the STR but intend to do so. This is part of COMESA’s strategies to boost cross-border trade. He added that apart from enabling small scale cross border traders to benefit from the tariff preferences available under regional integration the STR has the ingredients to stimulate domestic production and cross-border trade.
Malawi company gets €100,000 SIPS grant to produce COVID-19 PPE (SADC)
The Southern African Development Community (SADC) is improving private sector participation in the medical value chains, thanks to the Support towards the Industrialisation and Productive Sectors (SIPS), a joint action aimed at assisting the Region’s industrialisation and integration agenda. Under SIPS Joint Action, 14 companies in the SADC Region have received support to strengthen the development of regional value chains in the COVID-19 related medical and pharmaceutical products (CMPP). The €18 million Joint Action SIPS is co-funded by the European Union and the German Federal Ministry for Economic Cooperation and Development.
The Board of the African Development Bank (AfDB) has approved a grant of US$1.5m to advance intra-regional harmonization of electricity regulations and drive cross-border power trading in the COMESA region. This will be implemented through COMESA’s energy regulatory arm -the Regional Association of Energy Regulators for Eastern and Southern Africa (RAERESA). The two-year project seeks to provide tools for harmonizing regulatory frameworks to facilitate the smooth and timely completion, utilization and operation of regional energy infrastructure-a move that is expected to further enhance regional electricity trade, which is critical to COMESA noted RAERESA Chief Executive Officer Dr Mohamedain El-Seif.
Stop financing fossil fuel projects in Africa – Environmental coalition to AfDB (BusinessGhana)
A coalition of climate change-focused NGOs across Africa has called on the African Development Bank (AfDB) to stop providing financial and technical support for fossil fuel energy in Africa. “Establish an immediate ban on any new fossil fuel projects and publish a roadmap for phasing out all fossil fuel development financing to advance the just transition in line with the Paris Agreement” it stated in a document sighted by Citi News. The group charged the development finance institution to “prioritize the development and implementation of a fossil fuel finance exclusion policy that states that the bank will not fund, provide financial services, or capacity support to any coal, gas, or oil project or related infrastructure project that is carbon-intensive on the African continent after 2022.” The proposal focusing on energy; agriculture, forestry, land and ecosystems; and climate finance is an outcome of consultative processes with CSOs across Africa that seeks to promote human rights, sustainable development, and effective partnership.
Putting Africa on the path to universal electricity access (World Bank Blog)
As commodity prices soar and leaders around the world worry about energy shortages and prices of gasoline at the pump, millions of people in Africa still lack access to electricity. One-half of the people on the continent cannot turn on a fan when temperatures go up, can’t keep food cool, or simply turn the lights on. This energy access crisis must be addressed urgently.
In West and Central Africa, only three countries are on track to give every one of their people access to electricity by 2030. At this slow pace, 263 million people in the region will be left without electricity in ten years. West Africa has one of the lowest rates of electricity access in the world; only about 42% of the total population, and 8% of rural residents, have access to electricity.
As the African continent recovers from COVID-19, now is the critical time to accelerate progress towards universal energy access to drive the region’s economic transformation, promote socio-economic inclusion, and unlock human capital growth. Without reliable access to electricity, the holes in a country’s social fabric can grow bigger, those without access growing disenchanted with inequality.
Tackling the Africa region’s energy access crisis requires four bold approaches.
The private sector must do its part on data governance in Africa (Brookings Institution)
The last decade has seen an acceleration in the digitization of many aspects of our lives including financial services, commerce, education, and healthcare. Data gathering and exchange have accelerated alongside this swift uptake of digital engagement, and data has become the new essential commodity—with Africa as the next frontier. However, this rapid change brings along questions of data governance and privacy, especially as the implementation of the African Continental Free Trade Area (AfCFTA) moves forward. As the tech sector waits for regulators to catch up, individual companies can do more to protect consumers on their own.
Observing the commoditization of data as well as its attendant opportunities and challenges in Africa, it is hard to ignore that the analogy of data as the “new oil” is a powerful and prescient one. The commercialization of this resource can unlock considerable value for the continent in sectors critical for the development of thriving and connected economies. However, commercialization must be approached responsibly, as we have seen in the case of oil: If the exploitation of a resource is not well planned, unintended consequences—typically burdening the most vulnerable in our societies—arise.
Global economy news
DDG González: “Trade facilitation and economic resilience are two sides of the same coin” (WTO)
DDG González highlighted the importance of supporting least developed countries (LDCs) in implementing the WTO’s Trade Facilitation Agreement. She said that national trade facilitation committees could bring creative and strategic thinking to help governments, traders and development partners reap the economic benefits from full participation in the global trading system.
The Global Forum brings together members of national trade facilitation committees, policymakers and other relevant stakeholders to discuss the latest trends regarding implementation of trade facilitation reforms, including the implementation of the WTO Trade Facilitation Agreement.
Global services trade regulations showed signs of liberalisation in 2021, slowing the steady build-up of trade barriers identified in previous years, according to a new OECD report. OECD Services Trade Restrictiveness Index (STRI): Policy trends up to 2022 shows that liberalisation outpaced new restrictions during the past year, as the erection of new barriers to services trade slowed across almost all major sectors covered. The average cumulative increase in barriers across sectors covered by the Index (STRI) was six times lower in 2021 than in 2020, indicating a significant decrease both in the volume and effect of new trade restrictions.
High shipping rates and digital services sustain services trade recovery in Q3 of 2021 (WTO)
The third quarter services trade growth has kept pace with growth in trade in goods (24%) in the same period. World transport services, in particular, rose 45% year-on-year in the third quarter of 2021, and by 12% compared with the same period of 2019. Recovery was boosted by soaring consumers’ demand for goods due to lockdowns, the shift from services requiring physical proximity, and fiscal stimulus measures in advanced economies. The surge in demand coupled with pandemic-related restrictions resulted in port bottlenecks, misallocation of containers worldwide, and delays, which led to a strong increase in shipping rates. In the third quarter of 2021, Asia’s transport exports rose by 71% year-on-year, and by 46% compared with the third quarter of 2019.
Commodity dependence haunts least developed countries (UNCTAD)
Heightened reliance on exports of primary commodities has been a long-standing concern for policymakers in least developed countries (LDCs), because of the limited developmental benefits associated with this lopsided export specialization pattern, as well as the macroeconomic challenges it entails. Accordingly, the Istanbul Programme of Action (IPoA) envisaged the goal of broadening LDCs’ economic base to reduce commodity dependence.
However, the overall reduction in the weight of primary commodities is partly due to swings in international commodity prices, notably for fuels, which account for a significant share of LDCs’ export revenues.
Furthermore, the expansion of LDC manufactures exports is mainly accounted for by labour- or resource-intensive products. Moreover, the overall number of commodity-dependent LDCs has slightly increased over the period considered, from 34 to 37 (out of 46 LDCs!). This was mainly the case among African LDCs, 90% of which (29 out of 32 countries) can be classified as commodity dependent, and Island LDCs 67% (four out of six countries).
WTO Secretariat updates members on COVID-19 reports and new tools (WTO)
The information meeting consisted of three sessions, each starting with presentations by staff of the Economic Research and Statistics Division (ERSD) and the Market Access Division, followed by questions and answers. The first presentation focused on the latest trends in medical goods trade in relation to the COVID-19 pandemic. This presentation was based on the information note on Trade in medical goods in the context of tackling the COVID-19 pandemic, which was last updated on 14 December 2021. The Secretariat also explained some of the difficulties in measuring trade in essential products to tackle the pandemic, as explained in the information note Improving trade data for products essential to fight COVID-19: A possible way forward, published in July 2021.
The second session looked more specifically at trade in COVID-19 vaccines. Members also looked at how critical vaccine ingredients and the COVID-19 vaccines themselves are affected by tariffs, based on the information note COVID-19 vaccine production and tariffs on vaccine inputs of 8 October 2021.
Related News
tralac Daily News
Country-related news
Green energy transition will help South Africa become more resilient, competitive (Engineering News)
South Africa needs more power generation to overcome the supply gap and underpin economic growth, and investments by private companies, including mining houses, are essential to close that gap. Renewable energy projects provide good economic prospects, help to decarbonise the mining sector and ensure its resilience and global competitiveness, while supporting the transformation of mining-dependent communities and supply chains. Speaking during a ‘Decarbonisation & Going Green in the Mining Sector’ webinar hosted by Creamer Media on January 28, industry organisation Minerals Council South Africa environment, health and legacies senior executive Nikisi Lesufi said the council supports the decarbonisation of the mining industry and the South African economy, and recognises the need to move away from its reliance on coal-fired power generation. He stressed, however, that a pragmatic approach was needed, with security of energy supply being maintained and with any reduction in coal-fired power generation being matched by a commensurate upswing in renewable energy generation.
Zimra records Z$161bn gross revenue Q4 2021 (The Chronicle)
THE ZIMBABWE Revenue Authority (Zimra) has recorded Z$161 billion in gross revenue collections for the fourth quarter ended 31 December 2021, which is 48,9 percent above target. Despite the inflationary pressures, the country’s monthly revenue collections have remained on a positive trajectory having recorded significant growth since 2020 in response to prudent Government economic policies and revenue mobilisation strategies being pursued by Zimra. In a revenue performance report for the period issued yesterday, Zimra deputy board chairperson, Mrs Josephine Matambo said the year 2021 ended on a positive note in terms of revenue collection as the country surpassed its set target.
Digital impetus to drive economic growth – Dr Muswere (The Chronicle)
THE on-going digitalisation drive is providing new impetus for sustainable economic growth in line with the country’s National Development Strategy (NDS1), which is a key building block towards attainment of an upper middle-income economy by 2030. Government has emphasised the need to mainstream use of information and communication technologies ICTs) as part of measures to transform Zimbabwe into a knowledge-based society and enhance the country’s competitiveness in the world in order to stimulate and sustain robust economic growth. “As the world gravitates towards the fourth industrial revolution, innovation, information and communication technologies (ICTs), have become indispensable to our daily lives. Zimbabwe cannot achieve its development goals without investing significant financial and human capital resources in innovation and ICTs,” said Dr Muswere.
Climate Change Bill to bolster national adaptation efforts (The Chronicle)
GOVERNMENT has begun the process of drafting a Climate Change Bill to provide a supportive legal framework that enhances stakeholder collaboration in mainstreaming climate change mitigation and adaptation at all levels of development in the country. Establishing a climate change legal framework is critical towards consolidating broader implementation aspects and ensuring that project interventions are in line with the country’s economic blue-print, the National Development Strategy (NDS1:2022-2025) and Vision 2030 ideals. This comes at a time climate change is being mainstreamed in sub-national planning and budgetary processes.
Namibia, DRC in fishing quota dilemma (New Era)
The Namibian government will rely on international policy as well as the country’s legal framework to find a solution for the 27 300 metric tons of horse mackerel that was sold to the Democratic Republic of Congo last year. The full quota was never caught last year and cannot be transferred to the current fishing season, as stipulated by Namibia’s governing laws. Fisheries minister Derek Klazen indicated during the sale of the quota in September last year that the DRC was notified about the conditions of the agreement. The DRC government paid N$85 million last year for the quota, which was a remainder of the governmental objective quota that was auctioned off earlier last year.
Agriculture stakeholders appeal for incentives to organic farmers (The New Times)
Researchers have called for incentives to support organic farmers and also help link them to buyers inside and outside the country. The call is based on a study which established that the use of chemical fertilizers alone without organic fertilizers or using chemical fertilizers in improper ways is causing soil degradation and could trigger a decrease in agricultural productivity in the coming years if nothing is done.
Conservation researcher Elias Bizuru who is also a lecturer at University of Rwanda told Doing Business that, “There is need for more efforts to get more organic fertilizers available and accessible to farmers,” explaining that increasing the organic fertilizers ensures soil fertility improvement.
Current account deficit surpasses CBK forecast (Business Daily)
Kenya’s current account deficit ended 2021 above the central bank’s projection on the back of higher than anticipated oil prices, defying record diaspora emittances and higher earnings from tourism and horticulture exports. The deficit stood at 5.4 percent of gross domestic product (GDP) for the year, preliminary data from the Central Bank of Kenya (CBK) shows, against an earlier projection of 5.2 percent. The deficit stood at 4.6 percent in 2020. Higher imports of industrial and consumer goods also strained the country’s forex flows as the economy reopened and pent-up demand raised external purchases.
Kenya, EU launch talks to elevate ties ‘beyond aid’ (The East African)
Kenya and the European Union on Friday launched vital talks to elevate their ties beyond aid and focus on issues of long-term peace and development. At a meeting in Nairobi, Kenya’s Cabinet Secretary for Foreign Affairs and visiting EU top diplomat Josep Borrell Fontelles signed a joint declaration to formally begin discussions on a Strategic Dialogue, a guiding document that could turn relations to “common problems.”
Mr Fontelles, the EU High Representative for Foreign Affairs and Security Policy said: “We have been having, the European Union and Kenya, a long standing relationship. But we are no longer the donor of development aid. We are a strategic partner.”
The Strategic Dialogue, he said, will “bring concrete results, because it will focus on delivering on commitments, actions, investments, and sharing objectives among our people.” Those commitments will target long-term peace and security in the region, fighting poverty through trade and investment, environmental conservation and fighting climate change, defending democracy and the rule of law, and human rights, “as well as many sectors in Kenya’s priority development agenda,” Ms Omamo said
Optimism as Rwanda agrees to reopen border with Uganda after three years (The East African)
Rwanda has agreed to reopen its common border with Uganda. The move comes three years after it closed it in protest against alleged mistreatment of Rwandans in Uganda, and hosting of dissident groups plotting to overthrow Paul Kagame’s government. While Rwanda had insisted that the border would remain closed until the contentious issues are resolved, on Friday Kigali announced that it would reopen border points on Monday, January 31, as both countries continue to work on the resolving the dispute.
John Ruku Rwabyoma, a member of the Parliamentary Committee on Foreign Affairs, Co-operation and Security told The EastAfrican that the recent meeting between President Kagame and Lt Gen Muhoozi could change the status quo. Foreign Affairs minister Jeje Odongo says Uganda has complied with Rwanda’s conditions.
Rwandan traders rush back to Gatuna as Kigali prepares to reopen border (The East African)
A day after Rwanda announced the reopening of the border effective January 31, business operators, including clearing agents, customs, immigration staff and logistics sector players, rushed back to the border area to book space as they prepared for the resumption of operations. The businesses, like workers in services and activities that depended on the border traffic such as money changers, vendors, taxi operators and others, closed shop and traders left soon after the border was closed in February 2019. Kigali, which accused Kampala of mistreating Rwanda and supporting groups working against Rwanda, recently announced the border reopening following meetings between officials, and a commitment to address contentious issues.
Plans to decongest Kenya-Uganda border gears up – Commissioner (IPPMedia)
Uganda Revenue Authority Commissioner of Customs, Abel Kagumire made the assurance when speaking at the EABC-TMEA public-private dialogue at Malaba OSBP. He stated that the backlog of 4000 trucks has been reduced to 2500 trucks and the traffic queue has been reduced from 40KM to 25KMs following the implementation of the resolutions for the bilateral meeting between the Ministers of Works and Transport of the Republics of Uganda and Kenya held on Saturday. EABC CEO John Bosco Kalisa said: “In future solution to NTBs should be derived without waiting for Ministerial and Head of State decisions.”
The EABC boss also called for a borderless East Africa for free flow of cargo. He further urged for closer collaboration among transporters, importers, exporters, cross-border traders, customs, immigration and other trade facilitation agencies on both sides of Uganda and Kenya.
New NTBs add more bottlenecks at Malaba, Busia (The East African)
Kenya and Uganda face fresh logistical, bureaucratic and infrastructural challenges that are further obstructing the smooth flow of cargo on the Malaba and Busia borders. This is despite the two countries signing bilateral agreements to ease traffic snarl-ups by trucks that are hindering trade between them. Unilateral bans on products, high fees by Agriculture and Food Authority-Kenya, trade information asymmetry and single lane roads on the Kenya side stifle cross border business between Kenya and Uganda via Malaba and Busia One-Stop Border Posts. The private sector including the transporters, importers, exporters, cross-border traders, Customs, immigration and other trade facilitation agencies on both sides of Uganda and Kenya, have raised alarm that emergence of new Non-Tariff Barriers (NTBs) is stifling cross-border trade.
Lobby roots for seamless trade across borders (The Standard)
The East African Business Council is pushing for the revival of business committees to facilitate the flow of goods and services at border points. The council is seeking to revamp joint border committees in Kenya, Tanzania, Uganda, Rwanda, South Sudan, and Burundi under the East Africa trade protocol. “We are focused on revamping the joint border committees in collaboration with Kenya and Uganda revenue authorities and other relevant agencies,” said John Kalisa, the council CEO. Kalisa, who spoke at a forum that brought together different actors from Kenya and Uganda at the Malaba border on Monday, said they are focused on formulating systems that will guarantee fast clearance of cargo trucks.
Shippers’ Authority builds freight park to ease congestion on Elubo roads (News Ghana)
The Ghana Shippers’ Authority has constructed an ultra modern freight park at Elubo in the Western Region to ease both human and vehicular congestion. The freight park, would provide adequate and secured parking space and enhance the safety of motorists within the enclave. The freight park can house 40 trucks bound for transit trade and other logistics operators along the Abidjan-Lagos corridor. Ms Wilson described the facility as timely especially in the wake of the call for more intra Africa trade.
Ghanaians must benefit from the inflows of the Minerals Development Fund (GBC Ghana)
The Deputy Minister for Lands and Natural Resources, George Mireku Duker, has charged the Staff and Management of the Minerals Development Fund (MDF) to make their impact felt in Ghana, especially in the various mining communities across the country. He said it is important Ghanaians benefit from the inflows of revenue from the Minerals Development Fund especially what is detailed to the fund from the Minerals Income Investment Fund. He stressed that it is very important they decentralise the inflows of the revenue for mining communities to be developed, especially those in Tarkwa as the town hosts about 60% of Ghana’s Gold threshold.
Economic Outlook: With a large population, Nigeria can not be prosperous by relying on raw materials (Nairametrics)
Given a rapidly rising population, African economies must rely less on exporting raw materials and more on trading with each other especially through the African Continental Free Trade Area (AfCFTA). This was disclosed by Andrew Nevin, Financial Services Leader and Chief Economist at PwC Nigeria while speaking at the Nairametrics Economic Outlook webinar, themed, ”Your Money, The Economy and Government Policies”. He stated that this is one of the major implications of rising population levels in Africa, compared to the rest of the world.
Driving Infrastructure Devt For Economic Diversification (Leadership)
Infrastructure development is crucial for Nigeria’s economic growth, particularly for the realization of the federal government’s economic diversification agenda. The lack of adequate fiscal revenue to finance infrastructural development has however left the Nigerian economy grossly in deficit in this area. Infrastructures are the basic essential facilities and services that should be put in place for development. It facilitates and accelerates economic development, such that where there are no infrastructures, economic development and growth would be difficult to achieve. Economic development or growth is virtually impossible without a thriving infrastructure sector.
Indeed, poor quality of infrastructure is the longest standing problem of the manufacturing sector in Nigeria and it has contributed to the high cost of production. Some of the infrastructure challenges are bad road network system, inadequate electricity supply, Port Congestion and logistics bottlenecks and forex scarcity.
African trade news
AFCFTA makes giant strides in ensuring effective intra-Africa trade (GBC Ghana Online)
The Africa Continental Free Trade Area, AFCFTA, has made giant strides in ensuring effective intra Africa trade following a number of ground breaking decisions made by the Council of Ministers of Trade of AU member states. These include a One-billion-dollar Adjustment Fund and a 1.2 Billion Automobile Fund. Secretary General of the Africa Continental Free Trade Area, Wamkele Mene said the Automobile Fund will assist African Countries to exceed the target of manufacturing at least four point five million vehicles annually to match the growing population.
“The ACFTA Adjustment Fund is intended for those countries who in a short term will experience revenue loses as a result of reducing or eliminating their tariffs. It is an initial amount of $1bn that has been made available for this purpose by Afreximbank. Our studies indicate that we will need between $6n-$7bn to pluck the gap that will be created by revenue loses in the short term”.
AfCFTA to launch African Trade Gateway to support young entrepreneurs (Myjoyonline)
Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, Wamkele Mene, says his outfit will launch the African Trade Gateway for small and medium enterprises in Africa. This, he believes, will support young entrepreneurs in their quest to make their businesses thrive and take advantage of the secretariat. At a media briefing for the 10th meeting of the council of ministers he opined that the African Trade Gateway will provide the needed information for SMEs across the continent to access the activities of the secretariat. He said the initiative will be a tool for small business connectivity with information ranging from marketing strategy, due diligence of the marketing partners on the continent and the pan African payment and settlement system.
AfCFTA members conclude talks on rules of origin to boost free trade (Daily News Egypt)
Member states of the African Continental Free Trade Area (AfCFTA) concluded on Saturday their negotiations on rules of origin, a move expected to further reduce tariffs on original goods within the African continent. Ebrahim Patel, chairperson of the African Union (AU) Ministers of Trade, told a press briefing that the adopted rules could cover 87.7 percent of goods on the tariff lines of the AU member states. “That is a big breakthrough,” said Patel, adding that the agreed rules of origin would become the basis for full-scale trade among the various member states under the free trade agreement to boost Africa’s economic growth.
The Regional Integration and Trade Division (RITD) of the Economic Commission for Africa (ECA) in collaboration with Regional Economic Communities (RECs) and the AfCFTA Secretariat today convened a workshop to validate the report on the role of RECs in gender responsive implementation of the AfCFTA. The objective of the workshop was to review of the status of gender mainstreaming in trade at the REC level, to identify best practices and success stories, highlight challenges in gender mainstreaming in trade policy, and provide policy recommendations for gender sensitive AfCFTA implementation.
“The effectiveness of the AfCFTA will be limited if women, youth, SMEs, and informal traders are ignored,” Director of the Regional Integration and Trade Division of the ECA, Dr. Stephen Karingi said. The findings of the report are based on a literature review, a data collection exercise in selected regional economic communities, a desk review, and the outcomes of continental workshops on trade and gender issues. The report identifies challenges and opportunities for building on the frameworks, programmes, networks, and capacities of the Regional Economic Communities to address trade and gender concerns.
The Department of Trade, Customs and Free Movement, through the Trade Directorate, of the ECOWAS Commission has organised a three-day meeting for the ECOWAS Institutions Technical Working Groups (TWGs) established within the Framework of the Negotiations of the African Continental Free Area (AfCFTA) from January 25 – 27, 2022 in Nasarawa State, Nigeria. The Technical Working Groups (TWG) constituted by officials from various ECOWAS Institutions and Agencies was put in place to facilitate support to Member States during the AfCFTA negotiations and implementation, as well as to ensure ECOWAS’ active engagement of key stakeholders during all phases of the negotiations.
The three-day coordination meeting provides a platform for the presentation of updates regarding the AfCFTA negotiations under the various Protocols and facilitate exchange of views amongst participants in a bid to further reinforce ECOWAS’ technical contributions both in its capacity as a REC and building bloc of the African Union as well as in its support to Member States, who are the primary negotiators within this process.
Confirming banks and trade finance in Africa - Volume 13 | Issue 1 (AfDB)
Access to trade finance remains a significant challenge for African firms. Recent estimates from the AfDB and Afreximbank (2020) shows that the estimated value of unmet demand for trade finance in Africa was US$ 81.80 billion in 2019 and has averaged USD 91 billion over the past decade. Indeed, this is reflected by the low percentage (40%) of African trade that is bank intermediated compared to 80% globally. 13 duplicates removed
Regional organisations in Africa: What are the political economy dynamics? (ECDPM)
Given the wide array of actors engaged with the African Union (AU) on its many agendas, and oft-cited frustrations among policymakers and their international partners about progress and implementation gaps, ECDPM has been working to understand the Political Economy Dynamics of Regional Organisations (PEDRO).
This research is focused on better understanding, and promoting discussion of, the interests and incentives of the range of different actors who seek to cooperate and integrate around regional agendas and ambitions, including international partners. That means exploring the interaction of a range of actors and factors that shape domestic politics, and how they interact with regional, continental, and international relations.
Recent years have seen a new wave of dynamism at the African Union. Two main areas stand out: Connecting markets and people – the African Continental Free Trade Area (AfCFTA) Agreement and Free Movement of People Protocol, a highly ambitious project that seeks to alter the development trajectory of the entire continent by promoting trade within the continent, both agreements opened for signature at the same time. Institutional reforms of the AU – a range of proposals have emerged to address the issues raised by Kagame, in terms of internal functioning of the AUC, and its role in representing member states externally and the outreach of the Union to citizens.
EABL optimistic on 2022 after 131% jump in half-year profit (The Star, Kenya)
East African Breweries (EABL) is optimistic of continued growth in the second half of the current financial year after a strong performance in the six months ended December 31. This, even as it remains concerned over the uncertain trading environment with the lingering socio-economic impact of the Covid-19 pandemic, excise tax volatility, and shifting political changes. “We are cautiously optimistic that improved consumer incomes, on-trade recovery, and off-trade resilience will continue apace, fueling our net sales growth momentum across East Africa,” managing director Jane Karuku said.
“During this pandemic, our strategic clarity enabled us to maintain focus on brand-building, active portfolio management, consumer-led innovation, and digital transformation, all executed through extra-ordinary efforts and resilience of our people,” she said.
ECOWAS working on regional hamonised organic standard practices (Blueprint Newspaper)
The Head of the ECOWAS Commission, Agriculture Division, in Abuja, Nigeria and Chairman of Regional Steering Committee for Ecological Organic Agriculture Initiative- West Africa, Mr Ernest Aubee, has revealed that the Commission with other stakeholders are working on an Hamonised Organic Standard for the region. According to Aubee who spoke recently while presenting a lecture on the “Benefits of Hamonised Organic Standard in West Africa said the General Assembly of West Africa Organic Network (WAfrONet) that took place during the 5th West Africa Organic Conference in Ghana recommended the need for an harmonized Organic Standard for PGS activities in West Africa to encourage regional trade and the establishment of BioWest Africa Fair (regional organic exhibition in West Africa) to enhance visibility of organic agriculture sector in the region and market driven development of the sector.
China Business Council signs MoU with Lagos Chamber of Commerce (Daily Sun)
The China Africa Business Council (CABC) has signed a Memorandum of Understanding (MoU) with the Lagos Chamber of Commerce and Industry in Lagos. Vice Chairman of CABC Chief Diana Chen said the MoU would drive the economic advancement and Industrialisation of the nation through deliberate strategic partnerships and collaboration fostered by this agreement.
“China will encourage its businesses to invest no less than $10 billion in Africa in the next three years, and will establish a platform for China-Africa private investment promotion. China will undertake 10 industrialisation and employment promotion projects for Africa, provide credit facilities of $10 billion to African financial institutions, support the development of African SMEs on a priority basis, and establish a China-Africa cross-border RMB centre.”
Africa’s giant China export opportunity (African Business Magazine)
January 19 2022 is a day the ambassador of Ethiopia to China, Teshome Toga, is likely to remember for years to come. That day was the day he – and Chinese livestreaming star Austin Li Jiaqi, also known as the “Lipstick King” – helped sell over 11,000 bags of three brands of coffee from his country in one second.
It’s easy to dismiss this as a marketing gimmick promoting Alibaba, one of China’s largest e-commerce platforms. But it is also an example of a serious trend that is worth understanding, particularly because it also has links and implications for Africa’s new continental free trade area.
New trade commitments set the framework under which those coffee bags were sold, commitments that ambassador Toga and others worked hard to proposed and negotiate, and which we believe will have an impact on African businesses over 2022 and the rest of the new lunar Year of the Tiger. In headline numbers, the documents included a commitment by China to reach $300bn worth of annual imports from Africa by 2025. This is not a particularly large step up – given that imports even in 2021 were at $106bn – but it could nevertheless make China Africa’s largest export destination, ahead of the EU, especially because the commitments were backed up with three specific measures.
Global economy
Global forum focuses on easing trade during and after COVID-19 (UNCTAD)
Countries are at a turning point amid the COVID-19 crisis, and the decisions their policymakers make to ease trade will go a long way in determining the strength of their recovery from the pandemic. UNCTAD’s global forum for national trade facilitation committees (NTFCs) to be held online from 1 to 4 February will examine how to accelerate the implementation of trade facilitation reforms through these committees during and after the pandemic. To participate in the forum, register here. Trade facilitation entails expediting the clearance of goods to reduce the time and cost of import, export and transit procedures to ensure the free flow of goods across borders. “COVID-19 has been a stark reminder that the pains caused by trade disruptions are real. These pains were already daily realities for people in vulnerable nations, who rely on trade for essential goods,” said UNCTAD Secretary-General Rebeca Grynspan. “Making it easier and less costly to move goods across seas and borders is critical to ensuring a sustainable and inclusive recovery. Because trade is about people and about improving their lives,” Ms. Grynspan said.
COVID-19 Trade Policy Database: Food and Medical Products (World Bank)
Many governments are using trade policy measures to increase the availability of medical and food products during the COVID-19 pandemic. Tracking them is important for assessing their incidence, effectiveness, and potential international spillover effects—particularly on countries that depend on imports of these critical products. This database is derived from official sources, media reports and other public sources and is updated on a monthly basis. The underlying data can be found here.
DG Okonjo-Iweala noted sustainable development was a goal written into the WTO’s founding agreements in 1994, and that “exciting initiatives are underway at the WTO” to respond to sustainability challenges such as plastics pollution and climate change. “If you take one thing away from what I say here today, please make it this: trade is part of the solution to the challenges we face, far more than it is part of the problem. Across every dimension of sustainability – economic development, social inclusion, and environmental conservation – leveraging the full power of trade and trade policy will help us achieve our goals more effectively and efficiently.”
China port closures cause panic in global supply chain (The East African)
Partial closure of ports in China as a result of an increase in Covid-19 infections is expected to cause shortage of commodities globally in the next few weeks, with Africa likely to be most affected. China is one of Africa’s leading market sources, with data indicating that China-Africa trade reached $185.2 billion between January and September 2021, up 38.2 percent year on year. Some shipping lines have suspended operations as at least three Chinese ports, including Shanghai and Shenzhen, remain partially closed. The shipping companies said they are re-assessing the situation before resuming operations.
Ships looking to avoid Covid-induced delays in China are causing growing congestion at the world’s biggest container ports.
World’s Best Trade Finance Providers 2022 (Global Finance)
Global trade has been rocked by seismic changes to supply chains and subdued economic outputs over the course of the Covid pandemic; but increased innovation and digitalization of trade finance has ensured that businesses can still operate and provide a more sustainable future with greater transparency, which bodes well for a new trade finance ecosystem. Trade finance is playing an increasingly crucial role in supporting companies’ efforts in meeting environmental, social and governance (ESG) targets and opportunities, be it from paperless processes or green financing; and these are being enabled by the digital efforts of both banks and technology companies.
Societe Generale, which is present in 19 African countries, won the regional crown for its continued support of trade finance in Africa. A cooperation agreement with Absa Group has increased client coverage across 27 countries, while a new Payment Division dedicated to Africa, a regional foreign exchange trading room, participation in the “China-Africa Corridor” and development of intra-African corridors all provide support and impetus to increasing trade. Societe Generale has also introduced several solutions to help digitalize trade finance documentation, such as automated document checking in the framework, the transformation of images into text thanks to OCR technology, and the classification of documents and automatic extraction of data using named-entity recognition and natural language processing.
DDG Paugam underscores important role of trade for food security, sustainable land use (WTO)
More than 90% of the production of our food is directly or indirectly produced on our soils. However, according to the FAO, a third of the world’s soil has degraded and over 90% could become degraded by 2050. Our current agriculture is putting the food security of future generations at risk. We face an unprecedented challenge: to produce more food for the world’s growing population with limited land resources and to regenerate soil for tomorrow’s food security. In this context I would like to share three points about the role of trade for food security: First, the role of trade. Trade not only allows food to be produced where it is most economically and environmentally efficient, but also facilitates access to digital and other technologies and services needed to improve soil management and monitor soil quality. Second, how governments spend their money matters. More than US$600 billion is spent by governments on agriculture each year.
Third, we have an opportunity to update the WTO’s agricultural rulebook to enable it to address such contemporary challenges more effectively. The opportunity is now to secure an outcome at the forthcoming 12th WTO Ministerial Conference. Strengthening the rules on harmful subsidies and making trade flows more predictable and seamless would be an important commitment to future food security.
IDR 2022 (UNIDO)
The COVID-19 crisis has demonstrated that manufacturing remains the backbone of our economies. Yet, it also shows the vulnerability of our production systems to sudden shocks. For the recovery to take hold, it is critical to understand how the pandemic has affected the industrial sector—and the prospects for the future of industrialization as economies all over the world continue to rebound and recover. The Industrial Development Report 2022 contributes to this discussion by providing evidence at the country, industry and firm level that documents the impacts of the crisis, and by examining the drivers of resilience and vulnerability in those same contexts. Findings documented in the report strongly re-affirm the centrality of Sustainable Development Goal (SDG) 9—which is at the core of UNIDO’s mandate—to the achievement of the 2030 Agenda for Sustainable Development.
More efforts needed to tackle gender divide in the digital economy (UNCTAD)
Members of the Advisory Board of UNCTAD’s eTrade for Women initiative reaffirmed their commitment to empowering women entrepreneurs in the digital economy during their first meeting on 20 January. UNCTAD Secretary-General Rebeca Grynspan led a discussion on priority actions for helping more women reap the benefits of the digital economy with eTrade for Women advocates, a select group of women leaders in the tech sector. “The COVID-19 crisis has made the digitalization of the economy more decisive, but unfortunately, it has also widened the gaps,” Ms. Grynspan said. “If we continue with the same business-as-usual mentality as before the pandemic, digitalization will not reduce gender gaps, it will increase them.”
Related News
tralac Daily News
Country-related news
South Africa: Trade Liberalization In Africa And Arbitration Clauses In Cross-border Agreements (Mondaq)
The African Continental Free Trade Area or “AfCFTA”, launched last year in terms of the African Continental Free Trade Agreement, created the largest free trade area in the world measured by the number of countries participating, with the potential to unite 1.3-billion people and with a combined GDP valued at USD3.4-trillion, according to the World Economic Forum. The expansion of foreign and intra-African trade and investment has resulted in the increasing prominence of arbitration as an effective mechanism for resolving cross-border disputes that involve parties, legal representatives and arbitrators from different legal and cultural backgrounds.
Will South Africa finally ignite minerals and energy growth engines in 2022? (Engineering News)
Problems in South Africa’s electricity sector will, sadly, continue to dominate the headlines and undermine growth and confidence in 2022. Despite the fact that the crisis is now deep into its second decade, there is little sign of immediate relief and load-shedding remains a clear and present danger.
Zimbabwe seeks enhanced trade with Namibia (The Namibian)
A ZIMBABWEAN business delegation recently visited Namibia to enhance business ties and explore import and export opportunities between the two countries, as well as the storage of products at the Zimbabwe Dry Port.
“Our aim is to engage the Namibian business community to explore opportunities and the viability of using the Port of Walvis Bay as an alternative, and the Zimbabwe Dry Port facility for exports and imports to and from Zimbabwe. We are targeting increased trade with Namibia through strategic partnerships with local companies in the transport and logistics sector, and we are confident that our engagements will yield positive outcomes,” said BAK’s managing director logistics Mary Machingaidze.
Cross Border Traders Want Imports To Compete With Local Goods For Fair Pricing (263Chat)
The Zimbabwe Cross Border Traders Association (ZCBTA) has castigated local producers of goods for unjustified exorbitant pricing and called for unfettered access of imported goods into the market to bring fair pricing. Prices of goods have been skyrocketing with local producers attributing this to increased cost of production due to the hyper-inflationary macro-economic environment in the country. However, some increases have not been justified, but merely profiteering-driven.
“It is common knowledge that price distortions and exchange control instability benefit cartels and elite in the corporate sector hence their hesitation to address economic ills,”
“Given operating space, cross border traders can bring sanity in this area, if the Government temporarily lifts import restrictions on some basic commodities which are being overcharged and allow cross border traders to freely import these goods.”
Ghana and Rwanda sign agreement to deepen bilateral trade relations (GhanaWeb)
The Government of Ghana has through the Trade and Industry Ministry signed a Memorandum of Understanding (MoU) with Rwanda to deepen bilateral trade relations between the two countries. Speaking at the signing ceremony of MoU on trade and economic cooperation at the Africa Trade House on Thursday January 27, the minister of Trade Alan Kyerematen expressed optimism that the agreement signed will develop into a strong and mutually beneficial relationship between the two countries. He noted in his speech the significant role Rwanda has played in some of Africa’s business-oriented policies including the establishment the African Continental Free Trade Area (AfCFTA).
The Minister, whiles acknowledging the seemingly low level of trade between Ghana and Rwanda despite their good relations over the years, indicated that he hoped the signing of the MoU will change that narrative.
Rwanda to re-open border with Uganda as relations thaw (Reuters)
Rwanda will re-open on Monday a border crossing with Uganda that was shuttered nearly three years ago, even as tensions rise between the central African neighbours, fuelled by accusations of espionage and support for each other’s dissidents. Rwanda had repeatedly accused Uganda of supporting rebel groups planning to topple the government in Kigali while Kampala accused Rwanda of carrying out illegal espionage activities in Uganda. In a statement on Twitter on Friday, Rwanda’s foreign ministry said the country would re-open the common border on Jan. 31.
Afreximbank closes landmark EUR 200 million and USD 166 million dual-tranche facility for Uganda (Afreximbank)
African Export Import Bank (Afreximbank) has concluded a landmark 10-year, dual tranche facility of €200 million and US$166 million for the Government of Uganda. The transaction was structured using the Bank’s innovative specialised finance solution, introduced to facilitate access to long term finance by African sovereigns and other eligible entities.
The transaction, which is the first of its kind to be implemented by an African Multilateral Financial Institution, will greatly assist Uganda in achieving its trade infrastructure development and industrialisation objectives, thereby promoting the growth of Uganda’s exports and contributing significantly to the country’s economic growth and development in line with its National Development Plan.
Local manufacturing companies have made Nigeria self-sufficient in cement – Buhari (ICIR)
PRESIDENT Muhammadu Buhari has said that local manufacturing firms have made Nigeria self-sufficient in cement production. The president, who made the disclosure at the inauguration of new BUA Cement Plant of three million metric tonnes in Sokoto State on Thursday, praised the manufacturing plants for creating thousands of jobs. Nigeria’s cement production capacity has exceeded 40 million metric tonnes, with Dangote Cement the industry leader, followed by BUA and Lafarge. The country has met local demands and is currently exporting to African countries.
Economic diversification: From raw materials to processed goods (Daily Sun)
The president of the Africa Development Bank (AfDB), Mr. Akinwunmi Adesina, at the recent Mid-Term Ministerial Performance Review Retreat of the President Muhammadu Buhari administration, which held in October 2021, presented what he proposed as a roadmap for Nigeria’s economic recovery. Among the many recommendations, the need for the Federal Government to significantly boost productivity and revenues from its non-oil sector, with appropriate fiscal and macroeconomic policies that will enhance international competitiveness was particularly instructive. He stated further that “Significant support should be directed toward boosting industrial manufacturing capacities.” Nigeria, he opined, should also move rapidly to the top of selected value chains, such as automobiles, computers and electronics, textile and garments, and food manufacturing, transport, and logistics.
African trade news
Manufacturing in Africa needs a strong regulatory framework (Mail & Guardian)
Success towards resource mobilisation and infrastructural improvements aimed at establishing in-country vaccine production is steadily moving on an upward trajectory in some countries in Africa. New Covid-19 infections have been on the rise, accelerated by low vaccination rates and the emergence of new variants. However, some countries have made concerted efforts to renew their emergency preparedness and response to better address challenges and embrace the opportunities presented by the pandemic.
The African Medicines Agency (AMA) is an initiative that will enable a continental harmonisation of regulations relating to the manufacturing of vaccines and other medical products. The Agency is a collective effort aimed at spurring local pharmaceutical production by establishing a supportive structure in which all member states can work together to respond to current and future emergency health crises such as Covid-19.
The lack of regulatory harmonisation at continental level is one of the major barriers to realising local vaccine production and ensuring effective regional integration to address health emergencies and the development of adequate pharmaceutical products. The delay in ratifying the AMA treaty means that member states and their in-country national regulatory authorities continue to be faced with constraints from conflicting legislation, lack of capacity building, technology transfer and adequate skills to set up local vaccine manufacturing processes, insufficient domestic financing to respond to public health crises and prolonged dependency on high income countries’ support in responding to current and future health emergencies.
SADC Protocol on Trade in Services enters into force (SADC)
The Southern African Development Community (SADC) Protocol on Trade in Services has entered into force. This was announced by the Executive Secretary of SADC His Excellency Mr Elias M Magosi in his notification to the 16 Member States of SADC,
he SADC Protocol provides the framework for a preferential trade agreement covering all commercial and tradable services in any services sector. The Protocol aims to encourage increased intra-regional trade in services through the gradual removal of unnecessary or overburdensome regulation affecting the cross-border supply of services within the SADC region, a process known as progressive liberalisation. Barriers to trade in services are found in the way that nations regulate services, e.g. through a country’s banking or transport laws, where measures may be found that limit the ability of foreign services suppliers to trade freely across borders, or which discriminate against foreign service suppliers within the market place and distort competition in favour of domestic suppliers.
The first round of such sectoral negotiations was concluded in 2019 covering communication, financial, tourism, transport, construction and energy-related services. A second round of negotiations was approved by SADC Trade Ministers in 2021, covering regional trade in the remaining sectors, namely: business services; distribution; educational, health and social services; environmental services; and recreational, cultural and sporting services. The adopted first round Lists of Commitments/Schedules comprise of commitments in the six priority sectors by all Member States except for outstanding schedules by Mozambique (in relation to energy-related services), Madagascar (construction and energy-related services) and Angola and Comoros - yet to become party to the Protocol (all six sectors). Member States have agreed to negotiate the outstanding offers in the six sectors during the second round of negotiations.
The race to rail: Africa’s fastest trains (The Citizen)
African governments are ramping up the development of railway infrastructure through multi-billion dollar deals and replacing fleets of outdated-diesel powered locomotives with electric ones in a race to place faster trains on its tracks.
Ever since Abbas the First, opened Africa’s pioneering railway in Egypt in the 1850’s, the primary mission behind the continent’s railways has been clear - to stimulate trade. Railways are now being seen as a key catalysts for intra-African regional trade and to more efficiently move large numbers of people between key cities. African governments at the national, state and city level are getting behind rail and even competing on the quality and speed of their networks. An ambitious multi-million US dollar African Union project christened the “African Integrated High-Speed Railway Network” (AIHSRN) is adding impetus to the rollout of high speed trains.
Half of Africa’s countries now require a visa to access them (IOL)
African travellers now require a visa to access just over half of the continent’s countries. This is according to the African Visa Openness Index (AVOI) report which measures the extent to which African countries are open to visitors from other African countries, produced jointly by the African Development Bank (Bank) and the African Union Commission (AUC) since 2016. The latest findings show for the first time since the AVOI was published, openness levels dropped slightly in 2021, after some governments temporarily reversed their liberal visa regime partly in reaction to the Covid-19 pandemic and largely to respond to recent instability in their countries.
SADC, SACU and prospects of regional integration (The Herald)
This article focuses on the Southern African Development Community (SADC) and the South African Customs Union (SACU), the two bodies that exist side by side in Southern Africa. The two bodies have the potential to play an important role in regional integration, but a lot still needs to be done to ensure they become more effective, especially through harmonising their operations.
SACU provides for the adoption of common policies and strategies among its members and recognises the crucial role tariffs play as an instrument for regional integration and development. While both SADC and SACU strive to ensure regional integration is advanced, one issue that stands out is the duplication of their membership — will all the five members of SACU also belong to SADC?
Member countries from SADC and SACU have been known to disagree on several issues and to argue for adoption of positions in cohorts, thereby dividing opinion on regional integration. Yet, the major roles of both SADC and SACU as stated in various of their protocols is to enhance regional integration among countries in Southern Africa through co-operation in economic, political, social and cultural spheres. The aim of both organisations is to enhance development within the Southern African region, while linking up with other regional groupings on the continent and eventually the African Union. In the presence of both SADC and SACU, it has become clear that full regional integration still remains outstanding.
On the economic front, the region has made some significant progress, as all member states now have faith in market oriented economic policies through which they are gradually opening up for trade both within the region and outside the region.
SACU has registered its own successes on tariff liberalisation and establishing advanced integration when it comes to a customs union. Apart from the customs union, the organisation has a common external tariff and four of its members – South Africa, Lesotho, Eswatini and Namibia – have a common monetary area that recognises the South African rand as a common currency. The common monetary area encourages integration among the member states as they can produce goods and services at par and trade without problems of weighing the advantages and disadvantages of currency exchanges. SACU also boosts of a legal framework that seeks to expand integration through coming up with a common industrial development policy, co-operation in agriculture and mutual agreement on competition policies. Looking at the bigger picture, it is the contradictions in regional integration that arise as a result of the existence of SACU alongside SADC that raises concern.
Both have similar goals anchored on enhancing development and regional integration in the region.
Africa urged to take bold action on fisheries (The Namibian)
A SENIOR official at the Southern Africa Development Community (SADC) says the African Union’s Fish Governance II project will help African countries, regional economic communities and regional fisheries bodies to provide consistent responses to the challenges facing the fisheries and aquaculture sector. Motseki Hlatshwayo, the senior technical adviser for fisheries and aquaculture at the Gaborone-based SADC secretariat, made these remarks at a media training workshop on fisheries management and aquaculture development in Africa on Zanzibar’s Indian Island recently. The workshop was part of the AUs Fish Governance II project funded by the European Union (EU). Hlatshwayo said the sector has been impacted by a health crisis, and although it is on the road to recovery, there is much to be done to build resilience and enable actors in the fish value chain to ensure better adaptation. He said the Covid-19 pandemic has caught the world off guard.
“This has given rise to concerns... such as the supply of fish as priority health-related interventions to avoid malnutrition and gender inequalities, investment opportunities, and governance mechanisms to effectively combat the pandemic,” Hlatswayo said.
Comesa calls for strengthening of SMEs regional fish trading (Chronicle)
THE Common Market for Eastern and Southern Africa (Comesa) has called for the strengthening of small to medium enterprises (SMEs) participation in regional production and trading of fish as part of strategies to growing the aquaculture value chain. The Comesa Secretariat, through the Regional Enterprise Competitiveness and Access to Markets Programme (RECAMP), is already working on strategies to improve and strengthen SMEs involvement in fisheries and fish product value chains in the regional and international markets. This will be done through sustained supplies, improved trade efficiencies, enhanced value chains and quality of products, said the 21 member bloc in a latest update.
EAC rolls out plans for $900m fruit and vegetable exports (The East African)
The East African Community has unveiled a strategic plan to double its fruit and vegetable exports to $900 million in the next eight years. In the 2021-2031 strategic plan that was unveiled late last year, the region plans to increase the area under fruit production by five percent, to 10 million hectares, with an eye on the global export market. If implemented, the intra-EAC trade in fruit and vegetable products would increase from the current $9.9 million to $25 million by 2031.
According to the East African Community Fruits and Vegetables Value Chain Strategy and Action Plan 2021-2031, the volume of EAC trade in the market is about 1.28 million tonnes per year. “This sector has the potential for huge investments, and provides an economic opportunity for reducing rural poverty in the EAC,” Mr Bazivamo said. “The most direct contribution is through generating higher incomes for farmers.”
“The sector has a significant role in promoting the EAC industrialisation agenda. Thus the market for processed fruits in the EAC is among the most promising, with sector maturity still far off into the foreseeable future,” Mr Bazivamo said.
Africa faces shortage of goods as China ports shut on Omicron surge (Business Daily)
The partial closure of a number of ports in China as a result of the rising cases of Omicron variant is expected to cause a serious shortage of commodities globally in the next few weeks with Africa expected to be the most affected region.
China’s northeastern city of Dalian reported its first case of Omicron last week where two people who travelled there from Tianjin confirmed to have Omicron, becoming the second major Chinese port struck by the highly contagious variant after Tianjin, a port neighbouring Beijing. China-Africa trade reached $185.2 billion between January and September of this year, up 38.2 percent year on year.
The East African Community Secretariat has embarked on capacity building on Standard Operating Procedures (SOPs) for plant health inspectors at its One-Stop Border Posts (OSBPs) to ensure that the region is protected from threats of pest infestation against key agricultural commodities.
Speaking when he officially opened a capacity building workshop for plant health inspectors at the Kabanga-Kobero OSBP bordering Tanzania and Burundi, the EAC Director of Productive and Social Sectors, Mr. Jean Baptiste Havugimana, said that the initiative on PRAs commenced more than one decade ago. “The first activity we embarked on was the development of pest lists. The second stage entailed development, validation and adoption of PRAs for maize, beans and rice,” said Havugimana, adding that the Sectoral Council on Agriculture and Food Security held in June 2021 adopted the SOPs for operationalizing the PRAs three key agricultural commodities. “Utilization and application of the SOPs at the border points by plant health inspectors is a turning point in the entire process,” said Mr. Havugimana.
ACFTA: Yaoundé to host a regional forum to improve support in the cassava sector (Business in Cameroon)
Yaoundé, the capital of Cameroon, will host from January 31 to February 1, 2022, a regional forum aimed at improving support for Central African small businesses involved in cassava production and export, in the framework of the African Continental Free Trade Area (ACFTA). Organized jointly by the Economic Community of Central African States (ECCAS) and the State of Cameroon, the forum will be an opportunity for stakeholders in the cassava sector (farmers, processors and SMEs, and entrepreneurs) to discuss the challenges and opportunities offered by the ACFTA in terms of processing, added value, and innovation. It will also promote good social and environmental practices as well as the creation of decent jobs, for women and young people particularly.
Kagame to African youth: Leverage digital skills for European job market (The New Times)
President Paul Kagame has said that young Africans should leverage available technology to create jobs and integrate into the European labour market without necessarily migrating to other countries. He said this while addressing the Talking Africa Europe debate on migration and mobility in Africa-Europe partnerships, on Thursday, January 27. Organised by the Africa-Europe Foundation, the discussion is among other topics prepared to pave the way for the upcoming African Union-European Union Summit. Kagame said there are several reasons why Africans migrate to Europe, “some of them are justified, others are not, but they are either political, economic, security, all wrapped up on matters of governance.”
The elephant in the room: Bringing sustainable investment to Africa (World Bank Blog)
The coronavirus pandemic has renewed interest in sustainable investing strategies that allow investors to both protect the financial value of their assets and contribute to solutions to global problems such as climate change. These investments have become increasingly mainstream, and now account for more than $39 trillion in the five major global markets, a 34 percent increase over two years, according to the latest trends reported by the Global Sustainable Investment Alliance.
Attracting sustainable investment is a key challenge for the region for several reasons. First, while climate change and associated physical risks will be felt by all countries, some the most severe temperatures are predicted to occur in Sub-Saharan Africa. The region is also directly and indirectly exposed to the transition risks associated with climate change, which is amplified by the dependence of many economies, and jobs, on minerals, energy and mining. In addition, financial sector regulations that are rapidly being rolled out in the European Union and are being harmonized globally will impact all companies that are part of the supply chains that intersect with African countries.
Global economy
DDG Ellard: “Deeds not words” as the WTO becomes more gender-responsive (WTO)
Making trade more inclusive by supporting the integration of women in international trade is a way to achieve this. And it is at the heart of the WTO’s work today. We are seeing the proliferation of gender-related provisions – or gender mainstreaming – in free trade agreements. This is an important tool for promoting inclusive trade, gender equality, and sustainable development. And since free trade agreements often serve as laboratories of innovations that later get implemented at the multilateral level, in the future, we may see some of these provisions making their way into the WTO rule book. I am happy to share that the WTO has prepared and will soon publish a comprehensive database detailing gender provisions included in all trade agreements since the Treaty of Rome of 1957. This was the first trade agreement that introduced the principle of equal pay for men and women.
Members discuss way forward in dedicated meeting on WTO pandemic response (WTO)
The General Council Chair called the meeting following weeks of consultations with delegations on the way forward. In those conversations, members were of the view that only a holistic, comprehensive and balanced outcome on the WTO pandemic response would be credible. Delegations expressed willingness and eagerness to continue working on this crucial topic, with the objective of achieving results, and to do so without delay, he said.
On the trade-related angle, DG Okonjo-Iweala stressed that most delegations see the facilitator’s text as the basis to proceed despite the existing divergences. She said that “with goodwill those who have difficulties with it will be able to get their views in and get this resolved.”
South-South Ideas: The Importance of South-South Cooperation in Strengthening Global South Trade, Investments and Regional Integration: A Contextual Overview (SCC Global Thinkers)
Constant shifts in the global reality have challenged human development to exceed average expectations. From tackling innovative sustainable growth barriers to managing the global upkeep with rapidly transforming digital technologies, there is a consistent need for economies to collaborate, innovate and change for the betterment of their societies. In light of these necessary changes, there is an overlapping conversation that demands that particular attention be given to the development concerns and challenges of the Global South. The provision of enhanced frameworks that facilitate social, economic and political cooperation on every level among countries of the Global South has become an ever-more significant topic on the global stage. As the Global South becomes an increasingly important driver of the world’s economy, South-South and intraregional trade become more central to development discourse. To facilitate and strengthen cohesion among growing economies in the Global South, cross-country networks encouraging competitive business environments is key.
Investment Policy Monitor, Special Issue No 6 (UNCTAD)
Investment facilitation is becoming increasingly important for countries to attract international and local financing for sustainable development. As negotiations on a possible investment facilitation agreement progress in Geneva, UNCTAD’s monitoring shows that countries are already making progress on the ground.
Progress has focused on information provision, regulatory transparency, and streamlining of administrative procedures for investors through digital information portals and single windows. These tools, which have increased in both coverage and quality over the past 5 years, represent the most impactful elements among the gamut of investment facilitation measures. Since 2016, the number of countries with digital information portals increased from 130 to 169 and those with digital single windows from 29 to 75. Developing countries are catching up. Their use of digital information portals and single windows has jumped. While on average their ratings are lower, several achieve top marks, often with technical assistance. UNCTAD’s data shows that most countries - including those outside the negotiations - recognize the importance of investment facilitation to revive stagnant cross-border investment in industry, absorb an expected global push for investment in sustainability and infrastructure, and remain competitive as international tax reforms reduce the scope of fiscal incentives.
Fixing UN financing: a Pandora’s box the World Health Organization should open (ODI)
It is no secret that the World Health Organization (WHO) is grossly underfunded. As its Executive Board meets this week to discuss how it can become the global health institution the world needs and wants, all eyes will be on whether the WHO can finally solve the problem of its precarious financing. But there is even more at stake in this debate than the WHO’s own financial health. If a financial fix can be found for what ails the WHO, there will likely be ripple effects for the ways member states fund entities across the United Nations system whose funding structures are equally shaky. It is the possibility of these downstream consequences – including the potential liabilities that action at the WHO could place on reform efforts in other UN entities – that is one of the greatest political challenges to fixing the WHO’s balance sheet. Nevertheless, this is a Pandora’s box worth opening. The lack of predictable and flexible finance for a sickly UN multilateral system is a problem in urgent need of a solution.
Food security must remain central issue for G20: Agriculture Minister (ANTARA)
Food security must remain the central focus during G20 meetings so that global food security can be achieved in the face of challenges posed by climate change, among others, Agriculture Minister Syahrul Yasin Limpo has said.
The global pandemic has presented challenges of food and nutrition security due to restrictions on the movement of goods and services at the local, regional and global levels, the minister noted. “Logistics flow and the food distribution system have also been severely affected. Meanwhile, several countries have implemented protection policies through national stocks, which have had an impact on the imbalance in the global food system,” he said.
Related News
tralac Daily News
Country-related news
SARS Customs scales up digital transformation (SAnews)
The South African Revenue Service (SARS) Customs division will scale up digital transformation and increase data usage to improve the facilitation of trade, revenue collection and compliance by import and export traders across South Africa’s borders. The commitment was on Wednesday made by SARS Commissioner Edward Kieswetter at the annual International Customs Day.
Kieswetter said digital transformation and the increased use of data is necessary to combat the increased sophistication of organised crime, and better manage the expanding volume and complexity of international trade. The Commissioner reported that the Customs Modernisation Programme led to an improvement in the average case turnaround time on interventions by 22%, as at December 2021.
India-South Africa trade exceeds $10 billion target set by leaders (Business Standard)
Trade between India and South Africa has exceeded the USD 10 billion target set by the leaders of the two countries, Consul General Anju Ranjan announced at a reception here on Wednesday to celebrate India’s 73rd Republic Day. “India-South Africa trade has crossed the landmark. We have achieved the 100 per cent target and now it has increased from USD 10 billion to USD 11.6 billion,” Ranjan said. This was despite the restrictions posed by the COVID-19 pandemic in both countries, she added.
“Notwithstanding the pandemic, the improvement in trade relations between our two countries is a positive step. We aspire to do much more in the coming months in the areas of spices, IT, telecom, mining, pharma and textiles,” Ranjan said.
Trade declines by 13.8% in November (Namibia Economist)
The month of November 2021, saw Namibia’s total merchandise trade amounting to N$20.9 billion, a decline of 13.8% from the N$24.2 billion recorded in October 2021. China emerged as Namibia’s largest market for exports whereas South Africa maintained its position as the largest source market for the country. During the month under review, exports mainly comprised of minerals such as Copper, Uranium, Precious stones (diamonds) as well as Non-monetary gold. Fish continued to be the only non-mineral commodity within the top five products exported. On the other hand, the import basket was mainly comprised of Copper, Petroleum oils, Precious stones (diamonds), Motor vehicles for the transport of goods as well as Copper ores and concentrates.
Looking at year-on-year total merchandise trade, the November 2021 figure is an increase of 5.5% when compared to the levels of N$19.8 billion recorded in November 2020.
However, the country’s trade balance remained in a deficit, standing at N$3.3 billion from the revised deficit of N$6.9 billion recorded in October 2021, which is more compared to N$2.9 billion witnessed in November 2020.
Investment Conference envisaged to be the climax event for Namibia at Expo 2020 Dubai - NIPDB (Namibia Economist)
The Namibia Investment Conference set for 23 March is envisaged to be the climax event of the country’s Expo 2020 Dubai journey and will be one of the final pitches on investment opportunities, brand awareness and export promotion, an executive said this week. Namibia Investment Promotion and Development Board (NIPDB), spokesperson, Catherine Shipushu highlighted this in an update statement on Tuesday. Since officially opening its doors on 1 October 2021, the Namibian Pavilion has recorded a steadily increasing visitor count that currently stands at 146,855 representing an average of 37,000 visitors per month at the expo.
According to Shipushu, most investor interest is in the area of Green Hydrogen and recorded leads indicate investor interest in other key industries such as agriculture, education, tourism, and various trade activities.
Electronics, medicines top shipment from kin abroad (Business Daily)
Electronics, clothing items and medicines account for more than half of the value of items Kenyans living abroad ship to their relatives back home, highlighting the demand for higher quality at a more affordable cost.
A Central Bank of Kenya (CBK) survey on diaspora remittances shows that electronics (including computers), clothing and medicines account for 24.4 percent, 17.8 percent and 13.6 percent respectively of the value of goods received from relatives abroad. This is significantly higher than the value of household goods, vehicles and other items, whose share of costs of the merchandise shipped to Kenya is in the single digits.
The cost of remittance and hidden charges, however, remain a lingering concern for the diaspora despite the strides made in bringing them down with the adoption of digital channels.
Higher import duty killing sector, decry Kenyan juice makers (The East African)
Fruit juice manufacturers have rejected the Kenya Revenue Authority (KRA) decision to increase import duty on products used in the manufacture of ready-to-drink juices. They said KRA has increased duty from 10 percent to 25 percent, which sees consumers foot the extra costs. The reclassification of duty charged on semi-processed products used for juice manufacturing, they said, will raise juice prices and kill the local sector. KRA in November last year reclassified ready-to-drink juices that are manufactured locally from a lower to a higher tariff. It moved the products from tariff code HS 2106.90.20 to code 2009 which is for finished products and attracts 25 percent duty.
Economic Sanctions Won’t Bring Peace to Ethiopia (ZeHabesha)
The exclusion of Ethiopia from the African Growth and Opportunity Act is intended to stop human-rights abuses in Tigray, but there is little evidence that such measures affect the behavior of political elites. Instead, they limit options for low-skilled workers and damage bilateral relationships.
The decision to expel a country from AGOA could still be expected to pressure its government in three ways: deny it tax revenues, limit its access to foreign exchange, and encourage investors and interest groups to lobby for a policy change. But none of these levers is likely to work in Ethiopia.
To spur growth in the ultra-competitive light manufacturing sector of the global economy, Ethiopia adopted a low-tax environment for apparel and leather-goods production. It developed industrial parks allowing foreign firms to start production with minimal initial outlay and offering reduced taxation to promote long-term investment. During the early stages of the investment cycle, the most immediate benefits are employment generation and foreign-currency earnings, not tax revenue.
Ethiopia will lose some foreign exchange because of the Biden administration’s move. But this loss is likely to affect the supply and prices of imported consumer goods rather than any product or service that could contribute to “gross violations of human rights.”
Rwanda - Country Strategy Paper 2022-2026 (AfDB)
This Country Strategy Paper (CSP) for Rwanda 2022-2026 lays out the strategy that will guide the Bank Group support towards achieving structural transformation in line with the country’s first National Strategy for Transformation (NST-1) for 2017-2024, and the vision 2050, as well as the Bank’s TYS and High-5s. The Bank Group Committee on Operations and Development Effectiveness (CODE) endorsed the proposed priority areas of this CSP during its consideration of the CSP 2017-2021 Completion Report on the 29th June 2021 and provided guidance for the preparation of the CSP. This CSP 2022-2026 for Rwanda was prepared at a time when the country’s economy was bouncing back from adverse effects of the COVID-19 pandemic despite the second and third waves of this pandemic. This rebound mainly resulted from fiscal and monetary policy measures, as well as the ease of COVID-19 containment measures.
Uganda’s president seeks to boost trade, rein in borrowing (The Star, Kenya)
Uganda wants to curb its borrowing and boost exports in sectors such as meat and dairy as the East African country lifts restrictions triggered by the coronavirus pandemic, President Yoweri Museveni and government officials told Reuters. Uganda’s trade push follows several years of reduced Chinese lending to the continent and programmes designed to offer relief to indebted countries as they recover from COVID 19-induced slumps start to expire. “Uganda can do much better without borrowing in my opinion. Especially borrowing for ... budget support, the balance of payments support,” Museveni said, speaking to Reuters in a tent on his private farm as a large herd of his Acholi cows wandered past. Museveni said he wanted to expand the country’s meat, leather and dairy trade and add value to other agricultural exports such as coffee, which has long been one of Uganda’s main foreign exchange earners.
African Development Bank President Dr Akinwumi A. Adesina received four Nigerian executive governors and the Chief Executive Officer of the Nigeria Sovereign Investment Authority (NSIA) at the Bank’s Abidjan head office on Tuesday. The Bank President invited the Governors and the NSIA head to discuss what will be the rapid rollout of the first phase of the Bank’s Special Agro-Industrial Processing Zones (SAPZ) program in their states. The African Development Bank set up the flagship SAPZ program to support inclusive and sustainable agro-industrial development in countries across the continent. In Nigeria, the program will soon get underway in seven states. As Dr Adesina put it “the special agro-industrial processing zones will be game changers for agriculture in Nigeria. They will provide world class infrastructure to support food agribusinesses to locate close to zones of production, develop competitive value chains supported by logistic systems that will drive food processing and value addition. The SAPZs will help create massive wealth and jobs in rural areas and turn rural areas away from being zones of economic misery to zones of economic prosperity,” said Adesina.
Nigeria’s economy under Buhari worse than 10 years ago: World Bank (Peoples Gazette)
The World Bank has again noted that Nigeria’s economy under the Muhammadu Buhari administration is worse than 10 years ago. These findings are contained in its flagship report for 2022, titled ‘Global Economic prospect’. “The pandemic has reversed at least a decade of gains in per capita income in some countries—in almost a third of the region’s economies, including Angola, Nigeria, and South Africa, per capita incomes are forecast to be lower in 2022 than a decade ago,” the report said.
The report also mentioned that disruptions to the supply chains or armed conflicts could contribute to surges in food prices, leaving vulnerable groups suffering the most.
The findings from the global bank corroborate a study published by the Economic Community of West African States (ECOWAS), which revealed that many people living on less than $1.90 a day had jumped from 2.3 per cent to 2.9 per cent in 2021, and the debt burden of countries increased amid slow economic recovery, shrinking fiscal space and weak resource mobilisation.
China tasks Nigeria on trade imbalance, raises stake in Africa to $300billion (The Guardian)
The Chairman, China Africa Business Council (CABC), Chief Dana Chen, has announced that the Chinese government is planning to invest over $300 billion in the African continent over the next three years. According to her, the move is expected to increase the volume of trade between Africa and China from the current $30 billion. Chen stated this at the Memorandum of Understanding (MoU) signing ceremony between LCCI and CABC in Lagos. “We are targeting the next three years to increase the trade volume between China and Africa from over $30 billion to $300 billion. This is over 10 times the size of the current trade between China and Africa. The trade increase is expected to benefit more African businesses. “Nigeria imports too much and needs to also export to achieve a balance of trade level. This would also make the Nigerian currency to be strong. There are lots of areas we can explore and strengthen our trade relationships.
“We can invest more in logistics, supply chain and product manufacturing in Nigeria. We are also increasing investments in promoting the culture in Nigeria, because Nigeria’s creative industry is one of the biggest industries in the world where they can be developed to export to Asian countries and it offers huge potentials for Nigeria”, she added.
Angola to gradually eliminate import duties for AfCFTA countries (Xinhua)
Angola will gradually eliminate import duties for products originating from member states of the African Continental Free Trade Area (AfCFTA), according to a communique released on Tuesday. The measure is based on the Memorandum on the Proposed Tariff Offer of Angola under the framework of the AfCFTA, according to the final communique of a meeting of the Economic Commission of the Council of Ministers. In November 2020, Angola became the 30th country to ratify the agreement to establish the AfCFTA.
Morocco is positioning itself as an exporter of medical devices in West Africa (Oxford Business Group)
The topics covered during this discussion were centered around the role that Morocco plays in the development of the health sector in several West African countries. Among the topics that were discussed, the implementation of the African Continental Free Trade Area and government support measures were highlighted as two points that can contribute to the growth of Moroccan exports of medical devices to the region.
Liberia Abandons Agricultural Transformation To NGOs (The New Dawn Liberia)
Liberia still produces less than half (0.2) cup of rice per Liberian, per day after spending hundreds of millions on projects to be self-sufficient in rice production. Almost half of a billion (437.02 million USD) accounts for financial flow to Liberia’s agriculture sector- specifically the crop-subsector between 2018 and 2022. The African Union has consistently ranked Liberia “NOT ON TRACK” to transforming its agricultural sector. Liberia failed 22 of 24 progress indicators in AU latest report. 96% of farmers in Liberia relied on informal market as the main source of seeds, fertilizers and other inputs because agricultural market is not functional. The World Bank says Liberia is the worst place for farmers to operate their business. Cocoa, farmers in Liberia received 69.79% less average yield/hectare than farmers in Cote’ d’Ivoire, 69.22% less than farmers in Guinea, 65.6% less than farmers in Sierra Leone and 66.6% less than farmers in Ghana. Rice farmers are experiencing almost the same. No poor country in the world has ever reduced poverty without increasing agricultural productivity. If Liberia should move out of poverty, it must prioritize the transformation of its agriculture sector and improve agricultural productivity!!Liberians must sit up, shine their eyes, and begin to demand real sustainable results from stakeholders in the agricultural sector- especially NGOs and the Government.
Tunisia and AATB ink work programme (TAP)
Minister of Economy and Planning Samir Said and CEO of the International Islamic trade Finance Corporation (ITFC) and Arab Africa Trade Bridges (AATB) Program Secretary General Hani Salem Sonbol on Wednesday signed a work programme for the benefit of the Republic of Tunisia under the AATB.
According to the Department of Finance, this programme comprises several aspects, such as the consolidation of Tunisian-African cooperation in the training field and the organisation of bilateral meetings for the professionals in promising sectors (export of products and services, pharmaceutical and food industries, health services, building materials, digitisation, etc.).
African trade
PAMA: AfCFTA aims to achieve Africa’s industrialisation agenda (New Telegraph)
The Pan-African Manufacturers Association (PAMA) has disclosed that the Africa Continental Free Trade Area (AfCFTA) agreement is aimed at encouraging cooperation among African manufacturers in a bid to achieve market transformation, grow SMEs and create value chains in line with Africa’s industrialisation agenda.
The Interim Chairman, PAMA, Mansur Ahmed, an engineer, disclosed this in his opening speech during the Lighting of the Africa Trade Torch in Cairo, Egypt, recently. He explained that AfCFTA was the continent’s collective determination to promote and trigger engagement in intra-Africa trade and cross-border value chains.
“African manufacturers can be rest assured that with PAMA, there would be an increase in intra-Africa trade through the creation of competitive and comparative advantages for different markets.” Furthermore, the industrialist reassured the African Business Council of PAMA’s commitment to advancing and prospering the efforts of the AfCFTA in order to build high quality continental value chains.
“I strongly believe that our challenge is to boost greater cooperation between manufacturers and countries, and to constantly remind African manufacturers that they can and should think bigger and bolder,” he stated, adding that, “it is time to herald a new era.
Africa needs to open up to its people, not only trade, By Olufemi Ogunjobi (Premium Times Nigeria)
…for a continent projected to double its current growth rate by 2050, only with the free movement of people will there be the needed boost in intra-Africa trade, commerce and tourism; labour mobility, intra-Africa knowledge and skills transfer, social integration and tourism; improved trans-border infrastructure and shared development.
Intra-African travel is complicated and fraught with suspicion. To travel in Africa, According to the Visa Openness Index Report 2021, 51 per cent of African countries require citizens of other African countries to obtain visas before setting out. 25 per cent of African countries welcome some or all African visitors, visa-free. 24 per cent of African countries allow some or all African visitors to obtain a visa on arrival. Only Seychelles, Benin and The Gambia offer visa-free access to all Africans. Right now, African countries need to strategically position themselves to make the AfCTA work, and one of such ways to achieve this is by relaxing their visa restrictions for easy entry and exit among Africans. Like the European Union, we need to craft out a working model that will ensure great success in connecting people and economies…
Africa’s economic recovery: Financing robust post-pandemic growth (Brookings)
Africa’s future never looked brighter than it did during my time serving as the World Bank’s vice president for Africa from 2012 through 2018. The continent was home to the world’s fastest-growing economies—a growth fueled by high commodity prices. Free trade was becoming a reality with the rapid approach and realization of the African Continental Free Trade Agreement. Political instability was largely under control. And, even in the midst of an Ebola outbreak, the continent largely succeeded in containing the worst health and economic impacts of that virus.
But I am also concerned about Africa’s future, especially for the young people coming of age in a time of great uncertainty. Conflict is on the rise, and the number of countries falling into instability is increasing. The impacts of climate change are worsening each year. And while COVID-19 has affected everyone, it has not affected everyone equally: This truth is especially salient for Africa, which saw decades worth of economic and social progress erased almost overnight.
The path forward is clear: We must come together, as public and private actors, to ensure an inclusive, resilient recovery. We must unite around one shared and audacious goal: To create a more equitable and resilient world coming out of the pandemic than the one we had going into it.
Bitcoin remittance revolution: will Africa lead the way? (Moneyweb)
Africa might just as well be the new home of Bitcoin. Mobile phone penetration, weak national currencies, and restrictive monetary policies are some of the key drivers for the rise of Bitcoin remittance market in Africa. The African continent has many opportunities for widespread Bitcoin adoption. One of those opportunities is remittance fueled by Africa’s growing ~mobile~ population. There are over 30 million Africans living outside their countries of origin. Since 2012, the African Union considers the African diaspora the sixth Africa’s region. Among other factors, wide-spread mobile phone adoption is paving the way for the use of Bitcoin in Africa. The general rise of Bitcoin adoption in Africa goes together with this mobile phone penetration, leading to a surge in Bitcoin remittances on the continent.
Bitcoin is rapidly gaining adoption in Africa from those less interested in speculation than in its ability to transfer funds – also known as remittances. What are the factors pushing for this bitcoin remittance in Africa? Apart from mobile phone penetration, we also see government policies helping bitcoin adoption, although mostly unintended. Other reasons include the speed, cost, and reliability of bitcoin compared to fiat currencies that rely on older, costly technology for transfering money.
Investment in science and technology is key to an African economic boom (Brookings)
The African continent represents 20 percent of the earth’s surface and is home to 1.3 billion people
It boasts 60 percent of the world’s arable lands, large swathes of forests, 30 percent of the world’s reserve of minerals, and the youngest population of any continent. Yet, despite these riches, it produces only 3 percent of global GDP, accounts for less than 3 percent of international trade (mainly primary commodities and natural resources)
How can a continent that has fueled the world’s industrial revolutions, that helped drive the dominance of the mobile phone industry, and whose large store of rare earth minerals are integral to the global green energy transition tolerate such dismal statistics? A lack of investment in science and technology has undermined Africa’s economic transformation at both the structural level (the shift of workers and resources from low- to higher-productivity sectors) and the sectoral level (the growth of productivity within sectors). This lack of investment has had far-reaching consequences: Without the economic and scientific infrastructure necessary for innovation, the continent has continued to rely on the colonial development model of resource extraction, which is both unsustainable and largely responsible for its debilitating poverty and aid dependency. These challenges have been compounded by economic fragmentation, as smaller markets constrain the long-term investments and patient capital that would foster innovation and drive technology transfer in the context of globalization.
The silver lining is that there is potential here with growing recognition by policymakers of the role that science and technology can play in achieving national development goals and transforming Africa’s economic growth story. Moreover, given the positive correlation between growth and environments that beget competition and innovation, competitiveness must be fostered.
EU and African leaders seek to rebuild fragile trust ahead of summit (EURACTIV)
Migration, climate change mitigation and the fallout from the Covid pandemic are set to be the main bones of contention at the upcoming EU–African Union summit in Brussels, insiders to the talks have told EURACTIV. Ahead of the summit, the EU has been keen to play up its contribution of Covid vaccines and status as one of the largest donors to the COVAX vaccine sharing initiative, as well as proposing its €300 billion Global Gateway programme as a means to encourage investment in green technologies and infrastructure in Africa. However, trust is fragile. The EU’s rhetoric of a ‘partnership of equals’ has rung increasingly hollow following the EU’s handling of the pandemic. There is a lingering perception that Europe closed its borders, without consultation, after South African scientists discovered the Omicron variant late last year.
Partnerships to strengthen UAE-Africa food trade (Khaleej Times)
Dubai’s position as a global logistics hub make it the perfect destination for companies that are interested in strengthening the UAE-Africa food trade sector, experts highlighted at a webinar on Wednesday. Speaking at the ‘Tap into Dubai’s F&B sector’ webinar, organised by the Dubai Chamber, in association with The Corporate Group and ZimTrade, Omar Khan, director of International Offices at the Dubai Chamber of Commerce, spoke about the potential of growing trade between the UAE and the African continent. “We are all recovering from the Covid-19 pandemic, physically, mentally, and also economically. However, our attitude here in the UAE and Dubai is always on how we have to move forward. This is a new world and we can’t sit and wait for things to happen to us. We have to make things happen ourselves, and we always believed that everything should be done with partnerships,” he said.
In his presentation to the attendees, Allan Majuru, CEO of ZimTrade, noted that food exports from Zimbabwe are focused on health and wellbeing. “As a country, we are a non-GMO country and that has given us a niche,” he said. “We also have the capacity to go organic in terms of producing for exports.”
Global economy
The economic transformation: What would change in the net-zero transition (McKinsey & Company)
Global decarbonization will be possible only if nine system-level requirements are met, encompassing physical building blocks, economic and societal adjustments, and governance, institutions, and commitment. Here, we illustrate the economic and societal adjustments by examining the economic transformation that would enable a successful transition to net-zero emissions by 2050. We look at the shifts in the economy in aggregate, on energy and land-use systems and the sectors that they encompass, and on individuals, both consumers and workers. Our focus is on the nature and magnitude of the transition in four areas: demand, capital allocation, costs, and jobs.
The Data-Driven Journey Towards Manufacturing Excellence (WEF)
Global disruptions, such as supply chain shortages and climate change, are fundamentally affecting manufacturing operations around the world. Data is key to overcoming these challenges, to improving existing operating models and enabling new value creation. To help capitalize on the power of data, members of the Unlocking Value in Manufacturing through Data Sharing initiative co-developed the Manufacturing Data Excellence Framework, a tool that identifies high-value opportunities for data-driven applications and the technological and organizational enablers required to build and scale them. This white paper sheds light on best practices and real-life use cases implemented by the leading manufacturers that co-developed and applied the framework across their facilities. It also describes three stages of manufacturing data excellence: deriving actionable insights, predicting future outcomes and enabling self-optimizing systems.
DDG Ellard outlines state of play in the WTO negotiations (WTO)
In response to a question about the impact of COVID-19 on global supply chains, DDG Ellard noted that among the most pressing trade policy issues are: (i) access to vaccines, therapeutics and other products necessary to combat the pandemic; (ii) broader supply chains issues; and (iii) the pandemic’s overall impact on jobs and people’s lives.
In particular, she noted that having resilient supply chains is essential to combatting the pandemic, and participation in global value chains is crucial to economic wellbeing of many developing countries. Instead of simply aiming to “reshore” production, she said, countries should consider whether such a step would actually solve the problem and should instead work with their trading partners to diversify supply sources and adopt trade facilitating measures.
PwC’s 25th Annual Global CEO Survey: Reimagining the outcomes that matter (PwC)
As we near the two-year mark of the pandemic, the global economy has rebounded from the depths of mid-2020. The IMF projects global GDP to grow 4.9% in 2022, a downtick from the 5.9% growth expected in 2021, but still formidable. The 4,446 CEOs from 89 countries and territories who responded to our 25th Annual Global CEO Survey display optimism about continued economic resilience.
Yet threats, uncertainties and tensions abound. The survey was in the field during the COP26 conference in Scotland, which convened world leaders to try to prevent the worst effects of climate change. PwC experts who attended were both impressed by executives’ commitment to rapid progress and aware that the captains of industry in Glasgow were a self-selected group that came prepared to take action. The question of how to bring others along looms large. Then, just two weeks after our survey closed, news of the Omicron variant reverberated around the world, raising fresh questions about the course of the pandemic and about society’s ability to continue the slow climb to normalcy.
Related News
tralac Daily News
Country-related news
Mantashe: SA must oppose ‘investment killing’ foreign-funded lobby (Engineering News)
South Africa must oppose a foreign-funded anti-development agenda if it has any chance at growing its extractive industries for the benefit of the economy, Mineral Resources and Energy Minister Gwede Mantashe has said. Speaking at the North West provincial mining and energy investment conference on Tuesday, the minister highlighted the need for exploration for minerals and metals in South Africa, but warned an anti-development lobby is seeking to oppose such projects at every turn. “We must appreciate the fact that there’s an anti-development movement that is emerging, which is very confident, very emboldened. Every time you explore for mining, or even for oil and gas in the ocean, they take you to court. Their aim is to kill investment through the courts,” Mantashe said.
Long road ahead for the retail sector — particularly e-commerce (Daily Maverick)
The nature of household expenditure has assumed a profound change as a result of the unprecedented disruption induced by the pandemic. Although some sectors and firms have actually benefited from the fast-tracking of the digital revolution, prolonged and heightened uncertainty has been a thorn in the flesh of most retailers. The South African economy was very fortunate to have been buffered by a commodity price cycle that benefited the resource sectors, while generally favourable weather conditions and a highly competitive farming community also secured solid growth in the agriculture sector. Unfortunately, however, retail — which is one of the mainstays of the domestic economy — continues to underperform relative to the pre-Covid period. During the first 11 months of 2021, total retail trade sales amounted to marginally more than R1-trillion, which was 3.2% higher than the figure for January to November 2020, but still 4.7% lower than during the corresponding period in 2019 (in real terms). Of even more concern is the fact that 2021’s retail trade sales up to November are also still lagging behind 2017’s record inflation-adjusted figure for January to November, namely by 5.7%.
For the sake of South Africa, reopen business tourism (Daily Maverick)
When nations closed their borders and instituted travel bans and other restrictions on movement, the tourism industry received the world’s attention. But not all tourism received equal consideration. The effect of national lockdowns on business tourism, specifically the meetings, incentives, conferences and exhibitions (Mice) sector, has been woefully neglected in the national conversation.
South Africa is a global leader in business tourism. We have world-class facilities, internationally renowned experts in the field and an illustrious history of successfully hosting best-in-class international events. These achievements are at risk of being squandered. Before Covid-19 the exhibition industry was a vibrant, growing sector. According to Projeni Pather, chairperson of the Association of African Exhibition Organisers, the industry contributed R75-billion to the South African GDP annually before Covid-19.
2030 a scary deadline for SA’s car manufacturing industry (CAR Magazine)
Over the course of 35 years, 1 191 604 BMW 3 Series’ were manufactured and assembled at BMW Plant Rosslyn, North of Pretoria. Now, over 200 G03 X3’s roll off the line per day.The EU has made it explicitly clear that BMWs, Volkswagens, Toyotas, Fords and Mercedes-Benzes that are manufactured South Africa will no longer be accepted as imports. When one considers that 75% of all vehicles produced in South Africa are exported, the prospect of this is frightening for both investors, as well as those who work in the manufacturing plants – decreased demand equals lower production, which equates to fewer hands being needed. The knock-on will be catastrophic.
Zim Set To Export Oranges To China (NewZimbabwe)
ZIMBABWE has signed a deal with China to export fresh citrus fruits to the Asian giant. The Chinese Embassy has confirmed the deal. “The sweet and juicy Zimbabwean citrus will join the Chinese market as the citrus export protocol has just been signed,” it said. “We are implementing President Xi’s pledge that China will open a Green Channel for the export of African agricultural products. It will benefit more Zimbabwean farmers,” wrote the embassy. The agreement between the two countries was signed in 2015 as Zimbabwe looked for a market for Shashi Citrus smallholder farmers.
Entry barriers and policy missteps blunt Kenya’s exports competitive edge (Business Daily)
Kenya’s competitiveness in the export market has eroded in the last decade, stifled by a lack of entry by more productive companies and specialisation in commodities that have low demand growth.
The competitiveness erosion has particularly affected the agriculture and manufacturing sectors, with the latter identified as key in transforming Kenya into an industrialised, middle-income country by 2030. “The lack of dynamism in the exports sector seems to be the main explanatory factor for the loss of competitiveness as well as specialisation in products with low demand growth and subject to competition from producers from relatively low-income countries,” says the IMF.
Seaports register cargo growth despite Covid-19 (The East African)
There was an increase in the cargo volumes handled by the ports of Mombasa and Dar es Salaam in 2021, a rebound at a time when the two countries are investing more on their lakes and sea ports. Mombasa recorded a slight increase in throughput with 34.54 million tonnes against 34.12 million tonnes handled in 2020, representing a growth of 1.2 percent with transshipment contributing to about 25 percent of the total growth. Similarly, container traffic improved, registering 1.43 million twenty foot equivalent units (TEUs) compared with 1.35 million TEUs handled in the same period in 2020 representing an increase of 75,986 TEUs or 5.6 percent. Kenya Ports Authority acting managing director John Mwangemi said the improved performance was mainly attributed to a continued recovery from the Covid-19 pandemic period which in 2020 disrupted the global supply chain, and affecting many ports operations globally, but also, to improved resource planning and efficiency of business processes.
Kenya seeks new date for Uganda trade mission in bid to end milk standoff (The East African)
Kenya has requested Uganda to issue a different date for a trade mission to Kampala after an invitation to attend the talks in the neighbouring country was received late. Kenya’s delegation was supposed to start the trade mission to Uganda on Monday after Kampala finally issued a date. However, the letter which was sent through the ministries of foreign affairs and trade was received late, prompting Kenya to seek an alternative date to give room for preparations. Kenya wants to visit Uganda to ascertain that all the milk that comes from there is produced by local farmers, following allegations that the commodity is imported from third-party countries as powder and reconstituted before it is exported to Kenya as fresh.
Dar es Salaam: Striving to Become the Regional Port of Choice (World Bank)
Just over three years ago, the berth where these Post-Panamax vessels are now being hosted was but an outlet of a creek flowing into the harbor area. Motor vehicle imports arrived on much smaller ships due to the depth restrictions alongside the berths. Rather than being driven from the vessels, the vehicles on board would need to be offloaded with ships cranes at great risk to both the staff and the cars, and with the exercise requiring no less than three days to accomplish.
Construction of the first dedicated roll-on, roll-off (“RoRo”) infrastructure ramp and terminal in the port began in 2018 and was completed and became operational in March 2021, enabling the port to start hosting Post-Panamax vessels, with the first arriving in August. Motor vehicles are now driven off the ship and straight onto the adjacent spacious berth with a handling capacity of 3,000 vehicles at a time, or over 200,000 per year.
Rice millers, others unhappy over suspension of benchmark value discount reversal (BusinessGhana)
The Rice Millers Association of Ghana (RMAG), Peasant Farmers Association of Ghana (PFAG) and General Agricultural Workers Union (GAWU) have taken on the government for suspending plans to reverse the discounts introduced on benchmark values at the ports. The groups in a joint statement insisted that an estimated number of 100,000 persons who are directly engaged in rice value chain activities stand the risk of losing their livelihoods if the benchmark discount policy reversal is not implemented as planned. “How do we stop the importation of rice into Ghana if the benchmark value policy reversal is not implemented immediately? Such grand targets remain a mirage in the current paradigm where rice imports enjoy a 50% discount on import duties values as granted by this benchmark policy while local rice production faces high input costs and little or no support from government for millers.”
Ghana’s competition policy must be robust and forward-looking - Herbert Krapa (GhanaWeb)
A deputy minister of trade and industry, Herbert Krapa, has said an introduction of a competition policy for trading on the continent will inure to the benefit of industries and enterprises especially at a time the African Continental Free Trade Area is operational. Delivering a speech at the 3rd Africa Trade Roundtable, on the theme “The relevance of AfCFTA’s competition protocols on Ghana’s industrial transformation” at the University of Professional Studies, Accra, Tuesday, Mr. Krapa said the initiative “will guard against anti-competitive conduct” stressing that an “effective competition policy will be critical to ensuring that the gains expected from the AfCFTA trade liberalisation will not be eroded by uncompetitive practices.”
‘NCS must be driven by technology to achieve efficiency’ (The Guardian Nigeria)
As the World Customs Organisation (WCO) marks the International Customs Day today, Tony Nwabunike, the President of the Association of Nigeria Licensed Customs Agents (ANLCA), spoke with ADAKU ONYENUCHEYA on the activities of Nigeria Customs Service (NCS) and other issues that could affect AfCFTA.
What are your thoughts on the Nigeria Customs Service (NCS) operations in trade facilitation?
Given what WCO is about and the fact that the 2022 theme is ‘Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem’, I want to see NCS operate at a level where Information Communication Technology (ICT) is integral to the operation. I expect that it evolves further and attains a paperless and more scientific approach to work. NCS should have the examination of cargoes wholly done by scanners and relieve themselves from the burden of physical examination. NCS should be attained with other WCO member nations to combat trade bottlenecks and facilitate trade instead of the emphasis on revenue generation as they are in Nigeria. The Federal Government also has to release Customs from this burden of revenue generation at all times because what it means is that people are to enforce import guidelines and procedures, but they find themselves in a very tight situation because of the revenue targets.
The major bottlenecks with regard to trade facilitation at the ports result from the disparity or discord between Customs and their licensed agents. These are Customs licensed agents that do business with Customs but they are not working in synergy in terms of digital transformation. While Customs has moved up to NICIS II at the moment, so many Customs licensed agents are not up-to-date as they are still struggling with ASCUDA ++. Customs have gone past ASCUDA several years ago, but their crucial partners were not carried along.
Saving in Naira worthless, value eroded – NESG CEO (Daily Sun)
The CEO of the Nigeria Economic Summit Group (NESG), Mr. Laoye Jaiyeola, has described saving in Naira as a worthless venture since inflation has completely eroded its value. Jaiyeola made this assertion in Abuja on Tuesday at the launch of the NESG 2022 Macroeconomic Outlook Report. He said; “Why should you tell anybody in Nigeria to store his money in Naira when your interest rate on Naira in some places is even lower than the interest rate of some foreign currency?”
Egypt ready to be re-export hub for Malaysian palm oil in Africa, Arab countries, says envoy (Malay Mail)
Egypt is working seriously on becoming the re-export hub for Malaysian palm oil in Africa as well as neighbouring Arab countries, said its Ambassador to Malaysia Ragai Tawfik Said Nasr. As the North African country assumed the presidency of the Common Market for Eastern and Southern Africa (Comesa) this year, which comprises 21 member states, he said it is timely for Egypt and Malaysia to accelerate the plan. “There are a lot of incentives under Comesa, so Malaysian palm oil can be exported from Egypt using these incentives to the African countries. “We are working on having the factory or storage facility of palm oil in Egypt in the near future,” he said after his meeting with Bernama’s Editor-in-Chief Khairdzir Md Yunus at the Malaysian National News Agency’s headquarters, here, Monday.
On bilateral trade between both countries this year, he said the total value is expected to exceed the US$1 billion (RM4.19 billion) mark recorded in 2021, which was an increase of 85 per cent from the previous year. “This is significant although there is Covid-19. It means that there is a significant breakthrough and will from both sides to increase the trade as we have a lot of opportunities to be explored.
Morocco set to reduce its industrial trade deficit (The North Africa Post)
Morocco has launched an ambitious plan to cut its trade deficit by $3.7 billion by offering incentives to local investors to produce imported goods locally, Morocco’s trade minister said. So far 731 industrial projects were eligible for state subsidies, of which 90% will be funded by a Moroccan capital, minister Riad Mezzour told MPs. Most of these factories are focused on the agri-good, chemical and textile industries with a potential to create 400,000 jobs, he said. Morocco’s King had urged the government to strive to ensure Morocco’s self-sufficiency in strategic goods. Mezzour said that investors who choose to set up projects in remote areas with an emerging industrial sector will benefit from incentives including affordable real estate.
African trade news
#BizTrends2022: Key trade and investment trends in Africa - Part 2 (Bizcommunity)
The Technology, media and telecommunications (TMT) sector is transforming businesses in Africa, opening up competition, introducing new services and disrupting incumbent business models. Before Covid-19, businesses in Africa used technology to reduce costs, improve processes, grow customers and enhance innovation. The impact of the pandemic boosted existing trends, especially digitalisation and the remote delivery of services. However, for Africa to implement high end, fourth industrial revolution (4IR) technology and infrastructure, TMT companies require flexible and investment-focused policy and legislative frameworks that cater for the affordable and efficient rollout of telecommunications infrastructure and access to broadband spectrum. The rollout of 5G in Africa will lead to the significant transformation of the manufacturing, health, transport and utilities sectors.
Unfortunately, very few African countries have made significant progress in the roll out of 5G and if this is to be a focus then it will be important to ensure that policy and legislative frameworks are in place to enable the efficient and affordable roll out of telecommunications infrastructure, as well as access to the required broadband spectrum. A further important focus for the success of 5G roll out in Africa will be the ability of consumers to access affordable data services and smart devices.
Despite the global pandemic, the African fintech ecosystem has remained on a steady rise. Increasing access to mobile devices and internet connectivity has accelerated Africa into the second fastest market for global banking and payments businesses. Mobile money and third-party payment systems have been segment leaders, with more than half of the world’s mobile money customers now based in Africa, and the continent accounting for three quarters of the world’s mobile money and peer-to-peer (P2P) transactions by volume.
There have also been significant movements in digital currency trends. The Central Bank of Nigeria became the second central bank in the world to issue a Central Bank Digital Currency (CBDC) with its launch of the eNaira in October 2021. African CBDCs hold significant potential for the movement of money on the continent, especially in light of broadening trade corridors as a consequence of AfCFTA. Many other countries, such as South Africa, are also piloting similar projects and feasibility studies.
2022 – SADC aims for deeper integration (sardc.net)
The year 2022 promises to be an eventful period for southern Africa, with hopes that the region could begin to see a return to normalcy after the global community was hard hit by the COVID-19 pandemic. “Our task in 2022 is simple, but not easy,” the current SADC chair, President Lazarus Chakwera of Malawi said during a recent visit to the SADC Secretariat headquarters in Botswana. “Our task is to increase regional integration and development.”
On the economic front, SADC wants to continue to improve its manufacturing capacity as well as promoting industrialization to ensure that the abundant natural resources in the region benefit the people of the region through beneficiation instead of being shipped out as raw material. The manufacturing sector’s share of Gross Domestic Product (GDP) in the region has increased from an average of 10.3 percent in 2013 to about 11.9 percent in 2018, and the region now targets to more than double that share to 30 percent by 2030 and 40 percent by 2050.
An increase in the manufacturing sector’s share of GDP has ripple effects on the economy including an increase in production, employment and foreign currency generation from the export of value-added products.
CPI 2021 for Sub-Saharan Africa: Amid democratic turbulence, deep-seated corruption exacerbates threats to freedoms (Transparency International)
Senegal’s (43) performance on the CPI has significantly improved (from 36) in the last decade, gaining 9 points from 2012 to 2016. Advancements during this period include the creation of the Office for the Fight against Fraud and Corruption (OFNAC) and passage of the asset declaration law, among other reforms. But progress halted there, with Senegal’s 2021 score dropping 2 points compared to last year. In 2020, a national anti-corruption strategy was adopted, but its prospects are unclear, as resourcing and implementation remain a challenge. In recent years, the work of anti-corruption institutions – such as OFNAC – has lacked rigour, and numerous denunciations by the public about mismanagement of public funds and natural resources have not been adequately investigated. Patchy enforcement of anti-corruption legislation is also a major concern.
How gold worth billions of dollars is smuggled out of Africa (The East African)
Every year, billions of dollars’ worth of gold is smuggled out of Africa through Kenya into the United Arab Emirates (UAE) in the Middle East. According to an analysis by Reuters, the Middle East is a gateway to markets in Europe, the United States, and beyond. Customs data shows that the UAE imported $15.1 billion worth of gold from Africa in 2016, more than any other country and up from $1.3 billion in 2006. The total weight was 446 tonnes, in varying degrees of purity – up from 67 tonnes in 2006. Just recently, the special forces of Uganda have seized, an important cargo ship of two tons of gold belonging to a rebel group led by a certain Mulum Jean. The cargo was reportedly meant to have passed through Kenya for onward transmission to a group of European businessmen known as Olivier and Sasha. Much of the gold was not recorded in the exports of African states. Five trade economists interviewed said this indicates large amounts of gold are leaving Africa with no taxes being paid to the states that produce them.
Africa faces shortage of goods as China ports shut on Omicron surge (Business Daily)
The partial closure of a number of ports in China as a result of the rising cases of Omicron variant is expected to cause a serious shortage of commodities globally in the next few weeks with Africa expected to be the most affected region.
China-Africa trade reached $185.2 billion between January and September of this year, up 38.2 percent year on year. Different shipping lines have suspended operations in different Chinese ports with at least three ports partially closing its operations. Shipping companies said they are re-assessing the situation before the resumption of operations in different Chinese ports.
Ahead of the EU-African Union Summit scheduled for 17-18 February 2022, African thought leaders stressed the importance of trade agreements and regional integration as keys to drive investment into the continent in a discussion organised by the European parliament to discuss Africa’s partnership and cooperation with the EU. Chinelo Anohu, Senior Director of the Africa Investment Forum, joined Secretary General of the African Continental Free Trade Area (AfCFTA) Wamkele Mene and others, to reflect on deepening Africa’s relationship during the public hearing on African trade and finance held Monday. In a keynote address, Mene cited the EU as a model for African integration. He described a strong Africa-Europe partnership as a “win-win.” Africa’s youthful population and middle class presented significant opportunities for European businesses, he said, stressing the pharmaceutical, automobile and agro-processing sectors as hungry for investment.
UK signals West African expansion at Africa Investment Conference (GOV.UK)
UK Export Finance has released new data today showing it provided over £500 million worth of support for projects in West Africa throughout 2021, the most in over two decades. At last week’s Africa Investment Conference (20 January), the Prime Minister said the UK is already one of Africa’s biggest commercial partners but we are “determined to do much more - our shared task must be to ensure that Africa prospers from the green industrial revolution.” The government is also mobilising support from its export credit agency, UKEF, to boost exports to Africa – it provided support worth £2.3 billion in the past year, more than trebling the amount provided in 2018-19.
In West Africa this has been deployed to a range of vital infrastructure projects, helping to build major roads and bridges as well as providing medical and IT equipment, design services and environmental and social work.
Global economy
Trade Outlook 2022: Clogged supply chains won’t hold trade back (ING Think)
Despite the profound disruptive impact of the pandemic on supply chains, demand for consumer goods rose strongly last year. We expect merchandise world trade volumes to have increased by 10.6% in 2021 compared to the previous year, surpassing its pre-pandemic level by 4.3%. The growth rates of global merchandise trade should return to pre-pandemic levels this year, supported by industrial growth, global demand for goods remaining elevated, and only a limited shift of consumption back to services. And that double-digit expected increase comes in spite of massive supply chain disruptions and soaring transport costs. It reflects strong demand for goods during the pandemic with China being one of the main drivers of the trade surge.
Going into 2022, we expect trade growth rates to return to their pre-pandemic levels in line with a continued but weakened global economic recovery. For this year, we pencil in a growth rate in merchandise world trade of 4.1% compared to 10.6% the year before, while we expect world GDP growth to come in at 4.4% from 6.1% in 2021. 2021 was an exceptional year driven by pandemic-related catch-up effects. Despite ongoing supply chain frictions and average containerised transport costs expected to remain high, we still expect to see a decent growth rate.
New study explores role of trade in strengthening developing countries’ economic resilience (WTO)
Entitled “The Role of Trade in Developing Countries’ Road to Recovery”, the study looks into how international trade can help developing countries recover from the COVID-19 pandemic, strengthen economic resilience to future global shocks, reduce poverty, mitigate carbon emissions and adapt to climate change. An estimated 100 million people have been pushed into extreme poverty because of the COVID-19 pandemic, note World Bank Group President David Malpass and WTO DG Okonjo-Iweala, in a joint foreword to the study. The current growth of trade is uneven, with women and other vulnerable groups lagging behind. While keeping trade open and global value chains functioning is helping to drive economic recovery, boosting developing countries’ capacity to trade will be essential to distribute the gains from trade more widely and to support a transition to a green economy, the study stresses.
Why Trade finance matters to unlock LDCs’ trade potential (Trade for Development News)
Trade finance is vital to facilitate trade. The WTO estimates that between 80 and 90 percent of world trade relies on trade finance in the form of trade credit or insurance. A better access to trade finance in least developed countries (LDCs) could allow businesses to have the financial tools to participate in national, regional or global trade. Trade finance not only reduces the risks associated with trade for companies but also improve their cash flow, allowing them to access new markets. According to research by the World Economic Forum (WEF), lack of access to trade finance was found to be one of the top domestic barriers to a country’s trading capacity, alongside transportation and logistics. Without trade finance, many small businesses cannot trade and compete.
In recent decades, Ethiopia has experienced rapid economic growth and considerable expansion of its trade flows. An important component of this growth is the promotion of export development, and the need to increase the access of Ethiopian businesses to the international trading system. This economic expansion has been accompanied by a strong demand from businesses for trade finance, with only limited capacity to respond to such demand.
WTO farm talks: India demands withdrawal of ‘unbalanced’ draft text (BusinessLine)
India has said that the WTO’s draft negotiating text on agriculture was a ‘mistake’ and demanded its withdrawal as it did not include key proposals made by developing nations, including those on public stockholding and special safeguard mechanism, vital for a more balanced agreement. “At the WTO Committee on Agriculture meeting on Monday, a number of developing and least-developed countries and groups, including the African Group, the African, Caribbean and Pacific Group (the ACP Group) and the G33 group, continued to oppose the draft text and sought a review,” a Geneva-based trade official told BusinessLine. Attempts are on at the WTO to push forward negotiations in areas such as agriculture, fisheries subsidies and a proposed temporary waiver of intellectual property norms on vaccines and medications that were on top of the agenda of the 12th Ministerial Conference (MC12) scheduled late last year. The Ministerial was indefinitely postponed due to the Covid-19 situation but the WTO is attempting to conclude negotiations in the identified areas nonetheless.
The draft text on agriculture was circulated by the chair of the CoA prior to the scheduled MC12 with proposed deliverables on 7 negotiation topics including domestic support, market access, export competition, export restriction, cotton, public stockholding for food security purposes and a special safeguard mechanism. India had clearly stated at the WTO even before the MC12 was postponed that the draft negotiating text on agriculture was unacceptable as it ignored the primary demands of developing nations. These include provisions to ensure that countries can continue with their minimum support price and public stockholding programmes for food without worrying about caps and adequate safeguards to check escalation in imports of items.
General Council discusses convening of Ministerial Conference, advancing work agenda (WTO)
General Council Chair Ambassador Dacio Castillo (Honduras) convened a meeting of members on 25 January to report on his recent consultations regarding the convening of the 12th Ministerial Conference (MC12), how to proceed on substantive issues, and the WTO response to the COVID-19 pandemic. Director-General Ngozi Okonjo-Iweala said while members’ views on these issues were still in the process of converging, there was a willingness to keep working on all negotiating fronts and maintain the momentum built up late last year.
Not-so-natural disasters and international trade (EL PAÍS)
The number and frequency of natural disasters have markedly increased in recent decades, with climate change being one of the factors affecting this trend, especially in terms of hydro-meteorological disasters such as floods and droughts. The figure is close to 12,000 disasters in the period 1980-2018, and the economic cost of these disasters exceeds three trillion dollars, according to the International Disaster Database (EM-DAT).
Trade enters into this puzzle on the supply as well as the demand side of the economy. Clearly, reduced production means that exports fall, not only due to the damage suffered by exporting firms, but also to the destruction of transportation infrastructure. In terms of demand, imports can temporarily act as a buffer, replacing domestic production and facilitating recovery. However, falling exports and rising imports would imply a deterioration of the trade balance. Moreover, if the economy that suffers the disaster is integrated into global value chains, indirect effects are generated for the members of these chains, the intensity of which depends on the position in the chain and the productive specialization of the affected country. For example, small and medium-sized enterprises in developing countries that specialize in intermediate inputs can create bottlenecks in value chains.
According to a recent study commissioned by the World Trade Organisation, such disasters interact with international trade in a very complex way. From a macroeconomic perspective, a natural disaster triggers resource destruction and a supply shock, leading to a reduction in output and employment. From the micro perspective, it affects all economic agents: companies have to face the destruction of their physical and human capital, workers face health problems and job losses, and finally, the state has to contribute to financing the losses suffered by both parties.
World Economic Outlook Update: Disrupted Global Recovery (IMF Blog)
The continuing global recovery faces multiple challenges as the pandemic enters its third year. The rapid spread of the Omicron variant has led to renewed mobility restrictions in many countries and increased labor shortages. Supply disruptions still weigh on activity and are contributing to higher inflation, adding to pressures from strong demand and elevated food and energy prices. Moreover, record debt and rising inflation constrain the ability of many countries to address renewed disruptions.
Some challenges, however, could be shorter lived than others. The new variant appears to be associated with less severe illness than the Delta variant, and the record surge in infections is expected to decline relatively quickly. The IMF’s latest World Economic Outlook therefore anticipates that while Omicron will weigh on activity in the first quarter of 2022, this effect will fade starting in the second quarter.
Related News
tralac Daily News
Country-related news
Investments worth more than R26bn in SA’s ocean economy unveiled (Moneyweb)
A package of investments worth more than R26 billion in South Africa’s oceans economy, and that will create hundreds of new jobs, has been unveiled by Transport Minister Fikile Mbalula. Speaking at an event at the Port of Durban on Monday, Mbalula said these critical investments will contribute towards advancing South Africa’s interests through Operation Phakisa. Operation Phakisa is an initiative of the South African government that is designed to fast track the implementation of solutions on critical development issues.
Lemon producers in the country await anti-dumping decision by US (IOL)
LEMON producers in the country are on tenterhooks over an impeding decision by the US International Trade Commission (ITC) on whether South Africa is dumping lemons in that country, which may effectively close off a viable market for the local industry.
While there are various products including lemon juice concentrates, cosmetics, cleaning material and others that could be produced from local harvest, the fresh lemon market in the US is a mainstay for local producers and would lead to a glut, if South Africa is closed off.
Textile, footwear industries gain traction in region (The Herald)
Trade promotion body ZimTrade says textile and footwear industries made momentous progress on the export front in 2021 as the country continued to make inroads into regional markets. Statistics show that exports of these products in the first eight months of 2021 to August, grew to US$32,3 million in 2021 from US$17,7 million in 2020 which translates to an 85 percent surge.
Traditionally Zimbabwe’s textile market sector exports products mainly to South Africa with an estimated export market share of 91,74 percent, Zambia (1,91 percent), Germany (0,34), Malawi with an exports contribution of 0,12 percent, and Mozambique.
Kenya begins oil exploration in disputed Lamu Basin wells (The East African)
Kenya has stepped up oil and gas exploration activities in the Lamu Basin after rejecting a ruling over a four-decade maritime dispute with Somalia. Petroleum commissioner James Ng’ang’a said that ENI Kenya Business Venture, formerly Agip, started drilling last month at Mlima-1 well, which is also known as Block L11B. This follows seismic surveys that revealed that the area has potential for oil and gas. The company expects to release deposits results of the commercial viability of the block in two months.
Oil and gas explorers use seismic surveys to produce detailed images of the rock types and the location beneath the earth’s surface and to determine the size of potential oil and gas reservoirs.
Kenya extends avocado export ban indefinitely (Business Daily)
The horticulture regulator has extended the ban on the export of Kenya’s popular avocado varieties to overseas markets to curb the harvesting of immature crop. Head of Horticultural Crops Directorate (HCD) Benjamin Tito said the ban on Fuerte and Hass varieties will continue indefinitely.
The ban was placed on November 15, 2021, with exceptions given to exporters specialising on the Jumbo variety and those having off-season crop. “The harvesting of Hass and Fuerte avocado varieties will remain suspended until further notice,” said Mr Tito.
Kenya seeks to regain fuel business from Dar with its new reserve in Mombasa (The East African)
Kenya is banking on the $385 million new Kipevu Oil Terminal to wrest the petroleum business from Dar es Salaam port, which has been supplying the Great Lakes region. Tanzania turned the tables on the port of Mombasa after persisted allegations of adulteration of petroleum products on the Northern Corridor. Then the three-year closure of the border between Uganda and Rwanda, and lower tariffs made both countries depend more on the Tanzanian port.
Now, with the new Kipevu facility, Nairobi plans to create a petroleum products hub for the region, hoping to regain its lost business. The government has also begun converting the Kenya Petroleum Refineries Ltd (KPRL) Changamwe depot in Mombasa, a few kilometres from Kipevu, into a storage facility for fuel and liquefied petroleum gas.
Kenya’s Petroleum Principal Secretary Andrew Kamau told The EastAfrican that the procedures for Kenya Pipeline Company (KPC) to take over the KPRL are about be concluded to make the facility a hub for bigger vessels. Mr Kamau said the Kipevu Oil Terminal (KOT) will serve as an import and export facility.
Kenya, Uganda speed up clearance at Malaba border (The East African)
Kenya and Uganda have introduced new measures to expedite the clearance of goods still stuck at Malaba border posts after weeks of protests by truck drivers over Covid-19 testing. Although the Uganda authorities suspended the testing, the 70km traffic jam created by the drivers’ strike has taken more than a week to clear. More measures were needed to speed up the clearing of trucks as Ugandans struggled over the last one week to get fuel, whose price has increased tremendously. Hundreds of trucks have been cleared at the border, but for a border post such as Malaba which clears over 1,000 trucks daily, it is still a tall order to clear the thousands of trucks still on the queue.
Uganda: Budget Committee questions role of EAC Ministry (African Business)
Members of the Budget Committee have questioned the role of the Ministry of East African Community Affairs over its reported failure to engage the East African Community Membership on trade barriers. The East African Community Affairs Committee chaired by Hon Noeline Kisembo Basemera was on Monday, 24 January 2022 presenting the budget framework paper for the Ministry of East African Community. The MPs are concerned that of the ministry’s budget of shs30.6 billion, shs21 billion will be spent on subscription into the community, according to the Budget framework paper of the Ministry. The committee also queried the Shs1.8 billion request for sensitising Ugandans about the East African Community.
Hon Elijah Mushemeza (NRM, Sheema South) said: “I have not seen a budget proposal on how to deal with issues of borders, because if the borders are closed and you are talking of non-tariff barriers and improvement of trade, there is a problem there.”
Uganda: Delays in Financial Remittances from Member States Frustrate EALA MPs (APO)
Delays in financial remittances from member states are still a major impediment to the operations and activities of the East African Legislative Assembly (EALA). This was revealed by EALA MPs sitting on the accounts committee who are in Uganda to benchmark on the best parliamentary practices.
Hon. Dr Gabriel Garang Aher, EALA member from South Sudan said that with the exception of Uganda, other East African Community (EAC) member states do not make their financial remittances on time suffocating EALA activities. “Our biggest challenge as EALA is the issue of finances. There are times members go without pay because there is no money. Sometimes, we are forced to defer or cancel some of our activities because we do not get remittances on time from member states,” Garang said. However, the challenge of finances is not the only impediment of the East African Assembly. Hon Suzan Nakawuki, Uganda’s representative, blames EALA’s struggles on the EAC Council of Ministers for politicising and frustrating its legislative agenda and decisions.
Tema port operator secures loan for 15 Gantry Cranes at Terminal three (GhanaWeb)
The Terminal Three of Tema Port being operated by the Meridian Port Services Limited (MPS) is to have additional 15 Gantry Cranes as part of the expansion drive of the Port. A 53.31 million US dollars purchasing agreement has therefore been signed between the MPS and the Shanghai Zhenhua Heavy Industries Company Limited (ZPMC) to supply the additional 15 additional Gantry Cranes.
Mr Mohamed Samara, Chief Executive Officer of MPS, and Mr Liu Cheng Yun, President and Chairman ZPMC on January 18, 2022, signed a virtual agreement to cement the commencement of the project.
He noted that several shipping lines were attracted to put MPS Terminal three to the test as a potential transhipment hub, adding that MPS stood the test and therefore was determined to continue providing top services and the platform to connect its clients to major shipping routes around the world.
Clearing Agents Kick Against N4.1bn Revenue Target, Customs Modernisation (Leadership)
Clearing agents operating at the nation’s seaports have described the N4.1trillion revenue target set for the Nigeria Customs Service (NCS) as outrageous, saying, the pressure to meet such target will either reduce or threaten investments by the organised private sector. This was even as the group urged the federal government to consider the huge debt profile of the country before signing into law the $3.1billion Customs Modernisation Project. Speaking during a press conference in Lagos after the association’s National Executive Council (NEC) meeting over the weekend, ANLCA president, Tony Iju Nwabunike said the revenue target would undermine the productivity of the nation’s economy. Nwabunike said: “this high revenue target will place the NCS under pressure of high revenue collection and undermine the trade facilitation role the Service should render.
“Pursuing bigger revenue and failing to strengthen trade results in greater losses to the country as investments are either threatened, reduced or made non existent. “Totality of Customs efforts deployed into revenue pursuit reduces the service productivity in many ways.”
Port Congestion: Nigeria Losing 30% Container Traffic To Togo (Leadership)
In the last two years, Nigeria has experienced low cargo importation into its seaports as Togo’s Lomé port has become a preferred destination for foreign shipowners operating Very Large Container Carrier (VLCC) vessels. Shallow draught, high vessel turnaround time, and decaying, archaic port infrastructure, among others have forced foreign shipping companies to abandon Nigerian seaports for Lomé Port. Data from the United Nation Conference on Trade and Development’s (UNCTAD’s) Review of Maritime Transport 2020 indicated that Nigeria lost over 196,750 Twenty Foot Equivalent Units (TEUs) or 30 per cent, of its container traffic to Lome Port due to lingering congestion and the poor quality of its services.
‘CBN Export, Import e-Invoicing To Engender Accuracy, Global Standards’ (Leadership)
The new Central Bank of Nigeria (CBN) guidelines for the e-Valuator and e-Invoice is set to entrench accuracy and global best practice in exports and imports transactions in the country, the apex bank noted. The e-invoicing, and valuator, which become operational from February 1, 2022 will replace hard copy invoices
The bank said it “would operate on a Global Price Verification Mechanism guided by a benchmark price”. “The benchmark price is the actual spot market price obtainable at the time of consummation of invoicing, in that market where the goods are traded”. According to the circular, “effective, February 1, 2022 all Import and Export operations will require the submission of an Electronic Invoice (e-Invoice) authenticated by the Authorised Dealer Banks on the Nigeria Single Window portal Trade Monitoring System (TRMS)”.
“An importer/exporter of goods into Nigeria shall ensure that the purchase/sale contract with a foreign supplier/buyer stipulates compliance with the obligations set out in the CBN regulation and the supplier’s/seller’s invoice must be submitted in electronic format and authenticated by Authorised Dealer Bank (ADB) as part of the documentation for payment.
Revenue Target For 2022 Is N3.019trn, Not N4.1bn – Customs (Leadership)
The Nigeria Customs Service (NCS) yesterday said the federal government’s revenue target for the service is N3.019trillion and not N4.1billion recently reported.
In a chat with LEADERSHIP yesterday, the national public relations officer, Compt. Joseph Attah said the target for the year was N3.019 trillion, saying, the N4.1billion was for internal target given to commands. Speaking, he said, plans were underway to surpass the revenue target. Attah said: “this year, we have been given N3.019 trillion as the target for 2022. As usual, we will be looking at meeting the target and even surpassing it. Usually after we are given this target, inwardly, we set another target for ourselves as a strategy not to only meet the Federal Government target but to even meet our own target which is usually above what is set for us.”
With PAPSS, Nigerians will no longer need dollars for intra-African trade – Akinwuntan (Nairametrics)
With the introduction of the Pan-African Payment and Settlement System (PAPSS), Nigerians will no longer need dollars for intra African trade. Consequently, intra Africa trade could reach $300 billion by 2025. This was disclosed by the Managing Director/Regional Executive of Ecobank Nigeria, Mr Patrick Akinwuntan, during an interview with Arise TV. He stated that consumers don’t need to look for an international bank, as PAPSS will work in Africa, the same way Nigeria Inter-Bank Settlement System Plc (NIBSS) works in Nigeria. PAPSS is expected to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.
Structural Reforms Needed to Put Tunisia on Path to Sustainable Growth (World Bank)
Decisive structural reforms and an improved business climate are essential to put Tunisia’s economy on a more sustainable path, create jobs for the growing youth population and better manage the country’s debt burden, according to the Winter 2021 Edition of the World Bank’s Tunisia Economic Monitor. Titled “Economic Reforms to Navigate out of the Crisis” (in French, “Réformes économiques pour sortir de la crise”), the report estimates a slow economic recovery from COVID-19, with projected growth of 3% in 2021. Weighing on this recovery is rising unemployment, which increased from 15.1% to 18.4% in the third quarter of 2021, affecting the youth and people in the western regions hardest.
The second chapter elaborates on key barriers to competition, arguing that Tunisia’s current regulatory environment restricts competition and discourages the development of new businesses. Looking ahead, the report recommends that policy reforms to ensure a level playing field in every sector are essential in order to boost employment for Tunisians and to increase purchasing power.
Petroleum Industry Act let us down, say Niger Delta communities (African Business)
Dissatisfaction over funds allocated to the communities of Nigeria’s Niger Delta Region by Nigeria’s historic Petroleum Industry Act in August has been exacerbated by the recent oil spill at Nembe in Baysela state.
The Delta region has born the brunt of environmental damage from oil industry activity since Shell-BP became the first joint venture to drill for oil in 1956. In January, Morris Alagoa, an environmental activist and representative of the Environmental Rights Action (ERA), described the situation to Nigerian daily The Nation as “grievous”, commenting that no water body in the region is unaffected by oil pollution.
The development expected from oil profits has rarely materialised in the region, even as Nigeria became one of the world’s biggest oil and gas producers.
Environmental damage and a lack of local economic opportunity have fuelled sporadic insurgencies in the region which have targeted oil infrastructure and government forces. As a result, when Nigeria’s President Muhammadu Buhari signed into law the country’s long-awaited Petroleum Industry Act (PIA) in August 2021, it contained measures aimed at addressing the demands of the disaffected communities.
Mozambique kicks off first offshore gas project (African Business)
A floating plant for liquefying natural gas arrived in Mozambican waters on January 3 after a seven week maritime voyage from South Korea. Constructed by Samsung Heavy Industries (SHI), it is the first offshore project to come online in the nation’s embattled gas industry. It is also the first floating LNG facility to be deployed in the deep waters of the African continent, and the third in the world.
The plant will extract gas from Area 4 of the Rovuma basin, located off the shore of the Cabo Delgado province of northern Mozambique, starting in the second half of the year.
The project comes as Mozambique’s government assures oil majors that the security situation in the Cabo Delgado region is under control after four years of disruption and halted projects.
New sanctions risk plunging the people of Mali further into humanitarian crisis, warns Oxfam (Oxfam International)
In reaction to the EU and US support to Economic Community of West African States (ECOWAS) new sanctions against Mali, Oxfam together with 12 NGOs called upon the international community to protect the people of Mali. The agencies also urged sanction bodies to unequivocally commit to applying humanitarian exemption to allow life-saving aid to reach all those in need.
Last week, the European Union supported the Economic Community of West African States (ECOWAS) in the implementation of collective sanctions on Mali, which include closing borders and imposing a trade embargo, as well as cutting off financial aid and freezing the country’s assets at the Central Bank of West African States.
Africa
Economic Outlook 2022: Africa faces rickety rebound (African Business)
When the pandemic hit in 2020, Africa entered one of the most torrid recessions in half a century, its combined GDP contracting by 2.1%. The epic contraction was largely driven by African governments implementing strict lockdowns amid fears that Covid-19 would overrun fragile health services across the continent. 2021 was a different story. Last year, sub-Saharan Africa grew by a modest 3.7% according to the IMF, driven by a partial resumption of tourism, a rebound in commodity prices and the rollback of pandemic-induced restrictions. However, the outlook for 2022 looks barely unchanged as the Fund predicts that sub-Saharan Africa’s growth will only increase by 0.1% to 3.8%.
The second threat to growth is the accelerated pace of climate change, the IMF says.
FDI in Africa fell by 16% in 2020 to $40bn, from $47bn in 2019 – with commodity-dependant countries more seriously impacted than non-resource based countries. Mirroring Africa’s rebound from one of the worst recessions in more than half a century last year, FDI is expected to have improved in 2021 but only to a limited extent. The investment outlook in 2022 remains muted with a possible downtrend due to rising inflation and a slowdown in the global economy.
Services, jobs, and economic development in Africa (VOX-EU)
In a recent paper, we contribute to the emerging literature that analyses structural transformation in low-income economies using micro data as opposed to a focus on trade, global value chains, and broad sectoral shifts and aggregate indicators of output and employment at the country level. In this column, we present new data on the composition of jobs in services at the sub-national level in a sample of 13 African countries, describe how this has changed over time, and explain how employment in services correlates with indicators of economic development commonly used in the literature. A companion project webpage provides country specific graphs and maps plotting changes in sectoral employment and occupational dynamics over time.
East Africa council pushes for seamless trade (The Standard)
The East African Business Council is pushing for the revival of business committees to facilitate the seamless flow of goods and services at border points. The regional apex body of the Private Sector Association and Corporate has embarked on an ambitious plan to revamp joint border committees in Kenya, Tanzania, Uganda, Rwanda, South Sudan and Burundi under the East Africa trade protocol. “We are focused on revamping the joint border committees and work in collaboration with Kenya and Uganda revenue authorities and all other relevant agencies,” said John Kalisa, the council chief executive officer.
Speaking during a multi-agency forum that brought together different actors from both Kenya and Uganda at Malaba border yesterday, Kasila said they are focused on formulating robust systems that will guarantee fast clearance of trucks along the border towns of Kenya and Uganda.
US trade pact suspensions: what it means for Ethiopia, Mali and Guinea (The Conversation Africa)
Three African countries’ manufacturers have lost their tariff-free access to the US market this year. This follows the US decision in November last year to suspend Ethiopia, Mali and Guinea from the African Growth and Opportunity Act. The reason given for the decision was that it was in response to human rights violations and recent coups. The African Growth and Opportunity Act (AGOA) is a trade programme designed to enhance sub-Saharan African countries’ access to US markets.
The criteria and conditions for African countries to be eligible depend entirely on the US. Each year, Washington determines which nations qualify. And the US president grants or withdraws beneficiary status at discretion. Critics view the African Growth and Opportunity Act as an economic instrument of American foreign policy in Africa.
Despite commercial preferences granted under the African Growth and Opportunity Act, it’s difficult for these countries to access the US market. Ethiopia, Guinea and Mali are among the poorest countries in the world, with a major shortage of infrastructure and logistics, and a low income and highly
The 43rd Ordinary Session of the Permanent Representatives’ Committee (PRC) kicks off (African Union)
The virtual 43rd Ordinary Session of the Permanent Representatives’ Committee (PRC) kicked off today, ahead of the 35th Ordinary Session of the AU Assembly Meeting, scheduled to take place on 5-6 February 2022 under the theme “Building Resilience in Nutrition on the African Continent: Accelerate the Human Capital, Social and Economic Development”. Addressing the Ambassadors in his opening remarks, the Chairperson of the AU Commission (AUC), H.E Moussa Faki Mahamat reiterated his hope that this year will be marked by stronger collaboration between the Commission and the PRC, in the continuation of a successful practice that has been strengthened in recent times.
Global economy
TRIPS waiver, developing nations’ policy space key, India tells WTO (Economic Times)
India on Friday insisted on the inclusion of waiver of certain provisions of the global intellectual property rights agreement for Covid-19 medicines and products in the World Trade Organization’s pandemic response package, and cautioned against attempts at using the pandemic as a veil for securing market access concessions from developing countries. At the virtual informal World Trade Organization (WTO) ministerial meeting organized by Switzerland, New Delhi said that the topmost priority should be to address the supply-side constraints, including IP barriers to augment the manufacturing of vaccines, therapeutics and diagnostics, essential for treatment, prevention and control of the ongoing pandemic.
Tenth China Round Table looks at impact of 10 years of China Programme on LDC accessions (WTO)
The Tenth China Round Table on WTO Accessions, held virtually on 18-20 January, celebrated 10 years of the China Programme, with participants reflecting on its impact on the accession of least-developed countries (LDCs) and discussing the future direction of this initiative. The event also provided an opportunity for trade experts to present a study reviewing the results of accession for the nine countries that have joined the organization as LDCs since 1995 — Nepal, Cambodia, Cabo Verde, Samoa, Vanuatu, Lao PDR, Yemen, Liberia and Afghanistan.
WEF Davos: A resilient supply chain does not need to mirror the one in 2019, but build something better (Economic Times)
The last two years of the pandemic have led to the great supply chain disruption in the world. From a shortage of semiconductor chips to the unavailability of containers, the trade and supply chain network has been in constant chaos. The need of the hour is not to go back to pre-pandemic times, but to build a stronger, resilient supply chain network. Pat Gelsinger, CEO, Intel emphasises on the importance of diversification and believes that the company’s facilities should be global. “We believe that from all of our factories that we have around the world, along with two more sites that we’ll be announcing, they should supply to the world. They will also benefit by having a local presence and we believe that those benefits clearly can be satisfying local markets as well as global markets. That’s why we want a globally distributed, resilient supply chain where no market is uniquely dependent on any other supply, or any singular location,” he said. Gelsinger was speaking at a panel at the World Economic Forum’s Davos Agenda 2022 titled ‘Restoring Trust in Global Trade and Supply Chain’.
U.S. trade chief Tai says world can't return to 2019 trading system (Reuters)
U.S. Trade Representative Katherine Tai said on Thursday that global trade policy makers should not try to recreate the pre-pandemic trading system but build one that is more resilient, sustainable and supportive of higher living standards.
Speaking in a virtual panel of the World Economic Forum, Tai cautioned against a backward-looking "return to normalcy" after two years of COVID-19-induced disruptions. "I think that it is time for us to acknowledge that our goal really shouldn't be to try to go back to the way the world was, say in 2019, but to take lessons, very hard earned lessons, very painful lessons that we have experienced over the past two years and take this opportunity to build toward something that is different and better," Tai said. Key to this will be to strengthen and diversify supply chains, she said.
10 Trends in 2022: Global Perspectives for Business (Shortgo)
As 2022 gets underway, the temptation to quote Dickens — it’s the best of times and the worst of times, etc. — is more powerful than usual. For business, the ongoing pandemic and geopolitical risks (the threat of a further Russian invasion of Ukraine at the fore) are conflicting with strong economic growth and technological progress. It all presents an intense mix of challenges and opportunities. U.S. Chamber of Commerce President and CEO Suzanne Clark highlighted some of these issues in her State of American Business address earlier this month. On the international front she notes: “By one vital measure—trade—we’re standing still. And that means we’re falling behind.” Clark explains in no uncertain terms why the United States must demonstrate leadership on international trade in the year ahead.
Trade: The boom continues. Expanding international trade is both a cause and an effect of the recovery. The World Trade Organization estimates global merchandise trade expanded by 10.8% in 2021 and forecasts a 4.7% rise in 2022. Trade is surging even compared to pre-pandemic levels: U.S. goods exports in 2021 topped 2019’s level by 5% while imports rose by 11%. Indeed, major U.S. ports processed almost one-fifth more container volume in 2021 than they did in 2019. Services trade presents a mixed picture: digital trade continues its robust growth, but depressed travel and tourism continues to be a drag on some sectors that are major employers.
US and UK launch talks to resolve metal tariffs dispute (BusinessLIVE)
The US and Britain on Wednesday agreed to launch talks aimed at resolving their trade dispute over US steel and aluminium tariffs, the countries said in a joint statement. No specific date or timeline was given for the talks but discussions will address "global steel and aluminium excess capacity, including the US’s application of tariffs" on the metals from Britain. "Both parties are committed to working towards an expeditious outcome that ensures the viability of steel and aluminium industries in both markets against the continuing shared challenge of global excess capacity and strengthens their democratic alliance," the countries said in the joint statement.
Related News
tralac Daily News
Country news
South Africa unlikely to see solid economic growth in near term, says GlobalData (Engineering News)
Against a backdrop of travel bans, higher inflationary pressures, high unemployment figures, lower vaccination rates and electricity supply constraints, analytics company GlobalData believes South Africa’s immediate economic growth prospects are grim. The company has revised its 2022 gross domestic product (GDP) growth rate forecast for South Africa to 2.1%, down from a forecast of 2.5% made in December 2021.
According to Statistics South Africa (Stats SA), real GDP growth contracted by 1.5% quarter-on-quarter in the third quarter of 2021, compared with 1.2% in the second quarter of 2021. This year, the country’s economy is being impacted by tightening restrictions and constraints, GlobalData says.
Stats SA noted a manufacturing activity plunge of 8.9% year-on-year in October 2021, compared with October 2020. Rao comments that input prices for manufacturers rose steeply, versus output prices, which resulted in downward pressure on production.
SA’s wine export volumes rise 22% in 2021 despite booze bans, supply chain issues (Fin24)
Despite a series of alcohol sales bans and supply chain challenges, South Africa’s wine industry still managed to grow its export volumes. Not-for-profit industry organisation Wines of South Africa (WoSA) on Wednesday released export report for 2021. The data covers January to October 2021. WoSA promotes South African wine in key export markets. Total export volumes grew by 22% to 388.1 million litres. The value of wine increased 12.1%, to R10.2 billion. Notably in 2018, export volumes of 420 million litres only fetched R9.1 billion. In 2019, export volumes fell to 320 million litres due to the impact of drought. In 2020 volumes dropped slightly to 319 million litres as the industry battled the impact of the Covid-19 pandemic on restaurant and holiday trade, Fin24 previously reported. The UK was South Africa’s biggest market for wine exports - both in terms of volume (92.5 million litres) and value (R2.5 billion).
Port investments to contribute towards SA economy (SAnews)
Minister of Transport, Fikile Mbalula, has unveiled critical investments that will contribute towards advancing South Africa’s economic interests through Operation Phakisa. Amongst others, these investments include the construction of an onshore Liquid Natural Gas (LNG) regasification facility, liquid bulk operating license to develop and operate a liquid bulk terminal and access rights for the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP). “These ground-breaking investments will also give impetus to growing the oceans economy and the implementation of the Comprehensive Maritime Transport Policy, which seeks to create a nurturing environment for entrepreneurs to develop and grow their businesses,” the Minister said.
Logistics companies ally to enlarge African healthcare network (Engineering News)
Logistics companies Imperial and UbiPharm have joined forces to create an expansive healthcare distribution network across Africa. This strategic alliance is aimed at providing complementary continental route-to-market solutions to healthcare principals and clients, enabling both companies to leverage each other’s operations and commercial services.
Kenya’s trade deficit surges to Sh1.2 trillion on fuel, industrial imports (Business Daily)
Kenya’s trade deficit in the 11 months to November 2021 grew to a record Sh1.24 trillion, widened by a surging fuel and industrial goods import bill. The economic recovery recorded last year as the country came out of the worst of the Covid-19 restrictions boosted demand, allowing factories to resume production that had been stunted in 2020. The movement restrictions imposed by many countries around the world during the peak of the pandemic also disrupted trade and supply chains, resulting in pending supply issues that are now being unwound as international borders fully reopen.
The Kenya National Bureau of Statistics said total imports rose by 29 percent or Sh430 billion to hit Sh1.91 trillion, outperforming exports that rose by a more modest Sh89 billion or 15 percent to Sh672.6 billion. This wider trade deficit is a concern for the country’s forex position, with importers drawing out valuable dollars that would otherwise be providing backing for the under-pressure shilling.
Kenya’s current account deficit drops to 5.2 % in November - CBK (The Star, Kenya)
Kenya’s current account deficit widened to 5.2 per cent in 12 months to November compared to 4.7 per cent the same period last year. The weekly Central Bank of Kenya bulletin has attributed the higher deficit to lower service receipts as well as high imports, which more than offset increased receipts from agricultural exports and remittances. This is the third-highest deficit in two years since 2018 when the country recorded a 5.8 per cent trade shortfall with international partners.
The country has been witnessing shrunk earnings from the export market for the past 15 months on social-economic challenges brought about by the Covid-19 pandemic that saw international borders closed for close to four months last year. This negated gains from the service sector account for almost 45 per cent of the country’s gross domestic product.
Shoprite and Checkers to prioritise locally-produced sugar (Witness)
A groundbreaking partnership between the Shoprite Group and SA Canegrowers will see Africa’s largest retailer prioritising selling only locally-produced sugar in its 1 189 stores across the country. This is part of the Home Sweet Home campaign to encourage South Africans to buy locally-produced sugar at Shoprite, Checkers, Checkers Hyper and Usave supermarkets. The Home Sweet Home campaign was launched by SA Canegrowers in December 2020. The aim is to educate consumers about the threats the local industry faces because of the influx of cheap sugar imports and to encourage people to buy locally-produced sugar to safeguard rural jobs.
Kenya’s envoy to Uganda ‘quits’ amid trade rows (The Citizen)
Kenya’s High Commissioner to Uganda Kiema Kilonzo has quit his office for a political contest even as both countries trail on resolving incessant trade tiffs. Mr Kilonzo’s chief campaigner Chrispus Ileli told Nation. Africa the envoy was no longer returning to Kampala and diplomatic his tour of duty was over. Mr Kilonzo is expected to formally tender his resignation ahead of the February 9 for civil servants intending to join politics to quit.But his actions have lately left no doubt he is no longer a diplomat. Even as the trade row with Uganda over importation of agricultural goods, as well as Covid-19 regulations mismatches simmer, the diplomat has been seen in his native Kitui County.
Scrap metal woes need deeper intervention (Business Daily)
In the year 2018, the Treasury Cabinet Secretary, through the budgetary statement increased duty on imported steel from 25 percent to 35 percent. This, the CS said, was to protect local steel manufacturers against cheap imports and be in tandem with the Jubilee key flagship pillar on manufacturing and affordable housing.
A closer look shows the intervention created a reverse effect. Kenya has no known iron ore deposits sufficient enough to offer 100 percent raw materials for steel manufacturing. Import duty budgetary protectionist measures would only work where, ceteris paribus, raw materials are locally and readily available.
Dar port eyes higher goal, ups efficiency (The Citizen)
Tanzania Ports Authority (TPA) is banking on technology and modern equipment it seeks to up the efficiency of the Port of Dar es Salaam and turn the country into a logistics hub in East and Central Africa. TPA director general, Mr Eric Hamissi, said yesterday that so far the progress has been encouraging as the vessel turnaround improves significantly at the Dar es Salaam port.
According to Mr Hamissi, the target is to handle 18 million tonnes of cargo this financial year, out of which, over 50 percent has already been achieved so far. “We are investing more in new technologies to achieve our goals…in a day we work on up to five vessels,” he said.
Uganda EPZ earnings hit record $1.2b (The East African)
Uganda’s earnings from export processing zones grew to a record high of $1.2 billion in 2020 from $154 million the previous year, a new report has revealed. The report by the Uganda Free Zones Authority shows that for two years in a row, semi-processed gold was the driver of exports, accounting for 93 percent of total export earnings at $1.1 billion. Flower and horticulture exports ranked second, accounting for 3.7 percent of exports at $46 million. Tobacco ranked third, accounting for 3.1 percent of exports at $38 million, the report shows. Wheat flour exports recorded a 65 percent decline to $1 million in 2020 from $4 million registered in 2019.
Uganda Free Zones Authority Executive Director Hez Kimoomi Alinda said the positive performance in 2020 was driven by increased mineral and tobacco processing and export.
Putting economic value into Nigeria’s agro-commodities (BusinessAMLive)
Africa is one of the least industrialised regions of the world with an economy mainly centered on the exportation of agro-commodities, which are in most cases, processed into finished products by foreign industries, according to a report by the African Development Bank Group (AfDB). The report also asserted that most African countries have continually traded their natural resources majorly in raw forms which to a large extent, has limited diversification of value added commodities in global export trade. This, analysts explain, has become a familiar pattern for many African countries, including Nigeria, the continent’s most populous nation and largest economy, making it one of the most persistent challenges facing the country’s agribusiness/export sector.
U.S. Relations With Gabon (United States Department of State)
The United States established diplomatic relations with Gabon in 1960 following Gabon’s independence from France. Relations between the United States and Gabon are excellent. The United States applauds Gabon’s efforts to take bold steps to root out corruption and to reform the judiciary and other key institutions to promote respect for human rights. Gabon and the United States are working to diversify and strengthen Gabon’s economy, expand bilateral trade, increase security in the Gulf of Guinea, and combat wildlife trafficking.
Gabon’s oil-reliant economy shows signs of recovering from its downturn due to COVID-19 and the decline in oil prices and demand. Gabon’s middle-income status limits the amount of U.S. assistance available. The government is focused on economic diversification, most notably by expanding the agribusiness and tourism sectors. Most foreign investment, including U.S. investment, is concentrated in the oil and extractive sectors. Gabon is eligible for preferential trade benefits under the African Growth and Opportunity Act (AGOA). U.S. exports to Gabon include machinery, agricultural products, vehicles, and optical and medical instruments. U.S. imports from Gabon include crude oil, manganese ores, agricultural products, and wood. In Fiscal Year 2021, exports from the United States to Gabon totaled $77.3 million.
African trade
Payment in local currencies, real-time transactions... how Afreximbank’s PAPSS will work (TheCable)
On Thursday, the Africa Export-Import Bank (Afreximbank), in collaboration with African Union (AU) and African Continental Free Trade Area (AfCFTA), officially launched the pan-African payment settlement system (PAPSS) for commercial use. PAPSS is a cross-border financial market infrastructure enabling payment transactions across Africa, bridging trade challenges in a continent with over 40 known currencies. According to Afreximbank, participants pay in local currency, while a seller in another country receives payment in their local currency. This means that a buyer in South Africa can pay in rand while the seller from Nigeria receives payment in naira.
Africa urged to tap full gains of trade pact (Chinadaily)
African countries should seize the opportunity to boost the construction of infrastructure and gain the full benefits of the continent’s free-trade agreement, say analysts in encouraging governments to reject protectionism. The African Continental Free Trade Area, or AfCFTA, took effect in January last year, though many African countries have not begun participating in the arrangements, said investment banker Aly Khan Satchu, who cites a lack of infrastructure as a key constraint. Effective implementation of the agreement has been held back by insufficient infrastructure for transport and technological connectivity, among other areas, he said.
Set a date for Free Movement of citizens on the back of AfCFTA – Kojo Yankah (News Ghana)
Founder and President of the Africa University College of Communications (AUCC), Kojo Yankah is calling on African leaders to take advantage of the Africa Continental Free Trade Agreement (AfCFTA) and “set a date for the free movement of citizens” across the borders of the continent. Whereas the building blocks have been established for the realization that [AfCFTA] vision, there still remain some hurdles such as closed borders and several physical barriers and checkpoints on the major roads that connect countries on the continent, and that has been a major frustration tom intra-continent trade and movement of people and goods.
The Collaboration and Partnership Africa Needs and Developments that can Derail Progress - Osinbajo (Proshare Nigeria)
The health and economic crisis caused by the pandemic slowed down progress in many areas but as the world emerges slowly from the health and economic crisis caused by the pandemic, a number of important lessons have been learnt. The most obvious lesson of course is that it has proved impossible for individual countries to contain the virus as long as there are outbreaks in other parts of the world. Similarly, we learnt that disruptions including in supply chains in one part of the world inevitably affect other parts of the world. And though that might sound obvious I think it has driven home very powerfully especially in the last few months.
Indeed, as the last frontier in development, Africa has the potential to become the factory of the world especially given its bold steps to integrate through the African Union Agenda 2063 and the African Continental Free Trade Area agreement. There are several other reasons I think, to be positive about the African growth story given that its large youth population holds the prospect of a demographic dividend. Also, by giving greater space and providing more opportunity to the private sector, the continent is also making giant strides in agriculture, manufacturing and digital technology.
African carriers start intensive scramble for the airfreight business (The East African)
The battle for the air freight market share among African airlines is intensifying, thanks to Covid-19 disruptions that have driven up ocean freight rates. Many airlines are now upgrading their fleets and expanding destinations as shortage of containers in the region continues to bite. In its latest market summary, the International Air Transport Association (IATA) said demand for air freight has stayed above pre-crisis levels. “African airlines saw international cargo volumes increase by 26.7 percent end of last year, which is the largest increase of all regions. International capacity was 9.4 percent higher than pre-crisis levels, Africa is the only region in positive territory, albeit on small volumes,” read part of the IATA market summary.
Shippers Council of East Africa Chief Executive Gilbert Lagat said, apart from cost and efficiency, time to receive consignments has boosted the air freight business considering persistent road and ocean delays.
Foreign aid is not ‘aiding’ the development of Nigeria (Mail & Guardian)
Foreign aid to Africa has been an issue of debate over the past few decades. This is mainly because the economic and development expectations of developing countries have not been met despite increased foreign aid over the years. Hence, the effectiveness of aid is questioned. Economic hardship has made people, particularly from developing countries, migrate to other parts of the world in search of better living conditions. Those without the financial capacity risk their lives to cross the Mediterranean Sea into Europe.
Despite receiving the larger share of foreign aid, Sub-Saharan Africa accounts for seven of the 10 countries with the greatest number of people living in poverty. They account for nearly three-quarters of worldwide rural poverty, or 305 million people. Why then has this aid not yielded satisfactory results in African countries such as Nigeria?
Despite a more favorable external environment, marked by the rebound in global growth, fast-increasing oil prices, and unprecedented Fund financial support, CEMAC is ending 2021 in a fragile external position. Net external reserves fell throughout 2021 to reach their lowest level in decades, and gross reserves are just above three months of imports of goods and services. The launch of a second phase of the regional strategy at the August 2021 CEMAC Heads of States summit saw renewed commitments to accelerate structural, transparency, and governance reforms. The resumption of program engagements with the Fund, combined with high oil prices and significant fiscal adjustments in 2022, should allow for a turnaround, and the build-up in external reserves is expected to resume in 2022. Risks include possible adverse pandemic developments, oil price volatility, possible fiscal slippages, shortfall in external financing, and security issues.
Historically, Africa has lagged behind other regions in employing the full potential of previous industrial revolutions, limiting its ability to become a truly competitive market. The pandemic demonstrated the massive leaps made by business, government and civil society during the crisis – showing that sustaining this level of focus and momentum can boost economic growth. The African Union Fourth Industrial Revolution strategy provides the foundation to ensure the region is able to embrace the opportunities and address the challenges, including inadequate infrastructure and skills. This paper builds on that work, providing direction for policy-makers and investors to consider the mechanisms that can scale up digital transformation. It offers five pathways identified by the World Economic Forum Regional Action group for Africa to drive economic recovery and build resilience, and assesses the role incentives can play in motivating organizations to adopt Fourth Industrial Revolution applications
Imagine using one second to sell more than 11,200 bags of Ethiopian coffee. That is what happened on January 19, 2022, during the Ethiopian Coffee Brands Launch on China’s Largest E-Commerce Platform, Alibaba (Tmall Global), in a joint effort with the United Nations Economic Commission for Africa (ECA) and the Ethiopian Government. “Success recorded in exporting Ethiopian coffee to China will provide a roadmap in leveraging export potential for other ten African countries, where ECA is working this year, to provide more export potential from Africa to China,” said UN Under-Secretary-General and Executive of the ECA, Secretary Vera Songwe. “This launch demonstrates the benefits that, not only Ethiopia, but Africa can reap in harnessing digitalization,” stated H.E Gebremeskel Chala, Minister of Trade and Regional Integration, Ethiopia.
Agriculture Ministers pledge to focus on innovation, profitability of farmers (The Exchange)
Ministers of Agriculture from Africa and America meet and committed to working together to develop a cooperation agenda and agreed that the two continents face common challenges and opportunities regarding transforming their agri-food systems to make them more sustainable and inclusive. The agreement was reached during the First High-Level Roundtable between Africa and the Americas, convened and organised by the Alliance for a Green Revolution in Africa (AGRA) and the Inter-American Institute for Cooperation on Agriculture (IICA), entitled “Building Bridges for Future Cooperation in Agrifood Systems”.
“African economies have grown in recent decades, as have their agrifood systems, despite catastrophes such as droughts and floods and, most recently, the Covid-19 pandemic. As a region, Africa lacks access to modern technologies and mechanised tools that allow for increasing product variety and quality and expanding the percentage of arable land. Many of our farmers are still subsistence farmers; therefore, cooperating with Latin America and the Caribbean will enable us to improve the lives of our populations,” Former Ethiopian Premier Desalegn said.
The Global Corporate Tax Deal – An African Perspective (IDN InDepthNews)
On October 30, 2021, the leaders of the world’s 20 largest economies, the G20, endorsed a two-pillar blueprint to address the tax challenges arising from the digitalization of the economy. The agreement includes partial reallocation of taxing rights to market jurisdictions and a 15 per cent global minimum tax for multinational enterprises (MNEs).
It is worth noting that only 23 African states are among the 137 countries and jurisdictions set to implement this global deal—less than half of all the countries on the continent. Two of the main issues for African countries as their economies become increasingly digitalized are i) options for better nexus and profit allocation rules mainly as source jurisdictions; and ii) opportunities for policy and administrative support to deal with illicit financial flows (IFF). Assessing the current momentum around the worldwide tax reform deal can improve our understanding of the African context while promoting a more unified African voice on international tax cooperation and tax governance for sustainable development.
Can hybrid finance unburden Africa’s shaky SME sector? (World Finance)
It is tough being a small and medium enterprise (SME) in Africa, a continent where the SMEs sector is quite fragile. Nothing has exposed the apparent quicksand foundations of the sector more than the COVID-19 pandemic. With the crisis dragging the continent into its first economic recession in 25 years, SMEs bore the brunt with a majority sinking into oblivion. For those that have survived the pangs of the pandemic, rebuilding is bound to be torturous. “COVID-19 had a knock-on effect for SMEs, forcing many to close or curtail operations,” says Manuel Reyes-Retana, International Finance Corporation (IFC) director for Africa. He adds that although the sector has demonstrated a zeal for resilience with many SMEs finding ways to stay in business, the damage has been substantial with a majority struggling to regain momentum. For SMEs in Africa, the one challenge that has remained constant, and one that COVID-19 has yet again blatantly exposed, is how lack of access to finance makes the sector vulnerable. In fact, it’s been obvious that SMEs with relatively weak financial muscles have faced the most risk. Experts believe that for the sector to recover and build shock absorbers for long-term survival, adequate access to stress-free financing is paramount.
“Hybrid financing is a more flexible tool for SMEs,” states Conor Savoy, senior fellow, project on prosperity and development at the Centre for Strategic and International Studies. He adds that development financial institutions (DFIs) have the ability to lead the way in creating financial instruments through which SMEs can access hybrid financing, thus giving the sector a more solid backing to pursue growth. DFIs have proved they can be an important source of equity in developing countries. Some are already investing as much as half of their portfolios in equity. “In exchange for a certain degree of ownership, equity investments provide an essential source of capital for firms without burdening them with loan repayments,” he notes.
Africa Investment Conference: Clean Growth (GOV.UK)
Despite Africa’s abundance of renewable energy sources – solar, wind, hydro and geothermal - most countries, businesses and communities still rely on fossil fuels. Given the need for all countries to transition to clean growth, this presents an era-defining opportunity for the private sector. The UK Government is working with African countries to support their pursuit of clean, sustainable, and resilient development.
In 2020, at the UK-Africa Investment Summit, we committed to build a new business support service to expand trade with African countries. It is called the Growth Gateway - a digital portal that offers support on trade, finance, and investment, backed by a team of trade and investment specialists, including experts from Boston Consulting Group and PA Consulting.
A UK-Africa trade deal would create jobs and boost the Commonwealth: Post BREXIT, it is now possible (Daily Trust)
A deal would enable Britain to practice the free trade it has long preached and represent recognition by a G7 economy of the benefits of African unity, writes President Muhammadu Buhari of Nigeria. Two years after the United Kingdom’s departure from the European Union, my country, Nigeria, and her African partners seek a new settlement with Britain: one based on cooperation in fairer – and freer – trade.
Global economy
DG Okonjo-Iweala calls on ministers to step up negotiating efforts, harvest outcomes (WTO)
The informal gathering of around 30 trade ministers is traditionally hosted by the Swiss government in Davos but was held virtually this year in line with the World Economic Forum’s decision to cancel its in-person annual meeting. In her remarks to the event, the Director-General noted that pandemic-related uncertainty would continue to prevail so long as large numbers of people in much of the world remained unvaccinated against COVID-19 – and that the WTO had a contribution to make in ending vaccine inequity.
The Director-General called ministers’ attention to the key sticking points on the WTO’s response to the pandemic, fisheries subsidies and agriculture, while also making the case for moving ahead with WTO reform, including dispute settlement.
The impact of maritime piracy on trade and transport (VOX-EU)
Maritime piracy has long haunted both global shipping and people living near the shore. However, in times of pandemic-induced closures of ports, a blockage of the Suez Canal by the Ever Given and conflicts between rival governments in the Strait for Hormuz and South East Asia (Cosar and Thomas 2021), it does not come to mind as the number one threat to global transport networks. Nevertheless, modern piracy remains a common threat to international merchant shipping. As a result of the 229 incidents in the year 2020, more than a hundred people were held hostage, several of whom were wounded.
Besides the danger to the crew, piracy attacks also lead to delays of ships, as well as damages to the vessel and cargo. Shipping firms adapt by rerouting their ships on costly detours (Bendall 2010) or investing in armed guards, electric fencing, razor wire, water cannons, and other weaponry. Shippers also bear implicit costs of piracy such as wage premia and higher insurance payments. All of these costs have an economic dimension and make it more expensive to ship goods, which ultimately affects the welfare of trading countries.
Davos Agenda Closes with Calls for New Models of Public-Private Cooperation (WEF)
The Davos Agenda closed today following headline-making dialogues with heads of state and government, international organizations, business and civil society. The week-long meeting convened leaders on “The State of the World”. It was the first global platform of the year and focused on driving concerted action among key global stakeholders.
Access to COVID-19 vaccines continues to pose a serious problem for Africa, with fewer than 10% of populations fully vaccinated in most countries, said Yemi Osinbajo, Vice-President of Nigeria. He called for patent waivers to permit African countries to manufacture vaccines locally. “Now is a good time to test global will,” he said, in building international cooperation to prepare for new, possibly worse pandemics to come.
Related News
tralac Daily News
Country news
South Africa’s Covid-19 Response Gets a $750 Million Boost (World Bank)
The World Bank Group Board of Executive Directors today approved South Africa’s request for a $750 million development policy loan (DPL). This loan will support the Government of South Africa’s efforts to accelerate its COVID-19 response aimed at protecting the poor and vulnerable from the adverse socio-economic impacts of the pandemic and supporting a resilient and sustainable economic recovery.
“The World Bank budget support is coming at a critical time for us and will contribute towards addressing the financing gap stemming from additional spending in response to the COVID-19 crisis,” says Dondo Mogajane, Director General of National Treasury of South Africa. “It will assist in addressing the immediate challenge of financing critical health and social safety net programs whilst also continuing to develop our economic reform agenda to build back better.”
South African farming: new policy offers promise, but there’s fixing to be done too (The Conversation Africa)
For most agricultural subsectors, South Africa is emerging from one of the best years. The 2020/21 season saw bumper harvests for grains, oilseeds and some fruits. These boosted export earnings and improved farm incomes, especially for grains where the large harvest coincided with higher crop prices. When it started the current season, 2021/22, promised to be exceptional. But the continuation of the heavy rains has proved to be a challenge for various regions, causing crop damage and delaying planting. The heavy rains of the new year are La Niña induced and follow another year of higher-than-average moisture. Various crop surveys have indicated a potential decline in harvests in 2021/22 as a result. The year ahead could therefore be financially costly for the farming community if crop damage proves to be extensive. The devastation being caused is another reminder that climate change is driving unpredictable weather patterns.
Tourism sector and government must work together to rebuild tourism in South Africa (Mail & Guardian)
The announcement of the Omicron variant in South Africa, just days before the country’s peak tourism season last year, only served to further the misery the sector has experienced as a result of the Covid-19 pandemic and associated lockdowns. As the industry looks to recovery after a number of crises ranging from load-shedding and water shortages to crime and corruption, which has now been laid bare in the Zondo commission’s report on SAA, South African Airways Technical and ground-handling services, rebuilding South Africa’s brand as a tourism destination will require the government and the sector to work together to address a number of issues.
Opinion: Steelmaking remains a key strategic industry for South Africa (Engineering News)
Imported steel products continue to impact the viability of the South African steel industry. Each tonne of steel produced domestically adds to the national economy, creates jobs and provides value through beneficiation. It is estimated that it would take more than a decade to re-establish an integrated steel industry in South Africa were it to disappear. This would be detrimental to the South African economy in every sense. Contrary to the assertions of some in the industry, the protection measures implemented by the South African government are in place to protect the entire South African steel manufacturing sector and not just one player. These measures are vital for the survival of the country’s steel industry and for ensuring the steel sector remains the backbone of South Africa’s industrial manufacturing capacity and capability.
Nairobi plans e-platform to export agricultural products to China (Business Daily)
Kenya is working on an online platform that will sell agricultural products such as tea, coffee and macadamia nuts to the Chinese market, following the signing of six memoranda of agreements (MoUs) with the Asian giant. The two countries also plan to have exchange programmes by June to boost the export of avocados.
Kenya National Chamber of Commerce and Industry Nairobi Chapter chairman Julius Opio said the platform would ease access to Chinese markets for the exporters. It is expected to cut new logistic challenges created by the Covid-19 pandemic causing delays in supply and affecting business.
Food producers, KQ in Gulf cargo transport deal (Business Daily)
Horticulture producers have negotiated a cargo transport deal with Kenya Airways to export chilli, peas and passion fruits to the United Arab Emirates, with the first batch of export expected next month. Kenya Airways is set to start bi-monthly horticulture cargo flights from Kisumu International Airport to the Gulf nation, according to the Fresh Produce Consortium of Kenya (FPC-Kenya). The UAE market is important given that Kenya lost the lucrative European market due to quarantine pests that were found in Kenya’s consignment that were shipped to the EU in 2018.
Uganda, Tanzania resume talks over trade barriers (The East African)
Uganda and Tanzania have resumed talks aimed at eliminating trade barriers, a major hindrance to the smooth flow of trade between the two countries. During a Joint Permanent Committee meeting held in Kampala, officials from both countries also agreed to continue pursuing joint infrastructure projects. Uganda has over the years blamed Tanzania of instituting several non-tariff barriers that have thwarted seamless trade between the two countries. Uganda’s trade volumes have been affected by the non-tariff barriers imposed by Tanzania. These include restrictions on exports such as sugar, milk and movement on Ugandan trucks.
US, Uganda, Tanzania top as Kenya’s tourist sources (The East African)
Uganda and Tanzania continue to be major tourist sources for Kenya after the United States of America (USA) as the country registered a 53.29 percent growth in 2021, following the lifting of Covid-19 restrictions. This comes even as the tourism industry recorded a 34.76 percent increase in revenue, which translated to $1.46 billion, compared to $885 million recorded in 2020. According to latest data released by the Tourism Research Institute, last year, Kenya received 870,465 tourists compared to 567,848 in 2020.
“We have a strategy of future growth and one of them is to ensure we expand and modernise Kenya’s aviation industry and equip our main international airport, Jomo Kenyatta International Airport, with modern international facilities that delivers an efficient and friendly customer experience; and expand Ukunda and Malindi Airports which are key for international tourist arrivals,” said Mr Balala.
GIPC woos diaspora community to invest in Ghana (GhanaWeb)
The Ghana Investment Promotion Centre (GIPC) has called on the diaspora community to save and invest massively in Ghana for rapid socio-economic development. Mr Yaw Amoaten Afriyie, Deputy Chief Executive Officer of GIPC, said such investment moves would not only support the development of the country in a structured manner but would advance all sectors of the economy through entrepreneurship and innovation. “Ghana is indeed opened for business and investment, and we extend an invitation to the members of the Diaspora, commercial partners to grow in Ghana and with Ghana,” he said.
Republic of Congo: Overburdened by debt, can ECAir take off again? (The Africa Report)
On 7 January 2022 in Brazzaville, Jean-Marc Thystère-Tchicaya, the Republic of Congo’s transport minister, and Denis Christel Sassou Nguesso, the minister of international cooperation and promotion of public-private partnership, signed a memorandum of understanding with Allegiance Capital so that the national airline, ECAir, could restart its operations. Since 2016, the government has repeatedly expressed its willingness to revive the activities of the queen of the Congolese sky, without presenting a concrete plan.
There are still many uncertainties surrounding ECAir’s relaunch. Little information is available about Allegiance Capital and its managing director, Eric Kenneth Mouritzen, who visited Brazzaville in early January. For the moment, the Congolese carrier is planning to only operate national routes and to later serve the sub-region and international destinations
African trade news
Africa needs to beef up and integrate infrastructure for AfCFTA to have desired impact (Engineering News)
African nations need to establish and/or reinforce their infrastructure to meet the looming implementation of the Africa Continental Free Trade Agreement (AfCFTA), a panel of speakers participating in the UK-Africa Investment Conference, on January 20, have said. “For the African free trade area to function effectively, the goal would be [to have] effective infrastructure, transport, energy and digitalisation,” said Africa Union infrastructure, energy and information and communications technology commissioner Amani Abou-Zeid.
Foresight Africa 2022 (Brookings)
With this and every iteration of Foresight Africa, we aim to capture the top priorities for the region in the coming year, offering recommendations for African and global stakeholders for creating and supporting a strong, sustainable, and successful Africa. In doing so, we hope that Foresight Africa 2022 will promote a dialogue on the key issues influencing development policy and practice in Africa during the upcoming year. Such ideas will ultimately provide sound strategies for sustaining and expanding the benefits of economic growth to all people of Africa in the years ahead.
01 Financing robust post-pandemic growth
02 Ensuring equal access and self-sufficiency
03 Leading a continent
04 Tackling a global challenge
05 Creating and harnessing tools for improved livelihoods
06 Reinventing and pursuing new partnerships
Access to COVID-19 vaccines continues to pose a serious problem for Africa, with fewer than 10% of populations fully vaccinated in most countries, said Yemi Osinbajo, Vice-President of Nigeria, in his address to the Davos Agenda 2022. He called for patent waivers to permit African countries to manufacture vaccines locally. Osinbajo complimented COVAX and other global vaccine alliances for their contribution but noted that the price tag for vaccinating the entire world is just $50 billion, according to the Organisation for Economic Co-operation and Development. “This is affordable, he said, but we should not allow this opportunity “to slip through the cracks”. “Now is a good time to test global will,” he said, in building international cooperation to prepare for new, possibly worse pandemics to come.
He called for natural gas – which Africa has in abundance – to be accepted as a transitional fuel. Africa is the continent that contributes least to climate change yet has been most negatively affected by it, he said. This situation cannot be compounded by rules that hamper Africa from adapting.
Interview: BRI opening up dev’t opportunities in Africa on win-win outcomes: AU official (Xinhua)
Anchored on win-win outcomes, the Belt and Road Initiative (BRI) is opening up development opportunities across the African continent, an African Union (AU) official has said. Speaking exclusively to Xinhua recently, Albert Muchanga, the Commissioner for Trade and Industry of the AU Commission, stressed that a growing number of African countries are now implementing the BRI, which is driving development across the continent.
China has been Africa’s largest trading partner for more than a dozen years. Under the Belt and Road Initiative, the two sides have multiplied their efforts to cooperate. Over fifty African countries and the African Union Commission have so far signed cooperation agreements with China. Amid the growing list of African countries cooperating with China under the BRI mechanism, many African countries have realized new deep seaports, thousands of kilometers of roads and railways that have transformed logistics across Africa, among other development projects.
In Ethiopia, Guinea and Mali, Fears Rise Over Losing Duty-Free Access to US Market (VOA)
Effective January 1, Ethiopia was one of three countries — including Guinea and Mali — dropped from a U.S. trade program authorized by the African Growth and Opportunity Act of 2000. AGOA gives sub-Saharan African countries duty-free access to U.S. markets for 6,500 products — if those countries meet eligibility requirements such as promoting a market-based economy and good governance and eliminating barriers to U.S. trade and investment. Ethiopia lost its AGOA trade benefits for alleged “gross violations” of human rights in the conflict spreading beyond the northern Tigray region, and the West African nations of Guinea and Mali were disqualified for “unconstitutional change” in their respective governments, the U.S. Trade Representative’s office said. Guinea experienced a coup d’etat in September. Mali has had two coups since 2020, and its military-led transitional government recently delayed elections. Mali also had been suspended from AGOA for all of 2013 after an earlier coup A second AGOA delisting will have “serious consequences on the trade in Mali,” Mamadou Fofana, a Mali Chamber of Commerce and Industry spokesman, told VOA.
Mohamed Kaloko, head of Guinea’s Export Promotion Agency, said losing AGOA status raises the duty fee from zero to “at least 35%” for Guinean textiles, which he said were “well sought after on the American market.” Gracelin Baskaran, a development economist at Cambridge University, predicted the suspensions would have limited impact on Guinea and Mali. Each sends relatively little to U.S. markets — less than 1% of their total exports, based on 2019 trade data. But Ethiopia likely will feel “much larger effects,” Baskaran said. While the country ranks 88th among U.S. trade partners, its export-driven economic growth model has the American market as a key destination.
Minister for Africa visits East Africa to tackle regional challenges and deepen economic ties (GOV.UK)
Minister for Africa has visited Kenya, Uganda and Ethiopia to deepen partnerships on trade, education and health, and discuss solutions to regional challenges including conflict and drought Vicky Ford announced £17 million of UK Aid to respond to region-wide drought, and one million COVID-19 vaccines The Minister also announced new investments in East Africa and attended the regional launch of British International Investment (BII), where she announced a £37m BII investment into Kenya’s Equity Bank. In Ethiopia, she met with Prime Minister Abiy to discuss routes to a peaceful end to the conflict in northern Ethiopia, and UK support for post-conflict recovery.
West Africa: Extreme poverty rises nearly 3 per cent due to COVID-19 (UN News)
The proportion of people living on less than $1.90 a day jumped from 2.3 per cent last year to 2.9 per cent in 2021, while the debt burden of countries increased amid slow economic recovery, shrinking fiscal space and weak resource mobilization.
Sekou Sangare, the ECOWAS Commissioner for Agriculture, Environment and Water resources, said the pandemic has, in particular, annihilated benefits gained in fighting food insecurity and malnutrition.
“Even if we are happy with the governments’ response through the mitigation actions they have taken, we have to worry about the residual effects of the health and economic crisis as they are likely to continue disturbing our food systems for a long time while compromising populations access to food, due to multiple factors,” he said. The report highlights the effects of measures aimed at preventing coronavirus spread, such as border closures, movement restrictions and disruption of supply chains.
Global economy news
‘Suez Canal and Challenges in World Trade’ Conference Kicks Off at Expo 2020 Dubai Amid International Turnout (GlobeNewswire)
Admiral Osama Rabie, Chairman of the Suez Canal Authority (SCA), attended on Sunday morning the international conference the SCA organized under the title ‘The Suez Canal and Challenges in World Trade’ as part of Expo 2020 Dubai. The conference discussed how to support global trade amid different challenges, including the coronavirus pandemic, as well as the policies and procedures adopted to ensure the sustainability of the services the SCA offers and the continuation of the flow of global trade through the Suez Canal, which is the lifeline of supply the world over.
Minister Gamea explained that the Ministry of Trade and Industry has implemented a comprehensive strategy to gain access to more markets and enhance the competitiveness of Egyptian products to reach the target of $100 billion in exports annually, pointing out that the Egyptian Council for Export has been reconstituted under the leadership of H. E. President of Egypt Abdel-Fattah El-Sisi. Plans and policies to maximize exports were designed while activating the role of the Export Development Fund, developing a network of trade partnerships with foreign markets, and benefiting from regional integration and preferential trade agreements.
Here’s how we can resolve the global supply chain crisis (UNCTAD)
Our livelihoods – food, jobs, energy – depend on functioning and resilient global supply chains. Unfortunately, the uncertainty caused by the progress of the COVID-19 pandemic from region to region has made it difficult to resume business on a global scale. At the same time, fuelled by the e-commerce boom, container shipping freight rates are reaching record highs and transport capacity is being held up in congested ports. This represents a double shock for developing countries distant from global production hubs, with small island developing states (SIDS) and least developed countries affected the most. On top of disrupting the delivery of much-needed vaccines and critical food supplies, the supply chain crisis may hike global consumer price levels by an additional 1.5 percentage points as a result of increased maritime transport costs, according to UNCTAD’s latest Review of Maritime Transport. The impact on prices in SIDS is five times higher, with 7.5 percentage points additional consumer price inflation.
Our livelihoods – food, jobs, energy – depend on functioning and resilient global supply chains. Unfortunately, the uncertainty caused by the progress of the COVID-19 pandemic from region to region has made it difficult to resume business on a global scale. At the same time, fuelled by the e-commerce boom, container shipping freight rates are reaching record highs and transport capacity is being held up in congested ports. This represents a double shock for developing countries distant from global production hubs, with small island developing states (SIDS) and least developed countries affected the most. On top of disrupting the delivery of much-needed vaccines and critical food supplies, the supply chain crisis may hike global consumer price levels by an additional 1.5 percentage points as a result of increased maritime transport costs, according to UNCTAD’s latest Review of Maritime Transport. The impact on prices in SIDS is five times higher, with 7.5 percentage points additional consumer price inflation.
DDG González: Now is the time to think big on customs reform (WTO)
DDG González observed that customs authorities need to respond and adjust to changes in the global trade landscape brought about by the COVID-19 pandemic, rapid technological developments, geopolitical tensions and climate change. She added that the role of customs was becoming increasingly complex, and that customs officials were being continuously asked to do more in areas ranging from product and food safety standards, climate, deforestation and endangered species to veterinary regulations, fake goods, drug precursors and even labour standards and human rights.
DDG González emphasized that customs practices must be more nimble, innovative and forward-looking to meet the challenges of the 21st century and stay ahead of the curve. While e-commerce provided new export opportunities for small businesses, a wider choice and lower prices for consumers, customs administrations everywhere were being stretched thin by the massive increase in the quantity of e-commerce parcels, she noted.
Macron emphasises technology transfer in fight against vaccine shortages (EURACTIV)
French President Emmanuel Macron proposed pressuring pharmaceutical companies to share their knowledge to fight vaccine shortages worldwide, as an alternative to waiving intellectual property (IP) rights. Speaking before MEPs on Wednesday (19 January), Macron advocated for an increased focus on technology transfer to scale up vaccine production and increase global accessibility.
“Firstly, you have to transfer the technology and create the capacity,” Macron said, adding that technology should be transferred to Africa. The initiative follows a proposal from Ngozi Okonjo-Iweala, director-general of the World Trade Organisation (WTO), and Tedros Adhanom Ghebreyesus, director-general of the World Health Organisation (WHO).
Related News
tralac Daily News
Country news
New vaccine manufacturing facility to elevate healthcare in Africa (SAnews)
President Cyril Ramaphosa says the newly launched vaccine manufacturing facility campus at Brackengate in Cape Town will usher in a new era in healthcare, medicines and vaccines for the African continent. The President was speaking at the new facility - dubbed NantSA - which was launched in collaboration with world renowned technology healthcare scientist, Dr Patrick Soon-Shiong and his company NantWorks LLC.
The facility is aimed mainly at building vaccine manufacturing and pharmaceutical capacity for the African continent – including developing a new COVID-19 vaccine.
Busa asks Mbalula to review regulations preventing road transport of high-cube containers (Engineering News)
Business Unity South Africa (Busa) is requesting Transport Minister Fikile Mbalula to urgently review applicable regulations that make it illegal to transport high-cube shipping containers on South African roads. High-cube containers are the same length (12.19 m) and width (2.44 m) as a standard shipping container, but are 30 cm taller (at 2.89 m), adding 9.7 m3 of internal space when compared to a 66.5 m3 standard container.
5G, integration key to unlocking South African technology value (Engineering News)
Most South African companies, 80%, are adopting digital technologies and 78% plan to invest in fifth generation- (5G-) enabled campus networks. However, 65% of executives perceive tremendous challenges in navigating the network and digital technology integration complexity, extracting return on investment and choosing the right partner ecosystem and platform to provide solutions, the ‘Unfolding the next growth chapter in South Africa’ study shows.
Govt pays off outstanding GC22 bond (The Namibian)
ACCORDING to a report by Simonis Storm Securities (SSS), the Bank of Namibia (BoN) has a local and foreign sinking fund which is used to repay the capital portion of domestic (local and Johannesburg Stock Exchange-listed bonds) and foreign currency-denominated debt, respectively. The local sinking fund has a balance of N$1,88 billion. The sinking fund is mainly funded by incoming Southern African Customs Union (Sacu) receipts.
Zimbabwe: Nickel exports jump 157pc (The Herald)
NICKEL ores and concentrates exports from Zimbabwe grew 157 percent to US$90,7 million in November 2021, as global demand for the mineral surges driven by electric vehicle production. The Zimbabwe National Statistics Agency (Zimstat) said in its latest report, the US$90,7 million constituted 14 percent of Zimbabwe’s exports, which was 65,2 percent better than the US$54,9 million in the prior comparable in 2020. Zimbabwe has previously exported more in a single month after shipments of the commodity totalled US$122 million in February 2021, US$117 million in May and US$113 million in August. Nickel mattes earned the Southern African country US$83 million in November last year, which was however, lower than the US$95,7 million the mineral realised in October.
The country’s exports are usually dominated by gold, tobacco and platinum, which account for vastly more than three quarters of Zimbabwe’s total annual shipments.
Probe illegal duty-free sugar imports, CS Matiang’i urged (The Star, Kenya)
Farmers have urged Interior CS Fred Matiang’i to probe how 28,000 metric tonnes of duty-free sugar was illegally imported in November last year. They said the import caused a Sh1.3 billion loss in the sugar industry because it was over and above the yearly quota and violated a court order. The farmers on Wednesday said the sugar did not come from Uganda as it was initially thought. “While Kenyan farmers lost, neither Ugandan farmers benefited,” sugar campaign for change coordinator Michael Arum said. They said the issue of the Bilateral Trade Agreement on sugar with Uganda is being abused by government officials who pretend to be passionate about it. However, they are the ones facilitating illegal, and substandard sugar from other origins to get into the country.
Drought hits maize supply, prices in Dar (The East African)
Drought and poor harvest have disrupted Tanzania’s supply of maize, pushing up the price of the commodity. According to December 2021 reports by the Ministry of Agriculture, prices for maize grains are fluctuating and are fetching different prices at local markets across the country. The National Bureau of Statistics shows that a 100-kg bag of maize now costs between $23.9 and $39.1, with the northern regions of Arusha, Kilimanjaro, Tanga and Manyara affected.
Tanzania is the largest producer of maize in East Africa. Maize trade is part of bilateral deals between Tanzania and other EAC states, notably Kenya, Burundi and Rwanda, as it is a common staple food for African community members.
FG to spend 0.5% of GDP on tech, innovation – Minister (Daily Trust)
The federal government will spend 0.5 per cent of the country’s Gross Domestic Product (GDP) on science, technology and innovation in order to promote creativity among the youths and create jobs, the Minister of Science, Technology and Innovation, Dr Ogbonnaya Onu, has said. Onu said this at the Consultative Meeting on the provision of a minimum of 0.5% of GDP for Funding Science, Technology and Innovation Sectors in the country in Abuja, on Wednesday.
Ghana removed from list of EU’s high risk money laundering countries (Myjoyonline)
Ghana has been removed from the list of European Union’s high risk third countries with strategic deficiencies in their Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regimes, a statement from the Finance Ministry has revealed. This was after the country had strengthened the effectiveness of its AML/CFT regime by addressing related technical deficiencies including strengthening the legal and regulatory framework to meet the commitments in the Financial Action Task Force (FATF) action plan, with a view of removing strategic deficiencies identified under the Article 9 of 4th Anti-money Laundering Directives. The nation also established legal and regulatory frameworks to meet the commitments in our action plans regarding the strategic deficiencies the FATF had identified.
Ethiopia, Eurasian Economic Union Discuss Plans For Development of Cooperation In 2022 (Walta Information Centre)
Ethiopia and Eurasian Economic Union discuss plans for the development of cooperation in 2022. Ethiopian Ambassador to Russia, Alemayehu Tegenu and Director of the Department of Integration Development of the Eurasian Economic Commission (EEC), Gohar Barseghyan said: “Ethiopia is our traditional trade partner in Africa. The trade turnover between EEU member states and Ethiopia in January – October 2021 increased by 4.7 times compared to the same period in 2020. This is of particular importance in connection with the plans to double the trade turnover with the countries of the continent, which were announced during the Russia-Africa summit in 2019,”
Angola: 2021 Article IV Consultation (IMF)
The impact of the COVID-19 pandemic on the Angolan economy has begun to abate amid higher oil prices and less disruptive containment measures. Non-oil growth has started to recover and is expected to contribute to a broad stabilization of overall output in 2021. Inflation has reached over 25 percent, driven by supply-side factors. Continued fiscal restraint should deliver a substantial overall surplus in 2021, while higher oil prices are supporting a high current account surplus. Angola’s overall growth is projected to turn positive in 2022 and reach around 4 percent in the medium term, bolstered by the implementation of planned growth-enhancing structural reforms.
“Diversifying the economy through continued deep structural reforms is essential for achieving inclusive growth and consolidating economic sustainability. Rapid expansion of non-oil output requires the implementation of ongoing reforms to strengthen governance, improve the business environment, and to promote private investment and trade openness, as well as the development of human capital and infrastructure. The authorities should also promote the conditions for faster development of key economic sectors, such as agriculture, telecommunications, and finance.”
Senegal: 2021 Article IV Consultation (IMF)
A strong economic recovery is underway since mid-2020, driven by industrial production and the services sector, and 2021 growth has been revised upwards from 3 ½ to about 5 percent. The recovery is expected to continue in 2021–22, and growth will receive a temporary boost from oil and gas production starting in 2023.
Staff’s baseline scenario assumes that further COVID-19 waves are likely to occur and that vaccinating a significant share of the eligible population will take at a minimum well into 2022. However, absent new lockdowns, the impact on economic activity is expected to be limited. Furthermore, projections factor in a gradual recovery in global merchandise trade that would support goods’ exports while services, notably travel and tourism, continue to be affected by the pandemic. The onset of oil and gas production in 2023 will boost growth, exports and revenue (MEFP 11-15).
Commerce Holds Cassava Transformation Inception Meeting (The New Dawn Liberia)
The National Standards Laboratory of the Ministry of Commerce and Industry has recently held a one-day inception meeting and workshop of the National Quality Infrastructure (NQI) activities under the Cassava Transformation Project (CASTRAP) in Monrovia. CASTRAP is aimed at enhancing the competitiveness and regional integration of Liberia’s cassava sector through a value chain approach focusing on sustained production, value addition, entrepreneurship, and sustainable markets. The EU-funded project is Liberia’s (national) component of the West Africa Competitiveness Programme (WACOMP) launched on the 28th of October 2021.
African trade news
EAC loses $3.4b to Covid-19 measures as trade declines (The Citizen)
Uganda was the only country in the region to record a trade increase of 4.6 percent in 2020, a year when the average economic growth for the entire East African region declined to as low as 2.3 percent from 5.4 percent in 2019. In general, EAC member states lost $3.36 billion worth of trade in the year when the Covid-19 pandemic spread like bushfire, cutting global trade links and pushing regional and global economies into total lockdowns, according to the latest draft report on EAC Trade and Investment for 2020. The report shows that the total investment in the region declined by almost 46.29 percent in 2020. Overall trade for the six member states — Rwanda, Uganda, Tanzania, Burundi, Kenya and South Sudan — dropped by 6.08 percent to $51.91 billion in the period, from $55.27 billion in 2019.
Women in business urged to penetrate international markets (Chronicle)
WOMEN in business should take advantage of the African Continental Free Trade Area (AfCFTA) to identify and penetrate international markets to grow their businesses. The AfCFTA is a free trade area founded in 2018 and created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations. The free trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organisation on January 1, 1995. Speaking during a meeting with women in production from Matabeleland South Province in Gwanda yesterday, Minister of Women Affairs, Community, Small and Medium Enterprise Development Dr Sithembiso Nyoni said women in business should move away from regional markets such as South Africa and seek international ones.
Tech Start-ups Key to Africa’s Digital Transformation but Urgently Need Investment (WEF)
The World Economic Forum’s latest report, “Attracting Investment and Accelerating Adoption for the Fourth Industrial Revolution in Africa” analyses the challenges Africa faces in joining the global knowledge-based digital economy and presents a set of tangible strategies for the region’s governments to accelerate the transition. The Forum’s report, written in collaboration with Deloitte, comes just weeks after the announcement by Google of a $1 billion investment to support digital transformation across Africa, which centres on laying a new subsea cable between Europe and Africa that will multiply the continent’s digital network capacity by 20, leading to an estimated 1.7 million new jobs by 2025. Africa’s digital economy could contribute nearly $180 billion to the region’s growth by the by mid-decade. Yet with only 39% of the population using the internet, Africa is currently the world’s least connected continent.
‘Dangote Refinery to reduce Africa’s petroleum product imports by 36%’ (The Guardian Nigeria)
The African Petroleum Producers Organisation (APPO) has said that Dangote Oil Refinery would reduce importation of petroleum products production into the continent by as much as 36 per cent. Besides, the organisation expressed confidence that the success of the project could incentivise the rise of similar projects across Africa despite the current focus on energy transition. The Secretary-General, African Petroleum Producers Organisation, Dr. Omar Farouk Ibrahim, said in an interview that the refinery would be supplying over 12 per cent of Africa’s demand when it becomes operational. Ibrahim stated, “To appreciate the impact that the Dangote refinery is going to have on African economies and especially on the supply of petroleum products, and to some extent the conservation of scarce foreign exchange, a look at some statistics on the continent’s petroleum products demand and supply is in order.
AFRICA: Abu Dhabi launches renewable energy financing program (AFRIK 21)
Africa will be able to count on the United Arab Emirates (UAE) for its electrification in the coming years. Abu Dhabi has announced the launch of an initiative to this effect. Called “Etihad 7”, the program aims to finance renewable energy projects on the continent, with two objectives. The aim is to support electrification efforts and, above all, to accompany Africa’s transition to a low-carbon electricity sector. The program, which will run until 2035, is expected to provide access to electricity for 100 million Africans. The United Arab Emirates is thus making a commitment one year ahead of COP 28, which it will host in Dubai in 2023. “With Etihad 7, the UAE is consolidating its efforts in support of Africa in the context of Sustainable Development Goal 7 (SDG7). In line with the UAE’s foreign policy and development goals, the program facilitates sustainable development by addressing key challenges that hinder access to clean and affordable energy in emerging markets,” said Sheikh Shakhbout bin Nahyan Al Nahyan, UAE Minister of State, Minister of Foreign Affairs and International Cooperation.
Africa Energy And Economy Review And Outlook (2021-22): A Time Of Transition To An Uncertain Destination (Seeking Alpha)
Buffeted by a historic recession in 2020, Sub-Saharan Africa’s energy sector and the economy experienced a challenging 2021, exacerbated by COVID-19-related complications. Now the region’s economies are rebounding. And spurred by the global energy transition, governments are decarbonizing across the energy value chain. But the size and scale of these economic and energy transitions, both of which are occurring simultaneously, is unprecedented. Moreover, Omicron - and, perhaps later, other COVID-19 variants - is disrupting progress and clouding the future trajectory of initiatives taken today. With the region beset by a multitude of uncertainties, the only thing clear about what these transitions mean for SSA in 2022 is that there is no clear line of sight ahead. This blog reviews the progress that was made over the course of the past year, and provides an outlook identifying the complexities and questions the region will face in the coming year.
Trade Secretary: UK is Africa’s investment partner of choice for green transition (GOV.UK)
The UK is holding the second Africa Investment Conference today (20 January 2022) to boost economic cooperation with African nations and enhance its role as the continent’s investment partner of choice for greener, climate-friendly projects. Secretary of State for International Trade Anne-Marie Trevelyan is hosting the one-day virtual event which aims to unlock millions of pounds of new investment, especially in clean energy industries in both the UK and across Africa. In a ‘virtual fireside talk’ with WTO Director General Dr Ngozi Okonjo-Iweala, the Trade Secretary will say sustainable trade and investment are crucial for reducing global inequality, improving economies, raising incomes and creating jobs.
International Trade Secretary Anne-Marie Trevelyan said: Two years on from the inaugural UK-Africa Investment Summit, the UK’s ambition to be Africa’s investment partner of choice has never been stronger.
Global economy
WTO report looks into steps taken to boost LDCs’ participation in international trade (WTO)
“Boosting trade opportunities for least-developed countries” reviews the progress made over the past decade to help LDCs further integrate into the global trading system. The volatility of commodity prices over the past ten years and the onset of the COVID-19 crisis caused LDCs’ share of global exports to shrink to 0.91 per cent in 2020, compared with 0.95 per cent in 2011. The global goal of the United Nations aimed at doubling the LDC export share by 2020 is yet to be met. “Increasing LDC participation in global trade is a shared objective of the international community. The WTO offers LDCs a unique opportunity to help shape global trade rules that respond to their trade interests. This report has illustrated the tangible benefits that LDCs working closely with WTO members have achieved over the past ten years. It is important to build on what we have achieved so far and make sure that trade continues to boost economic growth in LDCs and worldwide in the next decade and beyond,” said Director-General Ngozi Okonjo-Iweala.
India to push for TRIPS waiver on Covid drugs at WTO (Economic Times)
India will push for a waiver of certain provisions of the global intellectual property rights agreement for Covid-19 medicines and products at a mini ministerial meeting called by the World Trade Organization to firm up its pandemic response. “The meeting is being held to discuss the WTO response both to the current pandemic and future ones to ensure that multilateral trade rules, including the intellectual property system, support international efforts to combat health crises,” said an official.
Global foreign direct investment rebounded strongly in 2021, but the recovery is highly uneven (UNCTAD)
Global foreign direct investment (FDI) flows showed a strong rebound in 2021, up 77% to an estimated $1.65 trillion, from $929 billion in 2020, surpassing their pre-COVID-19 level, according to UNCTAD’s Investment Trends Monitor published on 19 January. “Recovery of investment flows to developing countries is encouraging, but stagnation of new investment in least developed countries in industries important for productive capacities, and key Sustainable Development Goals (SDG) sectors – such as electricity, food or health – is a major cause for concern,” said UNCTAD Secretary-General Rebeca Grynspan.
World Bank chief contrasts Microsoft deal with poor countries’ debt (Digital Journal)
After Microsoft announced it would spend tens of billions of dollars to buy a video game company, World Bank President David Malpass on Wednesday drew a contrast between the deal and the amount of money rich nations have pledged to help poor countries facing higher debt loads.
A G20 debt service suspension initiative expired at the end of 2021, and this year alone, those countries must pay $35 billion in debt service. “The debt payments are staggering,” and it has become a “compounding” problem, Malpass said.
China is owed 37% of poor countries’ debt payments in 2022: World Bank (Devex)
Of the $35 billion that the world’s 74 lowest-income nations will owe in debt service payments this year, about 37% — or $13.1 billion — is owed to Chinese entities, according to the World Bank. A similar amount, $13.4 billion, is owed to the private sector.
Official bilateral debt to countries other than China accounts for only $8.6 billion, World Bank President David Malpass said Wednesday during an event hosted by the Peterson Institute for International Economics.
New OECD hub to boost transparency on the tax treatment of foreign aid (OECD)
The OECD today launched a new digital hub to improve transparency around the taxation of development aid by presenting approaches taken by participating donor countries to claiming tax exemptions on goods and services funded by official development assistance (ODA). The Tax Treatment of Aid: Digital Transparency Hub compares policies for how ODA is taxed from 12 members of the OECD Development Assistance Committee (DAC), who voluntarily provided details on their tax approaches of foreign aid.
Related News
tralac Daily News
Country news
Port cargo up marginally as trade recovers from Covid woes (Business Daily)
The Port of Mombasa recorded marginal growth in cargo volumes last year as business steadily recovers following the Covid-19 pandemic. During the period, the port registered 34.54 million tonnes against 34.12 million tonnes handled in the same period in 2020, representing a growth of 1.2 percent.
Kenya Ports Authority (KPA) acting managing director John Mwangemi said the positive performance was mainly attributed to a continued recovery from the Covid-19 pandemic period which in 2020 severely impacted global economies. “The pandemic had disrupted the global supply chain reducing international trade that affected many ports in the world. Similarly, the performance is attributable to improved resource planning and efficiency of business processes,” said Mr Mwangemi.
Supply chain hiccups tops business leaders’ worries (Business Daily)
The risk of interruption of doing business tops the list of concerns for Kenyan companies this year, ahead of the Covid-19 pandemic and market volatility which were the biggest concerns last year. Business leaders told global underwriter Allianz that cyberattacks and supply chain disruptions are the most likely threats to smooth running of businesses this year, mirroring similar concerns globally that has seen supply hiccups push up prices of products such as cooking oil and motor vehicles. Allianz said that fears of cyber incidents reflect an increase in ransomware attacks as companies continue to adopt digital systems and remote working.
Financing for Kenyan startups dips (The East African)
Funding for Kenyan startups by international investors declined by $138 million last year amid a fall in the number of deals valued at more than $1 million. Data from American online platform Substack shows that funding for young Kenyan firms fell to $411 million last year from $549 million in 2020, a 25.1 percent drop. This came as the country’s ranking on deals valued over $1 million raised in Africa fell from position one in 2020 to fourth last year.
Egypt eyes more fruit imports from Kenya (Business Daily)
Egypt plans to import more fruits and other food products from Kenya in a move that looks set to reduce the trade imbalance tilted in favour of the North African country.
Business delegations from the two countries Tuesday started a two-day trade forum where new trade deals would be signed.
Kenya mainly sells tobacco, paper and paperboard, fruits and vegetable textile fibres to Egypt, with the value of the overall imports growing 8.67 percent to Sh18.98 billion between 2014 and 2020.
Exports from Egypt include vegetable and animal products, minerals, chemicals, plastics and rubber — jumped 68.13 per cent to Sh42.93 billion over the same period, highlighting a trade partnership that heavily favours the Maghreb economy.
Kenya to up value addition to bridge trade gap with Egypt (The Star, Kenya)
Kenya is banking on agricultural produce value additional to bridge the trade deficit with Egypt. Speaking yesterday at the opening of the Nile Food Africa Trade Initiative in Nairobi, the Kenya National Chambers of Commerce and Industry (KNCCI) chief executive Samuel Mutonda commended Egypt for opening it’s market to Kenyan small traders, especially in the food sub sector.
Last year, the value of Kenya’s exports to Egypt stood at $80million (Sh9.1 billion) compared to $184 million (Sh20.9 billion) worth of imports from the Mediterranean country.
The value of trade between Kenya and Egypt has grown 43.98 per cent to Sh61.91 billion between 2014 and last year, with the latter being the major beneficiary.
Sh144bn coast roads to bolster Kenya-Tanzania trade (Business Daily)
The national government has in the last ten years injected Sh144 billion in the construction of 2,200km of roads at the Coast geared towards boosting trade between Kenya and Tanzania. The finances have been used to build and improve roads in Mombasa, Lamu, Kilifi, Tana River, Taita Taveta and Kwale counties, enhancing trade in the region. Transport Cabinet secretary James Macharia who inspected preliminary construction works for the 40km-long Mtwapa-Kwa Kadzengo-Kilifi road project, said the network will improve transport between Kenya and Tanzania by reducing travel time, vehicle operating cost, decreasing traffic congestion, and improving safety in the urban sections along the project road.
Horticulture sector producers lobby EU over pesticides (Business Daily)
Stakeholders in horticulture sector wants the European Union to agree on alternative pesticides for farming as it moves closer to restrict the use of over 200 chemicals that are used by local farmers. EU wants to implement its “Green Deal” which will see the continent cut over 50 percent of the pesticides that Kenya uses, a move that will impact negatively on the country’s exports to the political and economic union.
Fresh Produce Consortium of Kenya chief executive Okisegere Ojepati says they will be going to Brussels in March to try and convince Europe to relax the rules that require Kenya to ban at least 260 chemicals, failure to which the country’s produce will be restricted from accessing the lucrative market.
Uganda acts to ease border gridlock that triggered fuel crisis (The East African)
Uganda announced Tuesday it was suspending mandatory Covid testing at the border with Kenya after the measure caused huge truck queues, disrupting fuel supplies across the country. The crisis has led to panic-buying and skyrocketing prices at the petrol pump, with one minister warning traders not to take advantage of the shortages to “cheat” Ugandans. Kenyan media reports spoke of traffic snarl-ups snaking as much as 70 kilometres (40 miles) from its border with Uganda because of the delays caused by the coronavirus testing.
He said the move was also aimed at averting a “potential super-spreader” event at the border with so many drivers caught in the logjam.
Tobacco exports earn US$80m (The Herald)
Zimbabwe has exported tobacco worth more than US$80 million as companies selling to the Far East have started moving the crop to South Africa. Last year, global tobacco movements were affected by Covid-19. There has been an increase in the exports with 15 777 tonnes worth US$80 630 152 having been exported by local companies so far compared to 573 tonnes worth US$17 306 655 tonnes traded during the same period last year. The Far-East was the top destination for Zimbabwean tobacco with local companies exporting 190 153 tonnes of worth US$67 496 051.
TIMB spokesperson Ms Chelesani Moyo yesterday confirmed the increase in tobacco exports. “Companies mainly exporting to the Far East have already started moving their tobacco to South Africa for storage in order to secure shipping lines earlier as pending contracts between countries are being finalised.
Government likely to record wide budget deficit in 2022; but business environment better than Nigeria – Fitch Solutions (Myjoyonline)
Government is likely to continue to record wide budget deficits and arrears, particularly in the short term, despite planned reforms to broaden the tax base, Fitch Solutions, research arm of ratings agency Fitch has said. In its Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of the Ghanaian economy for the first quarter this year, the international research firm, however, said the country has better business operating conditions and greater stability than peer economies such as Nigeria or Cameroon. The report said the high public debt levels will continue to weigh on Ghana’s fiscal outlook over the coming years due to underperformance of government revenue.
On strength, Fitch Solutions, said the country has a better business operating conditions and greater stability than peer economies such as Nigeria and Cameroon, and therefore businesses will benefit from the relatively pragmatic government policy programmes implemented in recent years.
Nigeria Is Becoming Self-sufficient In Food Production – Buhari (Leadership)
For President Muhammadu Buhari, the commissioning of rice pyramids in Abuja yesterday is an indication that Nigeria is making steady and assured progress towards self-sufficiency in food production. The federal government is pursuing an agenda of Nigerians consuming what is produced locally to discourage importation, reduce pressure on the naira and grow the economy, an idea that is seen as protectionism by some foreign economists. “The measure will aid our efforts at reducing the price of rice in Nigeria,” Buhari said.
“As a critical policy of the government, the Anchor Borrowers’ Programme is expected to catalyse the agricultural productive base of the nation, which is a major part of our economic plan to uplift the economy, create jobs, reduce reliance on imported food and industrial raw materials, and conserve foreign exchange,” Buhari said.
Prioritise local manufacturers in benchmark policy decision – Prof. Quartey (The Business & Financial Times)
Director of Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Professor Peter Quartey, has called on government to be firm in making a decision on the benchmark policy that will favour and support local manufacturers rather than give advantage to importers.
His comments come after the Ghana Union of Traders Association (GUTA) expressed vehement opposition to the decision of government to reverse the up to 50 percent benchmark value it applied on the importation of some products – which was primarily aimed at reducing the duties importers pay in order to increase the volume of goods that come through the country’s ports.
African trade news
Let’s avoid an AfCFTA own-goal – why Africa must invest in connectivity now (Trade for Development News)
The opportunities provided by the African Continental Free Trade Area (AfCFTA) agreement are well-documented. This single continental market for goods and services would create the largest free trade area in the world by membership, boost intra-African trade and investment, increase productivity and value, and create enormous employment opportunities. If implemented fully, by 2035, AfCFTA would increase intra-African trade by 81% and lift more than 100 million people out of extreme and moderate poverty. According to Afreximbank, despite the formation of regional economic communities (RECs) in Africa intended to facilitate trade, in 2019, several African members traded more with Europe than with each other. That year, only 14.4% of total formal trade in Africa was intra-regional. However, an assessment of regional trade would be incomplete if it excluded informal trade. Though difficult to measure, partial surveys and other accounting activities have estimated Africa’s informal regional trade to meet or exceed formal trade, especially for specific products and countries. Some studies have estimated informal regional trade to range between 30% and 40%. One reason for the proliferation of low regional trade is poor connectivity. Hard and soft infrastructure would improve efficiency, drive down costs, and increase cross-border operations. Accelerating public-private dialogue to resolve these issues must be a top priority to ensure that AfCFTA reaches its full potential.
Window of opportunity to improve small business trade competitiveness across Africa (ITC)
Micro, small and medium-sized enterprises (MSMEs) in low- and middle-income countries suffer from high import and export costs, and uncertain transaction delays caused by limited correspondent bank relations, foreign currency availability and cross-border transaction rail capacity. Until now, payments and documentation need to go from a buyer’s bank through at least two “traded currency” intermediary “correspondent banks” to reach another supplier’s bank. Checks on transactions that take minutes or hours between strong, fully automated economies can take many days and cost a business in a low or middle-income country more than 10% of a transaction’s value. Central banks in these countries tie up millions in precious international currency reserves to settle large and small trade transactions.
With the launch of the Pan-African Payment and Settlement System (PAPSS) on 13 January, Africa shows the developing world and emerging economies how these international transaction challenges can be addressed with a commercially viable modern solution.
‘Agricultural trade will spur AfCFTA’ (The Nation)
The Agricultural commodity trade circle in the country is expected to propel the private sector to take over the African Continental Free Trade Area (AfCFTA), in food and manufacturing, the President, Information Marketing and Management Institute (IMMI), Dr. Ekenechukwu Aloefuna has said. Aloefuna, who spoke at a press conference on Agricultural Commodity Value Chain Expansion project in Abuja, said the reason for the conference is to take the sector to a viable business community synergy engagement that will bring about a full turn around in the entire value chain operation. He said the programme is also geared towards expanding commodity trade through implementation of agricultural research outputs, innovative best practices and multiple channel database, farm mapping, space technology based farm monitoring, farmers reporting, flood and environmental impart mitigation.
5 priorities for Africa in 2022, from vaccines to free trade (WEF)
A failure to restore trust and solidarity will likely result in a divergence in the global economic recovery, partly reflecting inequitable access to vaccines and financing. Africa’s rapid economic and social change will give the continent a bigger role in world global affairs and the global economy. Here are five ways in which the world and Africa can work together to restore trust on solidarity on key priorities for the region’s development.
AFC raises $400m in loan for critical infrastructure in Africa (Trade Arabia)
Africa Finance Corporation, the continent’s leading infrastructure solutions provider, has raised $400 million in a new syndicated loan to support the post-pandemic recovery through critical development of infrastructure. The three-year facility – the first from AFC since 2018 – was increased from an initial target of $300 million as strong interest from investors led to the offering being 2.5 times oversubscribed. The proceeds will facilitate upcoming infrastructure projects that address the continent’s developmental challenges.
The continued rise of investor interest across Africa (ICLG.com)
It was an inauspicious start to 2021, with Covid-induced lockdowns keeping much of the world behind closed doors. Fast forward 12 months and the resurgence of Covid globally would seem to suggest that not much has changed. However, that would be very misleading when considered in the context of the African mergers and acquisitions (M&A) and private equity landscape – the last 12 months have seen a huge resurgence in deal activity, fund raising and overall investor confidence in Africa.
The stand-out sector in terms of investor interest has been the technology sector. For the first time in history 10 African technology companies raised USD 100 million or more in a single funding round, in the process conferring ‘unicorn’ status on an additional five African tech companies.
African energy at point of transition to uncertain destination (Engineering News)
Buffeted by a historic recession in 2020, sub-Saharan Africa’s energy sector and economy experienced a challenging 2021, exacerbated by Covid-19-related complications. Now, the region’s economies are rebounding and, spurred by the global energy transition, governments are decarbonising across the energy value chain, insights provider IHS Markit states in a blog post titled ‘Africa Energy and Economy Review and Outlook (2021-22): A Time of Transition to an Uncertain Destination’.
“With the region beset by a multitude of uncertainties, the only thing clear about what these transitions mean for sub-Saharan Africa in 2022 is that there is no clear line-of-sight ahead,” the authors indicate.
Market of 90m people beckons as DRC launches final stage talks to join EAC (The East African)
The Democratic Republic of Congo has begun penultimate steps to be formally admitted into the East African Community, signalling an additional market of 90 million people for the bloc. In Nairobi on Monday, officials of the bloc launched negotiations with Kinshasa, promising to reach a conclusion before the planned timelines of March this year when the DRC is expected to be rubberstamped by the Community’s Summit as the seventh member. “The EAC Council of Ministers is fully committed to drive this process to a conclusion. We all must jointly work tirelessly towards this venture,” said Adan Mohamed, Kenya’s Cabinet Secretary for East African Affairs and the current chairman of the Council of Ministers for the bloc.
Will EU-AU summit reshape Europe-Africa relations? (African Business)
The sixth summit of European Union (EU) and African Union (AU) heads of state and government aims to “completely overhaul” the EU-Africa relationship, according to its host, President Emmanuel Macron of France. Speaking at a press conference in December, he held out the prospect of “reforging an economic and financial New Deal with Africa”, saying that Europe wanted to “establish a genuine system of peace and prosperity to build investments in African economies and build [a] shared future” at the summit, which takes place in Paris on 17-18 February. But some commentators are less sanguine. The summit risks producing nothing more than “grand declarations of intent” that have little substance, says Carlos Lopes, honorary professor at the Nelson Mandela School of Governance at the University of Cape Town. “The announcements will make an effect but there won’t be any concrete changes that augur a profound change in the relationship,” he told French newspaper Le Monde in January.
Global economy
Air logistics helping to drive economic growth (Bizcommunity)
The rapid change in retail and trade networks caused by the global pandemic has highlighted how logistics – and air logistics in particular – is crucial to the economy.
The first wave of lockdowns brought an urgent need for personal protective equipment such as masks, gloves, gowns, and face shields, as well as sanitising products. Given that minimal stock was held in individual countries, this meant emergency supplies had to be sent across the world as express cargo air freight. These expedited shipments were important to protect citizens in the first wave of the pandemic. Express air logistics is not just about greater speed and convenience, but also fast and efficient cross-border customs clearance – areas where it pays to have experts of specialisation on call.
The Trade Finance Landscape in 2022: Automation and Digitalization (Global Trade Magazine)
Given the rapid pace of digital transformation, it is often surprising to learn how many critical industries and services remain behind the curve, relying on manual processes and large-scale paper documentation. Global supply chain disruption resulting from the COVID-19 pandemic has highlighted that international trade finance is one such industry. International trade finance remains mired in an avalanche of paper, a plethora of conflicting national regulations and processes, and systems that do not communicate well with each other. These burdens, coupled with the industry’s failure to adapt quickly to more modern methods of analyzing credit eligibility, hit medium, small, and microenterprises (MSMEs) particularly hard. As MSMEs account for a large part of total global trade and are the largest employers worldwide, it is far past time for the industry to make changes that provide greater and simpler access.
Related News
tralac Daily News
Country news
Anxious times for South African citrus (Fruitnet)
With the start of the new South African citrus season only two months away, there is still no clarity on the negotiations that are destined to put a new legislation in place regarding citrus black spot (CBS) and false codling moth (CDM). The text needs to be advanced before the end of January when the EU is expected to discuss the details of the new agreement. If there is consensus, the new legislation will come into effect on 1 May this year. South African sources said they wanted to prevent unilateral decisions in the EU that would mean the new agreement would not be effective in mitigating the perceived risks among EU producers.
How Kenya will benefit from global cross-border tax deal (Business Daily)
Countries across the globe are signing up for The Organisation for Economic Co-operation and Development (OECD) initiative that requires tax authorities of participating countries to automatically exchange tax-related information on financial assets held in foreign countries. The initiative is dubbed Common Reporting Standards (CRS). Accessibility of such tax information is a valuable tool that authorities around the world are using to curb cross-border tax evasion. Kenya has not been left behind. The passage of 2021 Finance Act saw Kenya bring forth a raft of initiatives aimed at launching tax information exchange with other CRS participating jurisdictions.
Money circulation hits Sh238bn on recovery (Business Daily)
Cash circulating outside the banking system rose by Sh2.8 billion to Sh238.6 billion last November, a month after the night curfew was lifted, bringing the night economy back to life after 19 months of restrictions. The latest data published by the Central Bank of Kenya (CBK) shows that the metric, which is a blunt measure of the economic health of a country, rose to a four-month high from Sh235.8 billion in October. Improved consumption brought by increased income as a result of new hirings and easing of restrictions aimed at combating the Covid-19 pandemic has been critical in helping the economy recover, increasing disposable income of the population
KRA says unequal treatment of car importers lawful (Business Daily)
The taxman has dismissed a claim by a section of car importers that its demand for registration of imported used motor vehicles before entry at the point of clearance amounts to discrimination. In its submissions to a petition by the Car Importers Association of Kenya (Ciak), the Kenya Revenue Authority (KRA) says unequal treatment between the association members and franchise importers is lawful. Ciak is challenging a requirement that compels its members to have their vehicles assigned registration number plates at the point of clearance as opposed to when selling to a buyer. The association says that franchise importers ship in their new motor vehicles under the warehousing regime while Ciak members import under home use hence the difference.
“The East Africa Community Customs Management Act provide that subject to any regulations, goods liable to import duty may upon first importation be warehoused without payment of duty in a government or bonded warehouse,” KRA said.
Truckers blame slow Covid-19 testing for Malaba traffic (The East African)
Long distance truck drivers along the northern corridor highway have blamed the slow Covid-19 testing at the Kenya-Uganda border in Malaba for the snarl-up. Truck traffic is currently stretching about 130km from Malaba in Busia County to Lwandeti in Kakamega County, Kenya. The traffic jam has persisted despite last week’s decision by the Ugandan government to suspend a $30 Covid-19 testing fee.
Tanzania debt grows by $5b in 12 months (The East African)
Tanzania’s national debt stood at $36.08 billion by the end of November last year, up $5.34 billion year-on-year from November 2020, according to latest figures published by the central bank. External debt closed at $27.95 billion, a $215.8 million drop from October which the Bank of Tanzania attributed to debt servicing payments outweighing disbursements during the month. But the debt was still higher by $4.12 billion compared with November 2020.
Tanzania and Burundi sign railway deal (The East African)
Tanzania on Sunday signed a multimillion-dollar deal with neighbouring Burundi to build a Standard Gauge Railway (SGR) linking Gitega to the Indian Ocean. The planned 282 kilometre SGR railway line will run from Uvinza in Tanzania’s Kigoma region to Gitega in Burundi. Without revealing how much the project would cost, Mwigulu said the two countries have agreed to jointly finance the project.
Towards a new research and innovation policy in Lesotho (ACP)
Two reports produced following the six-month mission led by high-level international experts under the OACPS Research and Innovation (R&I) Programme’s Policy Support Facility (PSF) are expected to assist the Kingdom of Lesotho to develop a new and efficient R&I Policy. The Country Background Report and the Policy Recommendation Report will contribute to boosting the national R&I system for better impact on society and sustainable development.
Uganda’s 2022 economic outlook (The Independent Uganda)
Uganda’s economy underperformed in 2020 as coronavirus pandemic lockdown took toll on economic activities. The economy is projected to grow by 3.5-3.8% in the FY2021/22 and 5.5-6.0% in FY2022/23, before increasing to 6.5-7.5% in the medium-term (2 to 3-years ahead), according to the Bank of Uganda, driven by the ongoing vaccinations and easing of restrictions. However, the economy still faces numerous challenges ahead. Import growth is expected to outpace exports due to recovery in import-intensive household consumption and private investment. As a result, the contribution of net exports to GDP growth will be negative for an extended period.
Nigerian Tech Entrepreneur Appointed to Lead UK-Africa Trade Ties (This Day)
A Nigerian tech entrepreneur, Joel Popoola, has been appointed to head the task force to improve trading ties between Africa and the United Kingdom. Popoola, a digital democracy campaigner and the creator of the Rate Your Leader app, is to lead a Special Interest Group for Africa established by the UK Institute of Directors (IoD)-one of the world’s oldest and most prestigious business leader groups. According to him, the IoD Africa SIG will stimulate business opportunities, increase networking, and grow awareness of British businesses in Africa and African businesses in Britain.
The IoD Africa SIG will be launched in London on May 19, 2022, with all African diplomatic missions and some heads of state expected to attend. In a statement, he stated that prior to the launch, serious bi-monthly online roundtables would be held to discuss post-COVID-19 and Brexit business opportunities for UK and African businesses.
The UK Government has already negotiated eight free trade agreements with African countries and trading blocs since Brexit, creating tariff and duty-free trade between Britain and 30 African nations-this means significant opportunities for African consumers and companies, not least in 24 English speaking countries.
Engage industry players for steady development - AGI urges government (GhanaWeb)
The Association of Ghana Industries (AGI) has advised government to engage industry players for accelerated national development for the ultimate betterment of the country. “Industry creates jobs, generates revenue, and sustains economic advancement, adding that, in every rank, both great and small, it is the industry that supports us all,” Dr. Humphrey Kwesi Ayim Darke, AGI President stated at the investiture of new President and National Council of the Association.
Comoros discusses accession, post-accession technical assistance with development partners (WTO)
Mr Chanfiou confirmed Comoros’ high-level political support for WTO accession that was also expressed in the bilateral meeting between Comoros President Azali Assoumani and WTO Director-General Ngozi Okonjo-Iweala on the margins of COP26. He considered accession to the WTO in 2022 to be a realistic possibility, especially in view of the positive progress made in the bilateral negotiations. He also highlighted the importance of technical assistance to support the implementation of Comoros’ economic development plan. This would allow Comoros, a least developed country (LDC), to fully benefit from international trade as part of its WTO accession. He noted that many sectors of the economy, including tourism, food and construction, had been adversely impacted by the COVID-19 pandemic.
African trade
TZ hands over AfCFTA ratification instruments (Dailynews)
Tanzania has officially submitted the instruments of its ratification of the African Continental Free Trade Area (AfCFTA) agreement to the African Union Commission (AUC).
The instruments of ratification was presented by the Ambassador of Tanzania in Ethiopia, Innocent Shiyo, who is also the country’s Permanent Representative to the African Union.
He revealed that the opportunity also acts as a crucial catalyst for economic growth and trade between member states (intra-African trade) by promoting African participation in world trade and building its capacity to add value to products through sound technological, innovative and competitive policies.
One year after AfCFTA: Stakeholder engagement key to success of agreement – GUTA (BusinessGhana)
A year into the implementation of the African Continental Free Trade Area Agreement (AfCFTA), the Ghana Union of Traders Associations (GUTA) wants more stakeholder engagement to ensure success. The President of the Ghana Union of Traders Associations (GUTA), Dr Joseph Obeng, says a lot more effort will be required to ensure the agreement lives up to expectations. “I must say people did not take full advantage of this AfCFTA and the evidence is there for everyone to see. So, I think the earlier we sit down and discuss it the better. I believe that they (the AfCFTA Secretariat) will have to engage with the proper stakeholders than maybe the technocrats, because we are the traders, and they should talk to us.” “They should find a way to bring all traders in Africa for us to tell them what is militating against the success of the continental free trade,” he added.
Pan-African Payment and Settlement System Launched by President Akufo-Addo Foreseeing $5 billion Annual Savings for Africa (Afreximbank)
Ghana President H.E Nana Addo Dankwa Akufo-Addo, represented by the Vice President H.E Dr. Mahamudu Bawumia today in Accra, hosted and presided over the commercial launch of the Pan-African Payment and Settlement System (PAPSS), observing that the ground-breaking platform will save Africa more than US$5 billion annually in payment transaction costs, while it plays an increasingly significant role in accelerating the continent’s transactions underpinning the operationalisation of the AfCFTA.
Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, said in his remarks: “We are eager to build upon the African Continental Free Trade Area’s creation of a single market throughout Africa, and PAPSS provides the state-of-the-art financial market infrastructure connecting African markets to each other thereby enabling instant cross-border payments in respective local African currencies for cross-border trade. Afreximbank as the main Settlement Agent for PAPSS, provides settlement guarantees on the payment system and overdraft facilities to all settlement agents, in partnership with Africa’s participating Central Banks. PAPSS will effectively eliminate Africa’s financial borders, formalise and integrate Africa’s payment systems, and play a major role in facilitating and accelerating the huge AfCFTA-induced growth curve in intra-African trade.”
AfCFTA is an attractive venture for American investors – Stephanie Sulivan (GhanaWeb)
U.S Ambassador to Ghana, Stephanie Sullivan, has said there is the need for Ghanaian businesses to see the AfCFTA as a game-changer for them to expand their business to better their livelihood. Speaking at the opening of a new office for American Chamber of Commerce (AmCham), Stephanie Sulivan added that the AfCFTA (African Continental Free Trade Area) agreement could make Ghana the gateway to trade and investment in Africa. According to the ambassador, Ghana being the host of AfCFTA secretariat together with its growing middle class and stable political environment was attracting more American investors looking for opportunities in Africa. “The AfCFTA has the potential to be a game-changer, not only for doing business across the continent but also for how the rest of the world thinks of Africa. It can truly make Ghana a gateway for the African market. U.S. companies already see the opportunity,” Ambassador Sullivan was quoted by thebftonline.
AfCFTA: How feasible is Nigeria’s plan to become Africa’s manufacturing hub? (Nairametrics)
The African Continental Free Trade Area got a major boost last week, as the much anticipated Pan-African Payments and Settlement System (PAPSS) was officially launched in Accra, Ghana. According to PAPSS will enable a customer in one African country to pay in their own currency, while a seller in another country receives payment in their own currency.
Also last week, Nigeria’s Trade Minister, Niyi Adebayo, hinted that the FG will focus on improving access to power and infrastructure for manufacturers to improve Nigeria’s manufacturing capacity in Africa. He said, “With regards to power, we are aware that there is a power problem, so however, based on that, what we are doing is creating special economic zones and special industrial parks.”
‘Customs Partners Border Communities To Leverage Intra Africa Trade’ (Leadership)
How would you review the activities of Customs at the Ogun 1 Command in 2021, a year where smuggling seemed to characterise the border region? The fact remains that the borders are closed. So, the main work we do here for now is to enforce the anti-smuggling laws of the federation to ensure that there is no abuse of the law against border closure. Having said that, we are not expected to declare bumper revenue for close to two years.
Despite the border closure, we discovered that we still have over 25 checkpoints comprising Customs and other security agencies on the roads. Does this mean that smuggling still thrives? I answered that question with my assertion earlier that the activities at this border isn’t all about rice and fuel smuggling. It’s also not just about trading also. There are other issues like cross border crime. We used to have issues of people coming in from the border to snatch cars and take them out of the country.
Nevertheless, the fact that the borders are closed doesn’t mean that security operatives should go home. It’s not like we put a padlock at the border. Even after putting a padlock on your gate, you hire a security man to watch the gate.
FedEx says air freight an important part of AfCFTA, Africa’s economic growth (Engineering News)
The rapid change in retail and trade networks caused by the global pandemic has highlighted how logistics, and air logistics in particular, is crucial to the economy. Air express also has a role to play in helping drive economic growth in Africa, says logistics and courier services company FedEx Express sub-Saharan Africa Operations MD Natasha Parmanand.
How Union Systems is redefining the future of Africa’s trade finance technology (TechCabal)
The African Development Bank (AFDB) estimates that transactions in Africa’s trade finance — the sector concerned with international trade and commerce between indigenous and international organizations—reach $1.1 trillion yearly. The African trade finance sector, despite its potential, has been hampered largely due to the persistent reliance on manual processes. But digitization, led by indigenous solution providers, is slowly changing the dynamics. Trade finance technology ensures the smooth facilitation of international trade business operations. Over time, stakeholders in the African trade finance sector have relied on software solutions developed by international tech companies to automate their operations. However, these software applications are often one-size-fits-all built for global markets and do not take cognizant of the peculiarities in African countries. This reality creates a roadblock for the growth of Africa’s trade finance. To address this, indigenous technology solution companies like Union Systems Limited (USL) have begun to redefine the African trade finance sector by developing and deploying indigenous tech solutions that consider local requirements and optimize processes end-to-end.
DRC reaffirms Her willingness to join East African Community (EAC)
The Democratic Republic of Congo (DRC) has reaffirmed her willingness to join the East African Community. The Minister said that DRC has a big population who are consumers that constitute a big market for the EAC, adding that DRC was also in dire need of investors and was therefore offering incentives for entrepreneurs who would like to invest in the country.
The Minister disclosed that DRC had embarked on a national programme of reconstruction in various sectors including infrastructure, agriculture, energy and environmental conservation. He said that DRC had the world’s second largest natural ecosystem in the Congo Forest and was keen on preserving this system from wanton destruction to mitigate the effects of climate change.
EABC calls for review of region’s rules of origin (The East African)
East Africa’s private sector wants a review of the region’s rules of origin in order to maximise its gains from the implementation of the Africa continental free trade area. Traders, under the East African Business Council (EABC), say that the existing rules, which have not been reviewed since 2015, have denied a number of products duty-free access to the EAC markets. The current rules of origin deny edible oil, cement and newly introduced fruits duty-free access, among other products. The EAC rules of origin set the criteria to distinguish between goods that are produced within the EAC Customs territory and are eligible for community preferential tariff treatment, and those produced outside the bloc, which attract import duties specified in the Common External Tariff (CET).”The EAC rules of origin were updated up to 2015 and that is what is being used by all customs unions. Based on the fact that they should be reviewed every five years, the current ones are overdue for review,” said John Bosco Kalisa, the chief executive of EABC, which is the apex body of private sector associations and corporates from the six EAC members.
Regional Trade Facilitation Project Supporting Small-Scale Traders Closes (COMESA)
The Great Lakes Trade Facilitation Project (GLTFP) launched five-years ago to deepen small-scale cross-border trade in Burundi, the Democratic Republic of Congo, Rwanda and Uganda with a special focus on women and young people has closed on a high note and paved the way for increased intra-trade in the region. Financially backed by the World Bank, the GLTFP was launched in 2016 with USD$26 million meant to help increase the capacity for commerce and reduce the costs faced by traders, especially small-scale and women traders, at targeted locations in the borderlands.
eNaira casts a dark cloud over West Africa’s single currency, Eco (Nairametrics)
The launch of Africa’s first digital currency, eNaira, has cast some doubt of hope on West Africa’s single currency. According to the Economic Community of West African States, the introduction of the Eco, a new currency for the entire area, would help remove trade and monetary barriers, promote economic activity, and enhance living standards in the community of 385 million people (ECOWAS). In West Africa’s 15 countries, seven currencies are now in use, with CFA francs being used by eight largely French-speaking countries.
African countries are stuck on the free movement of people. How to break the logjam (The Conversation)
Most African countries signed onto the Free Movement of Persons protocol in Addis Ababa in January 2018. Its rationale was set out clearly: the free movement of people – as well as capital goods and services – would promote integration and herald in a host of other benefits. These included improving science, technology, education, research and fostering tourism. In addition, it would facilitate inter-African trade and investment, increase remittances within the continent, promote the mobility of labour, create employment and improve the standards of living.
And yet, four years after its ratification, only a handful of relatively small African states have fully ratified the Free Persons protocol. Over 30 countries signed the protocol in January 2018. But only Rwanda, Niger, São Tomé and Principe, and Mali have fully ratified it.
Border Profiling Survey Planned to Enhance Collection of Data (COMESA)
The COMESA Secretariat through the Statistics Unit is planning to conduct a Border Profiling Survey which is expected to add value to the understanding of the border trading environment as it affects small-scale cross-border traders. The survey Is planned for the first quarter of 2022. To kickstart the process, a draft questionnaire suited to borders such as Nakonde between Zambia and Tanzania and Kasumbalesa between Zambia and the Democratic Republic of Congo (DRC) has been developed and discussed with the Zambia Statistics Agency. A report from the Statistics Unit states that the Chief Statistician at COMESA Secretariat Mr. Themba Munalula recently led a team on a scoping mission for the profiling survey to selected borders in Zambia.
Comair leveraging Google Cloud to provide seamless travel experiences in sub-Saharan Africa (Engineering News)
Cloud technology and services provider Google Cloud and sub-Saharan African airline Comair are collaborating to accelerate the aviation group’s digital transformation plans in line with its mission to deliver seamless travel experiences for customers and help the travel industry regain momentum. Comair, which operates the British Airways brand and the Kulula budget carrier in sub-Saharan Africa, completed its infrastructure optimisation plans as it migrated six labour-intensive, on-premise data centres to Google Cloud.
Governments, Businesses to converge in Abidjan for Intra-African Trade Fair (NewsGhana)
Entrepreneurs, financiers, business leaders, governments and regulators will converge in Abidjan, Côte d’Ivoire for the Intra-African Trade Fair in 2023 (IATF2023) to deliberate on ways to boost trade and investment on the African continent. Organised by the African Export-Import Bank (Afreximbank) in collaboration with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat, the third edition of the fair is expected to build on the successes of the 2021 fair held in Durban, South Africa.
Africa is not a country: One size does not fit all in the fight for gender equality (Daily Maverick)
The concept of “gender equality” is sometimes thought of as a fait accompli, at least in the western world. Angela Merkel as the former chancellor of Germany and Halimah Yacob as President of Singapore are just two examples of women leading some of the richest nations; internationally, women outnumber men in university completion and three quarters of white employees consider themselves as allies to women of colour in the Global North. In developing countries in the Global South, however, former president of Liberia Ellen Johnson Sirleaf is very much the exception in Africa as a female leader, and the picture of everyday life for girls and women is markedly different from those living in the Global North.
The Natural Gas Value Chain: Potential for National Economies (AfDB)
This report contains an analysis of gas sector value chains and downstream policy tradeoffs. It is intended to enhance the capacity of regional member countries to strike a balance between maximising revenue from production of natural resources, and integrating them into national economies through downstream processing. Achieving this balance will advance the African Development Bank’s drive to industrialise Africa. Increasing downstream processing capacity presents a significant challenge for both the private sector and government. The report recommends that policymakers assess both barriers and economic benefits associated with downstream processing in order to make informed policy choices.
EU Green Deal: A double-edged sword for Africa (TRT World)
While the EU green transition attaches great importance to the African continent, what the future holds for African countries under this deal is the main question. When the European Commission introduced a set of goals to tackle climate change and environmental degradation, it opened up a path for economic recovery for African nations as well. The EU policy, part of the broader European Green Deal (EGD), looks at ways to address issues related to climate, energy, transportation and taxation to reduce net greenhouse gas emissions by at least 55 percent by 2030. The strategy is aimed as a multifaceted map for international climate policy, prominently including boosting and finding economic opportunities following the energy transition.
Opportunities and challenges of exporting East African avocados to Europe (CBI)
The European market for avocados continues to grow, and so does global production. Latin America dominates the supply to Europe with increasing exports. But Africa is following a similar trend. What are the opportunities and challenges for emerging suppliers in Africa? Latin America is the biggest avocado supplier to Europe. After years of strong growth, they supply almost 75% of total European imports, valued at 2.15 billion euros. Africa has grown at a similar rate, if not faster. The main suppliers to Europe are South Africa, Kenya and Morocco. Kenya leads the supply from East Africa. This region exported 148 million euros worth of avocados to Europe in 2020.
China, Africa push toward next stage (China Daily)
China and Africa are poised to build on the gains resulting from economic cooperation, with a shift to high-quality development on the way despite the disruptions caused by the pandemic, a forum has heard. Yu Zirong, vice-president of the Chinese Academy of International Trade and Economic Cooperation, or CAITEC, part of the Ministry of Commerce, said that while the pandemic has brought difficulties for the world economy, the steady growth in ties between China and Africa “fully demonstrates the complementarities and resilience of China-Africa economic and trade cooperation, and Chinese enterprises’ confidence in Africa’s future development prospects”.
China has been Africa’s largest trading partner for 12 consecutive years. From January to September last year, bilateral trade recovered rapidly from the pandemic, reaching $185.2 billion, a jump of 38.2 percent year-on-year and a record for the nine-month period, Yu said.
Horn of Africa: Swift aid for drought-affected farmers and herders needed to avoid a hunger crisis (FAO)
Over $138 million in urgent funding is needed to assist 1.5 million vulnerable people in rural communities in the Horn of Africa whose fields and pastures have been hard hit by an extended drought, the Food and Agriculture Organization of the United Nations (FAO) said today, as it released a comprehensive response plan calling for a range support for agriculture in the region. In a region already prone to food insecurity associated with weather extremes, natural resource limitations and conflict, the COVID-19 pandemic and 2020-21 locust invasion have stretched the coping capacities of rural communities to the limit, undermining agricultural productivity.
Global economy
Business applauds G7 Digital Trade Principles on free flow of data with trust (ICC)
“To harness the opportunities of the digital economy and support the trade of goods and services, data should be able to flow freely across borders with trust, including the trust of individuals and businesses,” opens the Data free flow with trust chapter of the Digital Trade Principles agreed by the G7 countries at the G7 Trade Track on 22 October 2021. We strongly support this sentiment and the clear call to action for governments to work together to “address unjustified obstacles to cross-border data flows, while continuing to address privacy, data protection, the protection of intellectual property rights, and security”.
Decisions and Resolutions of the 113th Session of the OACPS Council of Ministers (ACP)
The 113th Session of the Council of Ministers of the Organisation of African, Caribbean and Pacific States (OACPS) was held on 30 November to 2 December 2021. The Session was chaired by the Hon. Mr. Tete António, Minister for Foreign Affairs of the Republic of Angola and President-in-Office of the OACPS Council of Ministers. At the meeting, the ministers and their representatives approved twelve decisions and three resolutions.
Trade issues: World Trade Organization Ministerial Conference, Economic Partnership Agreements, Intra-ACP Trade and UNCTAD Quadrennial Ministerial Conference Commodities and Value Chains European Union (EU) list of non-cooperative tax jurisdictions and high-risk third countries with strategic deficiencies in anti-money laundering and countering the financing of terrorism (AML/CFT) Arrangements.
COVID means labour market recovery still ‘slow and uncertain’ (UN News)
In its flagship World Employment and Social Outlook Trends 2022 (WESO Trends), ILO has downgraded its 2022 labour market recovery forecast, projecting a continuing major deficit in the number of working hours compared to the pre-pandemic era. “Two years into this crisis, the outlook remains fragile and the path to recovery is slow and uncertain”, said ILO Director-General Guy Ryder.
How Some Developing Nations are Leading the Charge in Tech Innovations (Devdiscourse)
When you think of tech innovations around the world, you think of global superpowers such as America and China creating the newest and highest quality technology for people around the world. While there is certainly some truth to that, it is often forgotten how many developing nations provide for the tech world. From iGaming innovations to other ways of changing the world, the hottest tech is coming from all corners of the planet. The scale of the gambling industry can be seen by the vast amount of sites offering slot games and other gambling services. However, trends and attitudes around the world towards igaming are certainly still mixed. Many developing countries are embracing gambling as a way to make revenue, and Turkey is a prime example of a developing nation that has done this. Esports and e-gaming have become a massive market in the country, and according to research from 42Matters, Turkish game publishers have an average of more than 796,650 downloads, despite only making up about 2% of the overall market. This is higher than the download average of all mobile games at only 483,320. Furthermore, Turkish publishers use a higher percentage of ads and in-app payments to increase their revenue. As mobile internet becomes more widespread across the globe, trends like this will continue, where the share could well be better spread across the globe.
As research in February from The United Nations Conference on Trade and Development (UNCTAD) showed, there are a few developing nations that are showing stronger capabilities to use and adapt what they call “frontier technologies” than their per capita GDPs would suggest, according to an index of 158 countries in UNCTAD’s Technology and Innovation Report 2021.
Tech in 2022: Where next after pandemic unicorn boom? (African Business Magazine)
Investment flows into Africa’s tech ecosystem have risen dramatically over the past few years. In 2020, African startups raised a record $2.4bn, a figure that more than doubled in 2021 to $4.9bn, according to data collected by Briter Bridges. Clearly appetite for investment in African tech did not diminish throughout the pandemic. In fact, many business models were turbo-charged by Covid-19 as digital platforms quickly became an easy way to offer services in the context of widespread lockdowns and social distancing. The boon for tech companies was reflected in the number of firms to reach the $1bn valuation mark – to become unicorns during the pandemic.
Fashion is an industry capable of fundamental economic transformation for Africa (How we made it in Africa)
As the second largest sector in the developing world after agriculture, the fashion, textile and clothing industry has the potential to transform lives, particularly for women and youth. Global value chains are integral to inclusive growth across the world, and a clear indicator of economic transformation. In Africa, despite this potential, challenges remain. The majority of fashion businesses across the continent are informal, with limited access to finance for growth and high costs of shipping and transportation of raw materials. But though there remains work to be done in strengthening the value chain of the African fashion industry, the rapidly rising awareness and recognition of our extraordinary creative talent on the global stage is something to be celebrated and nurtured.
Related News
tralac Daily News
Country news
South African economy likely to revert to pre-pandemic levels in 2022: World Bank (Financial Express)
South Africa’s economy is likely to grow by 2.1 per cent in 2022, reverting to where it was before the COVID-19 pandemic began in 2020, the World Bank has forecast, but warned that constraints on long-term growth, large-scale unemployment and inequalities still persisted. “Growth in South Africa is forecast to revert to its pre-pandemic trend, with the economy projected to grow by 2.1 per cent in 2022 and 1.5 per cent in 2023,” the Global Economic Prospects report, which was released on Wednesday said, citing improved control over virus outbreaks along with more widespread vaccinations as the main reasons for the improved projection.
Govt stifles tech development, trade through misplaced assessment framework, say agribusinesses (Engineering News)
Agricultural organisations the Agricultural Business Chamber (Agbiz), CropLife South Africa and the South African National Seed Organisation (Sansor) say government is stifling the development of new breeding technologies (NBTs) by deciding to evaluate them under the risk assessment framework for genetically modified organisms (GMOs). The Department of Agriculture, Land Reform and Rural Development in October last year announced that a diverse and evolving group of products derived from NBTs would be evaluated according to the GMO Act. This decision, the organisations say, will have widespread implications in South Africa and on South African innovators, as well as for trade of commodities that may contain products derived from NBTs.
SA will continue with energy mix plans (SAnews)
Mineral Resources and Energy Minister Gwede Mantashe says the country will continue to pursue an energy mix while balancing the country’s low carbon emissions commitments.
“We will continue to pursue an energy mix to ensure security of energy and supply, cognisant of our international commitments to respond to climate change. We will continue to invest in clean energy technologies toward net zero emissions. We will do this through our ambitious energy procurement programmes facilitated by the Independent Power Producer Office (IPPO), which recognised globally for its pioneering excellence. “Our country relies on about 75 percent of coal for electricity generation…we cannot, overnight, shut down coal generation,” he said.
Lemon juice dumping: South Africa could face tariffs after US accusation (Fresh Fruit Portal)
Makers of lemon juice in South Africa may be slapped with anti-dumping duties by the US, if a petition against them succeeds next month. On Dec. 30, a US citrus juice maker, Ventura Coastal, filed a petition with the United States International Trade Commission, requesting that the US government impose anti-dumping duties on lemon juice from South Africa and Brazil, Business Insider reports. It alleges that lemon juice from South Africa and Brazil is sold at less than fair value in the US. Should the petition succeed and anti-dumping tariffs be imposed, South Africa’s juice processors will be left with a lemon juice glut, Andre Swart, managing director of Venco Fruit, told the Business Insider South Africa on Monday.
Kenya’s passport eighth most powerful in Africa (Business Daily)
Kenya’s passport is now the eighth most powerful in Africa and 71 globally after its mobility score improved six places in the latest ranking. The Henley Passport Index Report released on Monday shows that the number of countries that Kenyans can visit without a visa, or obtain it on arrival has increased to 72 from 64 in January last year. The mobility score measures the number of countries that a person holding Kenya’s passport can visit without having a visa or the nations where they can get a visa on arrival.
Kenyan textile firm opens Sh5.7bn plant in Zanzibar (Business Daily)
Kenya’s firm Basra Textiles Ltd is setting up a Sh5.7 billion ($51.3 million) factory in Zanzibar as it targets to get a pie of the regions clothes market. It is hoped that the factory, which was launched by President Samia Suluhu Hassan this week, will give a new impetus to Tanzania’s textile industry, which has the potential to become a significant sourcing location for foreign buyers. With the factory at Chunguni area in Zanzibar, Basra Textiles is targeting export markets across East and Central Africa, its company chief executive officer, Ahmed Othman, said on Tuesday.
The global textile industry was estimated at around $920 billion in 2018, and it was projected to reach approximately $1,230 billion by 2024, available global data show.
Imports of goods, services shoot up – BoT (Dailynews)
Import of goods and services increased to 11,251.5 million US dollars in the year ending November 2021, from 9,268.6 million US dollars during a similar period in 2020. According to the Bank of Tanzania (BoT) monthly economic review for November, the increase was observed in all import categories, with a significant rise in oil, industrial raw materials and transport equipment. During the period, oil imports increased by 44.9 per cent to 1,938.8 million US dollars on account of both price and volume. Service payments increased to 1,573.2 million US dollars from 1,349.8 million US dollars in the year to November 2020, much of the increase stemming from freight payments consistent with a surge in import bills.
Rwanda: 2021 Article IV Consultation and Fifth Review Under the Policy Coordination Instrument (IMF)
Rwanda’s medium-term outlook is positive, supported by the authorities’ large policy package to respond to the evolving COVID-19 pandemic and their continued commitment to the PCI in a challenging environment. Economic recovery is underway with easing of restrictions supported by faster vaccination rates since July. GDP growth is projected at 10.2 percent in 2021 and inflation remained subdued. But Rwanda’s remarkable economic and social progress over the last two decades faces a significant setback, with poverty, unemployment, and gender inequalities on the rise. These pandemic scars, if not addressed, risk reversing hard-won economic and social gains. With a large share of the population still unvaccinated and the emergence of new variants, risks to the outlook remain elevated.
Take advantage of internal resources to boost oil industry – Dr. Sulemana (GhanaWeb)
Energy expert, Dr. Yusif Sulemana, has said Ghana should focus on taking advantage of internal resources stating that hydrocarbon investments will not be attractive to foreign market and investors in the future. According to him, Ghana’s oil sector investments will suffer losses if internal resources because oil firms will no longer be interested in hydrocarbon investments which will hike the cost of energy. “The narrative will not change, there will be some headwinds. The headwinds are that we will continuously have constrained investments into the world of hydrocarbons. As long as we have constrained investments into hydrocarbons, the cost of energy will continue to rise and that’s a fact.
Govt plans $500m investment in technology for youths (The Nation)
To encourage creativity among youths, the Federal Government, in partnership with some international organisations, is mobilising $500 million for investment in technology and creativity. This was made known yesterday by Vice President Yemi Osinbajo (SAN). It was at the 2021 National Gold Award Presentation, organised by the International Award for Young People (IAYP) at the State House in Abuja. Describing the youth as Nigeria’s most valued assets, Osinbajo said the Federal Government valued their contributions to national development, adding that the Muhammadu Buhari administration is doing everything to encourage their creativity.
Improving the state of conditions in the manufacturing sector (Nairametrics)
A recent report states that the federal government has assured manufacturers of its relentless efforts at improving the state of conditions in the country’s manufacturing sector. According to the report, all hands are on deck to resolve the foreign exchange scarcity, the chief amongst issues faced by manufacturers, particularly for the importation of machinery.
Morocco settles trade dispute with Egypt (The North Africa Post)
Morocco has resolved a trade dispute with Egypt that was sparked in March last year after Cairo denied entry to vehicles made in the Tangier factory. Egyptian authorities have denied entry to some 300 cars made in the Renault factory in Tangier, claiming these were not included under the free trade deal because they were made in the free zone in Tangier instead of the Casablanca factory.
Morocco however is set to review a list of products that will not be included in the free trade agreements with Tunisia and Egypt including textile and reinforcing bars in a bid to curb its trade deficit.
ITCEQ proposes its recommendations for effective industrial policy in Tunisia: Report (TAP)
The instruments of an effective industrial policy for Tunisia are based on the variables controlled by public authorities to allow essentially, to act on the costs of companies and on the sectoral structures, underlines the Tunisian Institute of Competitiveness and Quantitative Studies (ITCEQ) in its report: “For a renewal of the industrial policy in Tunisia: requirements of the competitive positioning”
“These forms of intervention can take several forms. They can be direct or indirect measures. Nevertheless, there are variables whose qualification is not easy”, according to this document which has just been published on the website of the institute.
African trade
PAPSS officially launched to aid payment transaction across Africa (Nairametrics)
The much anticipated Pan-African Payments and Settlement System (PAPSS) was officially launched in Accra, Ghana, on Thursday, January 13, in a virtual event titled “Connecting Payments, Accelerating Africa’s Trade.” The new approach allows a customer in one African country to pay in their own currency, while a seller in another country receives payment in their own currency. After a successful pilot in the West African Monetary Zone (WAMZ), the payment system was launched commercially. Gambia, Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone make up the WAMZ, a West African economic and integration organization.
With PAPSS, Africa has demonstrated to the developing world and emerging economies how these international transaction issues can be addressed with a commercially viable modern solution. Participants no longer need to convert local currencies into exchanged currencies thanks to the PAPSS platform’s quick payouts. Overnight settlements allow central banks to reduce their international currency holdings. The technology checks for compliance, legality, and punishments in real-time. PAPSS has the potential to reduce transaction time to seconds, removing a major impediment to intra-African e-commerce, services, and goods trade growth.
Pan-African payment system launched: How it works (The New Times)
The long awaited Pan-African Payments and Settlement System (PAPSS) was launched Thursday, January 13, in Accra, Ghana, in a virtual event under the theme: “Connecting Payments, Accelerating Africa’s trade.” The new system allows a buyer in one African country to make a payment in his or her national currency and the seller in another country receives payment in their local currency.
According to Prudence Sebahizi, the Chief Technical Advisor at the AfCFTA Secretariat, the new system will allow a customer or a buyer to make payment in a national currency and the seller will receive the payment their own currency. This, he noted, is way easier and less costly than changing the Kenyan shilling to the US dollar and then converting the US dollar to the Ghanaian cedi, as has been the case.
Key pillars mostly in place to speed up Africa’s free trade in 2022 (Africa Renewal)
A major hurdle is ongoing negotiations on the remaining crucial elements of the trade pact, particularly rules of origin.
Concluding negotiations on rules of origin, which is basically to determine the “nationalities” of thousands of products to prevent dumping, will be key to success. Already, negotiators have reached an impressive 87.8 per cent agreement on rules of origin. That includes more than 80 per cent of the about 8,000 products listed under the World Customs Organisation’s Harmonized System of rules of origin and tariffs. Such a high threshold of consensus guarantees that the vast majority of products can be traded. “What is outstanding are automobiles, textiles, clothing and sugar. These account for about 12-15 per cent of what we call the tariff book. We want to conclude negotiations on these so that we can reach a 100 per cent rules of origin convergence,” Mr. Mene said.
The Futures Report 2021 launched last December in New York provides traders with valuable business information, making it one more item in the AfCFTA’s toolbox to catalyze intra-African trade. Jointly produced by the AfCFTA Secretariat and the UN Development Programme (UNDP), the report, titled “Which Value Chains for Made in Africa Revolution”, highlights for market participants value chains with lucrative opportunities in goods and services for value addition. Noting rising inequalities, the report states that, “Africa is the only continent where the number of poor people increased, up from 392 million in 2000 to 438 million in 2017.”
Analysts forecast grim 2022 economic outlook for Africa (Deutsche Welle)
African economies were badly hit by the emergence of COVID-19 in 2020 and the subsequent slowing of the global economy. On top of this, the lockdowns and restrictions accompanying the pandemic led to drops in the manufacturing of goods, trade volumes, investments, tourism and other revenue generating activities across the continent. There were some rays of hope in 2021, though.
Some of Africa’s poorer nations bounced back slightly in 2021. According to World Bank figures, emerging and developing economies, most of which are in Africa, grew by 6.3% at the end of 2021. Looking at only Sub-Saharan Africa, however, these figures are somewhat less positive. The region had an economic output growth of 3.5% in 2021, mainly driven by a rebound in commodity prices and an easing of social restrictions.
“Commodity dependent economies — like Nigeria, for instance, which relies on oil, Angola, Zambia on copper, even Ghana on gold — are expected to help mitigate some of the current challenge and help with economic recovery,” said Martey, a senior economist at Databank Financial Service in Ghana’s capital Accra. Africa’s developing nations are particularly vulnerable to global threats to economic recovery.
Global economy
Global Shipping Costs Are Moderating, But Pressures Remain (IMF Blog)
Shipping costs soared over the past year as consumers unleashed pent-up savings to buy new merchandise while the pandemic continued to snarl the world’s supply chains. Container rates have more than quadrupled since the start of the pandemic, with some of the biggest gains concentrated in the first three quarters of last year.
Lockdowns, labor shortages, and strains on logistics networks led to shipping-cost increases and significantly lengthened delivery times , though those pressures are easing. Our Chart of the Week shows how global container rates began to pull back from their record in September and have since declined by 16 percent, mostly due to falling rates for trans-Pacific eastbound routes, the main sea link from China to the United States.
COVID-19 pandemic stalls global economic recovery: UN report (UN News)
The 2022 World Economic Situation and Prospects (WESP) report, produced by the UN Department of Economic and Social Affairs (DESA), cites a cocktail of problems that are slowing down the economy, namely new waves of COVID-19 infections, persistent labour market and lingering supply-chain challenges, and rising inflationary pressures. The slowdown is expected to carry on into next year. After an encouraging expansion of 5.5 per cent in 2021 — driven by strong consumer spending and some uptake in investment, with trade in goods surpassing pre-pandemic levels — global output is projected to grow by only 4.0 per cent in 2022 and 3.5 per cent in 2023.
Africa takes vaccination into its own hands (EURACTIV)
Put simply; vaccine inequality is costing developing world lives. This is the view of former UK Prime Minister Gordon Brown, who says wealthy G20 nations have monopolised 89% of jabs at the expense of the world’s poorest. Emphasising the scale of the problem, he said: “For every vaccine delivered as first vaccines in the poorest countries, six times as many doses are being administered as third and booster vaccines in the richest parts of the world”. Two years on, we have our fourth globally spreading variant, yet our most vital preventative tool is still denied to billions. The African continent is at the forefront of this disparity, with vaccination rates of around 9% of the continent’s 1.2 billion population. In poorer African countries like Mali, that figure falls to 1.9%, in South Sudan to 1.4%, and desperately minute in DR Congo where just 0.1% of people have received jabs. Even in Nigeria, one of Africa’s richest economies, the vaccination rate only slightly exceeds 2%. This comes while Western Europe reaches close to administering an average of 200 doses per 100 people. In light of this, former UK Vaccine Taskforce Head Clive Dix recently said, “We must stop endlessly jabbing in wealthy countries while poorer countries go without”.
The Commodities Issue 2022 (Global Trade Review)
Despite the continued impact of the pandemic, the disruption to global supply chains and the transformative effect of technology on trade and trade finance, GTR’s most-read stories of 2021 focused on the commodity finance sector.
In this issue, our feature titled Collateral damage reviews the extent to which fraud risk could be mitigated by ramping up warehouse inspections and other goods checks, and whether such a move could ultimately open up more financing to SMEs. Elsewhere, our fintech feature pursues the matter of dodgy dealings, and examines the reasons why technology – which is successfully transforming so many areas of the trade finance ecosystem – has not yet been harnessed to solve commodity finance’s fraud troubles through the digitalisation of warehouse receipts.
Multilateralism is now needed more than ever to set and implement global standards, frameworks in an increasingly multi-polar world: Al-Mashat (Daily News Egypt)
Her remarks came during her participation in a high-level panel session during the third day of the World Youth Forum titled ‘The Role of International Institutions in Supporting the Post-COVID-19 Recovery from the Pandemic’. the minister underscored the importance of setting and implementing global frameworks that can be streamlined across all stakeholders in order to ensure transparency as well as inclusion of a variety of actors to push for inclusive and networked multilateralism, such as the private sector, civil society, and youths.
The minister presented her ministry’s framework for implementing international cooperation and development financing for Egypt, which streamlines all financing under one umbrella to avoid repetition and improve the management of international development cooperation to implement projects effectively. The minister added that the strategic partnership between Egypt and international financial institutions delivered substantial results in Egypt’s own local development vision.
TRIPS standoff continues in the new year (Devex)
A new year has one nothing to ease the global standoff within the World Trade Organization over the waiver of the Trade-Related Aspects of Intellectual Property Rights, as the EU dismissed India’s proposal to discuss it further as “premature.”
Technology is the key to transforming least developed countries. Here’s how (WEF)
One of the factors for this lack of structural transformation is LDCs’ overwhelming dependence on commodities for production and exports. According to the United Nations Conference on Trade and Development’s Commodities and Development Report 2021, over 75% of African LDCs.
Related News
tralac Daily News
National trade news
Economic policy uncertainty and the loss of South Africa’s growth momentum: Can the decline be reversed? (Daily Maverick)
The gradual loss of growth momentum in the South African economy, which resulted in a real per capita income decline since 2014, is threatening to endanger the country’s developmental aspirations and worsen the already glaring income and wealth inequality. From youth unemployment rates hovering well above 70% among the 15-24 age group to the inexorable decline in savings and gross fixed capital formation rates, most indicators of future economic performance are displaying red flags. Eunomix Research has recently projected that in the absence of a vigorous structural transformation of the economy, South Africa is at risk of falling back to lower-middle-income status by 2028.
While the structural aspects of the weak economic performance have been extensively discussed by various researchers and policymakers, the influence of economic policy uncertainty on the loss of performance has received much less attention. It is, for example, frequently reminded that the narrowness and shallowness of the structural foundation of the economy constitute a major constraint on its growth potential. They also underly the country’s inability to overhaul the exclusionary production and allocation system left in place by the apartheid regime.
Border Management Authority won't hinder trade activities, says Aaron Motsoaledi (IOL)
Home Affairs Minister Aaron Motsoaledi says the newly-formed Border Management Authority (BMA) will not hinder any trade activities between South Africa and other African countries. Motsoaledi made the statement when he was responding to parliamentary questions from EFF MP Mgcini Tshwaku, who asked how the department, through its newly formed Border Management Agency, would ensure that there was free trade between South Africa and other African countries. He also asked how the agency would not act as a restriction, and there would be no stampede of truck traffic and/or of persons going in and out of Zimbabwe, Mozambique, and vice versa at the border gates, among others.
November manufacturing output down 0.7% y/y – FNB (Engineering News)
Total manufacturing output (not seasonally adjusted) declined by 0.7% year-on-year in November, after declining by 8.5% year-on-year in October, reports financial services provider FNB. Senior economist Thanda Sithole explains that the slip partly reflects the unfavourable base effects of the latter part of 2020 when the manufacturing sector ramped up production.
Namibia’s International Energy Conference set to drive investment into an energy mix (African Review)
The fourth edition of Namibia’s International Energy Conference will be held from 20-22 April 2022 in Windhoek, Namibia, organised by Rich Africa Consultancy
Under the theme, ‘The Energy Mix: Positioning for Investment, industrialisation and Growth’, this thought leadership event will convene energy stakeholders with investors and international partners to drive industry growth and development as well as promote Namibia and Africa as the destination for energy investments. Participating companies, international investors, service companies and various international delegations, will share updates on exploration activities, green hydrogen and regional gas and other ongoing projects and announce future projects while highlighting upcoming business and investment opportunities.
Zimbabwe slashes trade deficit as exports rise by 20 percent (CGTN)
Zimbabwe managed to significantly cut its trade deficit towards the end of 2021 after it registered an increase in the value of its exports and a decrease in the value of its imports. According to the Zimbabwe National Statistical Agency (Zimstat), the trade deficit went down from 177 million in October to 36 million U.S. dollars in November on the back of a 20.93 percent rise in exports and a 4.07 percent decrease in imports. A narrowing of the trade deficit means Zimbabwe was able to retain a sizable amount of physical U.S. dollar bills in the economy. The major contributors to the rise in exports were food and beverages and transport equipment which were valued at 19.7 million and 2.84 million U.S. dollars, respectively.
Kenya's active role in Global South agenda paying dividends (Capital FM Kenya)
The rise of the Global South has been attributed to increased trade and investment, accelerated regional integration, and enhanced sharing of knowledge and technology among the low and middle income nations of Africa, Asia, Latin America and the Caribbean. The most visible manifestation of this increasingly influential grouping of States is the South-South cooperation framework on tackling political, economic, social, cultural and environmental issues facing the countries that make up the Global South.
South-South foreign direct investment (FDI) flows have also expanded and are expected to account for one-third of global FDI flows. This impressive growth in the global South’s contribution to the world economy has been realized against the backdrop of declining North-South trade and aid.
Another critical pillar of Kenya’s renewed effort to tap into the South-South economic transformation is through the African Union’s 21st Century Pan-African agenda which includes the African Economic Community (AEC) and the African Continental Free Trade Area (AfCFTA).
Flower industry push for increased cargo capacity ahead of Valentine’s (Business Daily)
The flower industry has raised the alarm over high freight charges and reduced cargo space that could deny them the chance to make money from the lucrative Valentine’s period. Kenya Flower Council (KFC) chief executive Clement Tulezi said the sector was heading to the peak season, especially in the month of February with the issues of cargo space being an Achilles heel. “The only alternative is to use chartered flights but the charges are prohibitive, leaving the sector players in a catch-22 situation,” noted Mr Tulezi. “Exporting flowers to Europe is not tenable. We are keeping our fingers closed hoping for the best,” he told Business Daily.
Debt servicing, weak shilling cut Kenya’s net foreign assets by $763m (The East African)
Kenya’s net foreign assets dropped by $763 million in the year to September, the biggest decline yet, indicating that local financial institutions liquidated some of their overseas portfolios. “Net foreign assets declined from $6.58 billion as at end of September 2020 to $5.81 billion as at end of September 2021,” the Kenya National Bureau of Statistics (KNBS) said in its third quarter GDP report.
Kenyan textile company eyes Zanzibar export market (The Citizen)
A Kenyan company is setting up a $51.3 million (about Sh115 billion) factory in Zanzibar as it targets to get a pie of the world’s $920 billion textile market. The global textile industry was estimated at around $920 billion in 2018, and it was projected to reach approximately $1,230 billion by 2024, available global data show. With its $51.3 million factory at Chunguni area in Zanzibar, Basra Textiles Limited is specifically targeting export markets across East and Central Africa, its company chief executive officer, Mr Ahmed Othman, said yesterday. It is hoped that the factory, which was launched by President Samia Suluhu Hassan yesterday, will give a new impetus to Tanzania’s textile industry, which has the potential to become a significant sourcing location for foreign buyers.
Tanzania, which also enjoys a duty-free market access to the United States through the African Growth and Opportunity Act (Agoa) as well as to the European Union, is unfortunately importing most of its textile requirements mainly from China, India, Pakistan and Korea among others, official data show.
A not-so-happy new year as food prices soar (The East African)
Cash-strapped families have little to smile about this new year as countries in the region battle high commodity prices following weather-induced food supply deficits. The East Africa seasonal monitor released on December 20 by the Famine Early Warning Systems Network (Fews Net) — a USAID platform providing early warning and analysis on food insecurity — shows that rainfall deficits were recorded over much of Uganda, eastern Rwanda and Kenya, eroding crops and livestock production prospects.
Port expansions could expose Kenya to more crime (ISS Africa)
Kenya’s US$3.6 billion ports master plan will transform the country’s sea, lake and dry ports over the next 30 years. Modern ports that comply with the International Maritime Organization (IMO) codes attract a greater shipping market, which could boost and sustain the economy of Kenya and the region. But with these expansions come security concerns, notably organised crime and terrorism.
The Kenya Ports Authority’s (KPA) flagship project is the new Lamu Port, which commands an initial investment of US$2.1 billion. It is one of the seven mega infrastructure development schemes under the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor Project. This US$25 billion programme is part of Kenya Vision 2030, which aims to transform the country into a middle-income economy.
Traders bank on Naivasha-Malaba train to ease transport (Business Daily)
Traders and transport players are banking on the plan to kick off operations between Naivasha Inland Container Depot from the Standard Gauge Railway (SGR) to the old meter-gauge railway (MGR) to significantly ease transport of goods. Traders and players say the move will underpin seamless and efficient rail transport along the northern corridor. “The integration of the SGR and MGR lines will remarkably improve the flow of cargo right from the port to the hinterland serving Uganda, Rwanda, Burundi, South Sudan and parts of eastern Democratic Republic of Congo,” said KRC managing director Philip Mainga.
Kenya Railways Corporation (KRC) has already started trial runs for freight train services to offer seamless cargo transfer at the Naivasha Inland Container Depot from the standard gauge railway (SGR) to the old metre gauge railway (MGR).
Concerns As New Bill Grants Customs Exclusive Control Of Trade Policies (Economic Confidential)
There are concerns about the proposed Nigeria Customs Service (NCS) Reform Bill as stakeholders said it negates best practices on administration, control and management of trade/customs. They said there are conflicting clauses in the proposed reform to the Customs and Excise Management Act (CEMA), which is undergoing review at the National Assembly, that contradict international conventions on trade, import, export, transhipment, border among others. According to them, CEMA was established from international convention, treaties and protocols to ensure the preservation of international trade and trust of the international committee on investments as well as boost national and regional economies.
Funding Non-oil Export for Economic Growth (This Day)
The country’s low export capacity has been identified as one of the major problems bedeviling the Nigerian economy in recent times. This argument finds expression in the fact that domestic output had been low over the years while the country doesn’t even produce enough to export. Often times, the agricultural commodities, which are eventually exported overseas, got rejected for failing quality standards. And importantly too, the inability to add value to agricultural produce had further hampered export prospects.
Here is how the new Lekki Port will generate revenue for Lagos (Ventures Africa)
In a few months, Nigeria will roll out one of its new golden geese, the Lekki Deep Seaport – a $1.5 billion port facility situated at the Lagos Free Trade Zone (LFZ), along the Lekki Corridor. The Lekki Port project commenced in 2021 following a $629 million loan financing agreement, signed earlier, in Oct. 2019, between the Lekki Port LFTZ Enterprise Limited (LPLEL) and China Development Bank (CDB). A consortium of banks also contributed to funding the project. Although developers have slated the completion for the first quarter of 2023, a recent report by The Sun News indicates that the project is about 80 per cent completed. While the country anticipates the completion of this notable project, the host state anticipates significant earnings and job creation for its residents.
Ghana's oil sector investments to be constrained – Energy expert (Myjoyonline)
Ghana’s oil sector investments would continue to be constrained, if it does not focus on internal resources. According to Energy Expert, Dr. Yusif Sulemana, the world is nearing an era where oil firms will lose interest in hydrocarbon investments. This, he said, will increase the cost of hydrocarbons, translating into spike in oil prices.
“The narrative will not change, there will be some headwinds. The headwinds are that we will continuously have constrained investments into the world of hydrocarbons. As long as we have constrained investments into hydrocarbons, the cost of energy will continue to rise and that’s a fact.”
Will Ghana remain West Africa's investment hub? (Investment Monitor)
Ghana – seen by many investors as the economic gateway to West Africa and one of the region’s most stable democracies – is jeopardising its access to international capital markets due to its high level of public indebtedness and limited tax base.
The country – with 32 million inhabitants and a $82bn (506.37bn cedis) economy – has managed to attract a wide range of foreign investors during the past five years but has now run into a set of economic and political problems, partly down to the Covid-19 pandemic. The International Monetary Fund (IMF) estimates that the country’s economy expanded by only 0.4% in 2020 but rebounded by 4.7% during 2021. It forecasts it will jump by 6.1% in 2022. Economic growth averaged 5.2% a year between 2015 and 2019. Income per head is now $2,556 a year, up from $1,784 in 2015.
In 2019, Google opened its first AI centre in Africa in Accra, while in April 2021, Twitter set up its first African office in the capital, too. “The AfCFTA has the potential to be a game changer, not only for doing business across the continent but also for how the rest of the world thinks of Africa,” said Stephanie Sullivan, the US ambassador to Ghana, in a speech in December 2021. “It can truly make Ghana a gateway for the African market.”
Ghana's economy remains highly dependent on the export of primary commodities such as gold, cocoa and oil, and consequently is vulnerable to slowdowns in the global economy and commodity price shocks. In general, however, Ghana’s investment prospects remain favourable, as the government seeks to diversify and industrialise – in particular through agro-processing, mining and manufacturing – according to the US State Department. It has made attracting FDI a priority to support its industrialisation plans and overcome an annual infrastructure funding gap of at least $1.5bn.
Official Launch of Malawi’s National Export Strategy II (2021-2022) (The Commonwealth)
Today Malawi’s Ministry of Trade, in collaboration with the Ministry of Industry and in partnership with the Commonwealth Secretariat and the WTO’s Enhanced Integrated Framework (EIF) Project, has launched the National Export Strategy II (NES II) at Bingu International Convention Centre (BICC). The purpose of the launch was to disseminate the Strategy and its actions to all the sectors and actors in the economy so as to kick-start its implementation inclusively.
The vision of the NES II is: “Make Malawi a Competitive, Compliant, Diversified and Sustainable Sourcing Destination for goods and services for the Regional and Global marketplace, and to increase exports as a percentage of GDP from 14.6% to 20%”.
Moroccan Economic Growth Could Accelerate with the Full Implementation of Broad-Based Reforms (World Bank)
In order to achieve broad-based growth and job creation, the sustained implementation of a multifaceted and ambitious reform agenda will be essential, according to the World Bank’s Morocco Economic Monitor, January 2022: From Recovery to Acceleration. The report analyzes the growth performance of the Moroccan economy over past decades. Thus far, fixed capital accumulation has been the main driver of growth, with limited productivity gains and an insufficient contribution of labor despite a favorable demographic situation.
“Going forward, the Moroccan economy will need to diversify its sources of growth to continue creating jobs and reducing poverty,” said Jesko Hentschel, World Bank Maghreb Country Director. “As envisaged by the New Development Model, this may require the implementation of broad-based reforms effort to stimulate private investment, boost innovation, include women in the labor force and increase human capital.”
Belt and Road Deal: Morocco to Become China's Trade Hub in Africa (South Morning China Post)
The Chinese government has high hopes regarding cooperation with Morocco following the North African country becoming the first to sign into the Belt and Road initiative. An analysis in the South China Morning Post (SCMP) cited several Chinese observers who see Morocco as “an exception” when it comes to China-Africa cooperation.
Finance Law 2022 is not best possible one: FinMin (TAP)
The Finance Law 2022 “is not the best possible one,” Finance Minister Sihem Boughdiri admitted, adding, however, it was one of the finance acts that did not include any new tax measures burdening businesses. “In view of the economic difficulties faced by the country, the result is acceptable insofar as the government has not increased taxation on companies, with corporate tax at 15%,” she added. The minister was speaking at a webinar held Tuesday by Tunisia's Joint Chambers Council (French: CCM), on the “impact of the 2022 Finance Law and new Tax Provisions.”
African trade
#BizTrends2022: Key trade and investment trends in Africa - Part 1 (Bizcommunity)
Baker McKenzie partners in Johannesburg discuss key trade and investment trends in Africa, and what can be expected in 2022.
To-date, 38 countries in Africa had ratified the AfCFTA agreement and 54 countries had signed it, with only Eritrea outstanding. The first shipment of goods under AfCFTA took place in January 2021 and most signatories have now submitted their proposed rules of origin. The introduction of the African Virtual Trade-Diplomacy Platform allowed parties from across many different timelines to meet in a secure online environment - speeding up negotiations across vast regions, housing many cultures, languages and legal frameworks. The streamlining of cross border trade and the free movement of goods across the continent is expected to take off in Africa in the coming years.
Trade uncertainty in Africa was exacerbated by the impact of the pandemic, which resulted in a twin supply-demand shock - supply was affected by mass production shutdowns and supply chain blockages and demand for products from Africa decreased. For example, the global demand for commodities such as steel and copper from Africa was markedly reduced during the pandemic. As a result, financial institutions and traders had to adapt and restructure transactions, and there have been some casualties. Further, oil rich countries in Africa that were badly affected by the global oil price crash have not yet recovered. However, Africa is showing signs of revival, mostly due to international traders who have spotted opportunities in the continent.
There were massive breakages in key links in global trade supply chains in the last year, with issues including route congestion and blockages, manufacturing shutdowns, a deficit of skilled labour, a global shortage of key logistics components, a lack of space in warehouses, a spike in transportation costs and substantially increased demand for goods around the world, post-lockdown. As a result, countries have been looking at ways to relink broken chains. Last year, the African Union African Peer Review Mechanism 2020 highlighted Africa’s supply chain challenges and overreliance on foreign trade and suggested that the continent boost its manufacturing capacity to build a strong African supply chain that could not be weakened by global blockages.
Foresight Africa: Top priorities for Africa in 2022 (Brookings)
With the rollout of COVID-19 vaccines, the world is eager to return to normal. However, the complexity of the challenges Africa was already facing—including poor infrastructure, high youth unemployment, rapidly increasing debt, and climate change—means that the region’s recovery is likely to be uneven and far behind much of the rest of the world. Moreover, of its 1.3 billion people, less than 8 percent of Africans have been fully vaccinated. Despite these obstacles, the region’s future remains bright: Its innovative youth are creating and utilizing technologies to improve livelihoods throughout the region, and leaders are using the economic recovery to rethink and reset development strategies instead of returning to the status quo. At the same time, Africa’s women and girls have emerged as influential and aspirational leaders not only within the continent, but for the world. Also, Africa is actively looking to leverage its collective power and impressive growth potential to collaborate with emerging external partners. In this way, this year’s Foresight Africa report will examine the most pressing issues facing the region in 2022. This year’s panel will feature high-level global experts to discuss critical issues for the region’s recovery, including policies for economic recovery, shoring up Africa’s public health systems, empowering African women and girls, addressing the impacts of climate change, harnessing technology for improved livelihoods, and exploring partnerships with emerging global players.
AfCFTA on track to lift 100 million Africans out of poverty by 2035 (The East African)
The AfCFTA market comes with many opportunities, some of which are highlight in this article: Consumer welfare gains; Attract investments; Job creation; Eliminate poverty; Income distribution.
What you need to know about the African Continental Free Trade Area (African Business Magazine)
The AfCFTA aims to reduce tariffs among members and covers policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and technical barriers to trade. As of 9 September 2021, 38 of the 54 signatories had deposited their instruments of ratification with the chair of the African Union Commission, according to the Tralac Trade Law Centre. The AfCFTA Secretariat, an autonomous body within the African Union based in Accra, Ghana, and led by secretary general Wamkele Mene, is responsible for coordinating the implementation of the agreement.
Understanding the AfCFTA: Guide for Small and Medium-Sized Enterprises in the ECOWAS Region (UNDP Africa)
Understanding the AfCFTA: Guide for Small and Medium-Sized Enterprises in the ECOWAS Region, was created to help small business owners, traders and producers, especially women, in the Economic Community of West African States (ECOWAS) region understand how the African Continental Free Trade Area (AfCFTA) works so that they can be in a position to make the best use of the business opportunities that can be found within the AfCFTA, including trading more easily across the continent and adding value to goods and services. The guide was produced by the ECOWAS Commission with support from UNDP.
Private sector urged to familiarize with rules of origin within AFCFTA (GhanaWeb)
International trade experts, Appiah Kusi-Adomako and Dode Seidu, have called on the private sector to familiarize themselves with the rules of origin regime under which AfCFTA trading is permitted. According to them, adequate knowledge of the rules of origin would help manufacturers and traders in the private sector position themselves adequately to benefit from the free market. Rules of origin are, in international trade, legal standards supporting the differential treatment of some products based on their country or region of origin. In the case of the African Continental Free Trade Area, because party states have made substantial tariff concessions that hitherto, were key contributors to national revenues, the experts say rules of origin are of utmost essence for intra-regional trading.
“AfCFTA has allowed us to export to a wide market duty-free, quota-free. When you learn and understand the rules and their dynamics, it would help you know where you source your raw materials from, and what kind of processes you need to add to it to qualify for export under AfCFTA without
Four make-or-break priorities for East Africa’s economic recovery (Africa.com)
How does the East African region achieve a full economic recovery from the impact of the pandemic while also building toward a more globally-competitive and sustainable future? As the only region in Africa to avoid a recession in 2020, East Africa is poised for strong growth despite ongoing disruption from the pandemic. While the exact level of threat posed by the newly-discovered Omicron variant of COVID-19 remains to be seen, the reaction from the global community – travel restrictions, potential lockdowns – could have a severe impact on the region’s economic fortunes. For organisations and business leaders in the region, the emergence of new unknowns and potential disruptions should not distract from the urgent task of recovery following an immensely difficult near-two year period. In particular, four key priorities could enable businesses to accelerate their recovery and achieve greater resilience against future disruptions:
When industrial policy meets African political realities: lessons from Uganda (The Conversation)
Since the 2008/2009 global financial crisis, industrial policy has been widely celebrated as having become fashionable again.
Four industrial policy regimes have been applied across most African countries at different points since independence. The first was the import substitution. This refers to trade and industrial policies that encourage domestic production to reduce dependence on foreign imports. The second is a market-led regime. Here policies ranged from currency devaluations, privatisation, trade liberalisation to financial sector liberalisation. This regime brought about a decisive shift of power from ‘spending ministries’ to ‘budgetary ministries’. The third regime was the export-first industrial policy. This has been dominant over the past two to three decades. It has been most visible through special economic zones and the encouragement of firms in Africa to link up to high-end global markets. This linkage was most pronounced in the apparels sector. The fourth regime was the domestically-oriented industrial policy. It has become increasingly visible over the past decade. It involves protection of domestic producers and the use of public procurement. Public procurement is used to encourage domestic consumption of locally procured goods (through Made In Campaigns).
Uganda, Rwanda and Kenya recently increased import duties on used clothes and then banned their imports. Other African countries have been using public procurement to secure domestic markets.
Top Five Infrastructure Projects Underway in West Africa (Energy Capital & Power)
Over the course of 2022-2023, west African countries are aiming to consolidate a post-COVID-19 economic recovery on the back of stronger energy prices and increasing flows of Foreign Direct Investment. But in order to meet robust growth forecasts and the demands of a young and rapidly growing middle class, various countries throughout the region are investing in major infrastructure upgrades to boost connectivity and further improve the overall competitiveness of each country’s economy. There are significant projects taking place in west Africa in established oil and gas producing markets such as Ghana and Nigeria, as well as emerging producers from the MSGBC Basin.
China helps advance technology in Africa (Global Times)
China has set a milestone in its technological commitments to Africa, with tech giant Huawei working with Zambia's mobile telecom operator MTN in a pilot program to roll out the African nation's first 5G network. Chinese technology offerings have played an indispensable role in developing the digital economy in the Africa, observers said, citing decades of sound China-African friendship as underpinning the popularity of Chinese-developed technologies in the continent.
Technologies and services that are crucial for digital prowess will be a pivotal area of cooperation between China and African countries, as the COVID-19 pandemic has impeded trade flows and increased the need for digital services. For Africa, this means an urgent push to upgrade its digital infrastructure, Song said, and China-Africa ties, adding to Chinese tech firms' established presence in the continent, makes Chinese offerings prioritized choices in the local markets.
Strategy and ambition: In Wang Yi visit, China’s long Africa game (The Indian Express)
When Chinese Foreign Minister Wang Yi visited Eritrea, Kenya, and Comoros in the first week of January as part of a five-nation tour that also included Maldives and Sri Lanka, he was observing a 32-year-old Beijing ritual of visiting Africa at the beginning of every year. In fact, China’s links with the continent go back farther than the last three decades.
For a dozen years, China has been Africa’s biggest trading partner. Two-way trade in 2020 was $ 187 billion, according to the ‘China-Africa Annual Economic and Trade Relationship Report 2021’, released last September. The balance of trade is heavily in favour of China.
According to the report, China invested $ 2.96 billion in Africa in 2020, an increase of 9.5 per cent over 2019, making it one of the largest investors in Africa. Data collated by the China-Africa Research Initiative of the Johns Hopkins School of Advanced International Studies shows Chinese FDI stock in 2019 totalled $ 44.4 billion, ahead of the United States.
Will Biden deliver on his commitment to Africa in 2022? (Brookings)
When he was running to win the White House, President Joe Biden’s campaign committed to implement a “bold strategy” toward Africa, and one that would be based on a “mutually respectful engagement” and a reinvigorated diplomacy, if elected. Indeed, the campaign was the first ever to outline how it would promote the interests of the African diaspora in the United States.
The November visit by Secretary of State Tony Blinken to Kenya, Nigeria, and Senegal advanced an important set of priorities for Biden’s Africa policy: COVID-19 recovery, combating climate change, support for democracy, and greater trade and investment. Blinken’s announcement of an African leaders’ summit in late 2022 will help to galvanize progress on implementing the Biden Africa agenda.
Important trade and investment issues remain to be addressed. Negotiations on the U.S.-Kenya free trade agreement, started under the Trump administration, should be resumed given the significance of Kenya to the United States as a commercial and strategic partner. This issue went unaddressed when presidents Biden and Kenyatta met in the Oval Office in October, and during Blinken’s November visit to Kenya.
Global economy
Pandemic Drives Need for Technology among SMEs but Barriers Remain (World Economic Forum)
A survey by World Economic Forum indicates that the COVID-19 pandemic has increased demand for more adoption and integration of digital technology among small and medium sized enterprises (SMEs). However, they face numerous barriers to adopting technology at a critical time of need. While 97% of global companies have accelerated adoption of technology to get through the pandemic, according to Forbes, Forum’s survey indicates that only 23% of SMEs were able to dedicate resources to new digital tools. SMEs are still scrambling to meet mandated health and safety measures, threatening their ability to stay operational.
“Having a better understanding on how COVID-19 is impacting SMEs is critical to the world economy,” said Lucas Camara, Executive Director of the Centre for the Fourth Industrial Revolution, Brazil.
Climate Failure and Social Crisis Top Global Risks 2022 (World Economic Forum)
Climate risks dominate global concerns as the world enters the third year of the pandemic. According to the Global Risks Report 2022, while the top long-term risks relate to climate, the top shorter-term global concerns include societal divides, livelihood crises and mental health deterioration. Additionally, most experts believe a global economic recovery will be volatile and uneven over the next three years.
Pandemic has accelerated air transport digitalisation tech investment (Engineering News)
Multinational air transport information technology (IT) provider SITA’s ‘Air Transport IT Insights 2021’ report states that 84% of airlines and 81% of airports expect to spend the same or more on technology this year, particularly on automation of passenger processing. Despite IT budgets having been largely flat in 2021, airport and airlines executives are betting on technology to support their recovery from Covid-19, with spending on digitalisation and sustainability as key priorities to 2024.
What It Means to Support a Waiver of COVID-19 Vaccine Patents (The Regulatory Review)
The Biden Administration should exert international and domestic pressure to waive COVID-19 vaccine patents. “We can no longer rely on these big superpowers to come in and save us.” These words of biotechnologist Emile Hendricks capture the sentiment of countries unable to pay for the same quantities of COVID-19 vaccines as wealthier countries. In Africa, Hendricks and others are currently working, with backing from the World Health Organization (WHO), to reverse-engineer the Moderna COVID-19 vaccine because the pharmaceutical company has not released the intellectual property rights for its vaccines.
The Office of the United States Trade Representative (USTR)—the executive office that negotiates international trade and investments—has not pushed for an internationally proposed waiver of vaccine patents. South Africa, India, and other countries proposed such a waiver in 2020 at the World Trade Organization (WTO)—an international body that regulates international trade—but the USTR has yet to support the patent waiver as it was initially proposed. Nor has the office engaged in negotiations with the waiver’s opponents, such as the European Union.
Although the WTO conference was postponed, the Biden Administration can still push for a virtual general-member meeting at the United Nations (UN). General members at the UN can pass non-binding international recommendations by majority vote. The UN general members cannot waive the vaccine patents like the members of the WTO can, but a UN meeting could highlight the waiver debate and increase international pressure on countries that oppose the waiver.
Support for Africa’s Vaccine Production is Good for the World (IMF Blog)
The start of a new year is often a time to reflect and reassess. As the pandemic stretches into its third year, apprehension over the health crisis and the associated economic uncertainties is proving hard to shake.
Notwithstanding the impressive efforts of the Institut Pasteur, for now, Africa remains reliant on COVID‑19 vaccine imports and donations. The most immediate priority must be to guarantee predictability in vaccine deliveries—including through COVAX and the African Vaccine Acquisition Trust (AVAT). Funding will also be needed to ensure that Africa’s health systems can vaccinate the local population swiftly as new supplies arrive, including through outreach efforts to reiterate the importance of vaccines and reduce misinformation and vaccine hesitancy. Beyond vaccines, the region requires access to tests, treatments, and protective equipment.
But we must not let efforts to meet urgent needs come at the expense of future needs. Boosting resilience for the future is also a priority—including the region’s capacity to provide for itself, against COVID‑19 or any other disease that may arise in the future. Without predictable and reliable vaccine supplies, for example, health authorities are often forced to react at short notice to accept doses, often with limited shelf lives, greatly complicating delivery logistics for already-stretched health systems. In short, true resilience in Africa cannot depend on the repeated generosity of the international community. It requires scaled-up local manufacturing capacity and strengthened regional supply chains.
Africa vaccinating Africa is necessary—and it is achievable.
Related News
tralac Daily News
Trade data updates
Solid SA trade surplus surprises, but rand takes hit (Fin24)
South Africa recorded a trade surplus of R35.83 billion in November, from a revised surplus of R27.68 billion in October, the South African Revenue Service (SARS) reported on Tuesday. According to Trading Economics, the November surplus was well above the market's consensus expectation of only R16.8 billion. South Africa saw a year-to-date trade balance surplus of R412.51 billion, from a surplus of R238.42 billion in the same period in 2020. This was largely due to booming commodity prices, which pushed up the value of mining exports. Exports increased by 18% year-on-year, while imports increased by 25% over the same period.
Kenya’s food imports bill rises fastest in four years (Business Daily)
Kenya’s food imports’ bill in the first nine months grew fastest since 2017 driven by a rise in the food products shipped by industries for processing before selling in the local market. The latest data from the Kenya National Bureau of Statistics (KNBS) shows that the food import bill rose 21 percent to Sh155.42 billion from Sh128.06 billion in 2020. The data shows that imports of food products drove the increase as industries sourced more for value-addition before selling in the local market. This is the fastest growth in the food import bill in the first nine months since a 60 percent jump posted in the same period in 2016 when the bill stood at Sh82.83 billion.
Kenya’s exports to Ethiopia up 68 pc on increased food consignments (Capital Business)
Exports to Ethiopia more than doubled rising by 68 percent in the third quarter of 2021 compared to a similar period in 2020, data released by the Kenya National Bureau of Statistics (KNBS) has said. The increment from Sh 1,927 billion to Sh 5,963 billion was attributed to the rise to increased food exports to the East African country which has been hit by a political crisis over war between government forces and the rebel Tigray People’s Liberation Army (TPLF) in the north of the country.
Overall, the Balance of Payments report prepared by KNBS noted that Kenya’s export value rose by 7.5 percent with Africa accounting for the highest value at Sh78,389 billion. “This growth partly resulted from increase in the value of domestic exports of food preparations for infants to Ethiopia and electric generating sets and converters to Tanzania,” the report noted.
Tanzania’s trade surplus across East Africa rose to $484 million (The Citizen)
Tanzania’s trade surplus across the East African Community region rose to $484.5 million in 2020, from $343.8 million the previous year, according to latest updated central bank figures. The country also reported a highly-improved trade surplus of $1.09 billion with Southern Africa Development Community (SADC) countries, indicating a further expansion of its sub-Saharan trade network. Kenya remained Tanzania’s main trading partner within the EAC bloc, accounting for 28.4 percent of intra-EAC exports and 76.4 percent of imports in 2020. Export figures to Rwanda, Uganda and Burundi also rose sharply while imports from those countries dwindled.
According to the Bank of Tanzania’s 2020/2021 Annual Report released on December 31, Tanzania exported goods worth $811.2 million to the EAC region in 2020, up from $678.5 million in the previous year, while imports from the bloc declined slightly from $334.7 million to $326.7 million.
Tunisia Foreign trade balance posts deficit of 16,215.1 MD in 2021 (TAP)
The trade balance for 2021 posted a deficit of 16, 215.1 million dinars (MD) compared to 12,757.8 MD in 2020. The coverage rate fell by 1 percentage point compared to last year, reaching 74.2%, the National Institute of Statistics said Tuesday in its Foreign Trade at Current Prices December 2021 note. The deficit was driven by high imports, particularly from China (-6,325,5 million), Turkey (-2,655,9 million), Russia (-1,440 million) and Algeria (-1,554,4 million). Meanwhile, the trade balance of goods showed a surplus mainly with France (4,001,2 million), Germany (1,860 MD) and Libya (1,588,5 million). The trade balance excluding energy declined to - 10,995.9 MD, while the energy trade balance shrank to -5,219.2 MD (32.2% of the total deficit) against -4,200.5 MD in 2020.
How vehicle imports jumped by 40% in 2021 – Expert (Daily Trust)
Managing Partner, Transtech Industrial Consulting and former Acting Director-General of the National Automotive Design and Development Council (NADDC), Luqman Mamudu
How would you rate the performance of Nigeria’s automotive sector in 2021? On a scale of 1-10, I will say 5.
Once the National Automotive Industry Development Plan was launched in 2013/14, activities with new entrants gradually ramped up to about 500,000 installed capacity or 700 percent jump but capacity utilization remained low at less than 4 percent or 15,000 vehicles per annum. Meanwhile, Nigeria import averaged 400,000 vehicles annually from official customs statistics but smuggling activities were prevalent. All vehicles destined for Nigeria were shipped to Cotonou and neighboring countries and gradually smuggled in. This remained the case between 2017 to 2020 as assembly activities and potential to increase capacity utilization remained undermined by the increased importation of used vehicles from scraps yards of Europe, North America, etc.
There was hardly any positive change in 2021 except that some significant Global Motor Companies like Gilly, XCMG, and new local brands joined the ranks of local assemblers. The industry suffered a significant setback with the passage of the 2020 Finance Act which completely shut down assembly.
Domestic trade news
Traders defy duty-free sugar import quota, raising prices (Business Daily)
Traders breached the limit the Treasury set on duty-free sugar imports and shipped in 25.4 percent above the quota by the end of last November, subjecting the consumers to costly sweetener. According to the Sugar Directorate, traders imported 263,988 in the review period, exceeding 210,530, which is the limit that the Treasury set for sugar coming in from Common Markets for Eastern and Southern Africa (Comesa). The breach of quota could be the force behind the current expensive sugar in the market as the Kenya Revenue Authority (KRA) was to charge 100 percent duty on imports above the limit, as directed by the Treasury.
“Total sugar for the month amounted to 61,458 tonnes. The white refined sugar was 22,390 tonnes while mill white/brown was 39,068 tonnes,” said the directorate.
Kenya acquires $28.9m tugboat, cranes for Mombasa port (The East African)
Kenya becomes the second African country after South Africa to own salvage boats after the Kenya Ports Authority (KPA) acquired a $16.65 million multipurpose salvage tugboat and three ship-to-shore gantry cranes at $28.9 million. The salvage tugboat bought from Turkey and three ship-to-shore gantry cranes from Japan will boost efficiency and bulk handling activities at the second container terminal. This follows President Uhuru Kenyatta’s order for port efficiency to boost businesses in East Africa.
Mobile money agents handle Sh6.2 trillion in 11 months (Business Daily)
Cash transacted by mobile money agents jumped 36 per cent to Sh6.2 trillion in the nine months to November. Data from the Central bank of Kenya shows transactions at the agents rose from Sh4.6 trillion in a similar period a year earlier, indicating their growing use during the pandemic. Mobile money agency business has been booming especially as banks seek alternatives for brick and motor channels to reach their customers. Kenyans have increased reliance on mobile money agents for transactions from an annual Sh2 trillion six years ago. For four years between 2016 and 2019 Kenyans transacted Sh3 trillion on average as transactions grew modestly below 10 per cent.
However the increase has been pronounced since 2020 when transactions grew 16 per cent following the outbreak of the Covid-19 pandemic that shifted more customer settlements to mobile, boosting agency businesses that supports the sector.
Uganda commits to conduct free Covid-19 test to ease Busia-Malaba trucks traffic snarl-ups (EAC)
The Republic of Uganda has committed to conduct free Covid-19 rapid tests at the Kenya-Uganda border points of Busia and Malaba for (seven (7) days to clear the truck traffic snarl-up that has disrupted intra-EAC trade on the Northern Transit Corridor. This follows a joint multi-sectoral virtual meeting of the Ministers/Cabinet Secretaries responsible for EAC Affairs, Health and Transport convened by the EAC Secretariat. Currently, over 4,500 trucks have stalled at the two border posts due to the mandatory Covid-19 testing requirement introduced by Uganda on 20th December, 2021. The meeting noted that this was a deviation from the 14 days Covid-19 testing period, previously agreed at the regional level and monitored through the Regional Electronic Cargo and Drivers Tracking System (RECDTS).
Nigeria prepares to play a central role as it embraces intra-African trade (Global Banking And Finance Review)
Nigeria, Africa’s largest economy, has long looked beyond the continent for trade partners. Indeed, trade flows between African nations have historically been low across the board, accounting for less than 17% of overall trade volumes – a figure dwarfed by the proportion of intra-continental trade found in Europe or Asia. In 2020, just 19% of Nigeria’s exports went to other African markets, while 8% of imports came from the continent.
But the country is now placing a renewed focus on deepening links with its neighbours. Greater regional trade integration within Africa has been an important policy priority for years. Intra-African trade is regarded as a powerful stimulant of economic growth, with the added benefit of bolstering African economic resilience by reducing exposure to global price fluctuations. For Nigeria, an increase in trade with African partners would represent an opportunity for local industries to achieve scale, and for the economy to reduce reliance on the currently dominant oil sector.
Negative reactions trail Customs’ 2021 revenue figure (New Telegraph)
In trade facilitation, Nigeria Customs Service (NCS) is required to adhere to valuation on imported goods and other aspects of international trade, including statistics, quota and licensing arrangements, taxes and other charges levied on imports. However, placing revenue generation above trade facilitation has been one of the major challenges faced by importers and exporters at the seaports and borders under the guise of protecting local manufacturing firms.
For instance, some of the tariffs used by Customs, such as five per cent duty on raw materials, 10 per cent on intermediate goods, 20 per cent on finished goods, 35 per cent on imports into strategic sectors, levies, excise and valued added tax (VAT) have posed major obstacles to trade facilitation, leading to false declaration, undervaluation, concealment, undervaluation, false description of imports, under invoicing, smuggling of banned items, erratic application of customs regulations, lengthy clearance procedures, high berthing and unloading costs and corruption.
Smuggling: Nigeria-Benin economic integrity needs serious review –Comptroller Dera (Daily Sun)
“Ultimately, the economic integrity between Nigeria and neighbouring, Benin Republic has to be seriously reviewed. The fact that they aren’t consuming the rice but they keep importing it, is a calculated attempt to undermine Nigeria,” these are the words of Comptroller Dera Nnadi, the Area Controller of Ogun 1 Command, Nigeria Customs Service (NCS).
AfCFTA: Expert seeks value creation for agric products before export (Vanguard)
John Isemede, former Director General of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), has said that for Nigeria to benefit from the African Continental Free Trade Area (AfCFTA) it must add value to its agricultural products before export. He noted that Nigeria is ripe to process raw/crude in finished products with value addition to run the chain with the rest of the world. In an interview with Financial Vanguard Isemede stated: “For us to achieve this we must add value to our raw materials, remove all the restrictions, all the roadblocks, provides incentives and support to manufacturers.
Economic and social impact of COVID-19 in Angola 2021 (pdf) (UNCTAD)
The emergence of the COVID-19 pandemic in the first months of 2020 amplified the symptoms of the economic crisis that the oil-dependent Angolan economy was already undergoing since 2014. Short term prospects for the recovery of the domestic economy are strongly correlated with the global evolution of the pandemic and trends in international oil markets. International oil market volatility is further compounded by global uncertainties surrounding the availability of vaccines to developing countries in the face of the appearance of new and more contagious strains of the COVID-19 virus.
Ethiopia notifies implementation of HS 2022 amendments from 1 January 2022
On 29 December 2021, the Federal Customs Commission of Ethiopia (ECC) notified the WCO Secretary General that the new edition of the Harmonized System (HS 2022) would enter into force in the country on 1 January 2022. Ethiopia has thereby become the first African country to have submitted a notification on the implementation of HS 2022 amendments to the WCO. In the notification letter, Mr. Debele Kebeta Hursa, the ECC Commissioner, thanked the WCO and the European Union for the support provided to Ethiopia in the framework of the EU-WCO Programme for Harmonized System in Africa (HS-Africa Programme), funded by the EU. He stressed that the assistance received from the WCO did help the ECC to migrate to the HS 2022 version in a timely manner, and expressed his hope that this co-operation with the WCO would continue.
ITC study reveals Egypt’s export potential in the medical apparel sector (ITC)
Egypt is in a position to become a regional player in the medical apparel sector; however, first several constraints and challenges need to be mitigated, a new study by the International Trade Centre revealed. The country can unlock significant local demand and tap into a large export market if it is able to organize its domestic market and institutions, potential valued of $18.6 billion.
African trade
Intra-African trade in industry, energy, mining others to increase by $1bn in value (Ghanaian Times)
Intra-African trade among selected sectors under industry, energy, mining and agriculture are expected to increase by 30 percent during the implementation of the African Continental Free Trade Area agreement. The projected 30 percent increase in intra-African trade in the selected sectors according to a study by African Export and Import Bank (Afrieximbank), translates into over $1 billion increase in value of trade.
One year of the AfCFTA: What has worked and the way forward (Africa Renewal)
Since trading began on 1 January, some intra-African trade under AfCFTA arrangements based on anecdotal evidence has taken place, including alcoholic beverages and cosmetic products (recent data on trade flows are not yet fully available). Although intra-African agricultural trade remains below 20 percent compared to more than 60 percent for Europe and Asia, trade is projected to grow once negotiations have come to an end and trade barriers are progressively rolled back. To date, 42 out of 55 African countries have ratified the agreement, and 88 percent of the negotiations on product-specific rules of origin have been concluded, covering more than 70 percent of intra-African trade according to the AfCFTA Secretariat in 2021.
However, a significant shortcoming of the agreement is that many nutrition-sensitive goods may not be fully liberalised or progressively liberalised over longer periods, as indicated by ongoing negotiations on tariff offers. Examples of protected goods include live animals, meat, fish, milk and dairy products, fruit and vegetables, coffee, tea, spices, oilseeds and sugars.
Africa’s free trade area has a slow take off (DW)
The African Continental Free Trade Area (AfCFTA) celebrates its first anniversary on January 1, 2022. With exception of Eritrea, all African countries are signatories to the agreement. Over time, ratifying counties pledge to eliminate import tariffs on 97% of goods traded between African states. Many hope this will increase trade between African countries, which will in turn boost manufacturing and create jobs, bringing more prosperity and social equality to those on the continent. African nations currently trade more internationally than with each other. Intra-African trade accounts for 17% of African exports, which is low compared to 59% for Asia and 68% for Europe, according to the World Economic Forum. But AfCFTA wants to do more than just boost trade in goods — its scope includes services, investment, intellectual property rights and competition policy, although these aspects are still under negotiation.
AfCFTA: Traders to have opportunities to scale up and expand their markets in 2022 (Africa Renewal)
You are always harping on the participation of African women and the youth in free trading. Why is that and are they hearing you? The reason I put a strong emphasis on young Africans and SMEs led by women is that, first, they are the drivers of the African economy. SMEs run by women account for close to 60 per cent of Africa’s GDP, creating about 450 million jobs. Also, young Africans are at the cutting edge of technological advancements, whether it is in Lagos or Kigali. They are developing the latest software to drive e-commerce and so on. We will be making a catastrophic mistake if we don’t include these important segments of our society in the implementation of this agreement. I believe that if we want to move away from the old models of trade agreements, trade agreements that were criticized as benefiting only the big corporations, we need to focus on young people and women-run SMEs. Let me also say that given the character of Africa’s economy and demographics, it would be ill-advised to have a traditional trade agreement, which focuses on trade in goods, trade in services, intellectual property rights, and so on. Therefore, we have a mandate from our Heads of State to negotiate a protocol on women and young traders. The trade agreement will not have credibility if you exclude important segments of society; it will be perceived to benefit only the elites.
2022: Africa’s practical realities on energy and climate change (Africa Renewal)
For African countries, however, the pandemic exposed the stark realities of global inequality. These countries scrambled to buttress their shattered food systems; they lacked industries to shift production to life-saving personal protection equipment even as young Africans were left out of schools because of lack of access to electricity and the internet, which made the shift to virtual learning almost impossible. The pandemic revealed how Africa, despite its best efforts, was unprepared for some of the pressing emergencies of our times, be it the pandemic or the looming threat of climate change. The UN Office of the Special Adviser for Africa is advocating for Africa to transition into 2022 with a sense of utmost urgency in building the continent’s resilience. We firmly believe that the foundational building blocks to this resilience lie in Africans’ access to reliable, affordable and sustainable energy.
What 2022 has in store for Africa (Chatham House)
2022 is already shaping up to be a year of mixed fortunes for Africa if the events of this first week are a harbinger. The continent launched the African Continental Free Trade Area (AfCFTA) in 2021 and emerged from recession, sparked for many by low commodity prices but worsened by the COVID-19 pandemic. Elevated commodity prices, a recovery in global trade, and the easing of stringent pandemic measures despite anxieties over the Omircon variant and low rates of vaccination, signal a trajectory of slow economic recovery and bodes well for corporate revenue and share price among African energy, metals, materials, and food producers.
The digital transformation of African goods and services and supply chains will also continue in 2022 but exchange-rate pressures with increased volatility, credit, and liquidity challenges are a key concern for many governments.
Africa’s debt burden ‘hard to ignore’ – Naledi Pandor (News24)
International Relations and Cooperation Minister Naledi Pandor says the devastating impact of the debt burden to the economies and sovereignties of several African states is hard to ignore. Pandor was responding to a written parliamentary question from EFF MP Thembi Msane, who wanted details on the African Union’s (AU) interventions to prevent African countries from losing their sovereignty to other nations through debts and loans. Pandor said, while AU member states determined their domestic priorities, the continental body continued its work with international lending institutions. She added that the devastating impact of the debt burden on the economies and sovereignties of many countries on the continent was hard to ignore.
EAC Partner States working towards adopting the EACPass to minimize cross-border trade impasse (EAC)
EAC Secretariat is set to convene a multi-sectoral meeting on Monday 10th January 2022, to consider the adoption of the EACPass, a harmonized system to facilitate cross-border movement, in a bid to end persistent border traffic snarl-ups disrupting intra-EAC trade. The meeting will include Ministers responsible for EAC Affairs, Transport and Health. EAC Secretary General, Hon. (Dr.) Peter Mathuki, said that as the region strives to rebound from the Covid-19 pandemic, constant trade impasses at EAC border points were reducing the gains made in integrating the region, adding that Partner States need to prioritise the adoption of a regional coordinated approach in handling the pandemic. “Harmonization of Covid-19 charges and coordinated waiting time for Covid results is critical to facilitate business continuity and ease the cost of doing business,” said Dr. Mathuki.
This happens in the background of an ongoing trade impasse at the Kenya-Uganda border points of Busia and Malaba that has disrupted cross-border trade. The two borders on the Northern Corridor also serve Burundi, the Democratic Republic of Congo, Rwanda and South Sudan.
Building Regional Capacities in Trade Negotiations (COMESA)
The World Trade Institute and COMESA have conducted a training course for COMESA Member States aimed at strengthening human and policy-making capacities on Trade in Services. The course took place virtually from 6 – 8 December 2021. It was attended by trade and trade law experts from Member States that deal in multilateral, regional and sub-regional trade negotiations, to sharpen their skills in analysis, formulation and implementation of Trade in Services policy frameworks.
Currently, all COMESA Member States are involved in negotiations on seven Trade in Services sectors that have been prioritized for liberalization namely: communication, finance, tourism, transport, business, construction and energy-related services.
DHL expands footprint into Sadc (NewsDay)
FREIGHT services provider DHL Global Forwarding has expanded its presence across the African continent, with the aim of giving local and regional businesses within Sadc access to global markets. The company said as a first step, DHL Global Forwarding set up a legal entity currently employing eight graduate trainees to align the sector with international standards synonymous with DHL and show the market the advantages of conducting business in a compliant manner. The new entity, it said, comprises a full suite of technology solutions and exceptional market knowledge meant to successfully address the challenges faced by the country’s freight forwarding and logistics industry.
Customs data plays a key role in supporting the operational efficiency of Customs administrations through effective management of Customs risks and improved facilitation in the clearance of legitimate trade. In recent times, some WCO member countries in the Southern African Development Community (SADC) had taken initiatives to work towards the interconnectivity of their Customs systems to enable exchange of Customs data and to leverage opportunities for mutual cooperation, improved data integrity and quality and systems interoperability. To this end, the WCO conducted a two-day virtual sub-regional workshop on Customs IT Systems Interconnectivity on 13 and 14 December 2021, under the Sida-WCO Trade Facilitation and Customs Modernization Programme with financial support from the Government of Sweden, to support the interconnectivity initiatives undertaken by the Customs administrations of Botswana, Eswatini, Malawi, Zambia and Zimbabwe.
Africa faces an uphill battle against western emissions to combat climate change (The Conversation UK)
The UN climate summit COP26, held in November 2021, focused the world’s attention on the urgent need to tackle climate change and concluded with 197 countries agreeing to the Glasgow climate pact. But opinions on the summit’s success are polarised.
African nations continue to hold the unenviable position of being disproportionately vulnerable to climate change. Although the continent accounts for the smallest share of global greenhouse gas emissions – only 3.8% – it’s already heating faster than the rest of the world. And if the target of limiting global warming to 1.5℃ above pre-industrial levels is missed, Africa could be facing catastrophic temperature increases of up to 3℃ by 2050. At the same time, the threat to GDP of African nations that are most vulnerable to these changes – meaning the amount of economic activity that stands to be lost if these changes are severe enough – is projected to increase from £660 billion in 2018 to over £1 trillion in 2023. That’s almost half of the continent’s projected GDP.
Sourcing Minerals for Africa’s Energy Transition (Energy Capital & Power)
Africa represents the second-largest mineral industry in the world, with many countries from the continent relying on mineral exploration and production to stimulate economic growth. Richly endowed with massive mineral reserves and ranking first in the quantity of several various mineral-types, the mineral industry contributes greatly towards Africa’s gross income. The global energy transition is shaping the mining industry, as priorities for an energy shift towards electric vehicle production, battery storage, and other green energy technologies, thus provoking a reduction in the world’s demand for fossil fuels. While nearly 50% of sub-Saharan Africa’s export value derives from the development and trade of fossil fuels, the continent is poised to prosper from its mineral energy resources such as nickel, copper, and cobalt. Minerals serve as essential components in many of the world’s fastest growing green energy technologies, with demand for these minerals expected to grow exponentially in the coming decades. Therefore, sub-Saharan Africa has a comparative advantage as the world begins its transition to clean energy sources, and as renewable technologies become cheaper and more readily available, there is indication that Africa will benefit exponentially from its mineral energy materials, particularly for countries with abundant sources of copper and nickel, such as the Democratic Republic of the Congo (DRC), Zimbabwe, and Zambia.
Africa’s energy strategy – GIS Reports (Geopolitical Intelligence Services AG)
Despite the worldwide impetus to replace fossil fuels with green energy, African countries are hoping oil and gas will remain in demand long enough for the continent to profit from its abundant resources.
In energy markets, volatility seems to be the watchword. Gas prices have dramatically increased in Europe. China has declared itself willing to “pay any price” to secure coal. Beijing has also joined the United States and other countries in tapping oil reserves to bring prices down. Africa, a continent that suffers from widespread energy poverty but that is also endowed with massive resources, will be affected by this turmoil.
energy poverty remains a major obstacle to growth. While it is home to 16 percent of the world’s population, the continent consumes just 3.3 percent of global primary energy. Not surprisingly, per capita emissions are estimated to be a fifth of the global average. Moreover, 600,000 of the 800,000 people estimated to live without access to electricity are in sub-Saharan Africa.
Sub-Saharan Africa lost R30bn due to govt internet shutdowns, report says (Engineering News)
Countries in Sub-Sahara Africa lost a combined R30.88-billion from their economies because of widespread internet shutdowns by regimes, as demonstrations and crackdowns on opposition and civic society ensued last year. This is contained in the Global Cost of Internet Shutdowns 2021 report, released on Monday.
Local Reviews of Sustainable Development Progress in Africa Published (UNECA)
Five African localities have published Voluntary Local Reviews (VLRs) of their frameworks and progress towards regional and global sustainable development goals. These VLRs – in Accra, Harare, Ngora District, Victoria Falls and Yaoundé – were supported by ECA and are among a first wave of local-level reviews undertaken across Africa, with many more on the way.
AGOA: What does the US decision to delist three African countries imply? (Ventures Africa)
Trade is one highly significant part of Africa’s story. Its pre-colonial, colonial and post-colonial transitions are all marked by trade. But for many years, African trade has struggled with several challenges: poor infrastructure, high transaction costs, opportunism and unfriendly policies. So when President Bill Clinton signed the African Growth and Opportunity Act (AGOA) in 2000, African countries were given a competitive edge by providing unilateral duty-free exports for 6,500 products from Africa to the United States. But that reality is changing for some countries. On January 1st, 2022, the US officially barred Ethiopia, Guinea and Mali from accessing the AGOA. The move comes two months after president Joe Biden told Congress that he plans to cut off the three countries from the program over coups and alleged human rights violations, which put them in violation of the program’s eligibility requirements.
‘Last on the rung’: Africa deals with fallout from a ‘Made in the USA’ supply chain crisis (Washington Post)
As the world’s largest cargo ships rush to the United States with all the clothes, furniture, toys and electronics that American consumers might want, Aditya Awtani is feeling neglected. The chief executive of Mega Garment Industries Kenya, which supplies brands such as Calvin Klein and Izod, sometimes must wait more than two months — twice as long as usual — for shipments of the imported Chinese fabric he needs to make clothes in his high-ceilinged factory in Mombasa, Kenya. Awtani’s problems getting raw materials into Kenya are mirrored by his troubles getting Mega shirts, pants and children’s clothing out of the country. Shipping containers are scarce, since carriers often hurry them back to China, making it hard to plan and easy to miss scheduled deliveries.
Global economy
Report Finds Trade Misinvoicing Continues to be a Massive and Persistent Problem (Global Financial Integrity)
A report published by Global Financial Integrity (GFI) finds an estimated US$1.6 trillion in potential trade misinvoicing among 134 developing countries, of which US$835 billion occurred between developing countries and 36 advanced economies, in 2018. This report, Trade-Related Illicit Financial Flows in 134 Developing Countries 2009-2018, shows trade misinvoicing is a persistent problem across developing nations, resulting in potentially massive revenue losses and facilitating illicit financial flows across international borders.
Global Growth to Slow through 2023, Adding to Risk of ‘Hard Landing’ in Developing Economies (World Bank)
Following a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from COVID-19 variants and a rise in inflation, debt, and income inequality that could endanger the recovery in emerging and developing economies, according to the World Bank’s latest Global Economic Prospects report. Global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.
At a time when governments in many developing economies lack the policy space to support activity if needed, new COVID-19 outbreaks, persistent supply-chain bottlenecks and inflationary pressures, and elevated financial vulnerabilities in large swaths of the world could increase the risk of a hard landing.
The slowdown will coincide with a widening divergence in growth rates between advanced economies and emerging and developing economies. Growth in advanced economies is expected to decline from 5 percent in 2021 to 3.8 percent in 2022 and 2.3 percent in 2023—a pace that, while moderating, will be sufficient to restore output and investment to their pre-pandemic trend in these economies. In emerging and developing economies, however, growth is expected to drop from 6.3 percent in 2021 to 4.6 percent in 2022 and 4.4 percent in 2023. By 2023, all advanced economies will have achieved a full output recovery; yet output in emerging and developing economies will remain 4 percent below its pre-pandemic trend. For many vulnerable economies, the setback is even larger: output of fragile and conflict-affected economies will be 7.5 percent below its pre-pandemic trend, and output of small island states will be 8.5 percent below.
Easing Trade Bottlenecks in Landlocked Developing Countries (WTO)
Landlocked developing countries (LLDCs) face many challenges to integrate into global supply chains. This report identifies trade bottlenecks in LLDCs and provides recommendations on how to keep trade flowing smoothly across borders.
Solving Maritime Challenges In 2022 (Leadership)
Maritime stakeholders thought the myriad of challenges facing the port system will end by year 2021 and operators can heave a sigh of relief. They believed challenges such as lack of port automation, overtime cargo fueling congestion at seaports, non refund of container deposit fee by shipping companies, non-disbursement of Cabotage Vessel Finance Fund (CVFF), resuscitation of National Shipping Line, introduction of Maritime Bank, and increased shipping surcharge by foreign shipping companies, will be solved by relevant agencies and authorities in the sector.
However, some stakeholders, e.g indigenous shipowners had lamented that foreign-operated vessels that engaged in Nigeria National Petroleum Corporation’s (NNPC’s) marine service contracts, accounted for over 90 per cent of the Cabotage trade, thus creating an uneven operating environment detrimental to the growth of indigenous tonnage.
Digital trade: Opportunities and actions for developing countries (pdf) (UNCTAD)
Digital trade is increasingly important and comprises both digitally ordered trade in goods and services (cross-border electronic commerce (e-commerce)) and digitally delivered trade (services delivered internationally through the Internet or other networks). However, countries vary greatly in their readiness for digital trade. If the share of developing countries, particularly the least developed countries, in world trade is to increase, as envisaged in the 2030 Agenda for Sustainable Development, actions are needed to strengthen their capacity to benefit from digital trade. The coronavirus disease (COVID-19) pandemic has made this need even more urgent.
Supply Chain Disruptions Halve November Air Cargo Growth (IATA)
The International Air Transport Association (IATA) released data for global air cargo markets showing slower growth in November 2021. Supply chain disruptions and capacity constraints impacted demand, despite economic conditions remaining favorable for the sector. As comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted, all comparisons below are to November 2019 which followed a normal demand pattern.
How barriers to trade can be barriers to climate change adaptation (VOX, CEPR Policy Portal)
A wide range of evidence suggests that global warming will have major effects on agricultural productivity throughout the world.
The exceedingly low levels of trade in poor countries stand as a critical barrier to climate change adaptation. Instead of agricultural specialisation shifting away from the hardest-hit regions as the world heats up, my model projections suggest that warming will keep more workers stuck on farms in hotter, poorer countries as falling agricultural productivity in these places exacerbates the food problem. As climate change makes people poorer and food more expensive, it raises the budget share and consequently the production share of agriculture in the absence of a major increase in food imports. With production remaining concentrated in the sector experiencing dramatic declines in productivity, people in these places project to suffer greatly.
UNCTAD takes the pulse of the SDGs (UNCTAD)
The purpose of this report, published on 2 July 2021, is to: provide an update on the evolution of a selection of official SDG indicators and complementary data and statistics; provide progress reports on the development of new concepts and methodologies for UNCTAD custodian indicators; and to also showcase, beyond the perspective of the formal SDG indicators, how UNCTAD is contributing to the implementation of 2030 Agenda. The report will also investigate thematic issues of relevance to 2030 Agenda – this year, the report discusses the remoteness as a challenge for achieving the 2030 Agenda.
Related News
tralac Daily News
National
South Africa records FDI inflows of R558bn in the third quarter (Engineering News)
South Africa recorded R557.9-billion of foreign direct investment (FDI) inflows in the third quarter of this year versus inflows of R17.4-billion in the second quarter, central bank data showed on Wednesday. The central bank said its December Quarterly Bulletin that the large inflows were due to technology investor Prosus buying about 45% of its South African parent Naspers.
SA Plastics Pact an effective platform for value chain collaboration (Engineering News)
The South African Plastics Pact sets aspirational targets for the value chain to meet by 2025, and businesses, government, producer responsibility organisations, nongovernmental organisations and retailers are collaborating and developing solutions to ensure plastics are eliminated, reused or recycled, says mass retailer Spar Group packaging manager Devin Galtrey. SA Plastics Pact members are working to eliminate problematic plastics, reducing the total amount of packaging on supermarket shelves, stimulating innovation and new business models that will help build a stronger recycling system in South Africa.
Importing cars older than eight years prohibited (The Namibian)
THE Namibia Revenue Agency (Namra), in collaboration with the police and the Roads Authority, is engaged in efforts to combat the illicit trading and fraudulent registration of motor vehicles. According to Tonateni Shidhudhu, the agency’s spokesperson, this applies especially to vehicles imported from outside the Southern African Common Customs (Sacu) area. Sacu countries include Botswana, Eswatini, Lesotho, Namibia, and South Africa. “The importation of certain second-hand motor vehicles into Namibia, from outside the common customs area, that are older than eight years and registered in the common customs area for less than two years prior to importation into Namibia are prohibited,” Shidhudhu says.
He says qualified vehicles are subject to import permits before entering the country. Such permits are provided by the Ministry of Industrialisation and Trade.
‘The DRC can become an electric car champion’ – Industry minister (The Africa Report)
President Félix Tshisekedi is committed to making the DRC an ‘electric car champion’, he said at the DRC-Africa Business Forum held from 24 to 25 November in Kinshasa, signing several agreements with various technical and financial partners. These include the United Nations Economic Commission for Africa (ECA), the African Development Bank (ADB), the African Export and Import Bank (Afreximbank), the Africa Finance Corporation (AFC), the Arab Bank for Economic Development in Africa (Badea) and the Australian mining group AVZ Minerals.
Ugandan Cabinet hits Kenya with farm goods export ban (Business Daily)
Uganda will restrict from its domestic market some of Kenya’s raw and processed agricultural products in a reciprocal move that follows her eastern neighbour’s continued ban on some of her agricultural products. On Monday, the Ugandan Cabinet finally agreed to this nearly two-year proposal, which has often been opposed by President Yoweri Museveni. According to Rebecca Kadaga, Ugandan Minister for East African Affairs, the Cabinet has directed the Agriculture ministry to identify and list Kenyan products that will then be banned by the Ugandan government “in a short time.” Key agricultural exports to Uganda from Kenya include palm oil at Sh7.2 billion last year, sorghum (Sh1.4 billion), vegetables (Sh311 million) and legumes (Sh200 million).
How standards body’s new certification procedures will boost trade (The New Times)
In previous months, Athanase Harelimana the coordinator of UNICOOPAGI (Union De Cooperatives Agricoles Intégrées) based in Nyamagabe District, Southern Province, would make several trips to Kigali when seeking certification or other services from the Rwanda Standards Bureau. The cooperative is often seeking services such as certification documentation, sample testing among others. However, recently when he was purchasing standards (a set of minimum mandatory standards that RSB expects producers to comply with for certification), he did not have to make the trip and received the service in hours as opposed to days as was previously the case. To access the service, he used the agency’s e-Portal, made his selection, made payments virtually and was able to download the documents.
The development follows the launch of a Single Window Information for Trade (SWIFT) project last week which was made possible by input and investment from partners such as TradeMark East Africa and USAID.
The Single Window Information for Trade (SWIFT) also reduces time and cost for local producers seeking services such as test results and certification as they only need to drop their samples at the agency and results are delivered electronically in about a week’s time as opposed to about a month previously.
2022 budget is one of the best-ever — Osafo-Maafo (GhanaWeb)
The Senior Presidential Advisor, Mr Yaw Osafo-Maafo, says the 2022 Budget is one of the best Ghana has ever produced because of its focus on youth entrepreneurship and employable skills development. He cited the infusion of the Electronic levy (E-levy) in the proposed budget towards funding entrepreneurship programmes as one of the best decisions of the government. Mr Osafo-Maafo made the remarks at the unveiling of the new Ghana TVET Service at the Accra Technical Training Centre (ATTC) in Accra on Tuesday on the theme: “Stirring Ghana’s industrialisation drive through skill acquisition for national development.”
“Indeed, this current budget is one of the best this country has ever produced because there are two things in it which are fundamental and these are entrepreneurship training that we are putting as part of the responsibility of government to ensure that the youth is resourced financially to be entrepreneurial, that people cannot use access to funds as a handicap.
Industry Ministry implements plan to boost local manufacturing, exports: Gamea (Daily News Egypt)
Nevine Gamea, Minister of Trade and Industry, has stated that the ministry is implementing a comprehensive strategy to deepen local manufacturing in the industrial sector and increase export rates. According to Gamea, Egypt’s exports have increased by 24.5% in the previous ten months, and the local industrial sector accounts for 17% of GDP.
She also noted that there are 100 measures in place to enhance the industrial sector, 30 of which have been finalized with 9 ministries, in addition to reshuffling the Supreme Council for Exports and strengthening the function of the Export Development Fund. She went on to say that these processes include raising VAT requirements, increasing the local components in the industrialization, and raising quality standards in order to meet the ministry’s objectives.
African Development Bank loans Nigeria $210 million for Special Agro-Industrial Processing Zones (AfDB)
A $210 million loan approved by the African Development Bank’s Board of Directors on Monday could impact the lives of millions of people in Africa’s most populous country. The loan will co-finance Phase 1 of the Nigeria Special Agro-Industrial Processing Zone Program. The program will help to unlock Nigeria’s agriculture sector potential. It will promote industrialization through the development of strategic crops and livestock. African Development Bank financing for this program represents one of the Bank’s most ambitious operations in terms of scale and scope to date. It is made up of an African Development Bank loan of $160 million and an Africa Growing Together Fund loan of $50 million. Phase 1 of the project will target seven Nigerian states and the country’s Federal Capital Territory. The project will support Nigeria’s efforts to raise agricultural productivity, promote investment, create wealth and jobs, and transform rural areas into corridors of economic prosperity. Its first phase will be implemented with co-financing from other partners in the amount of $538.05 million.
Farmers eye direct Eldoret Airport, EU flower exports (Business Daily)
Eldoret International Airport has resumed direct exports to the European market of cut flowers from the North Rift region as it seeks to turn around the fortunes of the local farmers and boost regional economy. The facility has partnered with Ethiopian Airlines to export the fresh produce to European markets such as Belgium and Netherlands. “For many years, farmers have been transporting their produce by the road which means extra costs. But now this is a game-changer in the horticultural sector as it will significantly lower costs,” said Walter Agong’, the airport’s manager. “Farmers are excited about this new milestone and we are targeting to increase volumes from current five tonnes per week to 15 to over 20 tonnes starting this week, that is five tonnes in each of the three flights in a week.”
Egypt’s exports hike 24.5% in 10 months (EgyptToday)
Egypt’s exports increased 24.5 percent during the first 10 months of 2021 on an annual basis, recording $25.9 billion, according to the Minister of Trade and Industry, Nevine Gamea. Gamea attributed Tuesday the increase to the measures implemented to stimulate exports. The minister added that the contribution of industrial production to the gross domestic product (GDP) increased to 17 percent during the fiscal year 2019/2020, compared to about 16 percent during the fiscal year 2018-2019.
Africa
Connecting Africans with Africans: How effective communication can help boost intra-African Trade (Modern Ghana)
January 2021 marked a historic event for African economic development –the launching of free trading under the African Continental Free Trade Area (AfCFTA).
The agreement promotes socio-economic growth and development in Africa through liberalised trade processes and structures. So far, the 54 African countries have signed the agreement, resulting in immense potential for the growth of trade between African countries. In fact, it has been hailed as perhaps the “most ambitious free trade project since the creation of the World Trade Organization itself” by Martyn Davies, the managing director of Emerging Markets at Deloitte Africa.
The question is, are African countries harnessing this potential offered by the AfCFTA?
Private sector, SMEs crucial for AfCFTA development benefits, primary commodities export bias a problem (Engineering News)
A survey of more than 400 CEOs from 44 countries in Africa and two outside has reflected the importance of small and medium-sized enterprises (SMEs) in Africa. The continent’s bias towards the export of primary commodities, however, reduces the relative developmental value that would accrue from trade in higher value-added manufactured goods, trade finance institution the African Export-Import Bank (Afreximbank) African relations and trade policy consultant Professor Patrick Utomi said on December 14.
Nigeria leads Africa in foreign investment inflows (The East African)
Eastern Africa received the lowest foreign direct investment (FDI) in 2020 compared to its western and southern Africa counterparts, mostly due to policy bottlenecks and rising political tensions, like those in Ethiopia. Kenya was the highest FDI recipient in the region and the fifth in Africa, attracting capital investments worth $500 million last year. This was a significant drop from the $2 billion it received in 2018. Tanzania was second, attracting $200 million while Uganda booked no foreign inflows in the year under review. Southern Africa regained its lead as the largest FDI hub in Africa owing to its diversified economy, which has attracted investors. Morocco and Egypt attracted most of the investment in the North while Nigeria, Ghana and Côte d’Ivoire dominated in the West. Angola took the lion’s share of FDI in Central Africa. The “Africa Attractiveness Report 2021” by global auditing firm Ernst and Young also shows that FDI into Africa fell sharply by almost 50 percent in 2020 due to the Covid-19 pandemic, trailing all other emerging markets.
Africa 2022: Supply Chain and payment revolution (IDG Connect)
As the African Continental Free Trade Area (AfCFTA) enters its second year in 2022, most enterprises are now looking continent-wide to grow their businesses. Inter-country trade has been a riddle that African governments, businesses and organisations have failed to solve, but is now being unravelled by technology. In 2022 we will see the use of technology erasing the borders that have hampered the growth of trade and business in Africa. The bedrock of trade lies in supply chain management, custom processes and easy payment options. Implementing these technologies will be innovative startups and entrepreneurs whose eyes are now trained on the 1.2 billion population in Africa. However, the tech talent to grow these solutions is lacking. Below are some of the technologies that will dominate developments in Africa and have the potential to positively affect how Africa does business.
Africa hopeful free trade area will block second-hand imports (the East African)
Towards the end of Liberia Road stands the assertive Africa Trade House, the headquarters of the African Continental Free Area (AfCFTA) that was commissioned in August last year. Nestled in the Africa Trade House, is also the African Export Import Bank (Afrexim), the Cairo-headquartered pan-African lender that provides loans for trade and other project related finance. More than any other continental institution, Afriexim Bank has poured massive sums into personal protective equipment (PPE) and Covid-19 vaccines.
Opposite the Africa Trade House, a little worse for wear, is Cedi House, a 14-storey building that houses the Bank of Ghana and the Ghana Stock Exchange. Next to Cedi House is another of new age complexes, home to South African giant First National Bank (FNB) and other financial institutions. Then, directly across the road from FNB, is the well-appointed National Theatre.
It is the perfect setting to beg the question; if you had to take a play across the road to the stage at the National Theatre about the dream of a pan-African market and the possibilities for the money people to make a fortune, what story would you tell?
Vehicle manufacturing and food processing could reap billions from African free trade zone (How we made it in Africa)
African Continental Free Trade Area supporters are betting that full tariff liberalisation of the vehicle manufacturing and food processing sectors will unlock billions of dollars in regional trade as the continent stands to reap the benefits of the world’s largest single market.
Communique on Progress Made on Vaccine Manufacturing in Africa - Kigali, Rwanda 06 07 December 2021 (Africa CDC)
On 6th-7th December 2021, the African Union, Africa Centres for Disease Control and Prevention (Africa CDC), the AUDA-NEPAD, and the African Continental Free Trade Area (AfCFTA) convened a stakeholder’s meeting in Kigali, Rwanda to review progress made in manufacturing vaccines in Africa. The objective of the meeting included: a) an update on progress made so far on the Partnerships for African Vaccine Manufacturing in Africa (PAVM), b) agreement on an AU-endorsed approach to facilitate regulatory approval of vaccines produced in Africa, c) discuss critical market shaping needs once African countries produce vaccines, and d) review progress on vaccine manufacture hubs and pilot a drug Active Pharmaceutical Ingredient (API)-final drug product Hub program.
NOTED that after considering several options the regulators agreed on two potential pathways for Emergency Use Authorisation (EUA) of vaccines including those for the SARS-COV-2, the virus that causes COVID-19: 1) Use and strengthen the Africa Medicines Regulatory Harmonization (AMRH), as a mechanism to provide EUA for COVID-19 vaccines produced in Africa pending the full operationalization of AMA.2) Create a network of National Regulatory Authorities (NRAs) from countries with intent to produce vaccines and other NRAs with advanced maturity levels, using AMRH structure with close coordination by PAVM, and develop a step-wise process for strengthening them to facilitate the issuance of EUA.3) Collaborate with the AfCFTA Secretariat to support manufacturing and Intra-Africa Trade for COVID-19 vaccines and pharmaceuticals products through appropriate Intellectual Property Framework. PROPOSE the submission of the options proposed above to the AMA Conference of States Parties in January 2022.
Kagame rallies for more domestic investment in Africa’s public health (The New Times)
President Paul Kagame has called for renewed commitment from African governments and national parliaments to increase domestic financing for health in Africa. He made the remarks on Tuesday, December 14, during the first international Conference on Public Health in Africa (CPHIA 2021), organized by the African Union and the Africa Centres for Disease Control and Prevention (Africa CDC). “This has been a priority of the African Union (AU) for several years, but progress has not been fast enough. We cannot continue to rely on external funding for something so important to our future,” he said.
Moussa Faki Mahamat, Chairperson of AU Commission, said that despite the many challenges brought about by Covid-19, it has also created an opportunity to build a new public health order that can effectively fight against future health crises.
The Senior Officials from the Southern African Customs Union Member States (Botswana, Eswatini, Lesotho, Namibia and South Africa) and Mozambique and the United Kingdom (UK) held the first meeting of the Trade and Development Committee under the SACUM-UK Economic Partnership Agreement (SACUM-UK EPA) via videoconference on the 10th November 2021.
The Parties agreed on an approach to develop the Rules of Procedure for the Institutions established under the Agreement as well as the appointment of arbitrators in preparation for the first meeting of the Joint Council. They further agreed to exchange views on the issues to be considered by the Special Committees on Trade Facilitation and Customs Cooperation; Geographical Indications and Trade in Wine and Spirits; and the Agricultural Partnership to facilitate the convening of the first meetings of these Special Committees.
The Parties acknowledged the importance of time-bound commitments provided for under the Agreement, including in relation to the review of regional cumulation; developing work programmes on Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) Matters; and the scope and volume under the automatic derogations. The Parties also provided information on their respective tariff rate quota usage and administration.
Green jobs for women in Africa (AfDB)
The transition to a green economy will create many new jobs around the world, including in sub-Saharan Africa. Will women share-in these new jobs, and will the economic transformation help women move into higher-paid, more stable jobs that require more education and skills? The short answer is “yes” – provided countries adopt strong policies and programmes to make it happen.
Five African countries presented their investment cases at the recent Africa Energy Marketplace, which brought together governments, the private sector and development partners, to highlight strategic projects and key energy sector reforms. The countries’ pitches also emphasized the scale of renewable resources among their key priorities. The theme of the fifth African Energy Marketplace, held virtually between 26 and 29 October, was Identifying opportunities across the energy value chain: Resolving bottlenecks and unlocking investments in Cameroon, Guinea, Kenya, Mozambique, and Tunisia.
African Development Bank publishes market study on demand for Adaptation Benefits in Africa (AfDB)
Development Bank, in partnership with professional services provider Ernst & Young and Perspectives Climate Group, has published a study on the demand for Certified Adaptation Benefits as a means of financing private sector adaptation projects in Africa. Certified Adaptation Benefits are generated by the Adaptation Benefits Mechanism (ABM), an innovative financial instrument that enables donors, consumers, and others who can afford it, to contribute to the costs of genuine adaptation projects in African countries. The report presents findings from 68 online responses and 15 in-person interviews. Participants considered the ABM highly relevant for agriculture and forestry, water management, energy access, biodiversity, and climate information systems across project sizes. They expressed specific interests in projects ranging from $1 million to $50 million.
New interactive report shows Africa’s growing hunger crisis (UNECA)
A new, interactive digital report launched today shows that the number of hungry people in Africa continues to rise, spurred by conflict, climate change and economic slowdowns including those triggered by COVID-19. The African Union Commission (AUC), the Food and Agriculture Organization of the United Nations (FAO), and the UN Economic Commission for Africa (UNECA) launched the digital report as the latest update to their annual reporting on the state of food security and nutrition in Africa. Hunger on the continent has worsened substantially since 2013, the report states, and most of this deterioration occurred between 2019 and 2020. The situation is expected to have deteriorated further this year, with no easing of hunger’s main drivers. The three agencies behind the report are calling on African countries to heed the call for agrifood systems transformation.
Sino-African Relations: Sustainable Benefits (Cameroon Tribune)
The just-ended Sino-African Summit in Dakar (Senegal) has added more impetus to the excellent relations between China and Africa. The eighth edition of the Forum on China-Africa Cooperation (FOCAC) that took place in Dakar, Senegal, from 29-30 November 2021 under the theme, “Deepen China-Africa Partnership and Promote Sustainable Development to Build a China-Africa Community with a Shared Future in the New Era,” has come and gone with many positive achievements.
During deliberations, though African leaders hailed the role played by FOCAC as a “beacon of hope” and a “valuable platform for dialogue and amplification of Africa’s voice on the world stage since its inception twenty-one years ago, they unanimously called for a trade equilibrium between China and Africa. This according to the leaders and participants can be done by increasing China’s infrastructure investment in Africa, especially in key sectors such as, seaport, railway, energy, water and technology transfer.
While waiting for the China-Africa 2035 joint vision to get on the rail, it is worth noting that Sino-Africa relations is waxing strong. According to the China-Africa Research Institute at Johns Hopkins University, the value of China-Africa trade in 2019 was $192bn, up from $185bn in 2018. In 2019, the largest exporter to China from Africa was Angola, followed by South Africa and the Republic of Congo. In 2019, Nigeria was the largest buyer of Chinese goods, followed by South Africa and Egypt. On 17 November, Chinese vice commerce minister Qian Keming reported that trade between China and Africa had risen 38.2% year on year to $185.2bn in the January-September 2021 period, a record level. China is also Africa’s biggest source of foreign direct investment that surged from $75m in 2003 to $2.7bn in 2019. China’s direct investment in Africa hit $2.59bn in the first nine months of 2021, up 9.9% year on year, reported Qian Keming.
International
E-commerce co-convenors welcome substantial progress in negotiations (WTO)
Australia’s Trade, Tourism and Investment Minister Dan Tehan, Japan’s Minister for Foreign Affairs Yoshimasa Hayashi and Minister of Economy, Trade and Industry (METI) Koichi Hagiuda, and Singapore’s Minister for Trade and Industry Gan Kim Yong highlighted the good convergence achieved in eight articles so far.
“Thanks to the good progress achieved so far, we’re on track to achieve convergence on the majority of issues in the negotiations by the end of 2022. Australia, Japan and Singapore are committed to driving negotiations towards this objective,” said Minister Tehan.
“The work undertaken promises more stability and predictability for consumers and businesses in a fast-growing sector of the digital economy. The pandemic has highlighted the importance of e-commerce as a tool for inclusion, helping small business access international markets, particularly businesses headed by women. I encourage the initiative to continue to keep its doors open for other members of the WTO to join and to continue discussing development issues necessary to bridge the digital divide,” WTO Director-General Ngozi Okonjo-Iweala said.
In an attempt to deepen financial inclusion, microfinance organizations are introducing digital solutions to serve low-income households and small- and medium-sized enterprises. Mobile financial services and fintech solutions are particularly promising in Africa where financial inclusion is only 43 percent, whereas mobile phone penetration is almost 90 percent. Such solutions show promise: In Kenya, for example, mobile financial services—specifically mobile money—contributed to increasing financial inclusion from 26.7 percent to 82.9 percent between 2006 and 2019. Microfinance organizations have two goals: One is to increase financial inclusion, the other to be financially profitable—or at least financially sustainable. Balancing those goals is not easy, as leadership must choose between prioritizing social impact versus financial performance, and must consider changes that come with time, investments, environmental fluctuations, innovations, and the like. Thus, as is common when pursuing dual, often conflicting aims, optimizing both is hard. Still, the rewards are worth it, and innovations are making this goal more achievable every day. Indeed, mobile money, fintech services, and online banking have the potential to transform the microfinance industry in Africa, given their enabling capabilities to increase both financial performance and social impact.
G20 GDP Growth - Third quarter of 2021 (OECD)
Gross domestic product (GDP) of the G20 area grew by 1.7% between the second and the third quarter of 2021, up from a moderate quarter-on-quarter growth rate of 0.4% in the second quarter, according to provisional estimates. This is in contrast with the slowing trend recorded in the OECD area over the same period (from 1.7% in Q2 to 1.1% in Q3). The relatively strong growth of the G20 area in the third quarter of 2021 reflects a rebound in India, where GDP rose by 12.7% in Q3, after a contraction of 11.6% in Q2, mainly driven by fixed investment and private consumption. GDP also rose markedly in Saudi Arabia (by 5.8% in Q3, from 1.1% in Q2), exceeding its pre-pandemic level for the first time, and in Turkey (by 2.7%, from 1.5%). Growth recovered more than previously estimated in Canada (by 1.3%, from minus 0.8%),1 and there was a robust contribution from some European countries including France and Italy. However, several other G20 countries recorded a deceleration or a contraction in GDP growth. In China, quarter-on-quarter GDP growth slowed to just 0.2%, from 1.2%, and in Korea to 0.3%, from 0.8%, in the third quarter of 2021. Growth slipped into negative territory in Australia (minus 1.9%), South Africa (minus 1.5%), Japan (minus 0.9%), Indonesia (minus 0.6%) and Mexico (minus 0.4%), and it continued to contract in Brazil (minus 0.1%, after minus 0.4%). These contractions reflected mainly negative contributions from private consumption in Australia, Indonesia and South Africa, and from exports in Brazil and South Africa.
High freight rates cast a shadow over economic recovery (UNCTAD)
The recovery of the global economy is threatened by high freight rates, which are likely to continue in the coming months, according to UNCTAD’s Review of Maritime Transport 2021 published on 18 November. UNCTAD’s analysis shows that the current surge in container freight rates, if sustained, could increase global import price levels by 11% and consumer price levels by 1.5% between now and 2023. “The current surge in freight rates will have a profound impact on trade and undermine socioeconomic recovery, especially in developing countries, until maritime shipping operations return to normal,” said UNCTAD Secretary General Rebeca Grynspan. “Returning to normal would entail investing in new solutions, including infrastructure, freight technology and digitalization, and trade facilitation measures,” she said.
UNited for a fairer and more sustainable recovery (EURACTIV)
Trade is a route to greater diversification of production and hence to more opportunities for citizens. But this is not immediate and automatic. It is also not without pain. Trade rules help to provide transparency and regulatory consistency, while the WTO helps to stymy the threat of protectionism through its monitoring and soft pressure. And this is important because by now we know that trade protectionism doesn’t protect jobs. In short, trade rules make trade possible, but we need to ensure that trade happens, and more importantly, that trade works for all. This is why multilateral efforts need to be combined with strong policies at home to manage the transition. Initiatives such as Aid for Trade and the enhanced integrated framework- two platforms for trade-related assistance under the WTO roof- place a spotlight on the needs of poorer countries for this kind of support, while helping to showcase why investing in trade can lead to scalable and impactful results.
If we are to reset the world economy, we need to do it together. We need to rebuild, recommit and reaffirm that multilateral approaches to global crises as the only route to a sustainable and inclusive recovery for all. The pandemic has lay bare our interdependence and has provided in stark terms examples of how a national action can have a global reaction.
COP26 defined by ‘reinvigorated multilateralism’ (UN News)
“The Glasgow Climate Pact to keep global warming to 1.5C and the other important commitments are a sign of progress”, UN Economic and Social Council (ECOSOC) President Collen Kelapile told the special meeting.
“As trillions are being spent on COVID-19 recovery, we must transform this tragedy into a historic opportunity…ensure that recovery efforts are aligned with the 2030 Agenda for Sustainable Development and the goals of the Paris Agreement to ‘build forward better’”, stated Mr. Kelapile. He urged the world to swap traditional “siloed” approaches for cross-sectoral decision-making and innovative solutions that “unlock synergies across government portfolios, sectors of the economy, and the SDGs”. “Recovery packages and policies to address the impacts of the pandemic must also bolster climate action and promote the transformative changes we need to realize the objectives of Paris and Glasgow as well as the SDGs”, upheld the ECOSOC chief.
Asia-Pacific partnership creates new ‘centre of gravity’ for global trade, UNCTAD says (UNCTAD)
A new Asia-Pacific free trade agreement set to enter into force on 1 January 2022 will create the world’s largest trading bloc by economic size, according to an UNCTAD study published on 15 December. The Regional Comprehensive Economic Partnership (RCEP) includes 15 East Asian and Pacific nations of different economic sizes and stages of development.
The RCEP will become the largest trade agreement in the world as measured by the GDP of its members – almost of one third of the world’s GDP. By comparison, other major regional trade agreements by share of global GDP are the South American trade bloc Mercosur (2.4%), Africa’s continental free trade area (2.9%), the European Union (17.9%) and the United States-Mexico-Canada agreement (28%).
UNCTAD’s analysis shows that the RCEP’s impact on international trade will be significant. “The economic size of the emerging bloc and its trade dynamism will make it a centre of gravity for global trade,” the report says.
IATA calls on States to reverse travel bans in wake of new Covid-19 strain (Business Daily)
The International Air Transport Association (IATA) wants governments across the globe to rescind a decision on flights ban and follow the advice issued by the World Health Organisation (WHO) in the management of the new variant. Public health organisations, including WHO, have advised against travel curbs to contain the spread of the Omicron Covid-19 variant that was first discovered in South Africa. A number of countries in the world have introduced travel bans in response to this latest strain of the coronavirus. “After nearly two years with Covid-19 we know a lot about the virus and the inability of travel restrictions to control its spread. But the discovery of the Omicron variant induced instant amnesia on governments which implemented knee-jerk restrictions in complete contravention of advice from the WHO—the global expert,” IATA said.
“Blanket travel bans will not prevent the international spread, and they place a heavy burden on lives and livelihoods. In addition, they can adversely impact global health efforts during a pandemic by disincentivising countries to report and share epidemiological and sequencing data.”