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Taking Uganda-South Africa trade and investment forward (The Independent Uganda)
Latest data from the Bank of Uganda shows that the East African nation and South Africa’s trade volumes increased from merely US $76million in 1999 to US $334million in 2019 before slowing down to US $148.8million in 2022 owing to the effects of coronavirus pandemic.
However, most of these trade volumes are in favour of South Africa because it exports mostly high-value products such as machinery, vehicles, plastics, chemicals, electronics, parts and accessories, petroleum, live animals, books and newsprint, textiles, footwear, aircraft, and household goods. On the other hand, Uganda exports low-value products such as cotton, gold, fish fillets, tobacco, coffee, and fresh flowers.
It is on this basis that Uganda and South African governments have organized for a second leg of trade and investment summit to be held in Kampala next month to actualize deals and initiatives that started during the first summit held in Pretoria, South Africa, in February this year.
Trade cooperation between Angola and South Africa valued at US$29.6 mln (Angop)
Trade cooperation between Angola and South Africa, valued at US$29.6 million is below its real potential, the executive director of the Private Investment and Export Promotion Agency (AIPEX), José Sala, said Tuesday in Luanda. José Sala added thar the two states have the potential to stimulate economic growth and promote regional development, creating more jobs for their citizens.
Speaking to the press on the sidelines of the Angola-South Africa Business Forum, the AIPEX administrator said that the South African investment, valued at US$29.6 million, is the result of seven projects, of which five in the area of service provision, one in the manufacturing sector and another in agro-industry.
José Sala suggested that the governments and companies of the two countries need to work together to facilitate trade and investment, which also includes improving infrastructure and establishing more cooperation agreements.
In recent years, the two states have reinforced bilateral relations with the signing of various commercial agreements, which include cooperation in the oil sector and the suppression of visas in ordinary passports.
Kenya eyes 6.1-month import cover to stop slide in shilling (The East African)
Kenya has set a target to ramp up its foreign exchange reserves to at least 6.1 months of import cover as it looks to provide a stronger buffer to cushion the shilling from external headwinds. This has been revealed in the details of the Medium-Term Plan 4 covering the period 2023 to 2027, the last implementation phase of Vision 2030. The first medium-term plan covered the period between 2008 and 2012.
The latest available Kenya National Bureau of Statistics data shows Kenya’s merchandise trade deficit stood at Ksh303.63 billion ($2.1 billion) between January and March 2023, an improvement from the Ksh328.1 billion ($2.27 billion) deficit reported in the same period in 2022.
The Finance Act 2023 has amended the Miscellaneous Fees and Levies Act of 2016 to introduce the Export Promotion and Investment Levy effective September 1, 2023, geared towards generating funds to boost manufacturing, increase the country’s exports and trim the monthly import bill.
Under the present environment, 6.1 months of import cover translates to about $11.2 billion (Ksh1.6 trillion) in foreign exchange reserves compared to the current $7.3 billion ($1.1 trillion), which translates to 3.98 months of import cover. According to CBK, the statutory reserves threshold is 4.0 months, an
Mining vaccines, and trade, Kenya and Indonesia ink multi-faceted agreements (Business Insider Africa)
Following bilateral discussions between President William Ruto and President Joko Widodo of Indonesia, agreements were reached that will allow Kenya’s Biovax and Indonesia’s BioFarma to work together to develop pharmaceuticals and other vaccinations for easy access between the two nations, as reported by the East African, a news publication with news centered on East Africa.
The most recent development occurs as Kenya’s government pushes for local health product manufacturing to reduce excessive importation and generate employment.
In order to strengthen regulatory collaboration for pharmaceutical goods, the Kenya Pharmacy and Poisons Board and the Indonesia Food and Drug Authority also signed a Memorandum of Understanding.
The two nations also agreed to cooperate in mining and geology, which would involve cooperative research projects, information exchange, and capacity building. Both nations also spoke about investing and trading, as well as working together in both higher and primary education.
In addition, the Kenyan President disclosed that Nairobi and Jakarta were finalizing the specifics of a potential preferential trade pact. “We also discussed the importance of concluding a bilateral investment treaty that will provide a stable and predictable investment environment, which is a prerequisite for accelerated private sector investment. We have tasked our joint teams to complete the drafting of this instrument within the next 90 days,” he said. With a favorable trade balance with Kenya, Indonesia expects to send $580 million (Ksh83.75 billion) worth of commodities to Nairobi by the year 2021, with palm oil serving as the primary export.
ECOWAS Moves to Empower Women through Cross-Border Women in Development Networks (ECOWAS)
The ECOWAS Commission through the Directorate of Free Movement of Persons and Migration organised a meeting for Needs Assessment and Project Identification for Cross-Border Women in Development Networks (WID). The event took place in Accra, Ghana, from the 14th to the 18th of August 2023.
The primary objective of the meeting was to assess the needs and identify potential areas of intervention for women in border communities across ECOWAS Member States. This first phase of the meeting brought together representatives of Women Groups from Benin, Ghana, Guinea-Bissau, and Nigeria.
Mr. Albert Siaw-Boateng, the Director of Free Movement of Persons and Migration at the ECOWAS Commission, delivered the opening remarks on behalf of the Commissioner in charge of Economic Affairs and Agriculture, Mrs. Massandjé Touré-Litse. During his speech, he emphasized the importance of assessing the needs of women in development and exploring possible areas of intervention. He further highlighted the ECOWAS financial grant offered to the Women in Development Networks, which Member States can access to enhance women’s capabilities and provide support for small and medium-scale enterprises.
Report: Big potential for green hydrogen in North Africa (New Era)
By 2050, North Africa could become a leading exporter of green hydrogen with Europe its main market, according to a recent report projecting the future of an industry still in its infancy. So-called green hydrogen is set “to redraw the global energy and resource map as early as 2030, creating a US$1.4 trillion-a-year market by 2050,” according to the report from accounting consultancy Deloitte.
Hydrogen fuel, which can be produced from natural gas, biomass or nuclear power, is considered “green” when hydrogen molecules are split from water using electricity derived from renewables such as solar and wind that do not produce carbon emissions. Less than 1% of the world’s hydrogen production presently qualifies as green. But the climate crisis, coupled with both private and public investment, has sparked rapid growth in the sector.
By 2050, according to Deloitte, the main green hydrogen exporters are likely to be North Africa (US$110 billion per year), North America (US$63 billion), Australia (US$39 billion) and the Middle East (US$20 billion). But the need to meet climate targets and generous subsidies are driving demand for clean energy of all kinds, including green hydrogen.
Sign contracts or lose out, businesses told as AfCFTA takes shape (The Star)
SMEs keen to trade under the African Continental Free Trade Area must have binding contracts in place or else they stand to lose; trade experts now say. This comes as trade under the pact starts to pick, with Small and Medium-sized Enterprises in Kenya and the East Africa Community forming the bulk of entities pushing for deals in the export market , mainly in south and western Africa.
While the continental deal holds huge potential for the SMEs in terms of trade and services, businesses are yet to find a proper footing with deals under the pact remaining low amid numerous challenges.
“Don’t sign business deals without proper procedures…friendly and mutual agreements don’t work. You must sign contracts which are binding,” said Olivier Konje, director of international trade at the Ministry of Trade, Investment and Industry (Kenya). He spoke in Nairobi during a national sensitization workshop for SMEs and women in business on AfCFTA protocols and their relevance to business in the EAC.
The forum by the East African Business Council (EABC) identified Non-Tariff Barriers, lack of harmonised tariffs and lack of access to financing as among major challenges facing business, hence slow uptake of opportunities under the AfCFTA. Meanwhile, EABC has called on improved productivity and standards to ensure goods from the region meet market criteria across the continent, while services fit the market needs.
Africa’s leaders prepare to address climate change challenge (Voice Online)
African leaders are preparing for a major conference in Kenya which will discuss the climate change challenges that face the continent. Climate change experts and environment campaigners will join senior government officials in Nairobi for this year’s Africa Climate Week (ACW 2023) which begins on September 4, The event will focus on how African countries can collaborate and find solutions to the problems that climate change is causing for the continent.
It is understood that the Africa Climate Summit will produce the ‘Nairobi Declaration on Green Growth and Climate Finance’ to drive action among African Union member states and partners leading up to the United Nations Climate Change conference (COP 28) in November.
This week a regional summit on health and climate change was held in Malawi ahead of ACW 2023 to discuss the effects of climate change on the health care systems of many of the continent’s countries. Delegates at the Regional Summit on Health and Climate Change for the African Region called for African leaders to adopt a unified African position on tackling the negative effects of climate change on health sectors.
Technical skills are key in driving African sustainable industrialization (Garowe Online)
Africa remains the world’s least industrialized region, with only one country on the entire continent, this is as per the 2022 data from the United Nations Industrial Development Organization (UNIDO). The report further states that only South Africa is categorized as industrialized. There needs to be a fundamental shift in the structure of the economies of African nations. Industry, especially manufacturing, will have to account for a far greater share of national investment, output, and trade.
It is expected that the African Continental Free Trade Area (AfCFTA) agreement, which will become operational on 1 January 2021, will usher in new and dynamic opportunities by enhancing intra-African trade and fostering an environment that can unlock foreign direct investment in the continent.
The continent is however facing a skills mismatch that has forced most countries to revamp their education systems which over the decades has been geared towards producing white-collar job graduates.
China-Africa trade rises 7.4% in the first 7 months, keeping on expanding this year (Global Times)
China has been Africa’s largest trading partner for 14 consecutive years, and the commerce between the two sides has sustained rapid growing momentum in the first seven months this year, according to China Customs. In 2022, China’ trade with Africa surged by 14.8 percent year-on-year to reach 1.87 trillion yuan ($282 billion), while the amount in the first seven months this year rose 7.4 percent year-on-year to 1.14 trillion yuan, official data showed. The trade index between China and Africa reached 990.55 last year, indicating rapid growing pace, as noted by China Customs.
China is the Africa’s largest export destination. In the past seven months, the nation imported 426.65 billion yuan worth of goods from Africa, including crude oil, iron ore and copper. In the same period, the import of agricultural products increased 20 percent to hit 23.66 billion yuan, including imported aquatic products and wine.
Intra-BRICS Trade and Analysis 2023 (Silk Road Briefing)
2023 is an important turning point in the BRICS development and its future global role. BRICS combined efforts are seen in cooperation and collaboration in developing alternative payment systems to SWIFT, the gradual development of a non-dollar financial system, the development of a common payment system (BRICS Pay), the increase of trade using respective domestic currencies, and creating a common currency. These are all progressing at different timescales, however the use of respective digital currencies in the settlement of future intra-BRICS trade will be a significant move. Russia, China, and India are all poised to launch their digital currencies for common usage by early 2025. This will allow trade to be conducted between them without the global SWIFT network and to reduce threats of the same upon other countries. Brazil and South Africa are close behind. In comparison, the United States and European Union, with rather more complex financial markets, have only recently agreed their digital currency protocols – a technical step the majority of BRICS members completed three years ago.
BRICS is facing many challenges, such as internal differences, global economic growth slowdown, geopolitical tensions, coordination problems, disagreements and different priorities of members, along with external pressures. Economic cooperation within BRICS is still limited, and its cohesion is not especially strong, meaning we can expect an increase in institutionalising the various BRICS initiatives during this summit. There are also likely to discussions concerning BRICS trade liberalization and reducing each other’s import tariffs.
The existing BRICS 2025 strategy, which was implemented in 2020 and will soon be due for renewal, has been useful in developing trade and mutual investment between BRICS countries, strengthening customs cooperation, inclusive growth, and diversifying cooperation into different sectors.
Brics day two: Ramaphosa concerned about financial systems used in wars, stresses use of local currencies (Engineering News)
President Cyril Ramaphosa noted on Wednesday that global financial and payment systems are increasingly being used as instruments of geopolitical contestation. Ramaphosa was speaking during the second day of the fifteenth Brics Summit, currently underway in Johannesburg, where he said global economic recovery relies on predictable global payment systems and the smooth operation of banking, supply chains, trade, tourism and financial flows.
Ramaphosa said South Africa was deeply concerned about global conflicts that continued to cause great suffering and hardship. This came as Russia continued its onslaught on Ukraine and as African countries faced violence.
Meanwhile, Ramaphosa said South Africa would continue discussions on practical measures to facilitate trade and investment flows through the increased use of local currencies. He highlighted that new economic, political, social and technological realities call for greater cooperation between nations and for a fundamental reform of the institutions of global governance for better representation and to be able to better respond to the challenges that confront humanity. “While firmly committed to advance the interests of the Global South, Brics stands ready to collaborate with all countries that aspire to create a more inclusive international order,” he said.
The house of BRICS may be expanding (SAnews)
A decision on the much-speculated possible expansion of the Brazil, Russia, India, China and South Africa (BRICS) group of countries is imminent. This according to President Cyril Ramaphosa who was making remarks during the 15th BRICS Summit currently underway at the Sandton Convention Centre in Johannesburg.
“We stand at the cusp of expanding the BRICS family because it is through this expansion that we will be able to have a much stronger BRICS in these turbulent times that we live in. We await the decision that will be taken by the BRICS leaders in this regard, in due course, as we go on with our Summit.
“We stand at another momentous moment. This is a matter that we are discussing and hopefully we will find a clear solution to this matter as we discuss it among ourselves as BRICS leaders,” President Ramaphosa said.
Speeches
Address by President Cyril Ramaphosa on the occasion of the XV Brics Summit Open Plenary, Sandton International Convention Center (The Presidency)
Full text: Xi Jinping’s speech at the 15th BRICS Summit (CGTN Africa)
Video Address to the Participants in the BRICS Business Forum (President of Russia)
Piyush Goyal’s Jaipur call to the G20: Help the world to withstand any future shock (Hindustan Times)
The G20 is expected to arrive at significant consensus to reform the multilateral trading system, create robust supply chains, promote micro, small and medium enterprises (MSMEs), and help people of developing and least developed countries prosper on the principle of equity, Union commerce minister Piyush Goyal said on Wednesday.
Under India’s Presidency, the G20 is looking for “global good and ensuring good future for the people in the developing and less developed countries”, Goyal added at a press conference in Jaipur ahead of the two-day trade and investment ministerial meeting (TIMM) starting from Thursday.
Quick links
Sustaining existing trade partnerships and finding new markets is imperative for SA agriculture
Namibia: Oil & Gas Discoveries Not Automatic Economic Panacea – Alweendo
Kenya: State Approves Harvesting And Milling Of Mature Sugarcane
Trading under AfCFTA will foster economic, continental integration
Deeper international partnerships will boost Africa’s growth
Internet shutdowns in Africa an impediment to economic growth
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Sustaining existing trade partnerships and finding new markets is imperative for SA agriculture (Bizcommunity)
South Africa is in the enviable position of being a net exporter of agricultural products. Aside from the obvious contribution this makes to SA’s GDP and job creation, this, combined with excellent local production and 2 prior years of record exports, are the main reasons why SA has been able to ensure food security and curb food price inflation compared to the rest of the world.
As SA’s agriculture is export-orientated, the focus must be on safeguarding its seamless continuation. Attention should be centred on improving logistics efficiency, intensifying the promotion of South African products in export markets, and sustaining solid relations with existing critical export markets while securing expansion into new markets.
This is particularly important in the context of growing tensions between the East and the West – as highlighted by the potential loss of SA’s benefits through the United States (US) African Growth and Opportunity Act (also known as AGOA) – and more onerous regulations being imposed by the European Union (EU).
Footwear and leather industry a giant in waiting (Sunday World)
Despite challenges brought on by Covid-19 in many businesses in the country, including the footwear and leather industry, the future looks bright for South Africa in its endeavour to turn its fortunes around. Trade, Industry and Competition deputy Minister Nomalungelo Gina said the shoe and leather manufacturing sector was a beacon of hope to enhance the economy and in the process create jobs.
This week, Gina pointed out at the event hosted by the South African Footwear and Leather Export Council and the eThekwini Municipality Footwear and Leather Cluster in Durban, that it was high time for the industry to turn the tide and focus on manufacturing most sought-after products in the country. The industry that produces footwear, leather, handbags and belts, has also seen declining sales due to counterfeit goods sold by illicit businesses resulting in further job losses.
“We will continue to support this industry through incentives and ensure that the Retail–Clothing Textile Footwear Leather Master Plan 2030 targets are achieved.”
National Entrepreneurship Strategy - South Africa (UNCTAD)
Micro, small and medium enterprises (MSMEs) in South Africa account for over 2 million companies, represent over 98% of formal businesses, and have experienced two-digit growth in the last years.
However, they contribute to creating less than a third of all formal jobs, leaving job creation highly concentrated in a small number of large employers and in the government. In addition, most entrepreneurs enter the ecosystem driven by necessity and the high rates of unemployment. As a result, the majority stay in the informal sector, keeping low growth aspirations and showing a high rate of failure and a low contribution to the creation of formal jobs.
South African youth entrepreneurs face similar challenges as their counterparts in the entire continent as they are hindered by a lack of access to sufficient capital, markets, poor marketing and branding skills, suitable infrastructure (including working space and ICT), as well as business management and educational skills.
Zimbabwean Central Bank starts implementing African payment system (The Zimbabwe Mail)
The Reserve Bank of Zimbabwe (RBZ) has started implementing the Pan-African Payment and Settlement System (PAPSS) aimed at connecting all banks, non-bank financial institutions, switches, and regional systems to enhance cross-border payment across the continent.
The system, expected to save the continent US$5 billion annually in transaction costs, is being promoted by the African Export and Import Bank (Afreximbank) as the settlement bank.
Prior to PAPSS, over 80 percent of African cross-border payment transactions originating from African banks had to be routed offshore for clearing and settlement using international banking relationships. That posed multiple challenges ranging from payment delays to operational inefficiencies and compliance concerns for the disparate regional payment systems. PAPSS, which has been successfully piloted in the six countries of the West African monetary zone, delivers multiple advantages and efficiencies to intra-African trade payments.
Dollar spend on food imports hits 68-month high in March (Business Daily)
Food purchases piled pressure on Kenya’s reserve of foreign currencies, taking close to 17.1 percent of the country’s total import bill in March, the latest from the national statistician shows. The share of food imports was the highest in 68 months, pointing to inflationary pressures occasioned by a crippling drought that depressed local production.
This was the largest share of food and beverage imports since August 2017 when these items took up close to a third of the country’s import bill, the latest data from the Kenya National Bureau of Statistics shows. Kenya spent Sh32.7 billion to import food in May, a drop from Sh37 billion in March.
Trade between India and Tanzania hits $6.4 billion (The Citizen)
Trade between Mumbai and Dar es Salaam has reached $6.4 billion, with Tanzania being described as the focal point of India’s relations with the African continent. According to India’s High Commissioner to Tanzania, Binaya Srikanta Pardhan there are Indian assisted development projects being undertaken in the country valued at $1.2 billion (Sh3 trillion). The envoy was speaking in Arusha during the occasion to mark the 77th anniversary of India’s Independence.
“The Indian Communities in Tanzania are the leading investors in the country,” he pointed out adding that, there are more Indians who have expressed interest to set up more enterprises in the country.
He added: Gold, unwrought or in semi-manufactured forms, or in powder form dried leguminous vegetables, shelled Coconuts, Brazil nuts and cashew nuts are among other products that are highly demanded in India
Nigerian ports can’t develop without fixing obsolete infrastructure, corruption – Nwabunike (The Sun Nigeria)
As a shipping magnate and former president of the oldest freight forwarding association in Nigeria (ANLCA), Tony Iju Nwabunike has said that without fixing infrastructure and fighting corruption, Nigerian ports cannot develop and compete with other neigbouring ports favourably.
In this interview, he pointed out that Nigeria does not need to give any individual or company concession to fix port access roads and other infrastructure in the port, adding that the industry has the capacity to generate billions of dollars and employment but it has been neglected by the Federal Government. He spoke on the danger of the $3.2 billion Customs modernisation project and other related issues as they affect the industry.
Somalia standards body to demand conformity certificates (The East African)
Somalia’s standards body has asked importers to acquire certificates of conformity before bringing goods into the country’s territory, part of a move to abide by global quality requirements for trade.
“The Somali Bureau of Standards, inform all companies, partners, traders (importers, international organizations, UN and all humanitarian agencies) and the Somali community that imports various goods, from all ports, borders as well as airports (country entry and exit points) to acquire the Certificate of Conformity (CoC).
Imports that do not meet the applicable requirements and are not accompanied by the mandatory CoC will be subject to penalty, effective as of September 1, 2023.
On July 22, Somalia’s Minister for Commerce and Industry Jibril Abdirashid Haji Abdi launched an implementation ceremony for the consignment-based conformity assessment between Sobs and Bureau Veritas, a UK-based company dealing with protecting consumers against dangerous, substandard or counterfeit goods through verification of conformity.
Negotiations between the East African Community (EAC) and the Federal Republic of Somalia for the entry of Somalia into the EAC begun in earnest in Nairobi, Kenya today. The nine-day negotiations have brought together experts from the seven (7) EAC Partner States, the EAC Secretariat, East African Legislative Assembly and East African Court of Justice, and their counterparts from the Federal Republic of Somalia.
Kenya’s Cabinet Secretary for East African Community, ASALs and Regional Development, Hon. Rebecca Miano, said that the EAC was keen on an expanded and vibrant bloc, with high volumes of trade within itself as well as with other blocs.
Speaking at the event, EAC Secretary General Hon (Dr.) Peter Mathuki said that joining the community would enable Somalia to benefit from the EAC’s regional infrastructure projects such as roads, railways, and energy networks. “These projects aim to improve connectivity, enhance transportation links, and boost regional trade, ultimately supporting Somalia’s economic development and integration,” said Dr. Mathuki.
Southern African bloc backs $17bn gas infrastructure plan (Engineering News)
A southern African bloc of nations backed a $17-billion natural gas infrastructure plan to bolster energy supplies on a continent where almost half of the population lacks access to power.
The 16-member Southern African Development Community approved the blueprint to invest in infrastructure such as pipelines and terminals for local and imported supplies. While not yet a major source of gas, the bloc is home to some significant discoveries with projects in various stages in Mozambique, Tanzania and South Africa.
With new coal projects unlikely, nuclear power considered costly and climate change threatening hydroelectric generation, “this leaves few options,” according to the plan. The plan still requires funding, at a time when the financing of fossil-fuel supplies grows increasingly challenging due to environmental concerns and a global shift to cleaner sources of energy. Project delays could also present an obstacle, as demonstrated by liquefied natural gas projects by TotalEnergies and Shell in the region that have fallen years behind their initial target to start production.
Japan testing China’s hold on African minerals (Asia Times)
Japan’s Minister of Economy, Trade and Industry Yasutoshi Nishimura has spent a week visiting five countries in southern Africa with Ichiro Takahara, chairman and CEO of the state’s Japan Organization for Metals and Energy Security (JOGMEC). Prior to his departure, Nishimura told Japan’s Sankei Shimbun newspaper that he aimed to secure access to important minerals including rare earths, cobalt, lithium and nickel during the trip.
“I would like to visit each country, sign more than 10 agreements, issue joint statements, realize cooperation agreements and build a supply chain. Budget support of approximately $1.5 billion (215.8 billion yen) for Japanese companies participating in the development of mines and related activities is also available.”
From August 6-13, Nishimura visited Namibia, Angola, the Democratic Republic of the Congo (formerly Zaire), Zambia and Madagascar. Measured against his statements before his departure, the trip was a success.
Japan is known as a reliable investment partner with a high level of technological expertise. It can offer Africa a wider choice of investment partners and, therefore, more bargaining power. As for Africa, in the future, its population will increase the most in the world and its economy will grow, he said. “In particular, there are abundant reserves of important minerals.” He expressed hope that Africa will “join us as a reliable partner.”
Embrace, Challenge, Transform: The Future of Digital Banking And Transacting In Africa (iAfrica)
Banking in Africa is on the brink of its next transformative era. Gone are the days of discussing the Fourth Industrial Revolution as a concept; we are already immersed in a world augmented and powered by artificial intelligence (AI), Big Data, and cloud computing. Now, the next frontier beckons, with generative AI, secure online watermarked fingerprints and cryptocurrencies taking centre stage.
Africa has demonstrated its propensity for embracing technology, particularly in the financial services sector. With around 8 out of 10 people on the continent owning mobile phones and over 570 million people online in 2022, up 470% from 2010 (a significant contrast to the global increase of 159%), access to information and services has become easier. Now more than ever before, digital access to financial services in Africa is at a ripe stage. However, to further and continue this digital transformation journey, we must solve the existing infrastructure challenges, collaborate more and strengthen institutional connections.
BRICS Summit updates
BRICS Business Council adopts trade, investment promotion statement (SABC News)
The BRICS Business Council says it has adopted a trade and investment promotion statement aimed at increasing intra-BRICS trade. The various chapters of the council say this is a 10-year plan of action that includes enhancing trade through bilateral agreements and the exploration of value chain opportunities.
Intra-BRICS trade is said to have been growing at an annual average of 7% over the past 10 years. Other plans aimed at ramping up trade within the BRICS group include developing a BRICS calendar for trade and investment promotional events. BRICS accounted for 7% of global trade in the year 2000 and has grown to about 30% of global trade currently.
“We have now created a model for the world that moves us away from an extractive approach in terms of economic engagement towards a collaborative approach where we can all benefit and why this is important for the African continent. We have the resources in abundance still in our continent, be it the human capital in terms of the youth that we have, be it the minerals resources or other natural resources,” says Busi Mabuza, BRICS business council, South Africa.
Call to accelerate implementation of AfCFTA (SAnews)
BRICS Business Council Chairperson, Patrice Motsepe, has emphasised the importance of accelerating the implementation and advancement of the African Continental Free Trade Area (AfCFTA). Addressing the 15th BRICS Summit in Johannesburg, Motsepe called for a sense of urgency to make sure that trade barriers – both tariff and non-tariff – are significantly diminished and eliminated.
Motsepe stressed that the future of African business depends on its capacity and ability to prove to the rest of the world that it can conduct partnerships, trade, investments as well as the ability to have business relationships that are mutually beneficial.
Last year, trade between BRICS countries totalled some $162 billion. “The potential is enormous but again the sense of urgency is what we need to translate the good ideas that we have; these big plans into effective, legislative policy instruments that allows for effective free flow of goods and services. When we started, we wanted to increase the trade between the African continent and BRICS countries.
“The commitment and the will is there. A market is an opportunity until you invest and sometimes your investment takes five to seven years before you realise value. There is opportunities in terms of what we can do, the magnitude of how we can grow and the magnitude of how we can grow the trade investment and business ties between South Africa, Africa and BRICS countries,” Motsepe said.
Putin says Brics should become trading bloc representing ‘global majority’ (The Guardian)
Vladimir Putin has told a summit of the Brics group of countries in South Africa, that it should become a trading bloc representing the “global majority”. However differences among the group – comprising Brazil, Russia, India, China and South Africa – have become apparent at the summit over accepting new members, and whether to turn Brics into a geopolitical counterweight to the west.
In his recorded remarks to the meeting, Putin blamed the volatility in global markets for food and other commodities on western sanctions, and said that Brics would be a force for fairness in international relations. “We cooperate on the principles of equality, mutual support and respect for each other’s interests,” he said. “This is the essence of the future-oriented strategic course of our association, a course that meets the aspirations of the main part of the world community, the so-called global majority.”
Next wave of global economic growth will come from Africa (SAnews)
China says African countries want industrialisation over infrastructure (Reuters)
Bank of China, IDC sign agreement on R10bn funding package (Engineering News)
Russia willing to cooperate in developing Africa (SAnews)
BRICS expansion: A watershed moment for the global economy (Modern Diplomacy)
BRICS kicks off as common currency, de-dollarization steal the spotlight (Kitco News)
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South Africa foreign policy in a tangle (CAJ News Africa)
This year will go down the annals of history as one in which the southern African nation faced the greatest dilemma in juggling its foreign policy. The upcoming Brazil, Russia, India, China and South Africa (BRICS) Summit is exacerbating South Africa’s Catch 22 as it precedes other summits to boost relations with the United States and Europe, which are nemesis to some allies within BRICS. South Africa’s policy of non-alignment, which according to critics is merely genuine on paper, is under a litmus test.
On one hand, South Africa must mend some regularly frosty relationships with some fellow African Union (AU) members, maintain relations between the continent and Asia, nurture continental ties with America as well as enhance affairs with Europe.
Amid the BRICS Summit, South Africa is inviting more than 30 African trade ministers and senior United States (US) Administration and Congressional representatives to the next forum of the African Growth and Opportunity Act (AGOA) scheduled for November this year. Again, later this year, South Africa will hold the European Union-South Africa Summit.
Overall, Ramaphosa said South Africa advocates for an open and rules-based global governance, trade, financial and investment system.
Kenya, Indonesia to sign preferential trade agreement (Nation)
Kenya and Indonesia yesterday signed four bilateral agreements on food security, mining, renewable energy and health following talks between President William Ruto and Indonesia’s Joko Widodo. Mr Widodo is on his first visit to Africa, which will also take him to Tanzania, Mozambique and South Africa, where he will attend the Brics (Brazil, Russia, India, China, and South Africa)summit in Johannesburg this week.
After a closed-door meeting between the two presidents that lasted about an hour, Dr Ruto announced the scrapping of visa requirements for Indonesians travelling to Kenya, saying, “nobody should need a visa to go home”.
Kenya is open for business. An important step in this direction must continue to be the easing and gradual removal of visa restrictions between our two nations. For our part, Kenya has decided to extend visa-free entry not only to diplomatic passport holders,” said Dr Ruto.
Kenya, South Sudan keen on infra projects under Lapsset (Africa Aviation News)
Kenya announced that it is committed to strengthening bilateral relations with South Sudan for the mutual benefit of the citizens of the two nations. President William Ruto said, “The two countries are pursuing joint infrastructure projects to enhance regional integration and boost trade.” “Kenya,” he added, “Is keen on implementing the infrastructural projects under the Lamu Port-South Sudan-Ethiopia-Transport Corridor project (LAPSSET). This will enhance connectivity, further integration and boost intra-regional trade for shared prosperity. This is instrumental in supporting bilateral trade.”
President Ruto made the remarks at State House, Nairobi, on Saturday (August 19, 2023) where he held talks with the President of South Sudan Salva Kiir. The two leaders signed a Memorandum of Understanding on the establishment of a fiber optic cable along the Eldoret-Juba road. They also agreed to complete the construction of the 11km Nadapal to Nakodok road to boost business between the two nations.
President Ruto said Kenya and South Sudan have also agreed to exploit the Africa Continental Free Trade Area Agreement to increase trade between the two nations.
Addis-Djibouti corridor to get $730 million major upgrade (Addis Standard)
The World Bank said the Addis-Djibouti corridor will get a significant upgrade with a $730 million grant following a newly approved Horn of Africa Initiative’s Regional Economic Corridor Project.
The “vital trade route and a lifeline for Ethiopia’s 120 million people,” received $730 million grant from the International Development Association (IDA), aimed at improving regional connectivity and logistics efficiency in Ethiopia along this key trade route connecting landlocked Ethiopia to the port of Djibouti, WB said.
“Improved regional connectivity and trade are essential to unlocking Ethiopia’s economic potential,” said Ahmed Shide, Minister of Finance. “This project is important to support our commitment to fostering inclusive growth and regional integration, as we are now fully focused on sustaining the growth and reaping the peace dividends,” he added.
Over 95% of Ethiopia’s import-export trade (by volume) uses the Addis-Djibouti corridor. The project aims to upgrade the road to Djibouti, including the Mieso-Dire Dawa section, which is currently in poor condition and unsuitable for growing truck traffic.
Trade vulnerability prompts urgent AfCFTA utilisation (The Business & Financial Times)
A recent report by the Ghana Statistical Services (GSS) has spotlighted the intricate dynamics of trade across the African continent, igniting discussions on the pressing need for economic diversification and the significance of the African Continental Free Trade Area (AfCFTA) initiative.
The release of the ‘Ghana 2022 Trade Vulnerability Report’ has shed light on the prevailing trade landscape, drawing attention to South Africa’s formidable position in intra-African trade. With exports reaching nearly GH₵15billion, South Africa retains a dominant role, influencing the direction of trade within the continent.
Ghana’s trade interactions, spanning both exports and imports, show a strong affinity toward European nations, accounting for over a third of all exports (35.9 percent) and imports (39.2 percent). Following closely is Asia, contributing 28.5 percent of exports and 37.2 percent of imports.
Notably, imports outweigh exports for all continents except Africa and North America. Specifically, exports to other African countries outpace imports by GH₵13.2billion while the margin narrows to GH₵6.8billion for North America.
Trade dynamics illuminate the significance of mineral fuels and oils in the import scene. Substantial imports from South Africa, Togo and Nigeria are anchored in these products, underscoring the interconnected nature of Africa’s trade network.
Ghana’s embrace of AfCFTA is palpable, evident through its issuance of the inaugural certificate of full commercial trading in 2022 to a ceramic tiles manufacturing firm. Under the banner of AfCFTA Guided Trade, this landmark initiative marks a pivotal stride toward meaningful trade relationships. Beginning with Ghana, Cameroon, Egypt, Kenya, Mauritius, Tanzania and Malawi, Guided Trade has recently extended its impact to Rwanda. The Rwanda Customs Division, operating under the Ghana Revenue Authority (GRA), received its first consignment of goods, bolstering AfCFTA’s role in cultivating regional trade ties.
DRC-Africa Battery Metals Forum ready for crucial launch (Miningreview.com)
The inaugural edition of the DRC-Africa Battery Metals Forum, taking place in Kinshasa from 20–21 September* this year, will contribute to the establishment of an inclusive and equitable battery metals industry, support large-scale sustainable growth, local beneficiation and socio-economic development.
“The DRC’s Ministry of Industry has been tasked by the government to build a battery metals industry in Africa, with a state-owned firm processing some of the battery minerals in the country and other African countries playing various roles in the value chain,” states Samukelo Madlabane, mining Events Director at the VUKA Group.
He adds: “In an effort to curb the effects of climate change, the world needs to go through an energy transition that will be driven largely by battery metals. With the DRC endowed with these minerals, the country needs a platform for dialogue on how to leverage the demand. The theme of the conference is: Creating wealth for the DRC and Africa’s battery metals industry value chain.”
Kenya to host Negotiations on the admission of Somalia into EAC this Tuesday (RegionWeek)
Negotiations between the East African Community (EAC) and the Federal Republic of Somalia on its admission into the EAC will start on Tuesday, Aug.22, 2023, in the Kenyan capital Nairobi, according to a statement issued on Saturday, Aug.20, 201 by the EAC headquarters in Tanzania’s northern city of Arusha.
In June 2023, the EAC Heads of State accepted the verification report of Somalia to join the EAC and directed the Council of Ministers and EAC Secretariat to commence negotiations with Somalia with immediate effect.
It was in 2012 when Somalia made its first application to join the East African Community (EAC), However, the verification mission to assess Somalia’s readiness to join the EAC was not conducted immediately due to various reasons. If Somalia joins the EAC, it will be the eighth member after the Republics of Burundi, Kenya, Uganda, Rwanda, South Sudan, the Democratic Republic of Congo, and the United Republic of Tanzania.
Somalia’s admission would further enhance economic integration within the EAC as it has a strategic location along the Indian Ocean coastline and has significant potential for trade and investment. This would open up new opportunities for cross-border trade, investment, and economic cooperation. In addition, the EAC would have a larger market size, which could attract more foreign investment and stimulate economic growth. The inclusion of Somalia’s population and resources would contribute to the overall economic development of the EAC member states.
Fresh move to curb services trade restrictions in EAC (The Citizen)
The East African Community (EAC) has embarked on addressing hurdles impacting trade in services. In that vein, a mechanism has been put in place to identify and monitor removal of the most nagging hurdles. This was announced by EAC secretary-general Peter Mathuki last weekend during his ‘State of the EAC’ address.
The removal of trade in service restrictions is being carried out within the framework of the Common Market Protocol. The protocol signed in November 2009 and enforced in July 2010 is one of the four pillars of the EAC integration.
EAC partner states have committed to scale up trade and investment in services sectors through guaranteeing free movement of services. Originally under the EAC Common Market Protocol, partner states made commitments to liberalise a total of 144 sub sectors and seven priority sectors. These are business, communications, distribution, education, financial, tourism and travel and transport. The EAC partner states further agreed to make additional commitments, at a future date, to liberalise the following additional service sectors not covered by the initial commitments. These are energy services, environmental services, health and social services, construction and related services and recreation, cultural and sporting services.
Dr Mathuki said in order to facilitate the free movement of services, the Community adopted and is implementing a Mechanism for Removal of Restrictions in trade in services.
Fresh Thrust Towards Free Movement in the COMESA Region as Immigration, Labour Ministers Meet (COMESA)
Ministers responsible for immigration and labour matters in COMESA have renewed their countries commitment to the implementation of the regional protocols on free movement as critical step towards unlocking the benefits associated with having free movement of factors of production in the region.
In their meeting conducted on 18 August 2023, Livingstone, Zambia the ministers welcomed the revised strategy for the implementation of COMESA Protocol on the Gradual Relaxation and Eventual Elimination of Visa, and the Protocol on the Free Movement of Persons, Labour, Services, Right of Establishment and Residence.
The two protocols have been in existence for a long time but have not yet attained the required ratifications by Member States to enable full implementation. Hence the Ministers adopted the immigration and labour experts’ recommendations to have a strong component on capacity building for migration stakeholders in the implementation of the Protocols as well as the past Decisions of the COMESA Council of Ministers relating to migration.
Addressing the ministers, COMESA Secretary General Chileshe Mpundu Kapwepwe said there cannot be meaningful integration of the region and the attainment of the aims and objectives of COMESA without the facilitation of seamless movement of goods, services and investment across the region. “Trade is on-going in goods, provision of services, investment, tangibles and intangibles. However, for the goods, services and investment to move across borders, there is need for a human interface between them to facilitate an effective delivery of those goods and services,” the Secretary General said. Currently, intra-COMESA trade potential is valued of over US$100 billion which could be unlocked through enhanced movement of goods and services across the region.
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South Africa still mulling design for sustainable automotive industry (Engineering News)
South Africa’s automotive manufacturing sector is widely regarded as a success story; however, it must now bolster local demand and adapt its policies and initiatives amid a weak domestic growth outlook and the global, albeit uneven, shift towards new energy vehicles (NEVs).
South Africa and Africa’s automotive markets are still dominated by internal combustion engine (ICE) vehicles, while the shift towards NEVs – which constitute a wide array of technologies – is occurring rapidly in the European Union and other developed markets. NEV development is, therefore, moving along in other markets in which South Africa competes, but not its domestic market, as NEVs are still not price competitive with ICE vehicles without considerable subsidies, Toyota Wessels Institute for Manufacturing Studies manufacturing ambassador Professor Justin Barnes explained.
The Automotive Production and Development Programme (APDP) in its current form is a particularly good incentive scheme for the production of NEVs and, therefore, the real challenge lies in the marketplace, Barnes argued. The country’s automotive industry is export orientated, with the APDP incentivising firms through a rebate mechanism that is tied to a reduction in import duties. If the domestic market does not perform well, there is less of an incentive to export, he pointed out.
While the focus should first be on targeting domestic and regional markets, the speakers also underlined the importance of having the right policy environment.
Nigeria ends oil subsidy to invest savings in infrastructure development (Africa Renewal)
“The fuel subsidy is gone,” said Nigeria President Bola Tinubu, in his inaugural address on 29 May 2023. “The subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead rechannel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”
Organized labour threatened a nationwide strike if the government failed to reverse itself as former president Goodluck Jonathan did in 2012, when he tried to end subsidies. But after negotiations with the Tinubu administration, the unions reneged on their threat.
Before President Tinubu’s inauguration, the Nigerian government spent ₦400 billion (about $500 million) monthly to subsidize petroleum imports, according to Mele Kyari, chief executive officer of the Nigerian National Petroleum Company Limited (NNPCL), licensed to operate in Nigeria’s oil industry. The subsidy was the difference between the projected open market price and the pump price. To make up for the market shortfall, the government issued it as a direct or indirect payment to individuals or companies that imported refined products.
In 2022, Nigeria’s House of Representatives set up a panel to investigate its petroleum subsidy regime from 2017–2022. The government has yet to publish the panel’s findings, submitted in June 2023, but it has maintained that the subsidies benefitted a few companies.
Standards body warned against harassment of farmers (New Vision)
Standards bodies have been cautioned against harassment of farmers when enforcing standards. The caution was made by Dr Hermogene Nsengimana, the secretary general of the African Organisation for Standards (ARSO). They are accused of closing and demanding for payments whenever they come across a processing mill or coffee roaster that does not meet the set standards.
The practice has locked out mainly small-scale farmers and enterprises that are trying to add value to various commodities, including coffee. This was raised during a panel discussion on accelerating the implementation of the African coffee standards under the African Continental Free Trade Area (AfCTA) at Speke Resort Munyonyo last Thursday.T he panel was part of the just concluded G-25 African Coffee summit that kicked off on August 7 and is expected to end on 10, under the theme Transforming the African Coffee Sector Through Value Addition.
He explained that the best way to enforce standards is by showing people the right standards coupled with information on the right procedures, right machinery including steps of acquiring the recommended machinery.
Nsegimana added that the regulation that assesses an organisation’s business practices and performance on various sustainability standards will soon be a requirement by the European Union when accessing products from African countries.
He, however, added that at continental level, a standard is being developed that is in line with sustainability, taking into account views from the farming communities and private sector, among other stakeholders to guide the certification team.
Interview: Value-added exports on the rise: ZimTrade (The Zimbabwe Independent)
ZimTrade chief executive officer Allan Majuru (AM) said the country should continue focusing on retooling the manufacturing industry in order to increase export in value-added products.
Statistics show that exports of manufactured products increased by 14,7% between January and May 2023 compared to the same period last year. ZimTrade chief executive officer Allan Majuru (AM) this week told our business editor Mthandazo Nyoni (MN) that the country should continue focusing on retooling the manufacturing industry in order to increase export in value-added products. This, according to him, could assist the country benefit from participating in the African Continental Free Trade Area through regional value chains
It is true that minerals make up the bulk of our exports. But there are particular sectors that we could leverage on to increase our exports. Growing exports of value-added products and horticultural produce remain the ultimate goal for us. We have already established the low hanging fruits that will make it easy to realise this goal and these include processed foods, horticulture, agriculture inputs and implements, protective clothing, building and construction, timber, furniture, and services sectors. These are just examples, but across all sectors, we have potential to boost exports of value-added products and services.
Value -addition is a good way for local companies to maximise profits. They are also good for the country’s export earnings. According to the National Development Strategy (NDS1), Zimbabwe aims to increase the contribution of value-added exports to 20% by 2025.
There has been a steady increase in exports of value-added products. Figures show that exports of manufactured or valued-added products increased by 14,7% from US$139,9 million in January to May 2022 period to US$160,5 million in January to May 2023. With the NDS1 in place, there are a lot of efforts being made to retool our industries, improve value chains and increase production of value-added products. As ZimTrade, we have put in place different initiatives to capacitate local companies. For example, our partnerships with international expert organisations have helped local companies to improve their value chain systems and become competitive on the export market.
Nairobi is ready for Africa Climate Summit – CS Tuya (Nation)
Environment, Climate Change and Forestry Cabinet Secretary (CS) Soipan Tuya has affirmed Kenya’s readiness to host the first ever Africa Climate Summit, convened by the African Union. The summit will be hosted at the Kenyatta International Convention Centre (KICC) in Nairobi.
CS Tuya spoke on August 16 in Addis Ababa during a joint press briefing. “The African leaders were prompted by the fact that the African continent and Africans themselves bear the greatest burden of climate change, despite the fact that Africa’s historical and current emission levels of greenhouse gases is very low,” CS Tuya recalled.
Out of the Summit, the CS said Kenya and the African Union looked forward to a “Nairobi Africa Leaders Declaration on Climate Change and Call to Action”, a blueprint that will propose a new climate financing architecture to alleviate the continent’s growing debt distress, among other provisions. Once again, CS Tuya said Africa Climate Summit will be a platform to showcase the continent’s immense climate action potential and seek partnerships needed to support Africa’s green growth ambition.
Africa should harness its vast mineral reserves to drive economic transformation and accelerate sustainable development on the back of power poverty, the Acting Executive Secretary of the Economic Commission for Africa, Antonio Pedro has urged, highlighting that the continent is well position to spearhead clean energy transition.
“The top priority for Africa is to achieve inclusive and sustainable economic transformation that delivers tangible impacts on job creation and poverty eradication while addressing the triple planetary crises of climate change, biodiversity loss and pollution,” Mr. Pedro, said in a video address at the 17th August opening of the 19th Ordinary Session of the African Ministerial Conference on the Environment (AMCEN) in Addis Ababa, Ethiopia.
Mr. Pedro reiterated that Africa was in the spotlight because of its rich mineral reserves which it must harness to tackle its development challenges. “Africa therefore needs a deep rethink on how it addresses its vast development challenges if it is to meet the goals of Agenda 2063, the UN 2030 Agenda for Sustainable Development and various national development goals, while positioning itself at the center of the global clean energy transition agenda,” Mr. Pedro said.
Home to up to one-third of global mineral reserves, Africa currently produces over half of the world’s platinum group metals, manganese, cobalt, and others. With the global demand for wind turbines, electric vehicles and other products that can generate electricity and transport people and goods without emitting C02, there is a projected huge increase in demand for lithium, cobalt, graphite, nickel, and copper by 2040.
Invest in Human and Financial Capital to drive sustainable industrialization, SADC urged (UNECA)
Africa should boost investment in human and financial capital to accelerate its sustainable industrialization and economic growth, Antonio Pedro, acting Executive Secretary of the Economic Commission for Africa said at the 43rd Southern African Development Community (SADC) Ordinary Summit of the Heads of State and Government in Luanda, Angola.
African countries should align their education systems with market and societal needs, Mr. Pedro urged. Equally, he said governments must invest in science, technology, and innovation to move away from the resource extractivism model that characterizes most of Africa’s mineral-rich countries and escalate value chains to avoid the middle-income trap.
“For countries in the SADC region, the Russian/Ukraine conflict laid bare the fragility of the diversification strategies that do not address the structural issues compounding our growth model and the germane issues of poverty and inequality, said Mr. Pedro, lamenting that, commodity dependence has left many African economies at the mercy of global commodity price fluctuations, boom and bust cycles, leading to macroeconomic instability.
Calling for African countries to “break this vicious cycle” of commodity dependence, Mr. Pedro highlighted trade diversification as the solution to reducing the region’s vulnerability to global market turbulence and geopolitics.
BRICS Business Council touts SA as attractive investment destination despite logistic, energy woes (IOL)
The BRICS Business Council has maintained that South Africa remains an attractive investment destination and a gateway for trade within African markets, in spite of ongoing logistical and energy challenges in the country.
The Council’s Trade and Investment Working Group’s chairperson, advocate Mtho Xulu said yesterday one of their focus areas was to make the African Continental Free Trade Area (AfCFTA) the main priority to showcase the opportunities that exist in Africa.
“As much as we’ve seen trade growing over the last 10 years of the business council, we are unfortunately still maintaining a deficit with regards to South Africa being part of the group, but we look at this deficit as an opportunity,” Xulu said.
“We need to use the Trade and Investment Working Group to project South Africa as an investment destination, not only for BRICS members, but also for the global economy.”
Xulu said they would make a case to investors that South Africa was competitive from a trade point of view, with the correct human resource, the correct infrastructure, and cost-effective energy.
World Bank, IMF enslaving Africa in restructured neocolonialist world economy – Olusegun Obasanjo (Modern Ghana)
African countries have been urged to leverage the African Continental Free Trade Area (AfCFTA) to break the shackles of colonialism, neocolonialism, and imperialism stifling economic growth and prosperity. It must flee from the subtle recolonisation tactics being pursued through the honeyed policy shackles of the International Monetary Fund, World Bank and the United Nations (UN) dogma.
Olusegun Matthew Okikiola Ogunboye Aremu Obasanjo, former President of Nigeria, said the treaties and conventions agreed upon and signed by the imperialist institutions before and after the independence on trade and commerce were not destined for Africa’s development.
The former President said the AfCFTA presented an opportunity to increase trade to ensure the prosperity of the respective countries. The trade area would lead to an increase in intra-African trade by $35 billion and reduce external imports by $10 billion yearly.
“It is important to rebrand and turn Africa around for the world to know that Africans are one and good people with natural resources and diverse culture and we need strong partnerships with the diaspora to do this. Let us build the human resources of Africa by extending a hand of friendship to them so that together we can help change the narrative of the continent, now and in the future.”
World leaders call on Russia to rejoin Black Sea grain deal (U.S. Embassy in Luxembourg)
Humanitarian and government officials have warned of drastic consequences to Russia’s July 17 decision to walk away from the United Nations Black Sea Grain Initiative. U.N. Secretary-General António Guterres had described the deal as “a lifeline for global food security and a beacon of hope in a troubled world.” Pope Francis called on Russia directly to rejoin the deal: “I appeal to my brothers, the authorities of the Russian Federation, so that the Black Sea initiative may be resumed and grain may be transported safely.”
The initiative, which the United Nations and Türkiye brokered in July 2022, moved more than 32 million metric tons of Ukrainian agricultural exports via the Black Sea. Nearly 19 million metric tons went to developing countries. The deal also helped reduce food prices by over 23% since March 2022, according to the United Nations.
“With its latest decision to kill the grain deal, Russia is again disrupting the food-supply chain,” said Arian Spasse, Albania’s political coordinator at the U.N., on July 26. “And if this were not enough, it is intentionally targeting ports and grain storage facilities.” Russia’s decision to walk away from the initiative has sweeping consequences.
China-led de-dollarisation gains traction among emerging economies ahead of Brics summit (South China Morning Post)
The American dollar’s dominance in global trade looks to be challenged by the expansion of an economic bloc involving China, according to research by ING that comes as talk of a currency union has turned heads in the lead-up to next week’s Brics summit.
The association of five major emerging national economies – Brazil, Russia, India, China and South Africa – represents 8.3 per cent of the global economy and accounts for 41.9 per cent of people on Earth. Bloc representatives will meet in South Africa from Tuesday to Thursday.
“We suspect the subject of ‘de-dollarisation’ might gain some traction this summer when senior leaders of the Brics nations meet,” the Dutch bank’s analysts Chris Turner, Dmitry Dolgin and James Wilson wrote in a note on Thursday.
The economic expansion of Brics could determine the speed at which it adopts commercial and financial systems outside of the dollar sphere, posing certain challenges to the dollar’s dominant status as an international currency, they said.
However, Reuters reported on Thursday that a Brics currency was off the table, citing South African officials. As a new global currency, the expectation was that it might become analogous to the euro for non-Western states.
Climate adaptation finance in Africa (Brookings)
A recent analysis by the Climate Policy Initiative and the Global Center for Adaptation shows that an annual average of $29.5 billion in climate finance was committed to Africa in the years 2019 and 2020. Of this amount, about $11.4 billion, or 39 percent, was for adaptation investments.
Further analysis of Nationally Determined Contributions (NDCs) also indicates that the adaptation finance needs for the continent over the period 2020-30 are close to $580 billion. Unless adaptation finance increases substantially in Africa, a gap of $453 billion will accumulate over this decade.
The IMF projects growth in sub-Saharan Africa to slow sharply from the recovery path of 2021 when GDP grew 4.7 percent, down by one percentage point to 3.6 percent, and remain close to that level in 2023. The global economic slowdown, tight finances, and inflation are impacting the region in areas such as food and energy prices. Public debt and local inflation are at very high levels. The IMF recommends tackling urgent socioeconomic crises while trying to build resilience to future shocks, including climate shocks. The IMF also recognizes the critical importance of high-quality growth and policies to set the stage for a sustainable recovery.
Handbook on Measuring Digital Trade: Second edition (IMF0
Digital technologies have made it increasingly feasible for buyers and sellers to place and receive orders on a global scale. They also enable the instantaneous remote delivery of services directly into businesses and homes, including internationally.
The Handbook on Measuring Digital Trade sets out a conceptual and measurement framework for digital trade that aligns with the broader standards for macroeconomic statistics. It aims to help statistical compilers to address policymakers’ needs for statistical evidence on digital trade. It includes extensive compilation guidance, drawing upon substantive inputs and case studies from both developed and developing economies and covering a variety of survey and non-survey sources.
This second edition of the Handbook builds upon the concepts set out in the first edition, published in 2019. Focusing on cross-border digitally ordered goods and services, on digitally delivered services, and on the role played by digital intermediation platforms the Handbook provides a framework and template for the compilation of internationally comparable statistics on digital trade.
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BRICS: SA-China trade is nothing unfair, says SA Chamber of Commerce (IOL)
South Africa should improve its industrialisation and manufacturing capacity in a bid to balance the trade deficit in the massive trade relationship with China, the second biggest economy in the world. On Tuesday, President Cyril Ramaphosa will host Chinese President Xi Jinping on a State Visit at the Union Buildings in Pretoria.
Despite the negativity channelled towards the two nations’ increasingly close ties, Mtho Xulu, president of the South African Chamber of Commerce and Industry said South Africa is scoring big from the mutually beneficial relationship with Beijing.
“Well, we are benefiting by the fact that we are selling (minerals to China). There is income that is coming from that country. What China has been able to do is to create an industry that converts raw materials into value-added goods. That is something we can learn from them,” Xulu said in an interview with broadcaster eNCA on Thursday morning.
“For as long as we are exporting, we need to establish how we can create an exploration fund to build more mines. So, if our competitive advantage is our (mineral) deposits, we need to invest in those deposits and make sure that we build industries around those deposits, if we cannot create value-added goods, let us rather create other industries that are linked to those minerals.
Logistics fixes critical for better agricultural outlook up to 2023 (Engineering News)
Research organisation the Bureau for Food and Agricultural Policy (BFAP) finds in its latest outlook for the agriculture sector over 2023 to 2032 that the sector is experiencing mounting pressure and challenges that are hampering the extent to which it can continue contributing to gross domestic product (GDP).
Speaking during the launch of the latest outlook, the ‘BFAP Baseline 2023’, commodity senior analyst and director Mmatlou Kalaba said: “We are not looking at the future for agriculture the same way we did just two years ago.” The BFAP states in the outlook that although agriculture has contributed strongly to GDP over many years, this contribution will largely stagnate in the years up to 2032.
She highlighted that the agricultural performance of South Africa was coming under increasing pressure owing to price pressures, market access, logistics challenges, weak domestic demand and biosecurity challenges, among others. In terms of industries that were struggling the most, she listed deciduous fruit, citrus fruit and ‘other horticulture’ as those with a less-than-ideal outlook for productivity up to 2032. Davids also explained that although world food prices had come down considerably, it had been offset by exchange rate dynamics to some extent in South Africa.
US-Kenya STIP could be model for Africa but its position on workers needs a rethink (The East African)
The US and Kenya announced a trade and investment partnership in July 2022. Talks have been progressing on the way forward in nine areas, including agriculture, anti-corruption, digital trade, environment and climate change action, and workers’ rights and protections.
The Strategic Trade and Investment Partnership (Stip) will be the first significant trade partnership between the US and a country in Sub-Saharan Africa. Countries in the region currently rely on the African Growth and Opportunity Act (Agoa), which offers duty- and quota-free access to the US market. The new deal is seen as a model for future agreements between the US and other Sub-Saharan African countries.
The labour provisions proposed under the Kenya-US deal are not new. They have become standard features of all US free trade agreements since first appearing in the North American free trade agreement of 1994. Kenya and the US undertake to work together to advance and protect labour rights through enforcement of and compliance with labour laws, promotion of social dialogue, and cooperation in other areas of mutual interest on labour and employment priorities, including with respect to forced labour in global supply chains.
There is currently very little information regarding the potential scope of the labour provisions. But there is reason to believe they will borrow heavily from precedents of the US-Mexico-Canada Agreement (USMCA).
Botswana Agriculture Joint Sector Review validated (FAO)
The Botswana Ministry of Agriculture, in collaboration with the Southern African Development Community (SADC) Secretariat and the Food and Agriculture Organization of the United Nations (FAO) through the European Union-funded project, Support Towards the Operationalization of the SADC Regional Agricultural Policy (STOSAR), successfully conducted a Joint Sector Review (JSR) aimed at evaluating the performance of the agricultural sector and fostering mutual accountability among stakeholders.
The key findings of the JSR review that was carried out by Dr Howard Sigwele emphasized the need for a collaborative approach towards increasing agricultural productivity, fostering sustained agricultural surpluses, and integrating the agricultural sector into the domestic and global economy to achieve agricultural transformation in Botswana.
The JSR’s comprehensive findings highlighted the pressing need for Botswana to increase its agricultural productivity. By so doing, the nation could achieve the transformation necessary for attaining food security and creating employment opportunities for its citizens. The report emphasized that agricultural productivity plays a pivotal role in elevating the sector’s overall performance and positively impacting the economy.
DRC better place to manufacture mobile phones – UN report (New Business Ethiopia)
As the major inputs used to manufacture mobile phone are abundantly found in many African countries, mainly the Democratic Republic of Congo (DRC), investors can cut their cost if they setup their manufacturing plant in the country, says a new report by a UN agency.
The report released on Wednesday by United Nations Conference on Trade and Development (UNCTAD) stated that the investment for precursor facility in DRC is three times less than what it would cost for a similar plant in a country without the required natural resources or proximity to countries where those metals can be sourced.
“It is estimated that building a 10,000-ton precursor facility in the Democratic Republic of the Congo, for instance, could cost $39 million, which is three times less than what it would cost for a similar plant in a country without the required natural resources or proximity to countries where those metals can be sourced,” stated the Economic Development in Africa Report 2023 that analyzes value chain of different products.
“In addition to its large reserves of cobalt, representing about 70 per cent of global supply, the Democratic Republic of the Congo could develop a precursor plant by procuring nickel from Madagascar and shipping it through Mozambique or the United Republic of Tanzania or procuring additional manganese from neighboring country Gabon,” the report stated.
Rwandan goods can now access African markets under AfCFTA preferences (The New Times)
Goods from Rwanda can now access the Gabon, Ghana, Togo, Botswana, and South African markets duty-free, while at the same time, service providers from Côte d’Ivoire, Cameroon, and Lesotho can issue their services in Rwanda, without barriers to market access or national treatment.
The development was announced on Wednesday, August 16 by the Minister of Trade and Industry, Jean-Chrysostome Ngabitsinze, during the official opening of the Golden Business Forum in Kigali. Attracting over 1,000 delegates from 40 countries for its second edition, the forum seeks to identify and facilitate business opportunities across Africa, and to promote engagement between developers, investors as well as financiers. This year’s forum is held under the theme “Creating African Wealth under the African Continental Free Trade Area.”
Ngabitsinze implored participants ranging from policymakers to captains of industry that there should be a common understanding that the AfCFTA belongs to the Private Sector. “In order to advance the continent in taking advantage of this opportunity, we require conversations such as these that reaffirm the role and responsibility of the private sector. As policymakers, we are working hard to ensure that businesses are well-integrated and are trading efficiently.
Botswana mulls signing onto Africa payment system (Mmegi Online)
PAPSS functions as a financial framework that enables cross-border payments in African currencies, eliminating the necessity for intra-Africa trade to be contingent on US dollar foreign reserves.
Presently, nine central banks have officially embraced PAPSS, with over 70 banks across Africa, including Botswana, having endorsed its adoption. During a recently concluded roadshow for the Intra-African Trade Fair in Gaborone, Gainmore Zanawe, a senior manager at Afreximbank, emphasised that as the Africa Continental Free Trade Area (AfCFTA) agreement disrupts established global trade patterns, it is imperative to establish robust financial systems that facilitate seamless payment for goods and services throughout the continent.
Nigeria set to join the Guided Trade Initiative – Segun Awolowo (Tribune Online)
Executive Secretary, National Working Committee, African Continental Free Trade Area (AfCFTA), Segun Awolowo has said Nigeria is ready to join the second phase of the Guided Trade Initiative (GTI) which is a solution-oriented approach that aims to facilitate trade between interested state parties by connecting businesses and products for export and import.
Head, Strategic Communications Directorate of the National Working Committee, AfCFTA; Mabel Aderonke said: “We reached a milestone in the first phase of the GTI. This successful pilot project has brought about positive development changes, capacity-building initiatives, and growth in the economy by impacting trade between Nigeria and other AFCFTA member-states. “As we prepare to join the second phase, it is to demonstrate and strengthen specific objectives and trade relations, particularly reducing trade barriers, streamlining custom procedures, ensuring infrastructure and promoting value-addition with key industries.”
“The checklist received from Ghana after the completion of the first phase requires the fulfilment of certain obligations, which Nigeria has began to process vigorously. “The importance of this relationship is to yield greater results as it will foster a more holistic approach in addressing trade challenges and enhancing trade facilitation within the region.
US, Africa relationship mitigates barriers to trade, investment — Marisa Lago (Vanguard)
The United States of America, USA, Under Secretary of Commerce for International Trade, Marisa Lago, has expressed optimism about the relationship her country was fostering with African countries. She noted that the move would remove potential barriers that can hamper trade and investment.
According to Lago, “Our engagement or vision for deepened engagement with Africa entails a lot more than just high-level visits. We are laser-focused on delivering tangible results across all dimensions of our bilateral relationship, as well as our partnerships with sub-national and pan-African institutions.
“And I am pleased to report that if we look just in terms of trade and investment, since December’s leaders’ summit and the U.S.-Africa Business Forum that the Commerce Department organised, the Biden-Harris administration has helped closed 75 new deals between the United States and African countries. We estimate that the total values of these deals result in $5.7 billion in two-way trade and investment.
As a united regional community of 16 member states, with a combined gross domestic product of around $720 billion and a total population of over 360 million, 75% of whom are young people, we have a market with considerable potential for investment and economic development.
Industrialisation is a priority for our Region, as it is necessary to support regional integration. In this regard, for the 42nd Ordinary Summit of the SADC in 2022, the DRC has focused on the theme “Promoting industrialisation through agro-processing, mineral beneficiation and regional value-chains for inclusive and resilient economic growth”.
This theme took into account the need to improve the deployment of SADC’s industrialisation and market integration programmes, as set out in SADC Regional Indicative Strategic Development Plan (RISDP, 2020-2030). The theme was also intended to drive forward the implementation of the SADC Industrialisation Strategy and Roadmap, which would help the region’s economies diversify away from dependence on primary commodities, such as raw minerals and agricultural products, and focus on high value-added manufactured goods.
I am delighted that the theme for the coming year, “Human and Financial Capital: The Key Drivers for Sustainable Industrialisation in the SADC Region”, as proposed by the incoming SADC Chair, the Republic of Angola, will enable our Region to continue to drive forward the industrialisation agenda by developing, mobilising and harnessing human and financial capital. We have the daunting task of ensuring that the aspirations of SADC citizens for sustainable economic well-being, justice and freedom are met. This means that we should relentlessly deploy our energies and channel our resources towards realising the aspirations of our founders.
Africa’s green business opportunities are abundant, UNEP study shows (UN Environment)
Africa’s private sector can bolster its green agenda and drive increased GDP, higher income per capita, create tens of millions of jobs, and foster collaboration between governments, businesses and local communities, according to a comprehensive study published today by the UN Environment Programme (UNEP).
The Africa Environment Outlook for Business is launched as 54 African ministers of environment are gathered in Addis Ababa for the 19th session of the African Ministerial Conference on the Environment (AMCEN). It recommends businesses adopt a holistic approach anchored in profit, people, planet, prosperity, peace, and partnerships.
Elizabeth Mrema, UNEP Deputy Executive Director, said: “This report shows that policymakers can create an enabling environment for investments that address the triple planetary crisis by adopting robust regulatory frameworks, investing in research, innovation, and education, as well as promoting public-private partnerships and fostering collaboration across governments, businesses and local communities.”
South African HC says BRICS meet to amplify global south voices; backs proposal for AU’s G20 entry (WION)
Ahead of the BRICS summit, South African High Commissioner Joel Sibusiso Ndebele has highlighted his country’s focus as the chair of the grouping which includes sustainable development and inclusion of the global South in multilateral systems. The mega summit will take place in Johannesburg from August 22 to 24, and a total of 67 countries have been invited to attend.
High Commissioner Ndebele affirmed, “The Summit will also provide an opportunity to amplify the voices of our friends in Africa and the global South with the BRICS-Africa outreach and BRICS-plus dialogues.” He stressed that the summit’s priorities align with the shared challenges and opportunities faced by South Africa, other BRICS members, and the global south.
High Commissioner Ndebele emphasised the pivotal role of aligning the work plans and calendars of South Africa, as the chair of BRICS, and India, the G20 host. “With India currently holding the G20 presidency and pushing for a more inclusive world order, it is an opportune time to induct the African Union (AU) as a permanent member of the G20,” he stated. He expressed South Africa’s full support for India’s G20 Presidency’s proposal for the African Union’s full membership during the upcoming New Delhi Summit.
The significant interest in joining BRICS is a clear sign that BRICS has remained true to its values of championing the global south, strengthening multilateralism, and driving reform as well as boosting global economic growth and stability. South Africa welcomes the discussion on BRICS membership expansion and will, in our capacity as chair, take this forward in close cooperation and full consultation with our BRICS partners.
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South Africa taking an average of 25 months to complete tariff investigations, report shows (Engineering News)
It is currently taking an average of 25 months for government to complete import duty investigations and to provide the necessary Ministerial approvals for the South African Revenue Service to implement duty increases or reductions, a new report shows.
Compiled by XA Global Trade Advisors, the analysis also highlights a marked slowdown in turnaround times over the past ten years, with the longest outstanding case in 2013 having been 17 months, which is eight months shorter than the current average turnaround time. Import duty investigations are officially meant to be concluded within six months.
CEO Donald MacKay believes the delays are also the chief cause for a steep decline in the number of applications to the International Trade Administration Commission of South Africa (Itac) for duty increases or reductions. “At times of economic distress, we should see the use of trade policy instruments rising, yet we find the very opposite happening,” Mackay argues.
The effectiveness of the proposed protection, Macsteel CEO Mike Benfield adds, is often undermined further by the proposed reciprocal-agreement stipulations attached to the proposed duty. The report, which is the third produced by XA, calls for a rethink of such reciprocal agreements, arguing that they are being unevenly applied, add significant cost without a commensurate benefit, slow down the process, and are causing businesses to opt out of the process. It also asserts that the delays are costly, calculating them at R2.6-billion in duties having been paid where there is no local producer and R4-billion in duties not collected in duties where protection has been requested.
Mixed reaction to anti-dumping duties for chicken imports (IOL)
There has been mixed reaction to Trade, Industry and Competition Minister Ebrahim Patel’s notice to impose definitive anti-dumping duties on imported chicken. The duties – approved by the minister in 2022 after a recommendation by the International Trade Administration Commission (ITAC) – had been suspended for 12 months but are now set to come into operation.
The notice published in the Government Gazette on August 2 said the International Trade Administration Commission of South Africa initiated an anti-dumping investigation on frozen bone-in portions of fowl of the species originating in or imported from Brazil, Denmark, Ireland, Poland and Spain in 2021. “After considering comments, the commission made a final determination that the product originating in or imported from the subject countries was being dumped into the Southern African Customs Union (Sacu) market causing material injury to the Sacu industry.
Izaak Breitenbach, the CEO of the SA Poultry Association (Sapa), said that the lapsing of the duties last year caused material harm to the local industry and imports surged from 17 000 tons per annum in October 2022 to 46 000 tons in February 2023. “Over and above this the industry had high raw material costs to contend with, as well as load shedding. This duty will impact dumped imports that hurt the industry in the past and will put the industry in a better position to grow, facilitating economic growth not only in poultry but the total grain value chain. It will also assist greatly with job creation.”
Whitman says US-Kenya bilateral trade pact to be concluded by end of year (Capital News)
United States Ambassador to Kenya Meg Whitman has revealed that the US-Kenya bilateral trade agreement is set to be concluded by the end of the year as a pace setter for Africa. Speaking at the Devolution Conference in Eldoret Uasin Gishu, Whitman stated that the bilateral trade agreement between Kenya and the US will be a first of its kind to be negotiated by the US government.
The United States and Kenya held pre-negotiating discussions in February this year and the first negotiating rounds in April 2023. According to Whitman, the United States is highly interested in Kenya trade investment climate.
Whitman has advised that even if President William Ruto’s administration has made great strides in building a business-friendly environment for foreign investors there is still room for improvement by addressing challenges that come up. “Kenya is the leading financial hub, it is the gateway to the East Africa market because 80 per cent of the regional trade passes through Kenya Mombasa port,” she added.
She has also called on Ruto’s administration to address challenges facing Cargo and container clearance at the Mombasa port. “Despite improving logistics, the delivery cost of a container to Kenya remains significantly higher than container shipment landing in Europe and Asia,” she said. Back in the year 2010 it took over 11 days to clear a container at the port of Mombasa but to date the government established measures to ease the process where now container clearance takes 3-4 days despite cargo increasing over the past 5 years.
Egypt to boost transit trade and re-exports (ZAWYA)
Mostafa Madbouly, Egypt’s Prime Minister, convened a meeting on Tuesday to discuss measures to maximise transit trade and re-exportation. Madbouly stressed the importance of maximising transit trade in Egypt to leverage the country’s existing ports and strategic locations.
Minister of Transport Kamel Al-Wazir highlighted the surge in transit trade and the movements that are driving this field forward, emphasising the importance of such projects. The Ministry of Transportation aims to increase Egypt’s share of transit trade in the Red Sea and the Mediterranean basins, as transit trade is an important and constant source of direct and indirect revenue in hard currency. To achieve this, the ministry has contracted with five international alliances to manage and operate five new stations. The main activity of the companies and alliances contracted with Egyptian ports will be direct and indirect transit trade as a global operator for regular shipping lines.
The infrastructure of maritime ports is also planned to be developed by creating 65 km of new platforms at depths ranging from 15-18 m, reaching a total length of 100 km of platforms in maritime ports. The latest development is the opening of the Tahya Misr station at the port of Alexandria with platform lengths of 2.5 km.
Africa’s rise as a global supply chain force: UNCTAD report (UNCTAD)
African economies can become major participants in global supply chains by harnessing their vast resources of materials needed by high-technology sectors and their own growing consumer markets, the United Nations Conference on Trade and Development (UNCTAD) said in its Economic Development in Africa Report 2023 launched today in Nairobi.
“This is Africa’s moment to bolster its position in global supply chains as diversification efforts continue. It’s also an opportunity for the continent to strengthen its emerging industries, foster economic growth and create jobs for millions of its people,” UNCTAD Secretary-General Rebeca Grynspan said.
Africa’s abundance of critical minerals and metals, including aluminum, cobalt, copper, lithium and manganese, vital components in technology-intensive industries, positions the continent as an attractive destination for manufacturing, as recent upheavals caused by trade turbulence, geopolitical events and economic uncertainty compel manufacturers to diversify their production locations. Africa also offers advantages such as shorter and simpler access to primary inputs, a younger, technology-aware, and adaptable labour force and a burgeoning middle class, known for its growing demand for more sophisticated goods and services.
The report says African small and medium-sized enterprises need more supply chain finance, which bridges the payment time gap between buyers and sellers, improves access to working capital and reduces financial strain. According to the report, the value of the African supply chain finance market rose by 40% between 2021 and 2022, reaching $41 billion. But this is not enough. The continent can mobilize more funds by removing barriers to supply chain finance, including regulatory challenges, high-risk perception, and insufficient credit information.
Political insurgency increasing prices of food items in sub-region (The Ghana Report)
Countries in the West African sub-region are bearing the brunt of political instability in the region, the Economic Community of West Africa States (ECOWAS) has said. According to the bloc, the five coup d’etat which had taken place in the four ECOWAS member states between 2021 and 2023, had contributed to uncontrollable increase in prices of market products such as onions and tomatoes, widely produced in Niger and Burkina Faso, respectively.
“As a result of insecurity and instability, economic activities in the region have been disrupted”, Ambassador Mrs. Perpetua O. Dufu, the Coordinating Director, Multilateral and International Organisation of the Ministry of Foreign Affairs and Regional Integration stated. She was speaking at the opening session of a day’s sensitisation workshop on ECOWAS protocols on Monday in Sunyani.
Ambassador Dufu indicated with widespread conflict and instability, economic prosperity could not be attained and sustained in the subregion, as regional integration was intrinsically linked to peace and stability. She said the region was currently at crossroads with many states witnessing severe cases of insecurity, conflict and violent extremism, which had been further exacerbated by the resurgence of unconstitutional changes of governments, bringing about political instability in some parts of the sub-region. The Niger coup, of July 26, 2023, has therefore underscored the importance of safeguarding democracy and upholding democratic norms within the sub-region, Ambassador Dufu added.
East Africa experiences some trade tensions as trade between Tanzania and Kenya dip (Business Insider Africa)
During the review period, Tanzania implemented new limits on grain trade with its neighbors in the East African Community bloc, laws that significantly curtailed the entry of maize into Kenya. According to information gathered by the Central Bank of Kenya (CBK), the value of Kenya’s goods imports from Tanzania fell 31.12% on-year to Sh18.68 billion between January and June. The decrease was the quickest since 2016 from Sh27.12 billion, a record-high for the half-year period, in a comparable period the previous year.
At the height of the disputes between Nairobi and the government of former Tanzanian President John Magufuli (dead), imports for the first half of the year had dropped 36.99 percent to Sh6.06 billion. Tanzania has dropped from being Kenya’s second to fourth-largest source market in Africa as a result of the dramatic decline in the value of imports over the Namanga border, having been surpassed by Egypt and Uganda. According to CBK statistics obtained from the Kenya Revenue Authority, Uganda’s imports jumped by 10.57% to Sh18.99 billion during the review period while Egypt’s imports increased by 5.21% to Sh23.75 billion.
Non-tariff Barriers and national protection impeding intra-EAC trade
Non-tariff Barriers (NTBs) and protectionism at the national level have been identified as the key factors impeding the growth of intra-EAC trade. The East African Community (EAC) Secretary General Hon. (Dr.) Peter Mathuki said that the region was therefore working continuously to eliminate NTBs with 26 NTBs having been resolved out of the 33 that had been reported as of June 2023. Dr. Mathuki added that seven (7) NTBs remained outstanding but were at different levels of resolution.
“To facilitate free movement of goods, Partner States have effectively eliminated Non-Tariff Barriers (NTBs) as they arise and have cumulatively eliminated a significant number of 184 NTBs with only a few remain outstanding,” said Dr. Mathuki. The Secretary General who was delivering the annual State of the EAC Address at the EAC Headquarters in Arusha, Tanzania, disclosed that EAC total trade increased by 13.4 percent to US$74.1 billion in 2022 from US$65.3billion in 2021, while the total Intra-EAC trade grew by 11.2 percent to US$10.9billion in 2022 from US$9.8 billion in 2021.
The SG further stated that the percentage share of Intra-EAC trade to EAC total trade stood at 15 percent in 2022, and 2023 has indicated a positive trend with 16% in January and 19% in February recorded of total EAC trade.
Dr Mathuki said that the implementation of the Single Customs Territory, which is a stop gap measure towards the realisation of a fully-fledged Custom Union in the EAC, has seen a reduction in the turn-around time from an average of 21 days to four (4) days along the EAC corridors.
SADC Council of Ministers deliberates on regional integration agenda, ahead of the 43rd SADC Summit
The Council of Ministers of the Southern African Development Community (SADC) met in Luanda, Republic of Angola on 13-14 August 2023 to deliberate on the implementation of regional integration issues in preparation for the 43rd SADC Summit of Heads of State and Government to be held on 17th August, 2023.
In his acceptance speech, His Excellency, Ambassador Téte António, said under the Chairship of Angola, the SADC region will pay attention and focus on Human and Financial Capital as a catalyst for industrialization guided by the theme; “Human and Financial Capital: The Key Drivers for Sustainable Industrialisation in the SADC Region”. The theme seeks to address two of the most critical enablers in supporting regional industrialisation, namely adequate human resources within the context of climate change and 4th Industrial Revolution, and adequate financial resources to ensure more sustainable funding mechanisms.
His Excellency Amb. Téte António, underscored the need for sustained peace and security, highlighting that that it is only possible to guarantee the successful implementation of the SADC Development and Industrialisation Agenda in a context of peace and security, since peace, security and stability are indispensable prerequisites for economic development.
The Executive Secretary urged Member States to continue making progress in pursuing the various regional integration targets and accelerating the regional integration agenda while addressing the challenges so as to remove the bottlenecks that are slowing integration, industrialization, and market access in the region.
Grains Trade and Milling in Eastern Sub-Saharan Africa (Rabobank)
Sub-Saharan Africa has long been considered an area of opportunity for trading grains due to the widening gap between the booming population and demand and the comparatively low local production and yields. These fundamentals remain the same, but interesting changes have emerged, with new dynamics, challenges, and opportunities. In this report, we focus on eastern sub-Saharan Africa (ESSA) and look at the long-term horizon toward 2035.
ESSA encompasses twenty-two different economies with growing populations, increasing urbanization, and dietary changes that are expected to boost overall grain consumption. By 2035, ESSA’s population is forecast to reach 705 million from the current 520 million. This will be the major driver for white corn consumption, which we expect to remain the primary staple consumed in the region. Simultaneously, demand for other key grains will emerge, like wheat across the entire region and rice in Uganda, Tanzania, and Madagascar. Wheat demand is expected to grow strongly, driven by urbanization, income growth, and dietary changes, all trends that we also observe in large cities like Nairobi, Kampala, Dar es Salaam, and Lusaka.
ESSA is not self-sufficient in grains, and trade opportunities differ across commodities. In a very conservative scenario, we expect an additional 2m to 3m metric tons of wheat imports in the region’s eight largest economies by 2035. This growth will vary among the different countries and depend on the production outlook. Several countries will continue to have low yields and remain strong net importers.
BRICS Bank to expand trade in national currencies amid sanctions: South Africa (21st Century Chronicle)
New Development Bank (NDB) launched by the BRICS bloc aims to increase local currency fundraising and lending, amid Western sanctions against founding shareholder Russia, South African Finance Ministry has announced.
According to South African Finance Minister Enoch Godongwana, increasing local currency use among NBD members will be on the summit’s agenda, with the aim of reducing the impact of foreign exchange fluctuations rather than de-dollarization.
“Most countries that are members of the NDB have been encouraging [it] to provide loans in local currencies,” Godongwana declared as quoted in a Reuters report on Monday. Analysts have suggested that US sanctions on Russia have underpinned the need to boost the NDB’s local currency fundraising and raise capital from new members, which could help it cut dependence on US capital markets.
BRICS bank issues debut bond in SA market
Global agricultural and food production are projected to continue to increase over the next ten years, but at a slower pace of growth than the previous decade due to demographic trends, according to a report released today by the Food and Agriculture Organization of the United Nations (FAO) and the Organisation for Economic Co-operation and Development (OECD).
According to the OECD-FAO Agricultural Outlook 2023-2032, while uncertainty has risen due to geopolitical tensions, adverse climate trends, animal and plant diseases and increased price volatility for key agricultural inputs, global production of crops, livestock products and fish are projected to grow at an average annual rate of 1.1 percent during the period, half the pace recorded in the decade ending in 2015.
“Surges in agricultural input prices experienced over the last two years have raised concerns about global food security,” OECD Secretary-General Mathias Cormann said. “Investments in innovation, further productivity gains and reductions in the carbon intensity of production are needed to lay the foundation for long-term food security, affordability and sustainability.”
Global trade in agricultural commodities covered in the Outlook is projected to expand by 1.3 percent annually - half the pace recorded in the past decade - due mostly to slower growth in demand by middle-income countries. Maize, wheat and soybeans contributed the most to the overall agricultural trade growth in the past decade; however, they are projected to experience the biggest drop in trade growth over the next 10 years. Sub-Saharan Africa’s trade deficit in major food items is projected to almost double by 2032, largely reflecting rapid population growth compared to other regions.
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South Africa likely to keep preferential US trade access, envoy says (Engineering News)
South Africa will likely keep its preferential access to US markets because hundreds of American firms are also benefitting, according to the nation’s ambassador to the Brazil, Russia, India, China and South Africa (Brics) bloc.
“I don’t think there is any serious threat of us losing preferential access to AGOA. AGOA is not a one-way issue, trade is not a one-way issue,” Anil Sooklal said at a Bloomberg conference in Johannesburg on Monday. “You have 600 US companies doing business in South Africa. Are they going to turn their backs on that?”
South Africa has asked the US to consider an early extension of the African Growth and Opportunity Act, which expires in 2025. But some US lawmakers have pushed the Biden administration to review South Africa’s access to AGOA, amid frustration over the country’s non-aligned position toward Russia’s invasion of Ukraine, and because they deem it too developed to qualify.
South Africa, which last year exported $2.7-billion of goods using AGOA and the so-called Generalized System of Preferences, will host an AGOA summit later this year.
Coal still has role to play despite naysayers, Menar MD tells conference (Engineering News)
Resources investment company Menar MD Vuslat Bayoglu has emphasised that South Africa is on the precipice of a significant industrial revolution. Fuelling this revolution, however, will require a consistent and reliable baseload power source that can only be produced by coal-fired power stations, despite calls from more developed countries for South Africa to reduce its coal-fired power station capacity to achieve sustainability and carbon dioxide emission reduction goals, he said on the first day of the Southern African Coal Processing Society International Coal Conference, in Secunda, Mpumalanga, on August 15.
Owing to the abundance of important minerals South Africa has – such as platinum, coal, chrome, manganese and others – it is vital to use and process these resources locally to generate income and create jobs, he added.
Bayoglu argued that decisions by government to close down coal-fired power stations, and therefore remove baseload power needed for the local power grid, could be detrimental. South Africa currently exports about 70-million to 80-million tons a year of coal. This stands in contrast to countries such as Australia and Indonesia, which have recently increased their coal exports from 100-million tonnes to 300-million tonnes a year and 100-milion tonnes to 700-million tonnes a year, respectively.
He also pointed out that as South Africa continues to export coal, the Asian market will be crucial for the country to supply to. “About two-thirds of coal-fired power stations are in Asia. And then the average age of those coal stations is 13 years. They’re quite young, and Asia’s going to be a key market for our coal. Globally there’s a trend that coal’s facing down, but it’s not out.”
Namibia: Peugeot plant still in limbo (New Era)
Workers at the Peugeot plant in Walvis Bay, in which government owns a 49% stake and French automaker Groupe PSA has a majority 51% share, continue receiving their basic salaries and locally assembled vehicles are still being sold domestically despite the factory being under care and maintenance. This is after the French car maker sued government for N$80 million, claiming government’s failure to honour its part of the investment agreement as it pertains to the establishment of Peugeot Opel Assembly Namibia (POAN).
The N$190 million assembly plant, which holds tremendous export and job creation potential, has been besieged by obstacles since its official opening in 2018. This has resulted in less than 200 vehicles being produced at the plant since inception. The carmaker has been left regionally uncompetitive due to import duties of between 18% and 25% into the Southern African Development Community (SADC) and the Southern African Customs Union (SACU). However, government refuted Groupe PSA’s legal assertion with what Humavindu called “evidence and facts” and this resulted in the court striking the case from the roll.
Zim elections: Agri revival burns bright for Africa’s food basket (Food for Mzansi)
Experts have called on the incoming government to be tough on consequence management and find a working mechanism to fight corruption and the non-implementation of policies that are aimed at improving the lives of the people through agriculture in Zimbabwe.
“Agriculture has always been a problem in Zimbabwe in terms of national policies, mainly the land reform programme which happened 20 years ago. What happened then continues to influence what is happening now in terms of politics.
According to Motsi, the unfair distribution of land in Zimbabwe was what led to the once food basket of Africa facing food insecurity and sanctions which has made the situation worse.
Motsi said Zimbabwean agriculture is slowly recovering, however, the biggest problem is corruption that is not being dealt with by the government. “The whole economy of Zimbabwe has been anchored on agriculture, especially on tobacco, soya beans and maize, but there was a decline since late 2000 after the grabbing of the land”
Motsi said the new model that has been introduced on how farmers can be contracted as suppliers with main foreign companies was a positive move that has yielded good results.
National African Farmers Union (Nafu) president Motsepe Matlala said the elections are important for Zimbabwe and whichever party wins has no choice but to focus on reviving the agricultural sector.
UNCTAD chief meets with the President of Kenya (UNCTAD)
UNCTAD Secretary-General Rebeca Grynspan met today with President William Ruto of Kenya to discuss the structural challenges facing the region and offer UNCTAD’s support.
President Ruto stated, “We strongly believe that UNCTAD is a strategic partner for Kenya” underlining that trade remains key to long-term sustainable economic growth. He was accompanied by Industry, Trade and Investment Cabinet Secretary Moses Kuria.
Ms. Grynspan’s itinerary in the East African nation features discussions with Kenyan ministers, high-ranking officials and business leaders, and a presentation of UNCTAD’s “Holistic Productive Capacities Development Programme for Kenya” – a tool assessing the economy’s latent potential for output. The UNCTAD chief is also set to tour a circular economy center in Lavington, Nairobi.
Kenya’s economy has demonstrated remarkable resilience despite COVID-19 and other shocks, with growth rates projected to exceed 5%. Diversified exports, including high-tech goods like mobile phones, position Kenya to reap gains from the African Continental Free Trade Area (AfCFTA). The country’s burgeoning e-commerce market, projected to encompass nearly 40 million by 2027, and plans for a $40 smartphone align with President Ruto’s vision of affordability.
Secretary-General Grynspan will launch UNCTAD’s flagship Economic Development in Africa Report 2023 in Nairobi on 16 August.
Come and trade, make money — Kenya to allow visa-free travel for all Africans (Modern Ghana)
Kenya has announced plans to remove visa restrictions for all African Union member states later this year in an effort to boost pan-African integration. The move was revealed by Cabinet Secretary for Foreign and Diaspora Affairs, Alfred Nganga Mutua. Mr. Mutua said the move demonstrates Kenya's commitment to play a leading role in regional integration. It’s also expected to boost tourism and generate revenue for Kenyan businesses.
Under the new policy, citizens of more than 50 AU nations will have reciprocal privileges to enter Kenya visa-free.
Kenya has been a strong proponent of AfCFTA, which aims to create a single market liberalizing trade and movement across Africa headquartered in Accra, Ghana. No firm date has been set for implementation, but the policy, which represents a major milestone in strengthening connectivity between African countries, is slated to take effect before the end of 2023.
AfDb approves $20 million for eco-friendly projects, including Nigeria (Nairametrics)
The African Development Bank’s Board of Directors has invested $20 million investment in the Pembani Remgro Infrastructure Fund II which will operate across various African nations, including Nigeria, focusing on industrial and infrastructure projects.
The Pembani Remgro Infrastructure Managers was formed in 2012 in South Africa and manages the Pembani Remgro Infrastructure Fund II. Nairametrics also reports that with the Bank’s contribution, the Fund aims to attract up to $400 million from private, commercial, or institutional investors to support its endeavours in Africa.
The funds amassed by this initiative will be directed towards a spectrum of industrial and infrastructure projects which encompass digital infrastructure, the shift towards renewable energies in the energy sector, logistics and transportation, waste recovery, as well as heating, ventilation, and air conditioning, all with a specific emphasis on enhancing energy efficiency.
Economic activity in ECOWAS to recover in 2024 (The Business & Financial Times)
The West African Development Outlook (WADO) is projecting economic activity in most Economic Community of West African States’ (ECOWAS) economies to rebound over the next two years while inflation is expected to decelerate, leading to improved conditions compared with 2022.
WADO, an annual publication by the ECOWAS Bank for Investment and Development (EBID), explained that economic activity will end this year at 3.8 percent; rebounding to 4.1 percent in 2024 on account of more stable prices.
The West African Economic and Monetary Union (WAEMU) is also expected to record an uptick in economic activity, growing at 6.1 percent in 2023 and further to 6.5 percent in 2024. On the other hand, gross domestic product (GDP) growth in the West African Monetary Zone plus Cabo Verde (WAMZ+) is projected to slow to 3.1 percent in 2023 before reaching 3.4 percent in 2024.
Notwithstanding the above positive outlook of economic activity in 2024 for the ECOWAS region, the WADO report also outlined six possible downside risks the West African economy faces – which, if not contained, could derail prospects and worsen risks.
Key among its recommendations is that ECOWAS countries work toward using local currencies in intra-regional and intra-Africa trade by taking advantage of the Pan-African Payment and Settlement System (PAPSS) platform, as envisaged under the African Continental Free Trade Area (AfCFTA) framework. This will help bring more stability to local currencies, given that it will lead to a reduction in demand for the dollar; giving them a better handle on inflation. Other policy options WADO2023 proposed include the need to rethink intra-regional trade, followed by improving labour productivity and increasing electricity coverage.
Niger: ECOWAS intervention will stop more coups – Prof Akinyemi (Vanguard)
A former Minister of Foreign Affairs and Professor of Political Science, Bolaji Akinyemi, has stated that the intervention of the Economic Community of West African States (ECOWAS) in restoring democracy in Niger is in a bid to stop spread of coups in the sub region. The body placed sanctions on the Niger military junta following the ouster of president Mohammed Bazoum in a coup on July 26.
Akinyemi also noted that with West Africa becoming a belt of coupist, Nigeria must be wary after the Niger coup. He said, “Whether in Nigeria, Côte d’Ivoire, Senegal and wherever, you would want to put a stop to the creeping phenomenon of coups. Yes, Nigerians whether in the north or south have been very vocal against the military component of the policy of ECOWAS.
“They felt that the military component being put on the table is so quick that there should have been more emphasis on diplomacy, dialogue and economic sanctions before you openly talk about military options.... It’s not just Nigeria, the question is why is confronting the coupist in Niger important to ECOWAS? You don’t want a domino effect.
Energising Africa’s Digital Economy: Cross-Border Data Flows and the African Continental FTA (Commonwealth Secretariat)
The African Continental Free Trade Area (AfCFTA) is the largest free trade agreement in the world by number of members and geographical area covered. It spans 54 African countries, 2 with a combined gross domestic product (GDP) of US$3.5 trillion and 1 billion consumers. Although initial trading under the agreement officially commenced in 2021, there are still ongoing negotiations on several outstanding protocols.
This issue of Trade Hot Topics provides an overview of the ongoing debate regarding cross-border data flows and their restriction. It examines this debate in light of Africa’s digital needs and explores how cross-border data flows are regulated in the multilateral
trading system and other large regional trade agreements, as well as by different African countries. It concludes with some recommendations for the negotiations on the AfCFTA Digital Trade Protocol.
The 11th Conference on Climate Change and Development in Africa (CCDA-XI) will be held in Nairobi, Kenya from 1-2 September 2023. It will serve as a pre-event of the Africa Climate Summit to be held under the theme; “African Solidarity for Global Climate Action from 4-6 September 2023 in Nairobi, Kenya. It will bring together African high level policy makers, senior officials, climate change experts, civil society organizations and other stakeholders to deliberate on the sub themes of the Summit.
“Africa has taken a position that it contributes the least to global warming but is the most vulnerable to the impacts of climate change and therefore has special needs and special circumstances warranting financial support to mitigate against and adapt to climate change,” the organizers stress. The continent is seeking to accelerate implementation of its climate change strategies and actions to avert the catastrophic impacts of global warming and build the resilience of the continent’s economies.
Global Africa Business Initiative aims to accelerate and promote business, trade and investment across Africa (African Business)
The Global Africa Business Initiative (GABI), the leading platform for promoting investment opportunities and business growth across Africa and the world, will bring together Heads of State and Government, CEOs, UN leaders, investors and entrepreneurs in September for a deep dive into energy, trade, and digital transformation. Themed ‘Unstoppable Africa’, the GABI event will take place on 21-22 September in New York during the high-level UN General Assembly week. This year’s program will center on three key themes: Energy Access & Energy Transitions, Inclusive Growth & Trade and Digital Transformation.
This landmark event comes at a pivotal time in Africa’s economic landscape. With a market potential of US$3 trillion, Africa presents enormous business, trade, and investment opportunities. The region’s GDP growth at 4%, expected to outpace the global average of 2.7%, is indicative of the continent’s robust economic momentum. Moreover, FDI into the region surged to US$97 billion in 2021 before moderating to US$45 billion in 2022, but still reflects a substantial increase from the US$39 billion recorded in 2020, underscoring a vibrant and attractive investment environment.
These unique attributes underscore the vast potential and innovative spirit that characterize Africa’s present and future economy. Leveraging 60% of the world’s uncultivated arable land and housing the youngest population globally, with 60% under the age of 25, the continent is poised for dynamic growth and expansion. GABI provides the perfect platform to explore and invest in these opportunities, laying the groundwork for a prosperous future in Africa and worldwide.
Impacts of The Suspension of the Black Sea Grain Initiative in Eastern Africa (ReliefWeb)
Wheat consumption represents 67 and 38 percent of total cereal consumption in Djibouti and Sudan, respectively; in Ethiopia, Kenya, and Somalia wheat consumption accounts for less than 24 percent of total cereal consumption.
Local wheat production remains below consumption needs across most countries in the Eastern Africa Region, with in-country production ranging between 0-25 percent of the total annual consumption requirements.
Djibouti and Somalia rely exclusively on imports to meet their domestic wheat demand. A sizeable portion of wheat demand in Kenya and Sudan is met by imports (86 and 77 percent, respectively). Ethiopia is the only exception as domestic production in 2022 accounted for 82 percent of total wheat consumption needs.
Considering the high reliance on imports from the Black Sea to meet the domestic wheat demand and weak domestic currencies, wheat availability and prices in Djibouti, Somalia and Sudan are more likely to be influenced by international trade dynamics.
Somalia and Sudan are largely dependent on imports from Russia and Ukraine to meet their domestic wheat demand. In 2022, Somalia imported 63 percent of wheat required from Ukraine. Sudan imports around 85 percent of its annual wheat requirements from the Russian Federation and Ukraine (accounting for 50 and 20 percent of wheat imports, respectively).
The suspension of the BSGI on 17th July 2022, pushed international wheat prices to a five-month high in the following days. Despite the initial spike, international wheat prices eased towards end of July through early August, reaching levels lower than those recorded before the halt of the initiative.
Quick Links
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Economists see South Africa averting second-quarter contraction (Engineering News)
South Africa’s economy probably avoided a contraction in the second quarter, despite record power cuts, logistical constraints and sagging consumer confidence. In the view of analysts polled by Bloomberg August 4 to 10, the economy stagnated quarter-on-quarter, compared with a forecast for a 0.1% contraction last month.
Better-than-expected mining and manufacturing output contributed to revised projections. The sectors that make up more than a fifth of total gross domestic product grew 1.5% and 2.3% respectively in the three months through June, according to data published by Statistics South Africa last week.
“The supply side of the economy seems to have stabilised, despite ongoing loadshedding and domestic logistical constraints,” said Jee-A van der Linde, a senior economist at Oxford Economics Africa.
China, Angola hold meeting on economic, trade cooperation (Xinhua)
The Second Meeting of the Steering Commission for Economic and Trade Cooperation between China and Angola was held Sunday in Luanda, the capital of Angola. During the meeting, co-chaired by Chinese Minister of Commerce Wang Wentao and the Minister of State for Economic Coordination of Angola Jose de Lima Massano, both countries jointly announced the conclusion of negotiations on the China-Angola Bilateral Investment Agreement and exchanged views on pragmatic cooperation in various areas, including trade, investment, infrastructure, industrial development, and human resources.
Wang said that under the strategic leadership of the leaders of both countries, the economic and trade cooperation between China and Angola has yielded fruitful results. China is prepared to collaborate in strategizing for the upcoming phase of bilateral economic and trade cooperation, enhancing the scope of trade and investment cooperation, strengthening the achievements in infrastructure partnership, and broadening engagement across sectors such as energy, mining, manufacturing, agriculture, and fisheries.
Ghana’s trade with the US hits a record high $1.8 billion trade surplus (Business Insider Africa)
As Ghana’s leading development partner, the US government continues to promote economic growth. Over $150 million in bilateral aid from the United States to Ghana in 2022 will go toward initiatives promoting human rights, governance, economic development, agriculture, education, and security. Additionally, the US government gave Ghana about $32 million in agricultural aid last year. The U.S. Development Finance Corporation has announced expanded support for micro, small, and medium-sized firms in the agricultural sector in Northern Ghana totaling $25 million in finance.
The United States has announced a $300 million investment in data centers across Africa, particularly Ghana, to support the expansion of the digital economy. The value of U.S.-Ghana two-way trade in 2022 hit $3.7 billion. Ghana’s exports to the United States in came in at approximately $2.7 billion. Major Ghanaian exports to the United States include crude oil, cocoa (bean, paste, and butter), apparel, rubber, and cassava. The United States is Ghana’s fourth largest export market.
Decentralisation and AfCFTA capable of propelling Ghana’s growth - GDCA (BusinessGhana)
The Ghana Developing Communities Association (GDCA) is committed to championing the cause of local governance in Ghana because it believes that decentralisation, coupled with the African Continental Free Trade Area (AfCFTA), can propel the country’s growth. Alhaji Osman Abdel-Rahman, Executive Director of GDCA, said this in the association’s release signed and issued on Thursday to mark this year’s African Decentralisation and Local Government Day.
On 10 August every year, African Union (AU) member states celebrate the African Decentralization and Local Development Day. This year’s theme is “Accelerating the implementation of the African Continental Free Trade Area (AfCFTA).” Alhaji Abdel-Rahman stressed that the AfCFTA initiative presents a huge potential for local development.
The Executive Director of GDCA said that the importance of integrating social accountability into the AfCFTA implementation strategy would ensure transparency, inclusivity, and effective progress tracking, thereby expediting the benefits of the AfCFTA for the people of Ghana.
Kenya’s Africa exports cross Sh200bn mark (Nation)
Kenyan traders earned an estimated Sh202.40 billion from goods sold on the continent in the first six months of the year, latest official statistics show, a 20.30 per cent growth over a similar period last year. Africa accounted for a record-high 42.23 per cent of the country’s Sh479.29 billion total value exports in the review period, according to provisional trade data collated by the Central Bank of Kenya. The share was higher than 38.84 percent, or Sh168.24 billion, in a similar period last year when total inflows from export of goods amounted to Sh433.15 billion. Kenya’s earnings from exports to African countries for the half-year period have crossed the Sh200 billion mark for the first time, giving a boost to President William Ruto’s push for increased intra-African trade.
The uptick has come at a time President William Ruto is championing the removal of trade barriers amongst African countries to ease the movement of goods, services and labour through integration of regional trading blocs. Africa’s under-developed transport networks have been blamed for raising the cost of goods and services by as much as 40 per cent, rendering intra-African trade uncompetitive compared with trade with developed continents such as Europe. For example, the first consignment of Kenya’s value-added tea to Ghana which left the country last October reached Port of Tema in February this year, highlighting the infrastructural, security and tariff hurdles hampering intra-African trade.
Kenya, Tanzania trade war cuts imports 30 percent (The Citizen)
Kenya’s imports from neighbouring Tanzania have slumped at the sharpest pace in seven years in a period renewed trade tiffs saw Nairobi bypass Dar es Salaam to buy more from as far as Egypt. Official trade statistics show expenditure on goods trucked from Tanzania in six months through June plunged by nearly a third on the back of restrictions on cereal exports to Kenya.
Tanzania imposed new guidelines on trade in grains between the country and its partners in the East African Community bloc in the review period, rules which largely restricted the importation of maize into Kenya. Data collated by the Central Bank of Kenya (CBK) indicate the value of Kenya’s goods imports from Tanzania plunged 31.12 percent year-on-year to Sh18.68 billion in the January-June period. The drop from Sh27.12 billion – a record-high in the half-year period – in a similar period in the prior year was the fastest since 2016.
The thawing of trade relations between the two biggest economies in the seven-nation EAC bloc during the reign of former President Uhuru Kenyatta and his counterpart Samia Suluhu had pushed Tanzania to become the second-largest source market on the continent after South Africa. But the sharp drop in the value of imports through the Namanga border has seen Tanzania drop from second to fourth-largest source market for Kenya in Africa having been overtaken by Egypt and Uganda.
EA faces more food shortage as conflicts add mouths to feed (The East African)
This week, a food market report showed that a combination of factors – including erratic food supply in the region, high prices due to shortfalls, high demand in importing countries and poor policies – have made the region food insecure.
The East African Cross-Border Trade Bulletin July 2023, released by The Market Analysis Sub-group of the Food Security and Nutrition Working Group, says the 2022 drought raised prices of grains as demand reduced supply. The Food Security and Nutrition Working Group monitors informal cross-border trade of 88 food commodities and livestock in Eastern Africa to quantify the impact on regional food security.
“In the first quarter of 2023, when it became known that Kenya could not acquire enough supplies from overseas due to higher prices and currency depreciation, cross-border trade was exceptionally high,” says the report. “The significance of the supply interchange between Uganda and Tanzania depends on the production and, in addition, the export policy of Tanzania, whereby, when domestic prices rise due to high domestic and regional demand, Tanzania reduces exports through various tools.”
President Ruto said the country is expected to harvest 44 million bags, compared to last year’s 32 million bags. But Kipkorir arap Menjo, a director at the Kenya Farmers Association, said the country remains food insecure because the government failed to set aside funds budget to cater for grain reserves.
Museveni and Ruto discuss trade, security (Monitor)
Kenya President William Ruto made an unannounced visit yesterday to his Ugandan counterpart, President Museveni, a week after he approved the blocking of Ugandan milk. He alleged that the milk was being imported from outside the region into Uganda. The two heads of State held a closed door meeting at State House Entebbe and talked about trade between the two countries and regional security.
The trade relationship between Uganda and Kenya has been worsening after Kenyan authorities blocked the importation of Uganda’s powdered milk to their market. Last week, President Ruto, while addressing the media in Mt Kenya region, Kenya, said Kenyan companies, which he didn’t name, import powdered milk to Uganda then process it to be able to access the Kenyan market.
Brookside Limited, a company owned by the former President of Kenya Uhuru Kenyatta has a big stake in Uganda’s milk industry and was one of the most affected companies by the blockage. The company has also cut jobs after the loss of the Kenyan market.
In January 2023, President Ruto sent a special message and it was delivered by his Cabinet Secretary for Investment, Trade and Industry, Mr Moses Kuria, to President Museveni where he allowed free access of Ugandan milk and chicken products to the Kenyan market.
Months later, Ugandan milk was blocked by Kenyan authority. On the security issues, Uganda and Kenya have deployed troops in the eastern DR Congo and they are engaging the Congolese government and M23 rebels to end the fighting. He had expressed concern about the blocking of Uganda’s milk in Kenya, but ruled out retaliatory action, saying they aren’t good for the development of the regional block.
SADC to hold 43rd Summit in Luanda, Republic of Angola, on 17 August 2023
The Southern African Development Community (SADC) will hold the 43rd Ordinary Summit of Heads of State and Government in Luanda, Republic of Angola on 17 August 2023.The 43rd SADC Summit will be held under the theme “Human and Financial Capital: The Key Drivers for Sustainable Industrialisation in the SADC Region”. The theme seeks to address two of the most critical enablers in supporting regional industrialisation, namely adequate human resources in terms of numbers and technical capacity within the context of climate change and 4th Industrial Revolution, and adequate financial resources to ensure more sustainable funding mechanisms.
Among some of the key issues, the 43rd SADC Summit will receive the report of the Chairperson of the Organ on Politics, Defense and Security Cooperation; review progress on implementation of the priorities of the SADC Regional Indicative Strategic Development Plan 2020-2030, implementation of the SADC Industrialisation Strategy and Road Map 2015-2063 and progress on the implementation of the 42nd SADC Summit Theme which is ”Promoting industrialization through, agro-processing, mineral beneficiation, and regional value chains for inclusive and resilient economic growth”.
LCCI inaugurates ECOWAS/AfCFTA Committee (The Eagle Online)
The Lagos Chamber of Commerce and Industry (LCCI) has inaugurated the ECOWAS/ AfCFTA Regional Integration, Trade & Investment Committee (EARI-TIC), as well as unveiled its pioneer members. At the inauguration ceremony, the LCCI President, underlined the priorities of peace, political stability, and good governance as some of the foremost promoters of regional integration, trade, and investment, indicating that the Chamber was establishing the strategic committee, in demonstrating its commitment to promoting regional integration, trade and investment as one of its strategic responses to the peculiar challenges in the sub-region as well as on the continent.
Asiwaju (Dr.) Michael Olawale-Cole stated: “In establishing this committee, we hope to leverage the expertise of Dr. Goodie Ibru, a trade specialist, renowned businessman, and a respected Past President of the Chamber, as the Chairman of the Committee. The Committee will work collaboratively with the other local and international stakeholders to promote regional integration.”
“The Terms of Reference for EARI-TIC include initiating and actively participating in discussions related to land border control, security, infrastructure, non-tariff barriers to intra-ECOWAS and intra-African trade. The Committee is also expected to contribute to strategic initiatives for developing and maintaining beneficial relationships between the LCCI and the ECOWAS Commission and other regional and international institutions, and actively participate in the discussion of private sector involvement in championing the ACFTA-guided trade initiative.
Kagame uses soft power to spread Pan-Africanism (The East African)
Rwanda’s President Paul Kagame is lobbying African countries to collaborate and do more business together to effectively address the challenges the continent faces amid heightened geopolitical tensions.
Against this backdrop, President Kagame has recently embarked on a diplomatic charm offensive visiting and hosting several African leaders. With a blend of soft power, including gifting cows — a symbol of wealth, friendship and appreciation in Rwandan society — to foreign leaders as a gesture of solid goodwill, proactive engagement signing several memoranda, President Kagame appears to be on a pan-African mission.
In Africa, President Kagame pointed out the pandemic, climate change, and the impact of geopolitical tensions have reversed decades of progress. However, African countries have to work together to address these challenges.
“Having these challenges is not the issue, the problem is leaving these challenges unaddressed. And for Africa, it is really sad because what are those problems that are insurmountable that have left Africa lagging behind the rest of the world forever?” President Kagame said, calling for a mindset shift among Africans to push back on the foreign influence that makes it difficult to work together and address their challenges.
‘Pilot Payment System’ for Intra-CARICOM, African Trade (The Washington Informer)
The idea of Barbadians doing trade with CARICOM and African countries in the Barbados dollar may be one step closer to becoming a reality, Prime Minister Mia Mottley announced Friday, according to Barbados Today. The Central Bank of Barbados has agreed to enter into a partnership with the Central Bank of the Bahamas to pilot a payment platform system for trade within the region and with Africa, Prime Minister Mottley said.
Mottley made the disclosure during a ceremony at the Hilton Barbados Resort at the launch of the African Export-Import Bank’s (Afreximbank) CARICOM headquarters at the Trident Insurance Financial Centre in Hastings.
“The current Governor of the Central Bank has agreed along with the Governor of the Bahamas Central Bank, to be able to anchor the piloting of a programme that will allow for trade within the region and with Africa to be taken on the basis of settling the net differences, rather than having to look for hard currency for every single transaction,” Mottley said to applause.
BRICS Ministers sign declaration on agriculture (SAnews)
Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, has welcomed the signing of the Joint Declaration of the 13th Meeting of Brazil, Russia, India, China and South Africa (BRICS) Ministers of Agriculture.
The Declaration outlines areas of collaboration, cooperation and agreement on various interventions among BRICS member countries on agriculture. These include reducing the impact of climate change on agriculture and food production; ensuring access to food for the most vulnerable; agriculture trade and investment; enhancing agricultural technology cooperation and innovation, and strengthening exchange of agricultural information.
“On climate change, the BRICS Ministers of Agriculture called for the provision of means of implementation for developing countries to enable them to reduce the negative impacts of climate change on food security by enhancing the adaptive capacity and resilience of people, food, and
Brics: South Africa push to fix trade disparity
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Patel stresses importance of China-South Africa trade (Engineering News)
Trade, Industry and Competition Minister Ebrahim Patel has welcomed the August 10 signing of trade and purchasing agreements between South African and Chinese companies, saying it would contribute to job creation, particularly for young people, while boosting the South African economy.
Highlighting discussions with Chinese Commerce Minister Wang Wentao on August 9 and 10 as part of the eighth session of the South Africa-China joint economic and trade committee hosted by the Department of Trade, Industry and Competition (DTIC), in Johannesburg, Patel emphasised the importance of trade between the two countries.
“The total two-way trade between China and South Africa has exceeded R900-billion, and South Africa’s exports to China exceed R500-billion. This represents a success in the first phase of our relationship, which is deepening, after the establishment of political relations in 1994. “The second phase of our relationship has been to achieve more equal investment by Chinese companies into the South African economy, and by South African companies into the Chinese economy. Today, Chinese investment in South Africa stands at close to R200-billion,” Patel said.
He said this increasing trade between the two countries represented a “building block” for the next phase of South Africa’s development, particularly to strengthen industrialisation in South Africa and support the transition to, and use of, more environment-friendly technologies.
As Patel and Wentao spent time examining a number of initiatives during the event, from the promotion of trade to investment in growing companies, Patel emphasised that this interaction continued the centuries-long trade relationship that had existed between the countries. Patel estimated that deals worth about $2-billion were signed during the event.
Mozambican President Filipe Jacinto Nyusi has commissioned a key link road funded by the African Development Bank. Completion of the Negomano-Roma Road, in the country’s northern province, is already enabling communities in the Mueda district of the northern Cabo Delgado region to enjoy improved road conditions, access to health and education, and increased local economic activity.
“The road is a great gain for the viability and maximization of regional integration,” Nyusi said. “It is also the materialization of a dream of first Mozambican president Samora Machel and his Tanzanian counterpart, Julius Nyerere, whose goal was to bring together the bonds of fraternity between both countries.”
Minister of Public Works, Housing and Water Resources, Carlos Mesquita described the construction of the road marked “a significant milestone for regional development”. The construction of the 164-kilometre section from Negomano to Mueda is estimated to cost $170 million. The project has been executed in phases, with the first phase approved by the African Development Bank’s board in 2016 for a loan of $70 million.
USDA Deputy Secretary Torres Small to Lead Trade Mission to Angola (USDA)
The U.S. Department of Agriculture Deputy Secretary Xochitl Torres Small will lead the first-ever U.S. agribusiness trade mission to Luanda, Angola on Nov. 28 – Dec. 1. USDA Foreign Agricultural Service is now accepting applications from U.S. exporters who wish to participate in this trade mission.
“When it comes to trade opportunity, Sub-Saharan Africa is both promising and often over-looked, and the USDA trade mission to Angola presents an incredible prospect for U.S. food and agriculture exporters to expand and explore new business opportunities,” said Torres Small. “Angola is one of the largest markets in Africa, and with imports making up more than half of its food market, Angola is a perfect location for U.S. exporters to introduce more American-made products to African consumers.”
FAO to build national strategic plan (The New Dawn Liberia)
The Food and Agriculture Organization (FAO) of the United Nations has commenced a 10-day technical mission to Liberia to collaborate with Technical Working Group (TWG), comprising the Ministry of Agriculture (MOA), the Liberia Institute for Statistics and Geo-Information Services (LISGIS) and other relevant stakeholders that manage agricultural data in the country.
Speaking at the Project Implementation Unit of the Agriculture Ministry in Gardnerville, FAO’s National Project Coordinator and Partnership Specialist, Emmanuel Kapee underscored the critical importance of data in making informed policy decisions, especially as it relates to food and agriculture vis-à-vis food systems strengthening and food security.
Mr. Kapee said data scarcity is a major challenge to achieving most interventions in Liberia to the extent that the lack of data to make informed decisions has now become a cliché.
Miraa farmers suffer blow in new Ethiopia-Somalia trade deal (Nation)
Miraa farmers in Kenya are staring at decline in sales after Somalia granted Ethiopia 10 days of exclusive khat market access every month. Nyambene Miraa Trade Association (Nyamita) chairman Kimathi Munjuri told Nation.Africa that cargo airlines operating from Nairobi had received instructions from Mogadishu not to allow miraa cargo from August 11. The developments come after Ethiopia, reportedly, lodged complaints with Somalia over Kenya’s dominance in the Somali khat market since President Hassan Mohamud lifted a ban on miraa last year.
Maua Miraa traders Association chairman Mohamed Quresh said Ethiopia was pushing for alternate market days for Ethiopian and Kenyan Khat. Mr Munjuri said the directives by Somalia mean there will be no miraa export to Mogadishu from Thursday night.
“We had alerted the government of this plan two weeks ago but it appears Kenyan officials have not been able to avert it. The fact that Ethiopia has achieved exclusive trade days due to direct push by their prime minister shows the level of intervention Kenya must activate,” Mr Munjuri said. He said Somalia had earlier introduced an import quota for Kenyan khat to accommodate khat from Ethiopia.
Kenya working on balanced trading with Mozambique (The Star)
The government has committed to increasing trade volumes with Mozambique to help create a favourable trade balance for Kenya. President William Ruto who is in Mozambique on a two-day State Visit said the two countries are exploring opportunities that will guarantee a win-win outcome.
Ruto said the current trade relations are in favour of Mozambique as it’s selling more to Kenya than Kenya is exporting products to the country. “In this burgeoning win-win relationship, Mozambique has the upper hand in trade balance terms, yet the opportunities before us take the form of a tide that will lift both our boats,” he said.
Over the five-year period between 2018 and 2022, Ruto explained, Kenya increased her imports from Mozambique from Sh3.2 billion to Sh5.2 billion, while Mozambique imports from Kenya increased from Sh1.2 billion to Sh1.4 billion only over the same period.
Uganda, Kenya seek funds in joint bid to take SGR to DRC (The East African)
Uganda and Kenya are seeking at least $6 billion from multiple lenders to jumpstart construction of the joint standard gauge railway (SGR) project, which stalled after the pull-out of the initial financier, China.
Last week, the two partners announced their intention to start construction of the line by December this year to improve flow of cargo and make the Northern Corridor competitive against Tanzania’s Central Corridor.
Transport ministers from the two states signed a deal to finalise a joint resource mobilisation drive in the next four months that will fund the railway line from Naivasha to Malaba to Kampala and from Kampala to Kasese to Mpondwe near Congo, with a branch line from Bihanga to Mirama Hills, near Rwanda. Once the project is completed, goods from Mombasa to the Ugandan border with DRC, to Rwanda and South Sudan will be ferried by rail.
Libya and Tunisia sign MoUs on exhibitions and integration between commercial free zones (LibyaHerald)
The Libyan-Tunisian Joint Ministerial meeting was held in Tunis yesterday. The meeting was to launch the sub-Saharan African Trade Corridor initiative between Tunisia and Libya and sign several MoUs.
Speaking exclusively to Libya Herald, the spokesman for the Ministry of Economy and Trade, Fawzi Wadi, said that the two sides stressed in the first place the importance and necessity of rehabilitating and developing the Ras Jedir border crossing in accordance with international standards so that it becomes a commercial gateway to Africa and a means to achieve economic integration, especially with sub-Saharan African countries, in addition to establishing an effective Tunisian-Libyan-African partnership.
The two parties emphasised the further strengthening and development of the volume of intra-trade between Tunisia and Libya through building fruitful partnerships and expanding areas of cooperation. This, in addition to exploiting all available legislation in the two countries that regulate relations and contribute to improving the level of trade exchanges and advancing bilateral cooperation.
Regional lobby moves to boost intra-African trade (The Citizen)
The East African Business Council (EABC) has entered into a $ 178,530 partnership with Afreximbank to foster intra-African trade. The initiative will largely focus on trade promotion within the context of the African Continental Free Trade Area (AfCFTA) agreement. Under it, deliberate efforts would be made to engage the private sector in trade facilitation and in unlocking new business opportunities in the East African region.
Through the grant, the EABC and Afreximbak will roll out a series of sensitisation workshops to raise awareness among SMEs and women in business about AfCFTA protocols and their significance for business growth. Such workshops will focus on trade facilitation procedures and strategies to access markets effectively under the AfCFTA trade regime.
Museveni challenges African leaders on economic injustice, unfair raw material trade practices (Nile Post)
At the G25 Africa coffee summit, President Museveni highlighted the loss of jobs and money that African countries face when exporting unprocessed goods at a low cost.
He emphasised that selling a kilogram of bean coffee in its raw form may only fetch around US$2.50, while the same quantity of coffee that is roasted, ground, and packaged may sell for as much as US$40. This significant profit disparity leads to a loss of money for the South and a loss of job opportunities.
Museveni expressed concern over the parasitic global system, where European countries take advantage of Africa’s raw materials, only to profit from their transformed products at a higher cost.
“If you take the whole spectrum of raw-materials from agriculture, minerals, forest products, etc., the loss to Africa is massive. That is why the economy of Africa is stunted. The GDP of the whole massive African continent, with a population now of about 1.5billion people, is USD2.7trillion,” he said.
The President lamented that Africa only receives US$2.4 billion out of the global coffee market value of US$460 billion. To address this issue, Museveni urged African countries to add value to their raw materials, including coffee, through internal struggles.
Ways Africa can reduce its reliance on Europe (Nairametrics)
The Secretary General of AfCFTA, Wamkele Mene has said that African countries will reduce their reliance and other Western countries by boosting intra-Africa trade.
He stated this while giving a keynote address at the 2023 Zenith Bank International Trade Seminar on Non-Oil Export themed: “Nigerian Non-Oil Export Industry. The Present, The Future”. According to him, economic diversification must also be the major objective for Africa’s intra-trade activities to increase their contribution to the global GDP.
“Economic diversification must continue to be Africa’s objective to reduce national resources accounting for the greatest share of export earnings in government revenue.” “55 countries in Africa contribute only 3.1% to global GDP and only 2.2% to global trading output and yet a country such as Singapore contributes over 6% to global trade and output.” Wamkele stressed that the trade deficit is an opportunity for Africa to accelerate national development, and global competitiveness and also create jobs.
Mene, on behalf of AfCFTA, signed a MoU with Zenith Bank to build a smart portal for trade on the continent. Zenith committed $ 1 million to fund the single portal for trade information in Africa.
pdf Inclusive growth and sustainable development: AU Commissioner Amb. Muchanga outlines what Africa must do (245 KB) (African Union)
Since the turn of the 21st century, Africa has boasted the world’s second-highest rate of economic growth after developing Asia, a growth supported by investment. However, the continent needs more transformative, sustainable growth... Africa’s persistent sovereign debt vulnerabilities, high debt levels, and climate and environmental concerns remain the main threats to medium- and long-term growth trajectories.
The creation of new regional value chains will expand Africa’s active participation in global trade. We have countries like Morocco or South Africa that have successfully upgraded their automotive production to supply European and other highly competitive markets. The integration of markets provides the critical mass of consumers, skills, suppliers, and other resources needed to develop and scale up knowledge-intensive sectors such as automotive and pharmaceutical value chains. In the digital sector, for example, start-ups in smaller African economies can take advantage of having access to high-performance data centers, which are largely concentrated in Egypt, Nigeria, Kenya, and South Africa.
Regional development corridors and cross-border special economic zones (SEZs) can offer “quick wins” to attract regional sustainable investments. Development corridors represent important ways of addressing the infrastructure deficits on the continent. Similarly, cross-border SEZs are emerging as means to catalyse private investment. For instance, the Musina-Makhado SEZ is located near the Beitbridge Border Post between South Africa and Zimbabwe, a gateway to Southern African Development Community (SADC) countries and a critical location on the region’s North-South trade corridor. The SEZ is intended to boost regional trade in energy and manufacturing, especially in the metal industry, while creating job opportunities for thousands of people.
And finally, let me underscore the importance of leveraging the capacity of the private sector to drive the economic transformation process of Africa’s industrialization and economic diversification agenda. Governments must create an enabling business environment for private sector to thrive to boost productivity through targeted policy reform and investments. This includes creating frameworks and policies that support and stimulate the expansion of Micro, Small, and Medium Enterprises (MSMEs) to support sustainable growth on the continent.
ASIS 2023: Private sector partnership is critical in addressing climate change in Africa (Ventures Africa)
While Africa contributes relatively little to global greenhouse gas emissions, it is one of the most vulnerable regions to the adverse effects of climate change. Africa loses seven to 15 billion dollars a year from climate change, estimated to rise to $50 billion by 2040 at the current trend. According to the African Development Bank (AfDB), Africa has been losing from 5 to 15% of its GDP per capita growth because of climate change and its related impacts.
“We must act quickly, and we must act now. It is disrupting businesses and every day lives of millions of people. Years of drought cyclones continue to inflict misery on communities that may not have contributed to gas emissions resulting in global warming,” Joyce Banda, former President of Malawi, said in her speech at the Africa Social Impact Summit hosted by the Sterling One Foundation.
“This global challenge requires our seasoned dedication and actual-oriented approach. The private sector is key in ensuring an action-oriented approach to addressing the adaptation and mitigation of climate change in Africa. The case study of Malawi has shown that we have to fast-track communities for resilience and transform lives,” she stated.
Coups in West Africa due to governance deficit, says ECOWAS commissioner (TheCable)
Abdel-Fatau Musah, the Economic Community of West African States (ECOWAS) commissioner for political affairs, peace and security, says deficit in governance has contributed to increased coups in the subregion.
“It is not a question of democracy. We know that there are governance deficits in the region but is that the best way? It is about governance deficit and not democracy as a system of governance. “Governance is broader, it is about economic development, youth empowerment, it is about building infrastructure for people to realise their potential. “And that is very difficult in the global environment that we find ourselves in today.
Russia includes Morocco in a North African free trade zone project (Atalayar)
During a meeting with his Cabinet of Ministers, Russian President Vladimir Putin announced his intention to sign free trade agreements with several North African countries, namely Algeria, Morocco, Tunisia and Egypt. According to the TASS press agency, the President of the Russian Federation has set himself the goal of transforming the existing political trust between Moscow and the North African countries into economic cooperation.
“We are preparing agreements on a free trade zone with Egypt, Morocco, Tunisia and Algeria. It’s the whole of North Africa. There are many more points of development on the continent, and there are some very interesting countries”, said the Russian head of state at the meeting.
According to Putin, the North African free-trade zone will be integrated into the Eurasian Economic Union (EEU), which already offers a common economic space on the model of the European Union with Belarus, Armenia, Kazakhstan and Kyrgyzstan.
Russian attacks continue to affect world’s most vulnerable, UN spokesperson says (UN News)
Attacks against Ukrainian port infrastructure are not isolated and with Russia’s termination of the Black Sea Initiative, are impacting global food prices and affecting the most vulnerable people, a UN spokesperson said on Monday. Farhan Haq, Deputy Spokesman for Secretary-General António Guterres, was speaking at the regular press briefing at UN Headquarters in New York. The Danube port of Izmail, in the Odesa Region, was hit on 2 August. The attack damaged facilities storing thousands of tons of food grains.
The Black Sea Initiative enabled the export of millions of metric tons of food from Ukrainian ports, and together with the UN’s parallel accord with Russia on export of food and fertilizer, had been vital for global food security and price stability, including in areas hit hard by conflict and hunger, such as Afghanistan, the Horn of Africa and Yemen.
Denise Brown, UN Humanitarian Coordinator in Ukraine, visited Izmail port on Saturday, three days after the attack. “The thousands of tons of grains that were damaged would have been enough to feed approximately 66 million people for a day,” she said. “Relentless attacks by Russian forces on grain stores and port infrastructure in Ukraine form an extremely alarming pattern of harm and may constitute a grave violation of international humanitarian law,” she added.
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South Africa’s manufacturing improved in June 2023 (IG)
The manufacturing sector has demonstrated an impressive performance in June 2023, showing a 5.5% increase in production (as per the STATSSA production and sales report for June 2023) compared to the same period in the previous year. This significant growth is primarily driven by key divisions such as motor vehicles, parts and accessories, and other transport equipment, which contributed 1.8 percentage points with a 19.5% increase.
Furthermore, basic iron and steel, non-ferrous metal products, metal products, and machinery have also contributed 1.6 percentage points, indicating a 7.5% increase. The food and beverages division, a key component of the consumer staples sector, also contributed 1.3 percentage points, showing a 5.8% increase.
However, the same robust growth was not reflected in the manufacturing sales, which decreased by 0.5% in June 2023 compared to May 2023. This is following a 2.8% decrease in May and a 0.6% decrease in April.
Collapse of SA-Zim link derails regional trade (CAJ News Africa)
The demise of the railway link between South Africa and Zimbabwe has been to the detriment of the two countries and the entire Southern African region.
The ruling Zimbabwe African National Union – Patriotic Front (ZANU–PF) has decried the downfall of the rail route as a sad development as costs of transporting goods and service by road becomes expensive. Chris Mutsvangwa, ZANU-PF spokesperson, said exporting or importing goods and services through neighbouring South Africa had become very expensive due to lack of rail.
“It’s rather cheaper exporting or importing goods and services through Mozambique,” Mutsvangwa said, speaking in the capital Harare, to journalists drawn from the Southern African Development Community (SADC) regional bloc. He said while Zimbabwe was doing more business with South Africa than any other SADC regional member state, trade ties were increasingly becoming unbearable owing to the absence of the railway line.
Botswana road drives Namibian opportunities (New Era)
Botswana is moving at great speed to rehabilitate and fully commercialise the Nata-Maun-Mohembo road to ease the flow of goods and services between itself and neighbouring countries. This was shared by that country’s minister of transport and public works Eric Molale in a conversation with Botswana’s Daily News newspaper on Monday. New Era is privy to the discussion.
Molale said once the Nata-Maun-Mohembo road is operational, it will offer a shorter route between Mohembo in Botswana’s North-West District and the town of Katima Mulilo in Namibia for cross-border trucks.
“The trucks that are passing here going to Katima in Namibia now have to take a straight route through Mohembo, instead of having to go to Windhoek first,” Molale said. The transport minister emphasised that improving road networks will improve and promote economic activities, as well as deepen regional integration by creating a conducive environment for seamless movement of people, goods and services.
Puzzle of skyrocketing food prices in spite of cheap imports (Business Daily)
Traders used the duty-free window to import in under six months quantities of rice equivalent to what Kenya normally ships in in a year, but still failed to cool the skyrocketing prices in the country.
Fresh data from the Kenya National Bureau of Statistics (KNBS) show that despite the increase in supply, retail prices of rice have barely gone down with a five kilogramme of the cereal nearly doubling from the beginning of the year. Cheaper sugar and cooking oil imports also failed to soften food prices, raising fears that some stocks may have been hoarded.
In a rush to use the duty-free importation window opened by President William Ruto’s government, traders imported 701,743 tonnes of cheaper rice in the first half of this year, according to the official KNBS data.
The quantity of rice majorly imported from Pakistan and India, valued at Sh39.7 billion, is more than what the country imports in a year and points to possible flooding of the local market with a cereal that is grown in 23 counties. Rice and sugar farmers are braced for cut-throat competition, with fresh data pointing to increased shipment of the commodities in the first half of 2023.
Manufacturers of edible oils have decried the shipment of palm oil, critical for the making of cooking oil, under the duty-free programme being undertaken by the Kenya National Trade Corporation (KNTC), which falls under the Ministry of Trade.
The duty-free scheme came to an end on August 6, in effect ending the free inflow of commodities that fell under the scheme including cooking oil, wheat, rice and beans. The scheme was started last September by the government as a means to bring down the retail prices of critical staples and lower the cost of living.
EAC in push to fully implement AfCFTA trade terms (The Star)
East Africa is at an advanced stage in implementing trade modalities under the African Continental Free Trade Area (AfCFTA), making it among the first blocs to embrace the continental deal. Led by the East African Business Council (EABC), with support from the German Technical Cooperation (GIZ) in EAC, the region is in the progress of developing the EAC Tariff Offer under AfCFTA for sensitive products and the exclusion list.
According to AfCFTA modalities for the submission of tariff offers, the sensitive goods under category B require seven per cent of the tariff lines to be liberalised over a period of 13 years for Least Developed Countries (LDCs), and 10 years for developing countries. For the EAC, the required tariff lines under this category are 398.The excluded goods, which are under category C, cover three per cent of the total tariff lines and must meet the anti-concentration clause; that is, not more than 10 per cent of intra-African imports should be excluded from preferential terms.
So far, the EAC Partner States have agreed on 308 tariff lines under category B; hence they are remaining with 90 tariff lines that have not been agreed upon. Under category C, the EAC Partner States have agreed on 75 tariff lines. Ninety six tariff lines are yet to be agreed upon.
According to trade and policy advisor at EABC, Adrian Njau, the outstanding tariff lines are few, at 192 product tariff lines, but are of significant importance in terms of food security, regional value chain, livelihood of East Africans, and industrialisation.
Local businesses in northern Nigeria feel the sting of regional sanctions against neighboring Niger (AP News)
A decision by a bloc of West African nations to shut down their borders with Niger as a way of sanctioning its coup plotters is harming local businesses in northern Nigeria, where a cross-border economy has boomed for years.
The bloc known as ECOWAS restricted financial transactions and shut the borders between Niger and its member nations as part of measures to force the coup plotters to reinstate Nigerien President Mohamed Bazoum who was overthrown last month by soldiers in his Presidential Guard.
Niger accounts for 75% of the total value of exports from Nigeria’s cross-border informal trade, according to a study by the Central Bank of Nigeria. The bank’s latest report in 2016 valued goods traded across the border with Niger at 828 billion naira ($934 million) a year.
In Nigeria’s northwestern Katsina state, the border’s closure and restricted traffic on nearby roads left dozens of trucks stranded for days, most of them loaded with food items and other perishable goods. Prices of livestock, animal products and some commodities usually supplied from the city of Maradi in Niger have increased, local residents said. Nigeria’s authorities are enforcing the restriction of movement across the border but the measure has also impacted traffic in the surrounding area, including truck drivers not heading to Niger but other border towns in Nigeria.
Releasing the huge potential of female-run SMEs (African Business)
Sandrine Henton, MD of EG Capital, which makes private equity investments in mid-sized businesses in the health, food and education sectors, mainly within the East African region, said the organisation had been set up to focus on sectors in which women and young people were active.
“This was a very conscious strategy because youth and women are at the heart of the consumer economy in Africa,” she pointed out. The social sectors are at the heart of any resilient economy, she stressed, as proved by the fact that Eastern Africa continued to grow during the pandemic – the only region in Africa to do so.
Henton attributed this growth to robust local production and consumption, which are underpinned by the region’s informal sector, where women and the youth are most active. “It is extremely important that African countries build resilient communities. That must be achieved across society, including women and the young,” she stressed.
Infrastructure, energy and the financial sector currently command the bulk of investment in Africa while, among the social sectors, education only receives investment of around 3%. This imbalance needs to be addressed urgently, she said, explaining that these particular, highly resilient sectors will be instrumental in securing the continent in the face of future shocks such as climate catastrophe, war or pandemic.
“These kinds of shocks are expected to become more frequent and more dramatic than we have ever seen, which makes investment in the social sectors more critical than ever,” she warned.
Afreximbank and Development Reimagined Support Access of High-End, Sustainable Made-in-Africa Brands to China (Afreximbank)
In continuation of its strategy to assist African businesses in increasing their international presence, the African Export-Import Bank (Afreximbank) and international consultants Development Reimagined (DR) have entered into a partnership to promote the entry and sale of high-end sustainable African brands in China.
The partnership which includes a grant from Afreximbank, has seen Africa Reimagined (AR), a flagship programme created and managed by DR, introducing high-end value-added Made-in-Africa goods from such sectors as fashion, skincare and beverages, to China.
Mr. Yusuf Daya, Director, AU/AfCFTA Relations and Trade Policy, Afreximbank, commented; “We are encouraged about our partnership with Development Reimagined, aimed at enabling access of African brands to global markets. The vast Chinese consumer market provides immense opportunities for African businesses. We urge African entrepreneurs to embrace this challenge, crafting goods that resonate with the market, not only boosting the presence of African products in China but also fostering more jobs, collaborations, and economic growth. Alongside our partners, we will continue forging global partnerships that support African trade.”
Remarks by U.S. Consul General Will Stevens At the Africa Social Impact Summit 2023 (U.S. Embassy and Consulate in Nigeria)
At the heart of the United States’ commitment to Africa lies a steadfast focus to fostering economic growth. The African continent is dynamic, chock-full of untapped potential, from its people to its vibrant innovative and entrepreneurial spirit and her vast natural resources. Recognizing this, the United States envisions a future where economic growth is inclusive, sustainable, and far-reaching. Through increased trade and investment in sectors such as agriculture, technology, and infrastructure we hope create jobs, boost innovation, and elevate the living standards of millions of Africans.
Through initiatives such as the African Growth and Opportunity Act (AGOA), the United States has played a pivotal role in fostering two-way trade relationships that empower African economies and communities. By providing duty-free access to U.S. markets for eligible African nations including Nigeria, AGOA has paved the way for enhanced market access and economic diversification. Since its enactment in 2000, AGOA has facilitated a staggering $1 trillion in total trade. This is not just a number; it’s a testament to the fact that AGOA has contributed to the growth of industries across the African continent.
BRICS Expansion Isn’t Aimed at Countering the West, South African Official Says (Bloomberg)
A planned announcement on the expansion of BRICS at a summit in Johannesburg later this month isn’t aimed at countering the West, which remains a crucial trading partner for South Africa, an official said.
“I don’t think we see BRICS as being pro-Russia or anti-Western. I think that would be extremely wrong,” South Africa’s Foreign Minister Naledi Pandor said. “We have said many times before that South Africa’s trading partners in the West are very important to South Africa’s economic progress,” she told journalists at an online briefing Monday.
Heads of state from Brazil, Russia, India, China and South Africa will set out strict criteria for who will be allowed to join the bloc when they meet Aug. 22-24, Pandor said. Twenty-two nations have asked formally to become full-time members of the group, and more than 20 others have submitted informal requests.
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Agro-processing Master Plan will help SA sow AfCFTA benefits (IOL)
Targeted Spatial Agricultural development in South Africa: operationalising the Agriculture and Agroprocessing Master Plan and capitalising on the Africa Continental Free Trade Agreement.
South Africa is land characterised by a dichotomous and dualistic economy and the contrast cannot be more striking than in the agricultural sector.
Recently, South Africa has undertaken significant steps in developing a coherent inclusive strategy for agriculture in the country. The sector, led by the Minister of Agriculture, Land Reform and Rural Development has developed the Agriculture and Agroprocessing Master Plan (AAMP), which is just short of a White Paper for agriculture.
The AAMP is a huge step in the right direction in terms of supporting an inclusive growth of the agricultural sector and it follows a value chain approach. This value chain approach enables the isolation and targeting of individual value chains while not losing sight of their interconnectedness within the sector and the broader economy.
Kenya’s export development levy sparks trade diversion fears across East Africa (Business Insider Africa)
The Kenyan government’s intention to impose an Export Development and Promotion Levy (EIPL) on imports, which might result in Kenya losing trade with its EAC allies, has been contested by the Kenya Association of Manufacturers (KAM), the Federation of Kenya Employers, and tax consulting businesses.
The EIPL on all items brought into the nation for domestic use has raised under the new law from 10% to 17.50% of the customs value. However, products with EAC partner state provenance that adhere to the Rules of provenance are exempt.
“The Act has imposed a 10 percent levy under the Export Levy while the rest of East Africa is at zero percent,” the Kenya Association of Manufacturers relayed via a statement. “The immediate impact of that is that the levy will create trade diversion in favor of neighboring countries. It will also promote investment in Comesa countries,” the statement adds.
Envoy assures traders of improved ports efficiency (Tanzania Daily News)
Tanzania has assured the business community in Zambia and SADC countries of increased efficiency in its ports following huge infrastructure improvements in the country’s gateways.
Tanzania’s High Commissioner to Zambia, Lieutenant General Mathew Mkingule said recently during the Agricultural and Commercial Show in Zambia that the improved port infrastructures especially at the Dar port are facilitating easy movement of imports and exports in the region.
“When we talk about the Africa Continental Free Trade Area, we cannot reach there if we don’t start at a regional level, it is high time that African countries traded among themselves,” he said, adding that there is already big trade between many African countries.
Why Nigeria’s export cargo face rejection in foreign markets (Businessday NG)
Export cargo leaving Nigeria, Africa’s most populous nation, is largely rejected in the international markets especially in Europe and America due to quality concerns. According to the National Agency for Food Drugs Administration and Control (NAFDAC), the Nigerian economy and exporters are recording huge financial losses as over 70 percent of the food items and agricultural products exported out of Nigeria are rejected by potential buyers.
Mojisola Adeyeye, director general of NAFDAC blamed the poor export trade facilitation at the nation’s airport and seaport for the challenges faced by regulated products that are leaving the country.
BusinessDay findings show that it takes export containers over one month to have access to the seaport and make their way out of the country. This delay, caused largely by the bottlenecks experienced by truckers lifting export containers from the exporters’ warehouses to the port, not only eats into the time the products are supposed to have left the shores of the country to its destination port but also compromises the quality of the products.
NACCIMA warns against lowering issuance of certificates of origin standard (The Guardian Nigeria)
The Nigerian Association Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has warned that deviating from the globally-acceptable standards in the issuance of certificates of origin for goods being traded internationally portends danger for Nigerian businesses and the economy.
The National President of NACCIMA, Dele Kelvin Oye, who spoke during a courtesy call on the Acting Comptroller General of Nigeria Customs Service (NCS), Bashir Adewale Adeniyi, also warned that such a move could deprive the country of its ability to compete and attract foreign direct investments (FDI).
He said NACCIMA is globally recognised as the representative of the business community and plays an important role in the administration of the certificate of origin system issuance and providing other services to businesses engaged in international trade.
Oye said attempts to take over the globally-acceptable duty imposed on the chambers of commerce under the African Continental Free Trade Agreement (AfCFTA) could be disastrous for businesses. The NACCIMA boss, however, appreciated that government by treaty can change the rules for issuing the certificates, noting that such deviation makes the certificates issued under such policies unacceptable, thereby depriving Nigeria of the ability to compete and attract foreign direct investment.
EAC private sector seeks to streamline business under Africa free trade area (Monitor)
East African Community (EAC) private sector players have said classification of which goods need protection and which do not need under the African Continental Free Trade Area is an important step the government must expedite.
Speaking on the sidelines of a two-day consultative meeting in Kampala yesterday, Mr Simon Kaheru, the East African Business Council Uganda Chapter chairman, said engaging the private ahead of the EAC partner states meeting in Bujumbura, Burundi next week, is one of the ways through which the region will form a voice in identifying which kind of products need to be put under the sensitive products category.
“It’s fantastic that the private sector is sitting a head of governments to see where we can seek protection and where we can seek promotion of trade with the rest of Africa,” he said, noting that partner states must agree, which has prevented the region from benefiting from the AfCFTA two years since signing of the treaty.
African coffee nations push for intra continental trade of coffee products (Xinhua)
Delegates from Africa’s 25 coffee-producing countries are meeting in the Ugandan capital of Kampala with the aim of influencing the African Union to make coffee a priority crop on the continent that will pull millions of people out of poverty. Experts argue that once the continent’s political leadership understands the power of coffee in transforming economies, it will bolster the continent’s efforts to internally trade the “strategic commodity” but also speak with a united force on the international market.
The meeting, dubbed the 2nd G-25 Heads of State Africa Coffee Summit, is convening from Aug. 7 to Aug. 10 under the theme “Transforming the African Coffee Sector through Value Addition,” which is in line with the theme of the 2023 African Union agenda that focuses on accelerating the implementation of the African Continental Free Trade Area (AfCFTA).
Ugandan President Yoweri Museveni said at the meeting that Africa is losing a lot of income to the international market that continues to prefer taking coffee in its raw form. He told the delegates that out of the 460-billion-U.S.-dollar global coffee value, the coffee-producing countries only take 25 billion dollars and Africa gets only 2.4 billion dollars.
Ethiopian President Sahle-Work Zewde urged international coffee trading companies to support coffee-producing African farmers technically and financially in the value-addition process.
Zenith Bank inks MoU with AfCFTA to showcase African products via smart trade portal (Technext)
Nigeria’s Zenith Bank has announced a signed Memorandum of Understanding(MoU) of $1 million with the African Continental Free Trade Area (AfCFTA). The deal signed by the Group CEO of Zenith Bank, Dr. Ebenezer Onyeagwu, and the Secretary-General of the AfCFTA, Wamkele Mene at the ongoing 2023 Zenith Bank International Trade Seminar, is to develop a trade portal in Africa.
Speaking at the event, the Group Managing Director talked about the need to bolster Africa’s wealth. He established that one of the many ways to channel this vision into reality is to create a single African trade portal. According to him, the portal will significantly facilitate trade among African countries, and demonstrate the bank’s commitment as a bank to digitization in African countries.
According to the Zenith Bank Group CEO, Zenith will develop the smart AfCFTA portal which will serve as a straight portal. The purpose of this portal is to showcase African products and services as well as the locations they can be found.
“Through the development of this portal, one of the capabilities we are going to build in there is that you can see it in every part of Africa and market your products and services. You can see it in every part of Africa and identify whatever products and services you require that are in Africa”, he explained.
Why African nations should collaborate to make e-cars (The Star)
South Africa and Morocco, two of Africa’s leading automotive centres, are considering building mega and giga factories in their bid to keep up with the increasing demand for electric vehicles worldwide. A growing question, however, is whether those countries can scale fast enough, on their own, to make a difference.
Meanwhile, mineral-rich countries like the Democratic Republic of Congo (DRC), Zambia, and Mozambique are also eyeing the market with big intentions of becoming significant suppliers of electric vehicle batteries.
Industry experts suggest that for these countries to effectively compete for a significant portion of the global electric vehicle market, they should establish regional value chains to reduce investment barriers and cross-border trade expenses.
According to the African Development Bank, Africa has several key global vehicle supply chain strengths. These include existing expertise in internal combustion engines, proximity to key auto markets, access to raw materials, and participation in the AfCFTA. But, the AfDB emphasises in its latest Economic brief dubbed ‘Strengthening Africa’s Role in the Battery and Electric Vehicle Value Chain,’ there is a pressing need for countries to rev up value addition of green mineral resources to unlock Africa’s real potential.
AUC and Partners Communication Experts Meet to discuss Strategic Communications for the Comprehensive Africa Agriculture Development Programme (CAADP) (The Guardian Nigeria)
The African Union Commission recently organised a meeting of communications experts from across the African Union entities and partners to discuss strategic communications for the Comprehensive Africa Agriculture Development Programme (CAADP). The gathering of communications experts focused on refining communication workplans and methods to enhance awareness and understanding of CAADP’s goals and initiatives. The experts highlighted the pressing need for improved strategies for communication and enhanced collaborative efforts to drive agricultural development across the continent.
The event, which marked the first CAADP communications experts meeting, emphasized the importance of bridging communication gaps and forming a formal working group to address these issues. Participants emphasized the need to develop targeted content and products tailored for various stakeholders and especially the small-scale farmers. The importance of capturing best practices and sharing them across the continent was highlighted.
The meeting underscored the significance of youth, women, farmers associations, and Civil Society Organizations (CSOs) and other non-state actors as important voices in agriculture who should be integral to these processes especially at the grassroots level. As the 4th Biennial Review (BR) cycle of the Malabo Declaration is underway, participants stressed the need for effective communication and visibility strategies to ensure the wide dissemination of results. With CAADP having existed for over two decades, there was a consensus that many farmers are still unclear about the program’s objectives, significance and impact.
The importance of engaging national communication experts, tailoring messages to targeted audience, and collaborating with various stakeholders was stressed throughout the discussions.
Deglobalisation will hurt Africa (Nation)
The fragmentation of world trade has culminated in the formation of rival blocs, giving impetus to an emerging deglobalisation phenomenon. At the World Chambers Congress 2023, in Geneva, the WTO director-general, Dr Ngozi Okonjo-Iweala, opined that global prosperity is at risk of being curtailed by simmering geopolitical tensions that continue to birth rival trade blocs.
Deglobalisation refers to a shift towards a less-connected world characterised by border controls. Bloc members reach a mutual agreement to eliminate barriers with a view to promoting free trade among them. But despite the immense benefits to members, it can distort the world economy as regards the specialisation of national economies. Countries prefer to trade with their fellow bloc members.
African economies would be greatly imperilled if deglobalisation escalated. A salient feature of globalisation is the reshoring of value chains that has the risk of curtailing the war against global poverty. The poorer regions will have several lost opportunities in global trade. Europe’s and the US firms, especially manufacturers, are reshoring their value chains, risking pushing more Africans into poverty.
BRICS Summit set to benefit Africa and global South (SAnews)
International Relations and Cooperation Minister, Dr Naledi Pandor, says she is confident that the upcoming BRICS Summit will strengthen the bloc’s partnership and benefit the people of South Africa, BRICS, Africa and the global South.
Pandor told the media that President Cyril Ramaphosa has confirmed South Africa’s readiness to host the upcoming BRICS Summit, which will be hosted in person for the first time since the COVID-19 pandemic.
Leading up to the summit, Pandor said the Department of Trade, Industry and Competition and the BRICS Business Council will host a BRICS Business programme from 19 to 23 August 2023. The gathering, according to the Minister, seeks to foster economic growth, promote collaboration, attract investment, and display opportunities within South Africa, Africa, and BRICS countries.
South Africa’s overall trade with its BRICS partners, Pandor said has increased by an average growth of 10% between 2017 and 2021. She told the media that the South African trade with BRICS reached R830 billion in 2022 from R487 billion in 2017. “Last year, BRICS accounted for 21% of South Africa’s global trade.”
MOC Says BRICS Reach Consensus in Recent Meeting, Major Results (teleSUR)
On Tuesday, China’s Ministry of Commerce (MOC) said that BRICS (five emerging economies - Brazil, Russia, India, China, and South Africa) ministers of trade and economy reached a consensus and achieved significant results at a recent ministerial meeting.
On Monday, during a video conference, the ministers agreed to expand cooperation in the digital economy and green development and make joint efforts to promote a stable supply chain and support micro, small, and medium-sized enterprises.
According to several reports, the ministers agreed to strengthen the multilateral trade system with the World Trade Organization (WTO) at its core and participate in the WTO reform with a constructive attitude.
Furthermore, they stressed that the policymaking related to climate change be consistent with the principle of common but differentiated responsibilities and the WTO rules. They also reached a consensus to invite non-BRICS countries to discuss the digital economy and explore cooperation with other developing countries and the least developed countries.
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South African farmers want WTO dispute declared over EU citrus rules (Engineering News)
South African citrus farmers want their government to lodge a complaint against the European Union at the World Trade Organisation over the European bloc’s citrus black spot regulations which they say threaten thousands of jobs.
The measures imposed by the EU in June 2022 require enhanced cold treatment for citrus exports due to concerns over False Codling Moth, a pest commonly found in sub-Saharan Africa, and Citrus Black Spot (CBS), a fungal disease which leaves dark spots on fruit. The EU’s plant health rules could cut South Africa’s orange exports to Europe by 20% this year, according to the Citrus Growers Association of Southern Africa (CGA).
South Africa’s citrus industry says its current pest and disease control measures are highly effective and accuses the EU of protectionism.
South African farmers are currently battling electricity and logistics challenges and increased input costs and cannot absorb the additional R2-billion annual cost for CBS risk management, Deon Joubert, the CGA’s special envoy on market access and EU matters, said in a statement. “The CGA calls on the South African government to work with the industry to put a stop to these CBS regulations and fight for South African jobs and revenue. Declaring a WTO dispute is truly a matter of urgency,” Joubert said.
Namibia: African exports reached N$4.9 billion in June (Windhoek Observer)
Namibia exported goods worth N$4.9 billion to African markets in June. At the same time, the country sourced goods from the rest of Africa worth N$4.9 billion, the Namibia Statistic Agency said. In terms of regional composition, the Southern African Customs Union (SACU) emerged as the largest export market during the month of June, contributing 38.8 percent to total exports.
The Organisation for Economic Co-operation and Development (OECD) ranked second with a market share of 23.7 percent while the European Union and the South African Development Community excluding SACU accounted for 20.7 percent and 17 percent, respectively. Common Market for Eastern and Southern Africa (COMESA) absorbed 15.8 percent of Namibia’s total exports.
On the demand side SACU maintained its position as the largest source of Namibia’s imports with a share of 47.2 percent of the total import bill followed by the OECD market with a contribution of 22.3 percent while (Brazil, Russia, India, China and South Africa (BRICS) came third in the list with a share of 14.3 percent. European Union (EU) and COMESA markets had a share of 13.6 percent and 1.0 percent, respectively.
Namibia’s trade by mode of transport revealed that in June, vast goods were exported via air transport, accounting for 40.9 percent of total exports, followed by sea transport with 34.1 percent and road transport with 25 percent. From the demand side, road transport was the most frequent mode of transport accounting for 59.6 percent of total imports followed by sea transport with 33.8 percent and Air transport with 6.6 percent.
Farmers jittery over plans to import maize from Tanzania, Uganda (Nation)
The government is faced with a difficult balancing act of increasing agricultural production and achieving food security by reducing fertiliser prices, while at the same time maintaining attractive producer prices for farmers by protecting them from losses due to low market prices caused by the influx of cheap imported produce.
While the reduction in fertiliser prices from Sh3,500 to Sh2,500 per 50kg bag will reduce production costs, farmers have expressed fears that the entry of cheap maize under the East African Community (EAC) Common Market Protocol ahead of this season’s harvest will destabilise prices and expose them to losses.
Farmers are opposed to allowing market forces of supply and demand to determine maize prices, arguing that the arrival of cheap produce will disadvantage them as they struggle to break even. “The cost of production in the other EAC member states — Tanzania and Uganda — is lower and they harvest their produce before us, allowing them to enjoy favourable market prices,” said Mr Jackson Kosgei in Moiben, Uasin Gishu County.
New AfCFTA protocols will create a level-playing field for businesses (GhanaWeb)
The Phase 2 of the AfCFTA agreement has been agreed and approved with the various protocols fashioned to promote fair trade and competition among businesses in the Free Trade Area. The agreed protocols, namely intellectual property rights (IPRs), investment and competition policy are expected to enhance competition within the free trade area for improved market efficiency, inclusive growth, and the structural transformation of the African economies, among other objectives.
Breaking the subject down to the public on the Eye on Port TV program, West African Regional Director for global research and advocacy institution, CUTS International, Appiah Kusi Adomako says the competition protocol will present tremendous benefits for not only businesses and corporations but the consuming public in Africa. He explained that it will ultimately ensure that businesses compete freely on the basis of highest possible quality of products for lowest possible price.
He said, presently a number of competition concerns exist citing examples in the maritime transport sector of Ghana. “For example a shipping company, sets up its own logistics firm in the port as well as a freight forwarding firm in a horizontal integration scheme. A problem that can arise is when they decide to give rebates to customers for using their services, driving away competition.”
UN official calls for new approaches to reap benefits of AfCFTA (Xinhua)
African nations need to adopt new approaches to realize the benefits of the African Continental Free Trade Area (AfCFTA) and accelerate the continent’s development, a UN official said Thursday. Ozonnia Ojielo, the UN resident coordinator in Rwanda, told a development policy dialogue in Kigali, Rwanda’s capital, that Africa needs to build integrated, diversified and resilient economies more than ever before.
“AfCFTA is a game-changer but translating it into reality requires preparedness and readiness supported by accompanying measures to ensure that countries make the most of this agreement. This is where we all have a role to play,” Ojielo said. “It is not about time to think outside the box. It is time to think without the box.” Ojielo highlighted a range of potential benefits of the AfCFTA, such as providing productive employment and poverty reduction, which he said are some of the urgent challenges that the continent has to address. “But without preparedness, no benefit can be realized,” he warned.
Prohibitively expensive intra-African trade major impediment to continental free trade (Namibia Economist)
The Chief Executive of the Namibian Ports Authority (Namport), Andrew Kanime stated that the Africa Continental Free Trade Area would boost intra-African trade which is currently not sustainable. Kanime made this statement during the nineteenth Dr Theo-Ben Gurirab lecture series on the Africa Continental Free Trade Area agreement (AfCFTA) held in Swakopmund on Thursday.
“The lion-share of African states trade with countries from outside the continent and this is detrimental to the growing African population,” he said. According to Kanime, a mere 15% of trade is intra-African and this is due to several trade barriers that make it difficult to trade among each other.
“It costs US$6000 to move a container from Walvis Bay to Ivory Coast, which is just around the corner. It first has to be shipped to Singapore before being transferred to Ivory Coast. However, from Walvis Bay to China it would only cost US$1400, meaning it is more than four times more expensive to trade with another African country,” said Kanime.
Ukraine grain saga: Brace up for higher food prices, USAID tells African countries (TheCable)
The United States Agency for International Development (USAID) has warned Nigeria and other African countries to prepare for higher food prices. Speaking at a media briefing on Thursday, Isobel Coleman, USAID’s deputy administrator for policy and programming, attributed the development to Russia’s recent decision to abandon the Black Sea Grain Initiative.
Coleman said the impact of the hike in food prices would be more felt in developing countries that were import-dependent, and had conventionally relied on grain imports from Ukraine. She said just in the last few weeks since pulling out of the initiative, the government of Ukraine estimated that Putin’s missiles and drone attacks have destroyed 180,000 metric tons of Ukrainian grains sitting in storage. According to her, the grain is sufficient to feed almost 12 million people for a month.
“It is very, very important to keep in mind is that countries that import grains, those grains are global commodities and they are priced globally. And taking off from the market one of the world’s largest breadbaskets – Ukraine – by doing that, Russia is increasing global food prices,” Coleman said.
China isn’t the only Asian country expanding its trade with Africa (Atlantic Council)
When it comes to Asia-Africa trade, many think of China first. But Beijing is not the only country growing ties. Take South Korea, traditionally a minor partner to the continent. In recent years, Seoul has accelerated trade, investment, and development initiatives—expanding trading volumes significantly. For African economies, this means another potential partner—and an alternative source of financing—as the continent seeks jobs for its growing population. In 2022, year-over-year growth of bilateral trade volumes was 29 percent, totaling over $20 billion.
While China has historically accounted for the largest share of trade growth between Africa and Asia, trade has also grown rapidly with other major economies in Asia. India has emerged as a particularly important partner. Since 2000, India-Africa trade has grown more than twenty-fold to over $97 billion in bilateral trading volumes, now exceeding that with the United States.
African trade patterns with these other partners are similar. As is the case for China, countries like India and South Korea mostly import raw materials (especially fuels and commodities) from Africa, while exporting more manufactured goods. But there are key differences. Unlike with China, these trade relationships with Africa are also considerably more balanced. Africa’s $47 billion trade deficit with China in 2022 (16.7 percent of total trade volume) far exceeded its $4.5 billion (4.6 percent) and $1.7 billion (9.6 percent) deficits with India and South Korea, respectively.
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Industrial policy changes needed, TIPS forum hears (Engineering News)
Academics and researchers have highlighted some of the policy changes needed within a changing global economy during economic research nonprofit institution Trade & Industrial Policy Strategies’ (TIPS’s) yearly forum.
Management consultancy firm RB Africa director Odwa Mtati told delegates that the contribution of small and medium-sized enterprises (SMEs) to manufacturing production and reindustrialisation could only be achieved if the broader economy was growing.
The contribution of manufacturing to gross domestic product (GDP) had fallen from 30% in 2011 to 11.3% in 2022, while the contribution of SMEs to total manufacturing turnover has grown from below 40% in 2008 to 53% in the fourth quarter of 2022.
Meanwhile, University of Cape Town Nelson Mandela School of Public Governance research fellow Vuyiswa Mkhabela detailed some of the changes in sourcing by clothing retailers and the impact on clothing and textile manufacturing in the country.
“Manufacturing competitiveness is not helped by trade policies unless these are paired with policies that can help manufacturers become more competitive,” she said.
However, the diversification of retailers’ supply chains not only included offshore sources, but also near-shore sources. Retailers sourced clothing from Southern African countries that had built up productive capacity to participate in the US African Growth and Opportunity Act. South African retailers sourced clothing and textiles from Mauritius and eSwatini that were exported to South Africa. The demands from US buyers on suppliers meant that the products were of high standards and that the suppliers built up their capabilities. South African retailers take advantage of the capabilities built up under preferential trade agreements in other regional countries.
Additionally, the global green energy transition is set to be minerals-intensive and Africa is well endowed with most of the critical energy minerals, said University of Johannesburg Centre for Competition, Regulation and Economic Development senior researcher Elvis Avenyo. “African countries can take advantage of the transition to green production processes to transition to medium- and higher-value chains by implementing minerals-led industrial strategies,” he said.
Consumers warned to brace for chicken price hikes as anti-dumping duties set to kick in (Fin24)
A 12-month suspension on anti-dumping duties for poultry from five countries has ended, which has raised warnings that consumers should brace for massive price hikes for the protein. Minister of Trade, Industry and Competition Ebrahim Patel on Tuesday issued a notice indicating that with the suspension period ending, the anti-dumping duties would become effective.
The duties are based on recommendations from the International Trade Administration Commission (ITAC) of South Africa. This followed an investigation into allegations of dumping “frozen bone-in” chicken portions, like leg quarters, imported from Brazil, Denmark, Ireland, Poland and Spain. ITAC found that the poultry was indeed being dumped into the Southern African Customs Union (SACU) market, of which South Africa is part.
Patel approved the commission’s recommendation to impose anti-dumping duties – which would be as high as 265% on imports from Brazil (additional to an existing 62% tariff), 67.4% on Denmark, 85.8% on Spain, 96.9% on Poland and 158.4% on Ireland. But he decided to delay the implementation (from August 2022) by a year, given the impact it would have on consumers at the time. He reiterated this in a notice issued on Tuesday this week, which also explains why the 12-month suspension was implemented.
“The purpose of this notice is to advise all interested parties that the 12-month period is ending, and in the circumstances, the minister is of the view that the anti-dumping duties should now become effective,” the notice read.
Govt grants local sugar firms licenses to import sugar out of COMESA (Capital Business)
The Government has granted licenses to Kenyan sugar companies to import the commodity out of the Common Market for Eastern and Southern Africa (COMESA). This is meant to cool the high prices of products that retail for about Sh510 for a two-kilo packet.
President William Ruto said on Wednesday that the supply of the product in COMESA has declined, thus the need to target international markets. “There is concern around sugar and we have heard issues around the whole sugar sub sector, there has been a lot of confusion and chaos since the sector has been riddled and poaching of sugarcane from one corner to the other, and others refusing to work in accordance to the law,” he said at State House.
“In fact the reason why many companies have closed shop temporarily is because there is no can to harvest and others were even harvesting cane that has not matured.” Ruto added that the government is working to create a roadmap that will be discussed in the cabinet meeting in the coming week to sort out the sugar issues in the country.
Central Africa achieved real GDP growth of 5.0 percent in 2022, compared with 3.4 percent in 2021. The rebound in economic activity was driven by favourable prices for raw materials, in a region that is home to net exporters of crude oil, minerals and other commodities. The region’s growth rate was higher than the African average, which is estimated at 3.8 percent in 2022, down from 4.8 percent in 2021. It is set to settle at 4.9 percent in 2023 and 4.6 percent in 2024.
These are some of the findings of the Central African Economic Outlook 2023 report, published on 31 July by the African Development Bank. The report has the theme “Mobilizing Private-Sector Financing for Climate and Green Growth in Africa”.
The Central Africa region achieved the best budget performance, including the smallest deficit. The deficit – despite improvements in the prices of the main exports from the region – can be explained by an increase in total primary spending owing to budget support measures undertaken by governments in response to persisting harmful effects of the Russian invasion of Ukraine on energy prices and food products.
Hervé Lohoues, Lead Regional Economist for Central Africa and Acting Division Manager for the Southern Africa, East Africa and Nigeria Country Economists, said: “Overall, the economic outlook for the Central Africa region is positive for 2023 and 2024. This performance is the result of the structural reforms implemented to support the non-extractive sectors, and the increase in external demand and the prices of the main products exported by the various countries in the region.”
COMESA Ministers of Gender meet to review progress (COMESA)
The 12th Meeting of the COMESA Ministers Responsible for Gender and Women’s Affairs was held Thursday 3 August 2023 as the region took stock of the progress it has made in advancing gender equality, empowerment of women and girls, as well as social and cultural development. The meeting, which was being held for the first time since 2021, was virtual.
COMESA Secretary General HE Chileshe Mpundu Kapwepwe delivered the opening remarks. “The pandemic pushed more women out of employment because they dominate the services sector which were shut down to prevent the spread of COVID. Moreover, according to a 2021 survey by the International Labour Organization, only 43.2 per cent of the world’s working-age women were likely to be employed post-COVID, compared to 68.6 per cent of working-age men. Women were also more likely to lose their jobs permanently compared to men,” she said.
“If women are equipped with the necessary resources, skills and opportunities to start stronger businesses, and pursue the growth potential of these enterprises, this would contribute significantly to poverty reduction, wealth creation and employment generation, and improved well-being for millions of the citizens of our region,” the Secretary General affirmed.
Actions speak louder than words – how the EU-AU partnership really works for Africa (Delegation of the European Union to the Kingdom of Eswatini)
Europe and Africa need each other to build a solid and lasting response to global and common challenges, from climate change to peace and security or economic development that affect us all. The partnership between the European Union and the African Union, rooted in dialogue and multilateralism, is solution-oriented and forward-looking.
While others seek to divide, the EU in its partnership with Africa seeks to deliver and foster cooperation. The commitments made by some countries have not stood up to the test of time. While the EU and its Member states have consistently invested in Africa and facilitated the duty free access of African exports in the EU, others only afford to invest in disinformation.
As of today, the EU is by far the main trade partner of the African continent, with a total volume of 268 billion Euro in 2021 (approx. 5. 225 trillion SZL) and 90% of African exports entering the European Union duty free. The EU is encouraged by the potential of the AfCFTA (African Continental Free Trade Area) and has been supporting it since the beginning, contributing, under a Team Europe (EU and Member States) approach, with expertise, institutional capacity and exchanges on lessons learned.
Afreximbank Sees Growth Opportunities For MSMEs In €41.8bn Factoring Industry (Leadership News)
Micro Small and Medium Enterprises (MSMEs) have more opportunities to grow by leveraging the factoring industry for operations, Peter Olowononi, head, client relations, Anglophone West Africa at the African Export-Import bank (Afreximbank) has said.
Factoring is when a funding source or financier acts as an intermediary agent that provides cash or financing to companies by purchasing their account receivables. Consequently, businesses suffer issues around lack of finance skills in preparing bankable proposals, risk-averse banks with excessive collateral requirements, lack of specialized financial institutions, shallow capital markets or a weak financial sector in general, amongst others.
“Ensuring the availability of adequate and appropriate financing to SMEs is essential to help them develop to their full potential; Factoring provides an important alternative to the other external financing sources available for SMEs such as bank loans, leasing, venture capital etc,” he said.He noted that while factoring is an emerging market, it has significant potential as its volume in Africa is above €41.8 billion and is expected to reach €50 billion by 2025.
AU Regional Economic Community capacity building on Data Policy Framework (Research ICT Africa)
July also saw the start of a two-year capacity building programme driven by RIA as part of the GIZ-funded implementation phase of the African Union Data Policy Framework in Addis Ababa. The Data Policy Framework is inclusive and forward-looking to enable member states to participate in a single African digital economy by cooperating to share data responsibly and co-create the infrastructure necessary for Africans to participate equitably in the continent’s digital economy.
As part of the implementation phase, the AU Commission has also developed a responsibility matrix to which the AU’s Regional Economic Communities and other affected parties are contributing. This will be finalised over the next few weeks and will provide another layer of guidance for domestication of the Framework at the national level.
BRICS agriculture meeting to promote sustainable production (SAnews)
Agriculture, Land Reform and Rural Development Minister, Thoko Didiza, will next week host the 13th BRICS Ministers of Agriculture meeting aimed at increasing cooperation among its member countries to promote sustainable and fair growth.
The 13th BRICS Ministers of Agriculture meeting will take place from 8-12 August 2023 in the Waterberg District, Limpopo. Held under the theme, ‘Strengthening collaborations towards sustainable agricultural production and increasing productivity’, the meeting will seek to pursue issues of common interest relating to food security, climate change, rural development, economic challenges, poverty, and population growth. The department said the BRICS mechanism aims to promote development cooperation, security, peace, and establishment of a more equitable economic world.
“The overall aim of BRICS agriculture cooperation is to improve access to food and increase comprehensive food production. The event will showcase rural development and climate change programmes,” the department said.
$31 TRILLION: Goods and services trade jumps 13% (Trade Arabia)
Trade in goods and services amounted to $31 trillion in 2022, a 13% rise year-on-year, according to a new report from World Trade Organisation (WTO). While trade in goods exceeded pre-pandemic levels already in 2021, trade in services caught up in 2022.
The share of manufactured goods in world merchandise exports fell to 63% in 2022 (versus 68% in 2018) mainly due to high energy prices limiting demand. Trade in transport services continued to grow in 2022, although at a slower pace than in 2021 as shipping rates returned to pre-pandemic levels, the report said.
Africa’s trade deficit in intermediate goods shrank to $4.4 billion in 2022. This is partly due to growth in its exports of intermediate goods, which totalled US$ 292 billion in 2022, an increase of 47 per cent compared with its pre-Covid-19 level in 2019. A rise in value terms is largely due to high commodity prices.
Least-developed countries’ (LDCs) exports of goods increased by 41 per cent in 2022 compared with pre-pandemic levels in 2019 while commercial services remained depressed (-14 per cent). This was due to subdued recovery of international travel to Asian LDCs (74 per cent below 2019).
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Global demand for coal is bringing mayhem to South African towns (Engineering News)
An often impenetrable logjam of trucks laden with coal at South Africa’s crossing with Mozambique has brought chaos to a sleepy border town.
The trucks began trundling through in ever greater numbers on their way to Maputo port, where their cargos are loaded onto ships and sent around the world, after South Africa became one of Europe’s main alternatives to Russian coal following Moscow’s invasion of Ukraine in February 2022. The procession continues even though European fears of an energy crisis have faded for now. Suppliers are finding new buyers in India and China. And miners of chrome, used to manufacture stainless steel, are increasingly using the same routes.
President Cyril Ramaphosa described the rail constraints as “a crisis of catastrophic proportions” in a meeting with key exporters in April and created a task force that includes private companies to look for solutions. They will take time to find, his spokesman said in response to questions in late July, adding “this is not a challenge you can resolve overnight.”
South Africa’s coal industry is the world’s fifth largest. In all, about 15 million tons of coal last year arrived at ports by road and another 50-million tons by train, earning its miners R227-billion after prices reached a record high of $450 per ton. That boosted South Africa’s economy – and for the first time, coal came close to rivalling platinum as the country’s most valuable export.
But the failures of Transnet resulted in lost opportunities. Shipping by road costs about 40% more. And if the rail network had been running at full capacity, the miners would exported more than R100-billion worth of minerals, according to the chief economist of Minerals Council of South Africa, Henk Langenhoven.
IMF praises Tanzania’s compliance with economic reform plan (The East African)
The International Monetary Fund (IMF) Deputy Managing Director Bo Li has concluded his visit to Tanzania with a firm commitment towards supporting the country’s efforts in unlocking its development potential. Mr Bo applauded the Tanzanian authorities’ efforts in implementing the country’s economic reform agenda.
The IMF also encouraged Tanzanian authorities to enhance domestic revenue mobilisation through tax reforms to help create the fiscal space needed to finance social spending and priority investment, particularly scaling up investment in human capital through increased spending on education and health.
Uganda has third highest level of income inequality in EAC (Monitor)
Uganda has third highest level of inequality in East Africa after South Sudan and Rwanda, according to a report by the African Development Bank (AfDB).
In details contained in the East Africa Economic Outlook 2023, AfDB indicates that the East African Community has a relatively high Gini coefficients that other African regions, which mirror the high-income inequality and poverty on the continent.
“Most of the East African countries … income is relatively concentrated in the hands of a few while the majority are struggling to meet their basic needs, such as food, energy, health care, housing, and education,” the report reads in part, noting that rising energy and food prices and prolonged droughts, compounded by adverse aftershocks of Covid-19 have been major headwinds to reducing extreme poverty in the region.
AfDB further notes that with a Gini coefficient of 42.7, Uganda only ranks better than South Sudan and Rwanda but is relatively in a worse position than Tanzania, Burundi and Kenya.
Angola: TAAG strengthens air link with DRC to boost commercial exchanges (Medafrica Times)
TAAG, Angolan airlines, will reinforce with a new frequency the connection between Angola and the Democratic Republic of Congo (DRC) to promote trade between the two neighboring countries, the company announced Tuesday August 1.
According to a note from the Angolan airline, an additional frequency will be made available on the connection between Luanda and Kinshasa, capitals of Angola and DRC, respectively, from the 14th of this month.
The document emphasizes that the increase in frequency between the two countries is also based on the development of business and mobility between Angola and the DRC, as well as a response to market demand indicators.
ECOWAS develops road information systems to boost AfCFTA (GhanaWeb)
ECOWAS Road Information Technical Experts have concluded a validation workshop in Accra to put in place measures in improving and digitalizing a one-stop shop source of information on road transport among member states to serve as a catalyst for economic development for the ECOWAS community.
The ECOWAS Commission believes transportation by road continues to serve as the main mode through which trading and movement of persons, services and goods in the ECOWAS Region are carried out. Thus to facilitate the wish of a Community Citizen to move freely, enjoy holidays, access services, it is necessary to ensure an interconnected and harmonized network of regional roads which are well maintained, managed and in good condition.
Speaking at a validation workshop for ECOWAS Regional Road Information System (ECRIS) in Accra, Mr. Chris Appiah, Acting Director of Transport at the ECOWAS Commission emphasized that in order to ensure optimum management of the road network in the ECOWAS Community the following ought to be considered: I. Identify all regional economic corridors connecting key economic centers, capital cities and open up new economic zones among others. II. Define and set key decision-making elements III. Automate the planning, programming, and implementation of their maintenance.
Rwanda hosts Cybertech Africa to advance innovation and combat cyber crimes on the continent (The New Times)
As Africa advances through technological innovations, it is becoming one of the world’s fastest-growing regions in terms of innovation and cyber capabilities. However, this progress has also led to a surge in cybercrimes, highlighting the critical importance of integrating cyber security into business strategies and policy considerations.
Recognising the challenges, Cybertech Africa 2023 was organised for the first time on the continent. The two-day conference, which kicked off on August 1, brings together key players from the business, innovation, tech, and cyber ecosystems, including dozens of companies, start-ups, esteemed speakers, renowned universities, senior government officials, C-level executives, industry trailblazers, and prominent decision-makers.
Ahmed Afif, Vice President of Seychelles, commended the revolutionary impact of cyber technology on communication, business, and information sharing, emphasising that technology’s constant evolution offers immense opportunities for entrepreneurs to reach a global market.
Whilst the AfCFTA is the engine driving economic growth, the Peace Fund is a linchpin mechanism that together with other mechanisms instituted by the African Union such as the with the Peace and Security Council, the African Standby Force, the Military Staff Committee, the Continental Early Warning System, and the Panel of the Wise, works to support the prevention, management, and resolution of conflicts, and facilitates timely and effective responses to conflict and crises in Africa. Recognizing that the prosperity of Africa is intricately linked to its stability and security, and as a key pillar of the African Peace and Security Architecture (APSA), the Peace Fund delivers timely and effective support in the areas of mediation and preventive diplomacy, AU led peace support operations, and in the development of core institutional capacities that strengthen responses to conflict and build resilience.
The relationship between AfCFTA and the Peace Fund creates a virtuous cycle that enhances economic prosperity and ensures peace and stability. Peace and stability is enhanced by the utilization of the Peace Fund, and it is a prerequisite for AfCFTA’s seamless implementation. At the same time economic prosperity spurred by AfCFTA can diminish conflict triggers and expand the resource base available for Peace Fund, reinforcing its efforts towards peace and security.
Clock Is Ticking For Food Security In Africa, Says New IITA Head (Inter Press Service)
“My key message is really simple,” says Dr Simeon Ehui, the newly-appointed director general of the International Institute of Tropical Agriculture, which works with partners across sub-Saharan Africa to tackle hunger, poverty and natural resource degradation. “The clock is ticking,” Ehui tells IPS in an interview from Washington DC on his last day at the World Bank, urging Africa’s leaders to recognise the “absolute, paramount” importance of increasing funding for agriculture.
As the African Development Bank recently noted, Russia’s invasion of Ukraine resulted in fertiliser prices rising two to three times over 2020 levels, creating serious supply gaps across the continent and driving food inflation. In sub-Saharan Africa, households spend up to 40% of their budget on food, compared to 17% in developed economies. Africa, the bank says, is over-reliant on food staples and agricultural inputs, importing over 100 million tonnes of cereals a year.
“My vision is thriving agricultural food systems in Africa,” says Dr Ehui, and, specifically for IITA and CGIAR, this means fostering the conditions to sustain centres of research excellence where scientists will be excited to work, with transparency of management and gender equality.
Balancing act: AfCFTA lures US investment (The Namibian)
The United States (US) government says the Africa Continental Free Trade Area (AfCFTA) agreement attracts US companies to invest, although analysts are cautioning against big companies taking advantage of the agreement, sidelining small businesses.
Judd Devermont, the special assistant to the US president, who was speaking at a press conference in Washington on Monday, said the reach of the AfCFTA agreement is attractive for US companies.
“But as you remove tariffs, trade barriers and non-trade barriers as you create bigger and bigger markets, it gives our companies the ability to invest in multiple countries. “If you invest in The Gambia, you’d probably also want to invest in Guinea-Bissau and Senegal. As the free trade area harmonises some of the regulations, it makes it easier for our companies to invest in multiple countries,” Devermont said.
US assistant secretary of state for African affairs Molly Phee said the US is eyeing the continent’s manufacturing of critical medical supplies and improving its agricultural activities.
Namibian trade economist Maria Lisa Immanuel yesterday warned that big companies could take advantage of these opportunities, and that this should rather be done by homegrown pan-African companies. “The West still has much of the money, by the way, in Africa’s investment deficit. This requires achieving all goals at continental level.” Immanuel said the US is playing a bigger role in the West, and also has its own interests at heart.
The Black Sea Grain Initiative Is Not About Hungry Kids in Africa (Foreign Policy)
On July 17, the Russian government announced that it was pulling out of the Black Sea Grain Initiative, an agreement brokered by the United Nations and Turkey that ensured Ukrainian grain could still be exported despite the conflict. Russia has also been carrying out deadly attacks on storage facilities in the Black Sea region. The grain deal, agreed to a year ago, allowed the flow of Ukraine’s maize, wheat, and a host of other staples to global markets.
In 2022, before the deal was brokered, media coverage and political conversations centered on how African countries depended heavily on grain imports from Ukraine, a country known as the breadbasket of Europe.
The United States, in a bid to score political points and sensationalize the news, has focused on the misguided, decades-old “starving African kids” narrative. It has ignored who the biggest beneficiaries of the deal are as well as the nuances of food security in African countries.
Africa has never really been the target consumer for Ukrainian grain. According to data by the United Nations, all the grain sent to Africa since the Black Sea deal was implemented accounts for less than 13 percent of total exports, and only a fraction of this went as food aid to so-called troubled countries.
Egypt and Kenya, both of which do not exactly fit into the picture of poor aid-consuming African countries, have been the biggest African importers under the initiative and account for roughly half of the 4 million metric tons sent to Africa. In comparison, Ethiopia has gotten just over 282,000 metric tons. Countries such as Djibouti and Sudan, which receive this grain chiefly as food aid, account for even less.
India’s rice export ban to hurt millions globally. These countries will be the worst hit (CNBC)
India’s rice export ban could ripple across global rice markets — and millions are expected to be impacted, with Asian and African consumers set to bear the biggest brunt. India, the world’s largest rice exporter, banned the exports of non-basmati white rice on Jul. 20, as the government sought to tame surging domestic food prices and “ensure adequate domestic availability at reasonable prices.” The country accounts for more than 40% of the global rice trade.
“Malaysia appears to be the most vulnerable according to our analysis,” Barclays said in a recent report, highlighting the country’s sizable reliance on Indian rice. “It imports a substantial portion of its rice supply, and India accounts for a relatively large share of its rice imports,” the analysts wrote.
The markets highly exposed to India’s export restrictions are concentrated in Sub-Saharan Africa and in the Middle East and North Africa (MENA) region, said BMI, a Fitch Solutions research unit. The firm cited Djibouti, Liberia, Qatar, the Gambia, and Kuwait as being the “most exposed.”
US Apparel Retailers Break Up With China Amid Worries (Bloomberg)
A record number of US fashion companies no longer list China as their top supplier, the result of growing diplomatic uncertainty and concerns about forced labor.
About 61% of apparel retail CEOs haves stopped using China as their primary supplier, up from 30% before the pandemic, according to a new survey by the US Fashion Industry Association and Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware.
Almost 80% plan to reduce their sourcing from China over the next two years. Those companies are primarily leaving China for Vietnam, Bangladesh and India, which have relatively large-scale production capacity and stable economic and political situations, according to the report.
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South Africa: Trade balance dipped unexpectedly in June (The Citizen)
South Africa’s merchandise trade balance unexpectedly dipped in June, with the value of the country’s exports and imports shrinking to register a trade shortfall of R3.5 billion. Lower export figures were mainly due to fall in the value of mineral goods, precious metals and stones, as well as vehicle and transport equipment exports.
Economic research group, Oxford Economics Africa, expected little change in the surplus but has noted that monthly merchandise trade flows will remain volatile for the time being. The group also says mineral producers find it difficult to get their goods to local ports, which are constrained by backlogs and inefficiency.
“The knock-on effects are undermining industry, a salient contributor to merchandise exports, which is already curtailed by scheduled power outages. What’s more, fixed investment intended to expand existing production capacity is undermined by weaker demand and unforeseen capital expenditure to source alternative energy generation.”
South Africa’s trade deficit of R3.5 billion in June is in sharp contrast to a downwardly revised merchandise trade surplus of R9.6 billion in May. The trade deficit was also much lower than the consensus forecast of R11.9 billion and marks the second goods trade deficit this year.
Final anti-dumping duties on tyres from China announced (Moneyweb)
Tyre importers and manufacturers in China have been slapped with anti-dumping duties for the next five years following an investigation by the International Trade Administration Commission (Itac). The commission recommended that Minister of Trade, Industry and Competition Ebrahim Patel impose anti-dumping duties on new pneumatic tyres imported from China for cars, buses and lorries ranging between 7.18% and 43.6%.
The application was lodged by the South African Tyres Manufacturers Conference (SATMC), representing Bridgestone, Continental, Goodyear and Sumitomo. These firms are responsible for the production of these tyres in the Southern African Customs Union (Sacu) area. They allege that the dumping causes material injury in terms of price undercutting, decline in sales volumes, market share, employment, output and productivity.
SATMC submitted its application on 24 November 2021, and Itac introduced provisional duties of 38.33% on the back of prima facie evidence of dumping. These duties expired on 8 March this year.
Itac’s investigation showed that dumped tyres with different rim sizes for cars, buses and lorries from China ranged between 36% and 81% of total imports for the period 1 August 2020 to 31 July 2021.
SATMC said in a statement it welcomes the final decision to introduce the anti-dumping duties that will remain in place until July 2028. “Fairly traded imports from other countries will continue unaffected into the Southern African Customs Union,” says SATMC managing executive Nduduzo Chala.
Egypt ensures food security amid global trade challenges (ZAWYA)
Egypt has been facing food security challenges for years as it heavily relies on imported wheat to meet domestic demand. Egypt also imports a good amount of rice and other grains to cover local needs. Russia’s recent withdrawal from the Black Sea grain-export initiative and India’s restrictions on rice exports have raised concerns about the future of food security in Egypt. However, the government has already taken steps to secure grain supplies and ensure market stability.
Egypt increased wheat imports by about 34% from the beginning of 2023 until July 18th, reaching 5.66 million tons, compared to 4.22 million tons in the same period last year, Asharq Business cited an official document.
Aya Zoheir, Research Section Head at Zilla Capital, tells Arab Finance: “Russia’s exit from the Black Sea grain-export initiative could have negative impacts on Egypt. It could result in increased competition from other grain-exporting countries trying to fill the void left by Russia, leading to increased wheat prices. In addition, Russia is considered the world’s second-largest wheat exporter, so exiting such an initiative would also result in a drastic decrease in supply, leading to a food shortage worldwide as well as an increase in Egypt’s import bill while finding alternative markets for wheat.”
Private Sector: Tanzania’s agro-trade policies distabilising regional trade (The Independent Uganda)
The move by the government of Tanzania to restrict food exports to Uganda and Kenya is facing opposition from the private sector and politicians that it is not progressive. This financial year, Tanzania reintroduced food export restrictions including new tariffs and forcing traders to open up offices in Dar es Salaam, as well as applying for export permits is they have to export.
At a recent dialogue with farmers, processors and traders in Dar es Salaam, agriculture minister, Hussein Bashe announced that whoever wanted to buy food anywhere in Tanzania, had to do so through a locally registered company. “And this directive also affects buyers from countries like Uganda, DRC, Burundi, Kenya and Rwanda,” he said, adding that the move is aimed at protecting farmers against exploitation and would also help in price regulation.
Several members of the Tanzania parliament have criticised the move as capable of hindering free trade, with others saying farmers in many areas are already stuck with huge stocks of food amidst price falls, since it’s harder to sell. The East African Business Council (EABC) however welcomes the move by Tanzania saying it is aimed at making agriculture trade formal.
Intra-EAC trade down by $1.8bn on barriers, taxation (The East African)
East African economies are losing millions of dollars as stiff trading policies, including slow implementation of agreed taxation rules, yet again force a drop in intra-regional commerce. A new report on regional commerce shows that policymakers have not been putting their words into action, agreeing on significant policies but delaying implementation. In turn, this has seen East African Community member states frequently flout the Common Market Protocol and undermine the regional integration agenda through imposition of non-tariff barriers (NTBs) to trade and repeated requests for preferential tax treatment and exemptions.
The Intra-EAC Trade Brief Analysis report by the East African Business Council (EABC) shows that the value of trade among the EAC members states fell by more than 33 percent ($1.8 billion) to $3.6 billion in 2022, from $5.4 billion in 2021. The report seen by The EastAfrican shows the intra-EAC trade was mainly impacted by trade in cereals, which fell to $285.5 million from $607.2 million and trade in mineral fuels, which fell to $175.1 million from $618.2 million in the period.
AfCFTA: Why Nigeria’s missing, as 8 countries commence guided trade (Vanguard)
Nigeria’s absence from the from the first batch of participating countries under the Guided Trade Initiative (GTI) of the Africa Continental Free Trade Area (AfCFTA) has been attributed to failure to meet the minimum requirements for trade under the agreement. The requirements include submission of a Schedule of Tariff Concessions (STCs) to the AfCFTA Secretariat and approval of the same and gazetting of the STCs or Provisional STCs.
Acting Chairman of Manufacturers Association of Nigeria’s Export Promotion Group (MANEG), Mrs. Odiri Erewa-Meggison said Nigeria is missing out from the first batch of participating countries because it is yet to meet the minimum requirements for the trade agreement.
“Nigeria has ticked most of the boxes but it is yet to gazette the STCs. The mobilisation and connection of local businesses with other members of the GTI is ongoing but progress has been slow. “There are some housekeeping issues that should also be sorted with the AfCFTA Secretariat. We believe that all outstanding actions can be completed within a short period if the political will is present and deliberately exercised,” she added.
Kenya among painful nations for suppliers in Africa (The East African)
Kenya is one of the most painful countries for suppliers on the continent given the time it takes to get money paid for goods delivered. A new report by Duplo, a payments platform for African businesses, shows that over 80 percent of Kenyan companies are taking more than a day to process invoices and the waiting can take nearly a year for some firms before the money is received. This highlights the struggles suppliers are facing to get their dues after delivery of goods.
The latest Duplo report: Exploring the State of B2B Payments in Africa shows that only 19.7 percent of Kenyan companies’ process invoices within 24 hours, with 57 percent of them taking up to a week to prepare them for payment.
South Africa has a better showing after the report found 39.9 percent of firms taking a day or less to process invoices compared with Nigeria’s 39.7 percent and Ghana’s 38.4 percent.
The agricultural sector, branding and communications, and consumer goods and retail, stand out as the most efficient invoice processors, mainly attributable to streamlined operational procedures, efficient administrative practices, or the nature of the businesses in these sectors, which may require prompt payment and transaction clearances.
Closing Africa’s gender tech gap will boost agri-food systems (Africa Renewal)
Women in agriculture still have significantly less access than men to mechanised equipment, according to The Status of Women in Agrifood Systems, a report released in 2023 by the Food and Agriculture Organisation (FAO).
The report is based on an investigation of the agri-food systems, the role of gender and work in the sector, the existing inequalities in resource distribution, women’s agency, norms and policies, and resilience to shocks and stresses. It shows that both men and women are equally likely to adopt new technologies when enabling factors are in place, underscoring the importance of ensuring equal access to productive resources for both genders.
The study shows that internet access has increased globally for both men and women while the gender gap has reduced slightly. As of 2022, 63 per cent of women globally were using the internet, compared with 69 percent of men, according to Statistica, a leading provider of market and consumer data. Unfortunately, the report highlights that the gender gap in internet use in Africa remains the largest. In 2022, 25 percent fewer women used the internet compared to men, a gap that has remained constant since 2019, according to the study.
This disparity extends to the agricultural sector, where the study established that as more women take up employment in non-agricultural segments of agri-food systems, gaps in access to relevant technologies become more evident.
West Africa experienced slower economic growth over the past year except for Cabo Verde, The Gambia, Guinea, Mali, and Niger, according to the African Development Bank’s 2023 West Africa Economic Outlook report.
Titled “Mobilising Private Sector Financing for Climate and Green Growth in West Africa,” the report provides key economic trends in 2022 as well as medium-term (2023-2024) economic forecasts for the region. It also evaluates strategies to accelerate the mobilisation of private sector financing for climate and green growth in West Africa.
The report notes that West Africa’s average gross domestic product decelerated to 3.8% in 2022 from 4.4% in 2021, implying that the growth recovery from the 2020 downturn had slowed. It attributes decelerating growth to, among other factors, such successive shocks as the resurgence of Covid-19 in China, a major trade partner for the region’s countries. Russia’s invasion of Ukraine has also spurred inflationary pressures on the cost of food, fuel and fertilizer in many West Africa region countries.
The 2023 West Africa Economic Outlook notes that adapting to climate change and the depletion of the region’s natural resources present an opening for businesses and governments to embrace sustainable and green growth.
Mineral-rich African states to explore new markets after EU changes its buying rules (The East African)
The European Union, the world’s largest single market, has introduced new measures to reduce their “dependency” on mineral imports from outside the bloc. The European Council adopted the Critical Raw Materials Act on June 30, a regulation that seeks to utilise the bloc’s Common Market and partnerships to “diversify critical raw material supply chains, which currently rely on imports from a handful of third countries.” A spokesperson of the European Commission told The EastAfrican that the bloc has taken this route because of the lessons they have learnt from the recent supply-chain disruptions that significantly impacted their supply and consequently costs of products associated with the raw materials.
Under the new regulations, EU will source up to 65 percent of its annual consumption of critical and strategic raw materials from within the bloc, dealing a blow to countries in the region that have been exporting to the region. At least 10 percent of the minerals used in the bloc will now be extracted from countries in the union, 40 percent will come from processing, and 15 percent will come from domestic recycling of the critical and strategic minerals.
According to the spokesperson, domestic extraction of the minerals in the EU has been low due to a number of factors, including “long permitting procedures, local opposition, high energy costs, high labour costs, and high costs of regulatory compliance.” The Act now seeks to address most of these hurdles.
SA outlines its BRICS approach ahead of Summit this month (IOL)
Working at reducing the trade deficit between South Africa and its BRICS counterparts – Brazil, Russia, India, China – while establishing strategic economic partnership to expand trade is key, according to the BRICS Business Council.
This view was emphasised at the BRICS Business Editors’ Breakfast in Johannesburg yesterday ahead of the BRICS Summit taking place at the Sandton Convention Centre in Johannesburg from August 22-24, under the theme: “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism.”
Stavro Nicolaou, a member of the BRICS Business Council, said the statistics showed that South Africa was benefiting from BRICS. “As we begin to mature as a BRICS formation across the five markets, it is important to see what the trade patterns look like and see how South Africa can benefit from export opportunities,” he said. South Africa ran a trade deficit with the four BRIC partners. Trade deficits were to be expected and should be seen as a positive business, commercial trade and investment opportunity, Nicolaou said.
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Trade statistics for June 2023 (South African Revenue Service)
South Africa recorded a preliminary trade balance deficit of R3.5 billion in June 2023. This deficit is attributable to exports of R167.6 billion and imports of R171.1 billion, inclusive of trade with Botswana, Eswatini, Lesotho and Namibia (BELN).
The year-to-date (01 January to 30 June 2023) preliminary trade balance surplus of R5.6 billion is a deterioration from the R129.6 billion trade balance surplus for the comparable period in 2022. On a year-on-year export flows for June 2023, were R167.6 billion, which were 8.3% lower compared to R182.9 billion for June 2022, whilst import flows were 6.5% higher having increased from R160.7 billion in June 2022 to R171.1 billion in the current period.
Confidential document reveals SA fears that Agoa trade pact status is under threat (Daily Maverick)
The document about South Africa’s Agoa status informed deliberations by high-level envoys sent to the US by President Cyril Ramaphosa to explain South Africa’s stance on the Russian invasion of Ukraine and to lobby to retain South Africa as part of Agoa. “The debate around the renewal of Agoa has provided Congress with an opportunity and a powerful tool to cajole and pressure South Africa to speak out against Russia more forcefully and publicly,” the document, dated March 23, reads.
“In addition, the new power dynamics in Congress, the current geopolitical context and big power competition for strategic influence, including in Africa, have afforded the Republicans a platform to use their narrow majority in the House of Representatives to put the Democrats under pressure to take stronger [measures],” it reads.
On Monday this week, the United States Trade Representative, which is responsible for developing and coordinating US international trade, began its annual review of the eligibility of sub-Saharan African countries to receive the benefits of Agoa
Ruto cuts on weigh bridges, roadblocks on Mombasa-Kla route (The Independent Uganda)
Kenya has agreed with neighbouring countries, a raft of measures to be implemented immediately to improve cargo handling through the Port of Mombasa to the hinterland. Among them, Ruto directed the immediate removal of all weighing points save for only Merikhani and at the borders for all transit cargo. He also directed that all the roadblocks along the transit highways within Kenya’s borders be removed immediately. These would be replaced by Mobile Police Security.
At a meeting held on Saturday at the port city, where Uganda was represented by Gen Edward Katumba Wamala, the Minister for Works and Transport, Kenya President William Ruto said they will convince again in 90 days to review the progress.
The directives President Ruto gave were aimed at facilitating faster movement of goods and services by reducing the non-tariff barriers to trade.
Morocco’s trade deficit widens 61.6% over first half of year (ZAWYA)
Morocco’s trade deficit widened by 61.6% in the first half of 2023 to 138 billion dirhams ($14 bln) despite a slight drop in imports, data from the foreign exchange regulator showed on Friday. Imports contracted 1.6% from a year earlier to 359 billion dirhams, overshadowing exports of 221 billion dirhams, up 1.9%, the regulator said in a monthly report.
Morocco’s energy imports stood at 61 billion dirhams, down 14.8%, while the cost of wheat imports slightly dropped by 0.7% to 45.7 billion dirhams. The automotive sector led Morocco’s exports with 70.9 billion dirhams, up 34.3%.
Breaking free of the dollar: PAPSS and intra-African trade, By Odewale Abayomi (Premium Times Nigeria)
At a recent forum on the African Continental Free Trade Area (AfCFTA) in Nairobi, Kenya, the Kenyan President, William Ruto called on African leaders to expedite the adoption of the Pan-African Payments and Settlement System (PAPSS) by both their central and commercial banks, in order to decrease pressure and reliance on the bullish US dollar for intra-African trade. The Kenyan president is deeply concerned about the fragmented African payment landscape, with nearly 40 currencies being used across 54 countries, under diverse payment structures and cumbersome processing strategies – thereby making free trade a herculean task.
During the forum referred to above, Ruto queried, “From Djibouti selling to Kenya or traders from Kenya selling to Djibouti, we have to look for US dollars. How is US dollars part of the trade between Djibouti and Kenya? Why?” “That is why Kenya champions the Pan African Payment and Settlement System that is done by our own institution — the Afreximbank. Why, members? Why is it necessary for us to buy things from Djibouti and pay in dollars? There is no reason,” he stated.
Before PAPSS, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) was the primary platform for African banks to conduct cross-border transactions, with an estimated loss of close to $5 billion annually, which undermines trade in Africa countries. It is quite an irony that it is faster and cheaper for Nigerians to receive and transfer money to far away Western countries than to those within Africa.
Currently, only nine countries, which are Nigeria, Ghana, Liberia, Guinea, Sierra Leone, The Gambia, Djibouti, Zimbabwe, and Zambia are part of the PAPSS’s network, out of the 54 African countries billed to trade under AfCFTA through a single and open market that allows for the unrestrained movement of goods, services, capital, and persons, and which supports investment opportunities. Every central bank on the continent is expected to enrol with and become part of PAPSS by the end of 2024, while all commercial banks are to follow suit by the end of 2025. But, the adoption process remains at a slow pace.
Civil servants urged to work towards maximising AfCFTA benefits (The Namibian)
Prime minister Saara Kuugongelwa-Amadhila has called on civil servants to prepare themselves for Namibia to reap the full benefits of the African Continental Free Area agreement (AfCFTA). She made these remarks in a speech read on her behalf by the deputy industrialisation minister, Verna Sinimbo, during the four- day 2023 Africa Public Service Day commemoration, which concluded at Katima Mulilo yesterday.
African Union (AU) member states commemorate Africa Public Service Day on 23 June annually to mark and recognise the role of public sector organisations and their positive contributions and benefits to communities, as well as the contributions of civil society and the private sector to national development efforts. This year, the day was celebrated under the theme, “The African Continental Free Trade Area (AfCFTA) will Require a Fit-for-purpose African Administration to Succeed”.
“Preparedness through the development of public systems and institutions, among others, is required. Further, we must align and coordinate our efforts at all levels and promote a spirit of partnership with other stakeholders beyond the public service in order to leverage the resources and capabilities of all Namibians to optimise economic growth and development. The public service is at the centre of the success of AfCFTA,” she said.
EABC organises forum on AfCFTA rules of origin (Tanzania Daily News)
THE East African Business Council (EABC) has commenced a three-day workshop on the African Continental Free Trade Area (AfCFTA) Rules of Origin. The workshop convened together National Associations, Chambers of Commerce from the Region, and delegates from the European Union and EAC Secretariat.
“Partnership in this endeavour is of vital importance for capacity building and knowledge sharing in fostering a vibrant, inclusive trade environment,” said EABC Board Member, Mr Paul Makanza in his opening remarks,
to fully realise the advantages of AfCFTA, it is crucial to understand a number of aspects related to the agreement, and the most fundamental aspect is the Rules of Origin, he said. “It plays a crucial role in ensuring fair competition, preventing trade deflection, and safeguarding products originating from the Region. A comprehensive understanding of this training will help the region navigate through the complexities of trading and harness the potential of the AfCFTA,” he added.
Strategic partnerships key to unlock EU’s market for agricultural produce (Tanzania Daily News)
When it comes to the economies of the East African Community (EAC), agriculture stands tall as the backbone. Not only does it contribute to food security, but it also fuels employment, industrial development, trade and investment. In a recent report by Eurostat, the European Union’s statistics authority, it was revealed that in 2022, the EAC exported agri-food products worth a staggering 2.16 billion Euros (Sh330b) to the EU. This figure represented an impressive increase of 26.2 per cent from the previous year. Moreover, intra-EAC trade in agricultural products witnessed a remarkable 33 per cent growth from 2018 to 2022.
However, despite the significant strides made in value addition, a considerable proportion of agricultural products from the region are still exported in their raw form, due to a combination of demand and supply-side challenges. These statistics highlight the EAC’s untapped potential if supply side and market access obstacles are effectively addressed. The hurdles encompass access to market information, enhanced productivity throughout the value chain, compliance with international standards, improved post-harvest handling, logistics, branding, and more.
East Africa will register the highest regional economic performance on the continent in 2023 and 2024, with growth figures at over 5 percent, according to the newly published African Development Bank 2023 East Africa Economic Outlook.
The report, launched on Thursday 27 July, projects mid-term economic growth in the region to accelerate to 5.1% in 2023 and 5.8 % in 2024, outpacing all the other African regions. This will be largely driven by growth in Rwanda, Uganda, Ethiopia, Kenya, Djibouti, and Tanzania.
According to the report, East Africa’s real GDP was propelled by its services sector, contributing almost half of the economic growth in 2022. The sector contributed 2.0 percentage points to GDP growth, lower than 2.5 percentage points on average for the period 2015-2021. The region’s natural and cultural attractions draw tourists from around the world, creating a demand for services like accommodation, food, and entertainment.
The report outlines four common challenges faced by the region’s economies, which justify a strong, inclusive green growth agenda. They include reliance on agriculture for livelihoods, natural resource dependence, energy, and water scarcity. It urges East African countries to adapt green growth pathways by tapping into key sectors like renewable energy; sustainable agriculture and infrastructure; and forestry.
23rd Meeting of SADC Ministerial Task Force calls for accelerated industrialisation (SADC)
The 23rd Ministerial Task Force (MTF) on Regional Economic Integration of the Southern African Development Community (SADC) held its meeting on 26th July, 2023 with Ministers calling for accelerated implementation of the industrialisation agenda to spur economic growth and poverty eradication in the SADC region.
In his opening remarks, Honourable Mr. Julien Paluku Kahongya, Minister of Industry of the Democratic Republic of Congo and Chairperson of the Ministerial Task Force (MTF) on Regional Economic Integration, highlighted the need for the SADC region to redouble its efforts in industrialising the regional economy in order to limit importation of finished products and reduce the export of raw materials.
He further called for the development of regional value chains, taking advantage of the region’s abundant minerals and natural resources which offer opportunities for trade, investment, and industrial development in the SADC region.
President Bola Ahmed Tinubu, President of the Federal Republic of Nigeria and Chairman of the Authority of Heads of State and Government of the Economic Community of West African States (ECOWAS) has convened an Extraordinary Summit of the Authority on the political situation in the Republic of Niger. The Summit held in Abuja, on July 30, 2023. The ECOWAS Leaders considered and discussed the political situation and recent developments in Niger during the Extraordinary Summit.
Forum report highlights need to properly assess Africa’s place in the global world (ZAWYA)
The Mo Ibrahim Foundation has released the 2023 Forum Report, Global Africa: Africa in the world and the world in Africa. The Report outlines the key takeaways from the 2023 Ibrahim Governance Forum, alongside the latest available data around the theme of ‘Global Africa’.
The Forum was held in Nairobi as part of the Foundation’s annual Ibrahim Governance Weekend, which took place between 28-30 April. The event brought together African leaders, politicians and thought leaders to discuss the ‘Global Africa’ theme across three sessions, with participants considering Africa’s weight in the current world, the world’s presence in Africa, as well as the continent’s place within the multilateral architecture.
“The world is changing around us. Time is gone to underestimate Africa, talk down to Africa or give instructions to Africa. Do not take Africa for granted.” - Mo Ibrahim, Founder and Chair of the Mo Ibrahim Foundation (MIF)
Russia-Africa 2023 Summit: Progress & Joint Declaration (Russia Briefing)
The 2023 Russia-Africa Summit has finished in St.Petersburg, with 49 of the 55 African nations attending, up from 43 at the previous 2019 event.
On a regional basis, the BRICS grouping is willing to discuss expanded membership to include several African nations. At present, Egypt already has equity in the BRICS New Development Bank, while Algeria, Morocco, Nigeria, and Senegal are all known to have made official applications to join.
Russia plans to increase exports of food and fertilizers, vehicles, and industrial machinery to Africa. These commercial transactions will be increasingly settled in national currencies, including the Ruble, as opposed to the US Dollar and Euro. Moscow intends to send both commercial and humanitarian shipments of grain to “African friends”, according to the Russian president. This includes free deliveries and shipping of Russian grain to six African nations as soon as possible, and the delivery of free fertilizers and shipping to a further six. Russia is set for a record grain harvest this year, with President Putin stating that Russia will provide sustainable and affordable deliveries to Africa.
Russia has written off US$23 billion of African debt and is in discussions to allocate a further US$90 million for lowering the overall debt burden of African countries. According to Oleg Ozerov, Chair of the Russia-Africa Partnership Forum Secretariat, African countries’ debt issues involve restructuring “some financial issues, but we are not talking about the direct debt. We are talking about certain financial agreements and the obligations of both sides.”
There was considerable attention paid to having various East African countries officially join the International North-South Transportation Corridor (INSTC) which provides multi-modal logistics and transport between the Caspian Sea and the Persian Gulf, effectively connecting Russia with the Middle East. Extending this from the Gulf to Africa – Egypt would be a primary destination – would make Russia-Africa trade far more effective and discount the use of the longer, and more expensive Suez Canal option. It would also assist African nations access Central Asian markets, an issue of interest especially to Africa’s Muslim nations.
The two sides agreed to the further strengthening of trade, economic, and investment cooperation between Russia and the African States, including with the African Union, and the leading African regional organizations
Russia specifically mentioned the operations of the African Continental Free Trade Area (AfCFTA) which came into effect in 2021 and has reduced intra-African tariffs on 95% of all products. Moscow is ahead of the game here in terms of recognizing the benefits of this, as it effectively means that goods can be sourced on a pan-African basis, consolidated into one area – such as a Free Trade or Economic Trade Zone (ETZ), producing a final product either for export or resale on the African market. Russia has such a ETZ at Port Said in Egypt, with the first exports from that facility due later in the year. Similar Russia ETZ have been proposed in Ethiopia, Namibia, and Malawi, while China is also doing the same. In contrast, European businesses appear to have missed the significance of the AfCFTA, perhaps wanting to concentrate on intra-EU trade and a more protectionist attitude.
In terms of boosting what AfCFTA means for Russian investors, the summit stated that it was important “in order to enhance the market integration, industrialisation and economic development of the African continent by facilitating technology transfer and encouraging investment, promoting the development of value added chains, and boosting mutual capacity to produce and export value added manufactured products.”
Russia is ahead of the game here in terms of understanding what Africa has done in this regard. Consequently, Russian auto manufacturers are already looking at establishing manufacturing plants in east Africa, taking advantage of both AfCFTA as well as the INSTC transport routes.
With the prevalent dependency of African economies on external supply of fertilizers and grains and up to 30% of cereals imported from Russia, ensuring that critical trade flows continue uninhibited, remains the priority of Afreximbank and its African member states. The lingering global food security challenges and the critical role trade with Russia plays in guaranteeing Africa’s food security was at the core of discussions for Afreximbank at the second Russia African Economic and Humanitarian forum which held at St. Petersburg from the 27th to the 29th of July, 2023.
Addressing the summit, Prof. Benedict Oramah, President and Chairman of the Board of Directors of the Bank, said in his remarks that “ Afreximbank is working with the African Union Commission, the United Nations System and Russian partners to use the Africa Trade Exchange (ATEX) e-commerce platform to facilitate seamless flow of goods and payments in any currencies chosen by sellers and buyers in a transparent manner. The platform pools Africa’s demand for grains and fertilizers, and the Bank has placed an aggregate credit limit of US$3 billion to support these transactions.”
Trade flows between Africa and Russia reached almost US$20 billion in the four years to 2021, as against about US$10 billion in 2015, despite the COVID-19 pandemic and other significant global crises, bringing it closer to the target of US$40 billion by 2026. It is expected that the trade flows could double over the next four years.
Developing countries all set to start trading in national currencies - BRICS bank head (IOL)
There are no obstacles for developing countries to switch to trade in national currencies, the president of BRICS’ New Development Bank (NDB), Dilma Rousseff, said on Wednesday.
The NDB is an international financial institution established in 2014 following the BRICS summit after an agreement between Brazil, Russia, India, China and South Africa. It aims to mobilise resources for infrastructure and sustainable development projects in BRICS countries, as well as other emerging markets and developing countries, through the provision of loans, guarantees and other financial instruments as part of state and private projects.
Members of the BRICS group do not cooperate against third parties, and this concerns financial issues as well, Russian President Putin said during the meeting with Rousseff.
Putin added that settlements in national currencies among BRICS countries were on the rise, and the development bank could play a key role in this issue.
E-commerce co-convenors to issue updated negotiating text (WTO)
In his opening remarks, Ambassador Hung Seng Tan of Singapore, co-convenor of the initiative and chair of the 2023 plenary meetings, said: “We need to exercise greater flexibility and we need to really put our shoulders to the plough and push together as we head towards the finishing line.”
In closing the meeting, he said that the co-convenors will take time to reflect over the summer and take stock of progress made so far. He added: “We will develop a roadmap for us to double down our efforts from September to November.” He also announced that a text on “single windows” — the practice of establishing a single entry point for the exchange of information between trader and government — has been “parked”, meaning the technical work on this topic has been finalized.
WTO issues 2023 edition of the World Trade Statistical Review (WTO)
The World Trade Statistical Review 2023 presents recent trends in international trade at a time of geopolitical and macroeconomic strains and technological challenges affecting the global economy and supply chains. The data cover merchandise and services trade broken down by geographical origin, main product groups and sectors, along with related data on key economic developments such as GDP growth, commodity prices, and exchange rate fluctuations.
Director-General Ngozi Okonjo-Iweala says in the foreword to the report: “As a succession of crises buffet the global economy, with the COVID-19 pandemic giving way to the war in Ukraine, inflation, monetary tightening, and widespread debt distress, world trade has lost momentum, with trade growth slowing in 2022 and remaining weak into early 2023. That said, global trade growth has remained positive, underscoring how trade has been a force for economic recovery and resilience. Nevertheless, numerous downside risks, from geopolitical tensions to potential financial instability, are clouding the medium-term outlook for both trade and overall output.”
New publication sets out common framework for measuring digital trade (WTO)
The measurement of digital trade offers policymakers statistical evidence on the significant impact of digital trade on the global economy. Digital technologies have made it increasingly feasible for buyers and sellers to place and receive orders on a global scale. They also enable the instantaneous remote delivery of services directly into businesses and homes.
The Handbook focuses on two key elements: digitally ordered trade and digitally delivered trade. Furthermore, it highlights the important role of digital intermediation platforms (DIPs) in facilitating digital trade and addresses particular compilation challenges in measuring DIP transactions.
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Somalia’s Institutions get a Boost to Help Bring the Country Closer to Debt Relief (World Bank)
Somalia's efforts toward building strong institutions received a boost with a new $75 million grant, the second in a series of two grants that is helping the country make progress on its path to qualify for full and irrevocable debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative.
In a context of multiple and overlapping shocks related to frequent climatic hazards, as well as widespread fragility, the Somali government is implementing an ambitious reform program to build institutions, attract investments, and achieve inclusive economic growth and job creation, aligned with the ninth National Development Plan which outlines numerous priority areas for moving the country forward, several of which are supported by this Development Policy Financing (DPF).
To develop high-potential sectors for economic growth, Somalia has approved new laws that establish the institutional environment in key sectors such as fisheries and electricity. To mobilize much needed private capital to develop these sectors, a new investment and investor protection law was enacted. To increase access to finance, a digital identification law was approved, which can support better know-your-customer protocols, alongside a data protection law to provide safeguards on the use of personal data.
Strategic partnerships key to unlock EU’s market for agricultural produce (Tanzania Daily News)
When it comes to the economies of the East African Community (EAC), agriculture stands tall as the backbone. Not only does it contribute to food security, but it also fuels employment, industrial development, trade and investment. In a recent report by Eurostat, the European Union’s statistics authority, it was revealed that in 2022, the EAC exported agri-food products worth a staggering 2.16 billion Euros (Sh330b) to the EU. This figure represented an impressive increase of 26.2 per cent from the previous year. Moreover, intra-EAC trade in agricultural products witnessed a remarkable 33 per cent growth from 2018 to 2022.
However, despite the significant strides made in value addition, a considerable proportion of agricultural products from the region are still exported in their raw form, due to a combination of demand and supply-side challenges. These statistics highlight the EAC’s untapped potential if supply side and market access obstacles are effectively addressed. The hurdles encompass access to market information, enhanced productivity throughout the value chain, compliance with international standards, improved post-harvest handling, logistics, branding, and more.
Can AI address Africa’s agricultural trade deficit? (African Business)
A majority of African countries are losing billions of dollars of foreign exchange annually through food imports. In 2022, 38 countries had a negative trade balance in agricultural products, with Algeria, Egypt, Nigeria, Morocco and Angola leading the ranking with more than $3bn lost over the year.
Set this against two important facts: that agriculture remains a main source of revenue for many households, contributing close to 23% of sub-Saharan Africa’s GDP and employing more than 60% of its population; and that the continent has 65% of the world’s remaining uncultivated arable land.
The trade imbalance also weighs on countries’ fiscal health. When they cannot compensate through other exports – such as oil in the case of Nigeria, Angola, and Algeria – countries become extremely vulnerable to external shocks. Recent disruptions in the cereal value chain due to the Black Sea blockade resulting from the conflict in Ukraine are seen as the straw that broke the camel’s back for many leaders across the continent. These disruptions coincided, however, with a year marked by unprecedented development in the field of artificial intelligence (AI).
Though AI has recently been the subject of much hype, it was being considered as a tool to help farmers improve their income two years ago. In 2021 Daphney-Stavroula Zois, a professor of electrical and computer engineering at the State University of New York at Albany in the US, worked with the non-profit AGRI-WEB to help smallholder farmers in Ghana develop better prediction models for their crop yields using artificial intelligence. But “there are many other uses of AI,” she says.
“As I have already said, Russia can well fill in the gap left by the withdrawal of the Ukrainian grain from the global market, either by selling its grain or by transferring it for free to the neediest countries in Africa, especially considering that this year we once again expect to have a record-high harvest.
To be more specific, let me say that in the next three to four months, we will be ready to provide, free of charge, a supply of 25,000–50,000 tonnes of grain each to Burkina Faso, Zimbabwe, Mali, Somalia, the Central African Republic and Eritrea, delivered at no cost,” said President Putin.
Why SADC countries should protect women cross-border traders (Daily Maverick)
For decades informal cross-border trade has been a cornerstone of African economies. It is an occupation dominated by resilient and resourceful women.
Numerous studies have demonstrated the significant role informal cross-border trade plays in reducing poverty and food insecurity for millions of households that are excluded from formal employment opportunities. Yet women traders like Chenai continue to face a host of challenges, including gender-based violence, administrative harassment, corruption and excessive taxation.
This month marks two decades since the adoption of the Maputo Protocol, arguably the most progressive instrument on women’s rights in international law. Adopted by the African Union (AU) on 11 July 2003, the protocol seeks to guarantee the empowerment of women in southern Africa by upholding their rights to inheritance, economic and social welfare, education and training and equal protection before the law, among others. Despite some progress, many challenges persist in realising the rights enshrined in this treaty.
Public finance management transformation needed in Africa (Engineering News)
African governments are unable to finance the $2.8-trillion needed for climate responses beyond the 10% of costs, or $250-billion, they have already committed as of 2022, owing to existing high levels of public debt.
However, public finance management transformation can help to correct these countries' fiscal trajectories, free up domestic capital for the climate agenda and create transparency and confidence around the management of fiscal funds that international funders will look for, management advisory and services company PwC Africa states in its 'Implementing Green Public Finance Management in Debt Distressed Countries' report.
The remaining $2.5-trillion is what the region needs to implement climate action commitments and achieve Nationally Determined Contributions. This figure is equal to the value of total gross domestic product during 2022 in sub-Saharan Africa, says PwC Ghana assurance, government and public services leader Hayfron Aboagye.
However, public finance management transformation can help to correct these countries' fiscal trajectories, free up domestic capital for the climate agenda and create transparency and confidence around the management of fiscal funds that international funders will look for, management advisory and services company PwC Africa states in its 'Implementing Green Public Finance Management in Debt Distressed Countries' report.
President Ramaphosa calls for shift to high value exports (SAnews)
President Cyril Ramaphosa has boldly declared Africa’s intention to prioritise the export of valuable finished products instead of raw materials from the continent’s minerals. President Ramaphosa told his Russian counterpart, President Vladimir Putin, that Africa wants to export finished products, which will set Africa on a path to unlock unparalleled opportunities for the continent’s economies. The President was speaking during a plenary session at the second Russia-Africa Summit held in St. Petersburg in the Russian Federation. The two-day summit kicked off on 27 July.
“We no longer want to export ore, soil, dusts and rocks from the minerals of our continent. We want to export finished products that have value. “There must be respect also for what we do as countries, and we must stop those countries that count their wealth and their assets in terms of minerals that reside in the African soil like they did in the past when they counted their wealth in the number of slaves that they owned, taken from the African continent. “Respect and mutual benefit underpin what we as Africa do when we relate to other countries in the world,” the President said.
“African countries should, as sovereign States, be able to pursue their own independent foreign policy approaches that are not beholden to any of the major global powers or blocs.
Moscow Has Forgiven $23Billion Debts Owed By African Countries - Russian President, Putin (Sahara Reporters)
The Russian government has written off over $20 billion of debt historically owed by African nations, President Vladimir Putin said on Friday.
President Putin who announced the debts forgiveness at a plenary session of the Russia-Africa forum in St. Petersburg, also said that Moscow would allocate more funds to help with the development of the continent, according to RT report. “The total amount of debt of the African countries written off by Russia amounts to $23 billion dollars with another $90 million to be allocated for the same purposes,” Putin stated, with reference to historical trade and finance links between Moscow and Africa.
Russia-Africa Agric trade grows despite Western sanctions (The Chronicle)
Speaking during a plenary session of the Russia–Africa Economic and Humanitarian Forum at the Second Russia-Africa Summit here on Thursday, President Putin said his government, businesses and the public are interested in further deepening multifaceted trade, investment and humanitarian ties with the continent to promote stable growth and prosperity.
“Friends, the numbers speak for themselves: last year Russia’s trade with African countries in agricultural products increased by 10 percent to $6.7 billion, and has already demonstrated record growth in January-June of this year by increasing by 60 percent. Russia exported 11.5 million tonnes of grain to Africa in 2022, and almost 10 million tonnes in the first six months of 2023. All this has been taking place despite the illegal sanctions imposed on our exports, which constitute a serious impediment for exporting Russian food, complicating transport, logistics, insurance and bank transactions.”
Singapore woos Africa for mutual benefits (BusinessGhana)
A Director at Enterprise Singapore (EnterpriseSG), Rahul Ghosh, has called for a strong collaboration between Singapore and Africa to establish global firms for mutual benefits.
The collaboration should precede the creation of a robust environment that will thrive on strong commitment to accelerate economic growth but resilient enough to birth international firms to serve both markets, Mr Ghosh who is in-charge of Middle East and Africa, said at a virtual media briefing on July 20.
He was speaking ahead of the seventh Africa Singapore Business Forum (ASBF) scheduled between August 29 and 31, 2023 at Singapore. On the theme “Driving Africa’s growth through digitalisation, manufacturing and sustainability,” the forum seeks to bring together more than 500 business and government leaders on a single platform to interact and propel solutions for mutual benefit.
Mr Rahul Ghosh stated that Africa was a very important market that should not to be ignored. He said the African Continental Free Trade Area (AfCFTA) has created the largest free trade area in the world with a combined gross domestic product (GDP) value of $3 trillion. He explained that Singapore companies were drawn by its potential and were eager to explore new opportunities for collaboration in areas such as manufacturing and digital solutions. According to him, Singapore companies can also share knowledge and innovative solutions with Africa, contributing to the continent’s development and creating mutually beneficial partnerships.
He added that companies in Africa should use Singapore as the gateway to reach consumers in Asia.
E-commerce co-convenors to issue updated negotiating text (WTO)
In his opening remarks, Ambassador Hung Seng Tan of Singapore, co-convenor of the initiative and chair of the 2023 plenary meetings, said: “We need to exercise greater flexibility and we need to really put our shoulders to the plough and push together as we head towards the finishing line.”
In closing the meeting, he said that the co-convenors will take time to reflect over the summer and take stock of progress made so far. He added: “We will develop a roadmap for us to double down our efforts from September to November.” He also announced that a text on “single windows” — the practice of establishing a single entry point for the exchange of information between trader and government — has been “parked”, meaning the technical work on this topic has been finalized.
Developing countries cannot preserve biodiversity without support from developed counterparts (Engineering News)
In an address to delegates of the G20 Environment and Climate Sustainability Ministers Meeting, in India, on July 28, Forestry, Fisheries and the Environment Minister Barbara Creecy said ambitious targets to preserve the planet were meaningless unless they are backed with enabling means of implementation for developing countries.
Creecy added that 17 of the major biodiverse countries in the world are developing countries. She emphasised further that developed countries need to assist with securing at-scale, predictable and appropriate funding streams for developing countries’ efforts to conserve and protect biodiversity. Particularly, she said, the G20 countries can work together to protect biological diversity.
In South Africa’s case, mega-diversity is both a natural and cultural asset, as well as a source of socioeconomic development through the use of plants, marine living organisms and wildlife, which the South African government has vowed to protect in the White Paper on the Sustainable Use of South Africa’s Biological Diversity.
DRC mobilising stakeholders for COP28 (CAJ News Africa)
The Democratic Republic of Congo (DRC) is encouraging local companies to capitalise on the potential of green business models and create opportunities from the carbon credit prospects. Sama Lukonde, Head of Government and Prime Minister of the DRC, made the call at the recent Economic Forum on the New Climate Economy.
“The DRC’s solution to the global climate threat must first be locally beneficial before it can be considered on a planetary scale,” Lukonde said. “Our climate action must therefore respond to internal and external challenges to sustainable economic development because solidarity between nations must consider the principle of responsibility towards our respective populations and the requirements of community development.” In addition, the just-concluded forum offered a unique opportunity to identify and select the Congolese companies that will accompany President Felix-Antoine Tshisekedi to the upcoming COP28 in Dubai.
“The energy and digital transitions are two major transformations underway,” said Patricia Katshabala, Head of External Relations at Vodacom Congo.
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South Africa Seeks to Halt Used Rail Track Exports to Curb Theft (Bloomberg)
South Africa’s trade minister proposed new regulations to prohibit the export of used rail tracks and increase restrictions on copper-product shipments as the government tries to combat theft and vandalism of public infrastructure. Trade and Industry Minister Ebrahim Patel proposed banning the export of the rail tracks until Dec. 15 and limiting the sources of copper that can be used to produce semi-finished products for export, so the source of the metal can be more easily verified when issuing permits.
Exporters are shipping ferrous scrap rail tracks that may have been stolen, using a loophole in measures that currently prohibit scrap-metal exports, Patel said a request for comment published in the Government Gazette on Wednesday. The theft and export of copper cables and other infrastructure has been a major contributor to power cuts and disruptions on rail lines that hamper transportation by companies such as Kumba Iron Ore Ltd. and Exxaro Resources Ltd.
Genesis Analytics has estimated that copper theft cost the South African economy more than 46 billion rand ($2.6 billion) in 2020-21, according to the notice.
FedEx Enhances International Priority® Service in South Africa (WebWire)
FedEx Express, a subsidiary of FedEx Corp. and the world’s largest express transportation company, announced the enhancement of its International Priority® (IP) service in an effort to improve the efficiency of goods circulation and enable customers to seize global opportunities.
FedEx has improved transit time of FedEx International Priority (IP) for exporters in South Africa. With this enhancement, shipments can now be delivered to major markets and territories around the world within two to three business days. This represents at least a one-day improvement compared to previous transit times for major markets
Shipments from South Africa to the U.S. and major markets in Europe can now be delivered within two to three business days. Shipments to major markets in AMEA can be delivered within two to four business days.
As part of its mission, the Africa Continental Free Trade Area Agreement (AfCFTA) member states have committed to lifting tariffs and barriers to trade. This will boost intra-Africa trade and increase demand. Now more than ever, African businesses require timely delivery solutions to meet the increasing and evolving demands of global markets.
Zambia’s success in restructuring its $6.3 billion bilateral debt under the G20 Common Framework continues to draw support from regional and global institutions. These institutions seek to ensure that the country sticks to the agreed debt arrangement, tackles debt owed to private commercial creditors—including Eurobond holders—and implements reforms critical to its economic recovery and growth.
The African Development Bank Group convened meetings in Lusaka last week
African Development Bank President Dr Akinwumi Adesina led a delegation to the meetings. “The starting point is to now make sure the debt treatment works, and that Zambia does not again return to a debt crisis,” he said.
Adesina outlined several measures that, once approved by the Bank’s Board of Directors, will deliver a total of $318 million comprising $150 million for budget support to Zambia from the Bank. The remaining annual allocation of $168 million will be drawn from its concessional window, the African Development Fund, to finance large transformative infrastructure, including energy, road and rail transport connections with Mozambique, Angola and the Democratic Republic of Congo.
Sibling rivalry: Is Kenya losing investment deals to Tanzania? (The Standard)
Tanzanian President Samia Suluhu does not shy away from throwing jibes at Kenya from time to time. Her recent remarks claiming that Tanzania is seeing an influx of foreign investors in the wake of the opposition-led protests in Kenya have kicked up another political storm between the two neighbouring countries that have had an uneasy trade relationship over the years.
Speaking during celebrations to usher in the new Islamic Year, President Hassan emphasised the importance of peace in a nation, saying it creates the right environment for investors. “If we fight, those [investors] who show up will say ‘that is not a good business environment’,” she said.
Tanzania Investment Centre (TIC) Director General Gilead Teri, during the interview referenced by President Hassan aired by Tanzania Broadcasting Corporation, detailed how the country between January and March saw investments worth $1.3 billion (Sh195 billion), equivalent to Tsh2.8 trillion. This is from 93 projects, which will provide employment to about 16,000 Tanzanians.
Weighing in on the supposed influx of investors to Tanzania over Kenya’s unfriendly political environment, Kenya Association of Manufacturers (KAM) Chairman Rajan Shah said the lobby body is continuously striving to advocate for reduced costs and ease of doing business.
“Whether is power, taxation or regulatory environment, we continue to do that. And whilst Kenya still remains a preferred destination, we are also opening up the region and for sure, there will be investments which will go to our neighbouring countries as well based on the competitive advantage of what are the resources available.”
Report: Nigeria Increases Share of ECOWAS GDP to 62.7% (THISDAYLIVE)
Nigeria’s share of the Gross Domestic Product (GDP) of the Economic Community of West African States (ECOWAS) grew to 62.7 per in 2022. This was revealed in the 2023 West Africa Development Outlook (WADO) released on Monday by the ECOWAS Bank for Investment and Development (EBID). The report also revealed that poverty worsened in West Africa in 2022, as the number of the working poor increased by 3.9 per cent (5.4 million persons) to 142.3 million persons in 2022.
The theme of the report was, “A Mixed Bag Outlook: Debt Distress, Flagging Growth and Declining Inflation.” According to the report, “Nigeria increased its share of the sub-regional GDP to 62.7 per cent in 2022 from 60.6 per cent in 2021 at the expense of Côte d’Ivoire, Ghana and the rest of ECOWAS, with Ghana being the biggest loser from 10.9 per cent in 2021 to 9.6 per cent in 2022). The report, however, added that, “on a more positive note, no ECOWAS Member State recorded a negative growth in 2022, in spite of the very turbulent socio-economic environment.”
Congo & Rwanda consider waiving visas to nationals (FurtherAfrica)
Rwanda and the Republic of Congo announced last week that citizens from the two countries may be exempted from Visas while entering both sides. “President Kagame met with President Sassou Nguesso for bilateral discussions aimed at strengthening cooperation in various sectors including trade and investment, agriculture, air service, visa exemptions and more,” said the Rwandan Presidency.
The Presidency added that the two Presidents also witnessed the signing of an agreement of cooperation on accelerating the implementation of the African Continent Free Trade Area (AfCFTA) agreement, before addressing members of the press.
While addressing the Rwandan Parliament both chambers, President Sassou-Nguesso pushed for free movement of all Africans on the continent. “We should work towards irreversible integration of African people, an option that defies borders, brings people together and enables solidarity and complementarity,” the Congo leader said.
How intra-EAC exports thrived despite Covid-19 (The Citizen)
In the face of the Covid-19 pandemic, exports within the East African Community (EAC) bloc showcased remarkable resilience, surging from $3 billion in 2019 to $5.2 billion last year. The growth of exports within the region led to an increase in intra-EAC export share, reaching 24 percent of the total exports in 2022, up from 22 percent in 2019. This encouraging development was announced in Kampala during the official launch of the East African Business and Investment Summit and Expo, scheduled to take place from August 31.
With the theme “Private Sector-Driven Regional Integration for Increased Intra-African Trade, Investment,” the summit is set to be a critical facilitator of trade and business promotion. The summit will gather stakeholders to discuss successes, challenges, and opportunities in trade and investments not only within the EAC but also in the African Continental Free Trade Area (AfCFTA).
Africa pursues free trade amid global fragmentation (World Bank Blog)
Defying the trend toward deglobalization and economic fragmentation, African nations are uniting to form a free trade area. The project promises to offer the rest of the world a renewed message of hope on the benefits of removing – not erecting – barriers to free flows of goods, services, investment, and ideas across borders.
Turning the aspiration into reality will require sustained effort and strong collaboration among African governments, the private sector, civil society, and the international community. That was the consensus among leaders representing those stakeholder groups during a forum in Washington in April alongside the Spring Meetings of the World Bank and the International Monetary Fund.
“The agreement is riding on a wave of unprecedented political support and will,” AfCFTA Secretary General Wamkele Mene told the forum. “But delivering on its promise needs the effective and aggressive implementation of its protocols.”
No doubt, Africa faces myriad challenges. Some countries are plagued by persistent conflict. Difficulties in transacting among 42 currencies impose an estimated $5 billion a year in extra costs on traders. Border procedures can be cumbersome and time consuming. Small-scale cross border trade is flourishing but comes rife with risks, especially for women, who often face harassment and violence.
But Africa has made a start: Its eight Regional Economic Communities can serve as building blocks. It will be incumbent on wealthier African nations, who are likely to be the first to benefit from freer trade, to catalyze opportunities for economically weaker states, Amany al-Wassal, executive director of Egypt’s Export Development Fund, told the forum.
“We have to lift the small countries and emphasize to them the importance of implementing the agreement,” she said.
North African countries are projected to see a slight increase in economic growth to 4.6 percent in 2023 and 4.4 percent in 2024, and should make green growth an urgent priority, according to the African Development Bank. The pan-African institution published its 2023 North Africa Economic Outlook report in Tunis on Thursday 27 July, under the theme “Mobilizing Private-Sector Financing for Climate and Green Growth in Africa”.
“To sustain inclusive growth, the region should implement structural reforms that support the development of the private sector, improve productivity and employability, and create job opportunities,” stressed Ms Verdier-Chouchane.
According to the Bank Group, growth in the region is essentially driven by the service sector, particularly trade and tourism. Growth in North Africa in 2022 was moderate: 4.1 percent compared with 5.4 percent in 2021.
North Africa should take full advantage of its significant natural resources while making green growth an urgent priority. North African governments, foreign and domestic private investors, multilateral development banks and development finance institutions, as well as the private sector, should invest in green growth. Private-sector financing, in particular, can play a crucial role by investing in green energy infrastructure, energy efficiency, sustainable agriculture and land restoration.
The private sector can also provide the expertise, technology and management skills needed for effective and efficient implementation of green development projects.
African countries unite to close revenue leakages in post Covid-19 recovery (Monitor)
African countries have demonstrated a strong post-Covid-19 recovery, with an average economic growth of approximately 5 per cent between 2020 and 2021 among the countries participating in the African Tax Outlook (ATO) initiative, aimed at closing revenue leakages in tax collection.
During the same period, tax revenue mobilised by the ATO participating countries increased by 7.7 per cent. This growth was attributed to the fiscal stimulus measures implemented by countries to counter the impact of the pandemic.
Uganda is among the 37 ATO countries which provided data for ATO 2022 and type of revenue administration agency. According to the report, Uganda posted a six percent increment in GDP in 2021 and a 10 per cent growth in nominal tax.
African Union calls on Russia to reinstate Ukrainian grain deal (POLITICO)
The African Union called today to urgently reinstate a United Nations-brokered deal allowing Ukraine to export millions of tons of grain that was terminated at Russia’s behest.
“The problem of grains and fertilizers concerns everyone,” Comoros President Azali Assoumani, who heads the 55-nation African Union, told Russian state newswire RIA Novosti. He was speaking in St. Petersburg, where Russian President Vladimir Putin is hosting a summit with African leaders.
Putin last week pulled out of the Black Sea Grain Initiative that had allowed Ukraine — one of the world’s breadbaskets — to export grains and oilseeds through three Ukrainian ports on the Black Sea: Odesa, Chornomorsk and Yuzhny/Pivdenny.
Russia-Africa 2023-24 Trade and Development Prospects (Russia Briefing)
The 2023 Russia-Africa summit is currently taking place in St.Petersburg, with delegations from 49 African countries (from a total of 54), 17 of which are led by their respective heads of state. Despite a dip in trade in 2021, due to shipping disruption created as a result of the Ukraine conflict and Western sanctions, Russia’s trade with continental Africa rebounded somewhat in 2022 to reach US$18 billion.
With over 330 major infrastructure and industrial facilities in Africa, Moscow has a significant historical contribution in the region. However, recent Russian investment is less than 1% of Africa’s total foreign direct investment and significantly less than European, American, and Asian competitors. The St.Peterburg event will be looking at stimulating this.
Creating a more efficient system of logistics and passenger and cargo transportation has a significant impact on the development of cooperation. Therefore, it is possible for East Africa countries such as Egypt to join the North-South International Transport Corridor (INSTC) project. That feeds directly into the Persian Gulf, heads north via Iran to the Caspian Sea and to markets in Russia, Turkiye, and Central Asia. Coordinating east African ports and logistics to the INSTC will be a major development area.
Moscow has welcomed economic relations with individual countries in Africa as well as regional-African associations (SADC-ECOWAS), greater economic integration, the formation of the African Continental Free Trade Agreement (AfCFTA), and the establishment of mutual relations in the framework of the Eurasian Economic Union (EAEU).
The cooperation of African associations with Russia, as an EAEU member state, is also being strengthened, as this also opens up markets in Armenia, Belarus, and Kazakhstan in particular. The EAEU and African Union have already signed agricultural agreements.
Africa’s commercial infrastructure is also a way to circumvent sanctions, and the banking sector, government and monetary and financial system, while safe mutual settlement mechanisms, including free from adverse external influences can help Russia. These include proposals such as a joint Russian-African Trade Bank and discontinuing the use of the US dollar and Euro in multilateral trade. Russia and Africa are also establishing a US$5 billion online trading platform to further facilitate trade.
WTO members facilitate imports, reduce trade restrictions, but food export curbs persist (WTO)
The Director-General’s mid-year report on trade-related developments shows that WTO members continued to facilitate imports and generally exercise restraint in the use of trade-restrictive measures from mid-October 2022 to mid-May 2023. However, while the number of export restrictions on food, feed and fertilizers has come down substantially, many such measures remained in place, contributing to supply uncertainty and price volatility.
Speaking at the launch of the report, DG Okonjo-Iweala said: “The fact that WTO members have been taking more steps to facilitate imports illustrates how trade is a valuable tool for pushing back against inflationary pressures.” Pointing to the introduction of export restrictions on food, feed and fertilizers since the start of the war in Ukraine in February 2022, DG Okonjo-Iweala noted that several such restrictions have been phased out.
The UN Food Systems Summit +2 Stocktaking Moment (UNFSS+2) closed on Wednesday at the Food and Agriculture Organization of the United Nations (FAO) after three days of high-level events, meetings and dialogues bringing together over 2000 participants from 180 countries, including over 20 Heads of State and Government and 125 Ministers, to explore challenges and opportunities to transform agrifood systems.
“The path is long and we need to accelerate our step,” added FAO Director-General, QU Dongyu, underscoring that the Organization is committed to supporting members along with their national pathways toward better production, better nutrition, a better environment, and a better life- leaving no one behind.
The United Nations Deputy Secretary-General, Amina Mohammed, officially closed the UNFSS+2 Stocktaking Moment by presenting Call-to-Action on behalf of the UN Secretary-General, António Guterres.
She advocated for urgent action at scale to close the implementation gap, highlighting the linkages to financing for development, debt relief, inclusion, engagement with non-state actors, and access to science, technology and innovation for all. She also outlined key priorities for further action, including establishing food system strategies across all national policies and promoting multi-stakeholder partnering.
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SA’s manufacturing sector and the golden opportunities for SMEs (Bizcommunity)
South Africa’s manufacturing sector is one of several areas of interest, identified in the National Development Plan (NDP) as an industry poised for job creation and GDP growth. Despite several hurdles having thwarted the industry’s progress over the past few years, efforts by the public and private sectors to revitalise and expand South Africa’s manufacturing capabilities, present an encouraging prospect for small- and medium-sized (SMEs).
Last year saw South Africa’s manufacturing sector being put through its paces, with the industry’s gross value showing a decline of 1.3 percentage points during the first six months of the year when compared to the same period in 2022. Persistent load shedding, input cost pressures and the Durban floods during April this year dealt deafening blows to the sector’s progress in several key performance areas.
The industry did, however, show signs of recovery during the latter part of 2022, with an almost 3 percentage point year-on-year increase in September.
For Jeremy Lang, chief investment officer at Business Partners Limited, as sectors such as manufacturing seek to follow the country’s renewed impetus towards economic recovery, a vital component of the solution lies with small businesses.
As he asserts: “Going forward, the strategic positioning of small businesses along the industry’s supply and value chains will serve to unlock the sector’s potential as a bolstered contributor to our country’s GDP, socioeconomic development and the broadening of the fiscal base.”
Recent data presented by Stats SA saw South Africa’s manufacturing sector taking its place as the second highest contributor to total turnover (25%), after trade.”Now is the ideal opportunity for local entrepreneurs to seek out and harness the opportunities that exist within the manufacturing space,” says Lang, who encourages SME owners to look into sub-sectors such as agriculture, pharmaceuticals, renewable energy, and steel.
Considerations, opportunities for South Africa’s entrenched automotive manufacturing industry (Engineering News)
South Africa’s automotive manufacturing sector has been a real success story for the country but there are several challenges and considerations that stakeholders must grapple with, as well as opportunities that can be capitalised on, as changes unfold, including a move towards electric vehicles. This was noted by speakers during Creamer Media’s webinar, titled ‘The Automotive Industry: Building on South Africa’s success and facing the challenges of the future’, and held on July 26.
National Association of Automotive Component and Allied Manufacturers executive director Renai Moothilal attributed the success of the sector thus far to the country having a long-established history of automotive production and a very sophisticated network, both from an original equipment manufacturer (OEM) perspective and the supplier base that had developed over a very long period of time.
Importantly, and supporting the strong private sector presence, there had been recognition and active involvement by various administrations of the South African government to provide serious levels of policy and incentive support, he pointed out. Therefore, Moothilal said, the country had a fairly stable supporting mechanism.
Toyota Wessels Institute for Manufacturing Studies Manufacturing Ambassador Professor Justin Barnes posited that the South African automotive industry’s opportunity lay in Africa and in creating regional value chains. He pointed out that an important area of focus for the country needed to be on increasing its domestic market, as this was tied to the number of vehicles it could export owing to rebates.
South Africa asks US for early renewal of key trade agreement (Engineering News)
South Africa asked the US government to consider an early extension of the African Growth and Opportunity Act to help stimulate investment across the continent, Trade, Industry and Competition Minister Ebrahim Patel said.
The request was made during a visit by South African officials to the US earlier this month to discuss the trade pact and finalize preparations for an AGOA forum that’s scheduled to be hosted in SA this year. An early renewal of AGOA in its current form would be preferable to a revised agreement that may take time to conclude, Patel said in an interview with the Johannesburg-based Business Day newspaper.
“If we extend AGOA largely in its current form, we can incrementally improve the terms over the next few years,” the paper cited Patel as saying. “Many African countries are keen on an early extension because it gives investors certainty to commit additional investment on the continent.”
South Africa ships cars and agricultural produce to the US under the accord. Last year, it exported $2.7 billion of goods using AGOA and the so-called Generalized System of Preferences.
IFC partners with Banking Association South Africa to boost climate finance (Engineering News)
Development finance institution the International Finance Corporation (IFC) is joining forces with local body the Banking Association South Africa (BASA) to help increase climate finance in the country and pave the way for a transition to a low-carbon economy.
Under the terms of the agreement between the IFC and BASA, IFC will provide advisory support to strengthen the climate risk assessment, mitigation and adaptation practices of South Africa’s banks and help them reduce their exposure to climate change-related risks. The partnership will also promote investment in green, climate-friendly assets, in line with the country’s National Development Plan and its commitments to the Paris Agreement.
Through the programme, the IFC aims to facilitate at least $500-million in climate investments by South African banks, and at least $300-million in climate-themed bonds issued by South African corporates, by 2027.
The country needs an estimated R1.5-trillion ($84-billion) over the next five years to transition from coal to renewable energy, reduce carbon emissions, adopt new green technologies and support affected communities.
World Bank Says Mali’s Economy Showed Signs of Resilience Despite Sanctions and Climate Shocks (World Bank)
Mali’s economy showed signs of resilience despite Economic Community of West African States (ECOWAS) sanctions, high food inflation, and parasite infestations that affected cotton production. According to the World Bank’s 2023 Economic Update for Mali, entitled “Strengthening Financial Resilience of Pastoralists to Drought,” GDP growth is estimated at 1.8%, driven by the recovery of food agriculture and the resilience of the gold and telecommunications sectors. Average annual inflation increased to 9.7% in 2022, owing primarily to rising food prices.
In terms of projections, the report notes that the outlook for 2023 is fraught with risks associated with the electoral timetable and tighter financial conditions. The rising cost of financing on the regional market, given Mali’s high gross domestic financing needs, is a significant risk that has emerged in the last 12 months.
The second chapter of the report focuses on disaster risk financing and insurance instruments designed to reduce the adverse socioeconomic impacts of climate shocks. It notes that Mali experienced at least 40 major climate shocks between 1970 and 2020 and that each year droughts are estimated to have affected about 400,000 persons and reduced crop revenues by $9.5 million. Financial resilience to drought could, however, be strengthened by establishing instruments to protect key sectors such as pastoralism and agriculture.
Douala-Bangui corridor: Truckers spend up to CFAF255,000 at checkpoints, survey reveals (Business in Cameroon)
Truckers traveling along the Douala-Bangui corridor disburse an average of CFAF64,000 and a maximum of CFAF255,000 at checkpoints along the corridor, a recent survey reveals. According to the survey published by the European Union (EU)-funded Observatory of Abnormal Practices (OPA) on the major corridors in Central Africa, these expenses average just CFAF22,941 with a maximum of CFAF126,000 on the Douala-Ndjamena corridor, which connects Cameroon and Chad.
Based on those figures, the OPA concludes: “Checks on the Douala-Bangui corridor (1,435 km) remain more costly than on the Douala-N’Djamena section (1,934 km), even though this route is shorter (400 km less).”
According to the OPA, payments made at road checks are the most abnormal practices corridor users mostly report in the Central African region.
Uganda to host a freight conference next month (The Independent Uganda)
Uganda Freight Forwarders Association (UFFA) in partnership with the International Federation of Freight Forwarders Associations (FIATA), will host the RAME2023 an international conference that brings together freight logistics stakeholders from the Region Africa and Middle East (RAME) at the Commonwealth Resort, Munyonyo, next month
RAME represents over 1,000 freight forwarders in over 30 countries in the Middle East and Africa. The three-day conference starting on August.01 will provide an opportunity for companies in the shipping business to discuss current and emerging global supply chain trends concerning resilience, adaptability, and diversity.
The conference will also provide an opportunity for Ugandan companies to participate in the heavily standardized oil and gas industry by forging partnerships with more established foreign players. Uganda, which is currently developing its oil and gas industry, hope to start production in 2024.
A strong African voice on global financial architecture reform (Mo Ibrahim Foundation)
The COVID-19 pandemic, the cost-of-living crisis fuelled by the war in Ukraine, the tightening of global financial conditions… Since the beginning of the new decade, Africa has been hit by a series of shocks that has stalled progress on the Sustainable Development Goals (SDGs), threatening to lead to a lost decade for the continent, rather than one of action.
62 million Africans were pushed into poverty in just one year after the COVID-19 outbreak, with an additional 18 million estimated to have joined their ranks by the end of 2022. Economies have been hit hard and many African countries are burdened with elevated levels of debt and insufficient fiscal space to make essential investments in critical infrastructure projects, education, and healthcare.
To respond to those challenges, the United Nations Economic Commission for Africa (ECA) created the Africa High-level Working Group on Global Financial Architecture (the Group) at the beginning of 2022.
The Group serves as a forum to develop reform proposals for the global financial architecture as well as to unify the African voice on the global stage. Many of the Group’s proposals have been echoed in a resolution passed by African Ministers at ECA’s Conference of Ministers in Addis Ababa in March 2023. Those proposals were also presented during the Africa Consultative Group meeting with the IMF Managing Director in Washington DC during the 2023 Spring Meetings of the WBG and the IMF. At the heart of those proposals are three key asks, centring on unlocking liquidity, reforming the global debt architecture, and enhancing representation for African countries in global financial institutions.
East African business body launches business, investment summit to boost trade (Xinhua)
The East African Business Council (EABC), a regional apex body of the private sector, has in collaboration with its partners launched the East African Business and Investment Summit 2023, aimed at charting out a common agenda to take trade to higher heights for increased prosperity, the EABC said in a statement on Wednesday. Themed “Private Sector-Driven Regional Integration for Increased Intra-African Trade, Investment & Economic Growth,” the summit is slated for Aug. 31 to Sept. 1 in the Ugandan capital of Kampala, said the statement.
“This summit is organized in close collaboration with all investment promotion authorities in East Africa, who will showcase investment opportunities and present viable projects ready for investment to East African, African, and international investors,” said the statement.
The hybrid Meeting of the Committee of Ministers of Justice/Attorneys General of the Southern African Development Community (SADC) was held on the 20th July 2023 in Kinshasa, Democratic Republic of Congo, to review progress made on decisions taken at its previous meeting and considered the draft legal instruments to be recommended to SADC Council of Ministers and Summit of Heads of State and Government for consideration, approval, adoption and signature.
Among the legal instruments was the Draft Amendments to Annex VII to the SADC Protocol on Trade which was also considered and recommended to the Committee of Ministers of Trade for approval and adoption. The draft amendments to Annex VII the Protocol on Trade seek to incorporate the agreed provisions on the Preferential Trade in Sugar in the SADC region such as preferential access to be established for SADC surplus sugar producing countries to markets of deficit SADC sugar producing and non-sugar producing countries (surplus to deficit trade in sugar) amongst others.
Food crisis in Africa: the high cost of imported fertilisers is adding to the problem (The Conversation)
Global fertiliser suppliers have made incredibly high profits in 2022/23 on the back of price spikes attributed to the Russia-Ukraine war. The profits of the world’s top nine producers trebled in 2022 from two years previously.
The wide gaps between fertiliser prices in the region and international fertiliser prices point to major issues within the supply chain with excess margins of some 30%-80% being earned on sales to many African countries.
High fertiliser prices undermine production, contribute to high food prices, and exacerbate food insecurity.
High prices for fertiliser inputs are squeezing African farmers who are cutting back on fertiliser use meaning low yields and supply, and high food prices. International action is therefore urgently required on fertiliser prices to improve food security in Africa.
Boosting trade with Morocco is a big Brexit benefit (Politics Home)
When it comes to post-Brexit trade opportunities, the government is right to prioritise building on the UK’s unique 800-year-old relationship with Morocco.
Morocco is well positioned not only by its proximity to the UK but as the “Gateway to Africa” to support and help catalyse UK-Africa trade, business, and commercial ties, offering both proximity and privileged access to the African market.
Importantly Morocco is a unique trading partner. In fresh food alone it produces ‘green/climate friendly agriculture’, utilises sustainable farming and produces an array of fresh products. It has a wonderful array of trade infrastructure.
Since the association agreement was signed in 2021, total trade in goods and services between the two countries has increased by 50 per cent. In 2022, the UK and Morocco did about £3.1 billion-worth of bilateral trade and the UK is using the association agreement with Morocco to boost that even further.
Minister Pandor outlines key elements ahead of 2nd Russia-Africa Summit (SAnews)
A number of key elements in areas of collaboration, including digital innovation, space science, as well as strengthening people-to-people exchange will form part of the subjects to be discussed at the second Russia-Africa Summit in St. Petersburg.
Speaking to SAnews in St. Petersburg, Department of International Relations and Cooperation (DIRCO) Minister, Dr Naledi Pandor, said that a wide spectrum of areas of partnership are a rationale for South Africa’s presence at the summit.
“We’ve also added a much stronger focus on matters of trade. All of these will be part of the subjects that we will discuss during this second summit,” Pandor told SAnews.
The Minister emphasised that it was important to mention that for the first time, it is not just Heads of State attending the summit, but there are also a number of enterprises from various African countries as well as the Continental Development Finance institutions present.
“Interestingly, we also have the brand new president of the New Development Bank or the BRICS Bank, as it is sometimes called. This will be President Dilma Rousseff’s first detailed interaction with African leaders, particularly the BRICS leaders. This (meeting comes ahead of the) BRICS summit that will occur in Johannesburg in South Africa, next month,” Pandor said.
Russia to continue to supply grain, food, fertilisers to Africa – Putin (IOL)
Russia was able to replace Ukrainian grain and would continue to supply grain and fertilisers to African countries despite sanctions, Russian President Vladimir Putin said yesterday.
“I want to give assurances that our country is capable of replacing the Ukrainian grain both on a commercial and free-of-charge basis, especially as we expect another record harvest this year,” Putin wrote in an article titled “Russia and Africa: Joining Efforts for Peace, Progress and a Successful Future” published by the Kremlin yesterday.
The Russian city of St. Petersburg will host the Russia-Africa summit from July 27–28. Putin emphasised that Russia was ready to build mutually beneficial relations with the AU, including within the framework of the Eurasian Economic Union.
DG Okonjo-Iweala underlines role of trade in transforming food systems at UN summit (WTO)
Addressing a session on trade for agri-food systems transformation via a virtual connection, DG Okonjo-Iweala emphasized that open and predictable trade is an indispensable mechanism for people to access affordable food because “one in five calories consumed around the world is traded across an international border”. Furthermore, “farm trade rules and policies shape the incentives influencing production, investment and consumption decisions at the centre of the food systems transformation,” she added.
The Director-General said trade is “a key factor” in driving development and income gains for people in poor countries and in supporting better access to nutritious food, as evidenced in the decades of trade-enabled growth up until the COVID-19 pandemic.
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R78.9m disbursed to citrus growers under the economic transformation programme (Engineering News)
Over the past three years, more than R161.3-million in funding has been approved under the Economic Transformation of Black Citrus Growers (ETBCG) Programme and R78.9-million disbursed to support black grower citrus operations, creating 78 permanent and 625 seasonal jobs in total, as well as enabling 208 ha of new trees to be planted.
Industry organisation the Citrus Growers Association (CGA) in 2019 launched the R307-million ETBCG Programme in partnership with the Jobs Fund, the Land Bank, the Department of Agriculture and Rural Development, AgriSETA, the LIMA Rural Development Foundation and FNB, said CGA CEO Justin Chadwick.
While the ETBCG Programme was launched in 2020, the Covid-19 pandemic impacted its roll-out, as well as a number of new challenges faced by the local citrus industry over the past three years, which has threatened the sustainability and profitability of farming operations. These include a major hike in farming input costs and freight rates as well as loadshedding and operational issues at ports.
Additionally, the local industry has predicted that citrus exports could grow to 260-million 15 kg cartons a year by 2032, if all role-players work together. With transformation of the industry a key priority over the next ten years, a target for black citrus growers’ contribution towards the overall 260-million cartons a year has been set at 50-million cartons a year.
inDrive launches name-your-price freight service in South Africa (Engineering News)
California-based mobility and urban services platform inDrive has launched a name-your-price freight service in South Africa, targeting small businesses and individuals. InDrive is already active as a set-your-price e-hailing service in the country.
“The [freight] service aims to deliver reliability and efficiency on last-mile, in-city routes, with same-day delivery available on demand,” says the company. inDrive.Freight’s operations have now been launched in Cape Town and Johannesburg, with a programme to expand the offering to more cities by the end of the year. inDrive.Freight promises the delivery of small parcels or large shipments of non-liquid freight, varying from 20 kg to 20 000 kg.
“At inDrive, we understand the unique logistics challenges that small businesses and individuals face,” says inDrive business representative Southern Africa Vincent Lilane. “We have introduced inDrive.Freight in South Africa to address these challenges. It is a comprehensive solution offering competitive pricing, timely delivery, and the flexibility and scalability needed in today’s fast-paced world.”
DTIC aims to improve awareness on AfCFTA through outreach programme (Engineering News)
The Department of Trade, Industry and Competition (DTIC) has embarked on provincial outreach and awareness workshops in collaboration with provincial governments, wherein it hopes to have engaged all provinces on the African Continental Free Trade Area (AfCFTA) by the end of July.
The DTIC is also developing an AfCFTA implementation plan, including the establishment of a national implementation committee and a targeted strategy for the implementation of the AfCFTA.
“The AfCFTA brings us a step closer to realising the historic vision of an integrated market in Africa. For sustainability and legitimacy, Africa’s integration must deliver shared benefits,” DTIC director-general Malebo Mabitje-Thompson said during a webinar on the operationalisation of the AfCFTA on July 25. She added that trade integration and liberalisation should be accompanied by programmes to support African industrialisation and regional value chains. “Coordinated efforts and inclusion of AfCFTA across all of government and relevant stakeholders to ensure the benefit of AfCFTA opportunities to all of South Africa’s private sector is imperative,” Mabitje-Thompson said.
She explained that, for the successful implementation of the AfCFTA, a doubling of road freight will be necessary, increasing from 201-million tonnes to 403-million tonnes. The agreement also calls for the provision of about 1.8-million trucks for bulk cargo and 248 000 trucks for container cargo by 2030. The estimated investment required for the road freight aspect amounts to about $345-billion.
SA views BRICS as a key strategic partner – Minister Ntshavheni (SAnews)
South Africa has assured its BRICS partners that it continues to view the bloc as a crucial strategic partnership through which a just, peaceful and more equitable world order can be pursued and realised.
South Africa, led by Minister in the Presidency responsible for State Security Agency, Khumbudzo Ntshavheni, today hosted a BRICS National Security Advisors meeting in Sandton, Johannesburg. Delivering the opening remarks, Minister Ntshavheni told her BRICS counterparts that state and non-state actors are hard at work in certain parts of the globe using various role players to promote their agenda whilst undermining countries’ national security.
“As an African country, we firmly believe in the need to promote peace and sustainable development as well as deepened political, economic and social relations. South Africa remains deeply committed to multilateral diplomacy, in principle and in our demonstrable actions - particularly through our close collaboration in the bloc,” the Minister said.
Foreign investors withdraw $345m from faltering Kenya economy (The East African)
Kenya lost over $345 million worth of foreign direct investment (FDI) and other investment inflows in three months as economic growth plummeted over increased political noise and unfriendly policies. The latest Central Bank of Kenya (CBK) data shows that the country’s net financial account inflows dropped by 34 percent ($345 million) to $660 million in the first quarter of this year, compared with net inflows of $1 billion in the same period in 2022. Economic growth fell from 6.2 percent to 5.3 percent, according to the Kenya National Bureau of Statistics.
Foreign investors, on the other hand, have voiced concerns over a dollar shortage in the country, difficulties in accessing short-term loans to shore up their working capitals, restrictions on capital repatriation and the high cost of doing business.
China envoy Wang Yi calls Kenya economic ties a ‘win-win’ (The East African)
China’s top diplomat Wang Yi during a visit to Kenya on Saturday praised the two countries’ economic partnership as a “win-win”, according to a statement from the Chinese authorities. Kenya and China have “become good friends with mutual trust in politics and good partners with win-win economic cooperation”, according to the statement from the Chinese embassy in Kenya.
With the most dynamic economy in East Africa, Kenya is considered by the international community as a stable democracy in a troubled region. China is the second-largest donor to Kenya after the World Bank.
China has also loaned $5 billion (4.7 billion euros) toward the most expensive infrastructure project in the country since its independence in 1963: a train line that since 2017 has connected the port city Mombasa with Naivasha, in the Rift Valley, via the capital Nairobi. ”The landmark project of the Mombasa-Nairobi Railway has completely changed the face of Kenya,” the embassy’s statement said.
Cameroon’s customs revenues went up 19.3%, to CFAF486.4bln, in H1-2023 (DGD) (Business in Cameroon)
The Directorate General of Customs, housed at the Ministry of Finance, collected CFAF486.4 billion in customs revenues between January and June 2023. The revenue is up 19.3% year-on-year compared to the CFAF 407.8 billion collected by the end of June 2022. It also exceeded, by CFAF16 billion, the CFAF470.4 billion target set for the customs administration over the period under review.
This performance was achieved in an economic context that was rather unfavorable to revenue mobilization. In detail, this context, according to the General Directorate of Customs, is notably “marked by the slowdown in world trade volume growth, the continued dismantling of tariffs following international trade agreements (EPA between Cameroon and the European Union and the AfCFTA), as well as the implementation of salutary measures to combat inflation, such as subsidies for petroleum products and tax and customs duty exemptions.”
Addis-Djibouti corridor upgrade to improve regional integration (ESI-Africa.com)
The Addis-Djibouti corridor, a vital trade route and a lifeline for Ethiopia’s 120 million people, will upgrade significantly thanks to the newly approved Horn of Africa Initiative’s Regional Economic Corridor Project. The project, endowed with a $730 million grant from the International Development Association (IDA), aims to improve regional connectivity and logistics efficiency in Ethiopia along this key trade route connecting landlocked Ethiopia to the port of Djibouti.
“Improved regional connectivity and trade are essential to unlocking Ethiopia’s economic potential,” said Ahmed Shide, Minister of Finance of the Federal Democratic Republic of Ethiopia. “This project is important to support our commitment to fostering inclusive growth and regional integration, as we are now fully focused on sustaining the growth and reaping the peace dividends,” he added.
Over 95% of Ethiopia’s import-export trade (by volume) uses the Addis-Djibouti corridor. The project aims to upgrade the road to Djibouti, including the Mieso-Dire Dawa section, which is currently in poor condition and unsuitable for growing truck traffic. This section forces road users to take a longer route through Mille, adding 146km to their journey.
Africa headed to miss own deadline on food security (The East African)
African countries are headed to miss their own target of reducing hunger through better agricultural investments. The revelations emerged on Monday at a meeting of the African Union meant to evaluate Africa’s path to towards better nutrition and eradication of extreme hunger. And it emerged just four Member States are on track to deliver key nutrition targets, just two years to the deadline agreed on it the Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods.
At the event organised by the African Union InterAfrican Bureau for Animal Resources (AU-IBAR) and the Bill and Melinda Gates Foundation at Naivasha hotel, participants were told of imminent ramifications: prolonged poverty. “It is now imperative that we prepare to account for how the livestock sector has contributed to delivering against key targets,” said Dr Nick Nwankpa, the African Union-InterAfrican Bureau for Animal Resources (AU-IBAR) Acting Director.
Malabo Declaration is supposed to end by 2025. Incidentally, it is also the mid-way point of implementation of the Livestock Development Strategy for Africa (LiDeSA), a continental vision to tap into the value of livestock as a key source of food, ending poverty. But the continent has suffered more droughts, more floods, more pest invasion and lower food production, also owing to global events such as Covid-19 and the Russian invasion of Ukraine.
“The multiplicity and increasing frequency and severity of shocks and their complex and interlocking effects demands an approach that will also strengthen resilience in feed and fodder systems,” Dr Nwankpa said. “Unfortunately, we only produce 40 per cent of the required amount thus having a deficit of 60 per cent,” he revealed.
Weather, aborted Ukraine grain deal spell doom to EA food basket (The East African)
East African economies are staring at a fresh spike in food prices and a further deterioration in inflation outlook in the wake of adverse weather conditions that have heavily impacted the region, compounded by the collapse of a crucial grain export deal between Russia and Ukraine last week.
Latest data by the United Nations Food and Agriculture Organisation (Fao) shows that Cereal production in the East African region is expected to decline by four percent to 52.8 million tonnes this year from 55 million tonnes in 2022, according to the Fao latest quarterly report on ‘Crop Prospects and Food Situation’ around the world.
The UN agency, through its quarterly report on ‘Crop Prospects and Food Situation’ around the world dated this month shows that the region faces steep grain deficit with cereal import requirements for this year standing at around 13. 68 million tonnes and 14.77 million tonnes in 2024.This signals East Africa’s huge demand for wheat, maize, rice, barley and sunflower whose global supply chain has now been disrupted by the collapse of the Russia-Ukraine Black Sea grain export agreement.
Among African Low-Income Food Deficit Countries (LIFDCs) total cereal production in 2023 is forecast at a slightly below-average level of 106.1 million tonnes largely as a result of erratic rain distribution in East Africa which has curbed harvest expectations in Kenya, Ethiopia, the Sudan, Uganda and Tanzania.
Kenya, Uganda and Tanzania face unfavourable cereal production prospects in 2023 due to adverse weather conditions, according to the report.
The Southern Africa region has seen a slowdown in economic growth over the past year as its largest economy, South Africa, confronts multiple challenges. Civil unrest, electricity crisis and natural disasters have contributed to dampen prospects for the region, which is lagging behind the others in Africa, according to the African Development Bank’s new economic report.
The 2023 Southern Africa Economic Outlook, launched on Monday 24 July, analyses the recent economic trends and developments in Southern Africa. In line with this year’s theme for the annual outlook: mobilizing private sector financing for climate and green growth in Africa, the report also explores the potential role of the private sector in financing the region’s climate action and green growth ambitions.
In 2022, the Southern Africa region’s GDP growth barely reached 2.7 percent, a level much lower than global and African averages of 3.4% and 3.8 %. Growth in the region is expected to slow down further in 2023 to 1.6%, followed by a slight improvement - 2.7% - in 2024. Weighing down the environment further is the external debt burden which is forecast to remain high across the Southern Africa region. In 2022 it stood at 48%.
Speaking during the launch, Kevin Urama, African Development Bank vice president and chief economist commended African governments for their “remarkable resilience,” in the face of recent challenges.
Quoting from the report he said financial needs for climate action in southern Africa stood at $1 trillion, with an annual requirement of $90.3 billion for 2020-2030. Average annual climate finance flows to Southern Africa stand at $6.2 billion, a mere 6.9% of what is required. Southern Africa, in addition, received the least financial flows relative to its financial needs, compared to other African regions.
“We estimate that the continent will need about $235-$250 billion annually between now and 2030 to meet investments needed under the Nationally Determined Contributions. So this leaves Africa, the African private sector and the global private sector with an investment opportunity of up to $213.4 billion annually to address climate change alone,” he said.
Africa’s regional integration realized through the implementation of the African Continental Free Trade Area (AfCFTA) is imperative to the continent’s economic growth and development, says outgoing Joe Attah-Mensah, Principal Policy Adviser at the Economic Commission for Africa (ECA).
“What many Africans aspire for is that the 55 fragmented economies on the continent become integrated into one strong, robust, diversified and resilient economy,” said Mr. Attah-Mensah, in a farewell seminar on the theme: ”Is Africa Integrating or Disintegrating? A Reflection over the last 20 years and the future”. The seminar was organized by ECA staff to mark his retirement.
In a presentation punctuated by sayings and statements by Africa’s founding leaders, Mr. Attah-Mensah stressed that an integrated Africa is underpinned by a first-class trans-boundary infrastructure, a highly educated, flexible and mobile workforce as well as highly mobile financial capital. Furthermore, sound health facilities, peace and security are vital in supporting an integrated Africa.
Mr. Attah-Mensah, called for investment in and ”strengthening of the supply chain infrastructure, such as transportation, communication, utilities and technology to support the AfCFTA.”
What next for EAC after EU-Kenya trade deal? (Monitor)
In the first part of the Economic Partnership Agreement (EPA), a pact that is looking to flung open the domestic market of Least Developed Countries (LDCs) like Uganda for the European Union (EU) countries manufactured goods, we revealed how this deal is silently disintegrating the East African Community (EAC) bloc instead of unifying it in the spirit of regional integration.
After showing her hand for all to see because of fear of attracting tariffs on mainly flower and vegetable exports to European Union (EU) countries if she doesn’t sign the Economic Partnership Agreement (EPA), Kenya has sacrificed what some have termed as “long-term success for a short term gain.”
According to continental trade and investment treaty analysts, Kenya should factor in the long term losses that the EPA will inflict on itself and the region in terms of loss of revenue, negative impact on industrialization and intra-regional trade, and on overall development.
Following thorough review of the EPA, experts conversant with trade and investment treaties as well as multilateral and bilateral negotiations from the continent (Africa) still came to a conclusion that it is not worth it for Kenya and the region to append their signature on the dotted line for as long as the agreement is in its current form.
The service sector has emerged as the driving force towards reshaping economic landscapes across the world. With 54 African countries, 1.3 billion people, and $3.4 trillion in GDP, it’s time to leverage significant opportunities for export-led growth, economic diversification, inflows of foreign direct investment (FDI) and integration into regional and global value chains.
At the Thirteenth COMESA Meeting of the Committee on Trade in Services, that kicked off today in Mombasa, Kenya, COMESA Director of Trade and Customs, Dr Christopher Onyango, remarked that trade in services is a game changer towards unlocking the potential of regional and global trade.
“The service trade has been proven to promote greater inclusiveness, particularly for female and young workers and entrepreneurs as well as micro, small and medium-sized enterprises (MSMEs). The importance of the sector has been fuelled by technological changes and its increasing role as intermediate inputs into production and delivery of other goods and services’’ he stated. “But these attributes can only be realized if services are mainstreamed in regional and national development strategies. It is evident that services are still absent in national development strategies. Such are those countries in which there exist no rules and regulations in the service sector, or in only a few select sectors and, if available, are not considerate of current developments in the sector’’ he remarked.
ECOWAS Parliament Speaker Advocates Inclusion Of Vulnerable Groups In Decision Making (Voice of Nigeria)
The Speaker of the Economic Community of West African States, ECOWAS)l Parliament, Sidie Mohammed Tunis has advocated for the inclusion of vulnerable and marginalized groups in decision making in the region. According to Dr Tunis, supporting the participation of people from vulnerable and marginalized groups in the decision-making and democratic processes of the societies was key to continued peace, security and sustainable development.
“As we all know, inequality has been one of the bases or causes of subversive acts in our region.” The marginalization of vulnerable groups from important decision-making processes, particularly ethnic or religious minorities, women and young people, provides fertile ground for conflict of violent extremism, according to Dr. Tunis. “We must convince ourselves that supporting the participation of people from vulnerable and marginalized groups in the decision-making and democratic processes of our societies is imperative for peace, security and sustainable development.”
UK-Pan Africa region development partnership summary, July 2023 (GOV.UK)
The Strategy for International Development (IDS) places development at the heart of the UK’s foreign policy. It sets out a new approach to development, anchored in patient, long-term partnerships tailored to the needs of the countries we work with, built on mutual accountability and transparency. This approach goes beyond aid and brings the combined power of the UK’s global economic, scientific, security and diplomatic strengths to our development partnerships.
By 2030, one in 5 of the world’s population will be African. The continent will play an increasingly important role in shaping global dynamics. Geostrategic competition in Africa will intensify over the next decade. This competition will also shape – and be shaped by – the actions of African actors.
Many African countries are already suffering from the long-term economic impact of the COVID-19 pandemic, which has been exacerbated by the Russian invasion of Ukraine. Almost half of sub-Saharan African countries are either in debt distress or at high risk of debt distress. Poor infrastructure, a weakly developed private sector, and barriers to trade continue to limit the potential for economic growth, investment, and job creation.
Sub-Saharan Africans are amongst the least responsible for causing climate change, but many are expected to be the most vulnerable to its impacts. Increasingly frequent and severe droughts and floods are driving new patterns of displacement and leading to greater numbers of people facing acute food insecurity outcomes. Adapting to address these trends is vital for our long-term interests.
Our support to trade and investment in Africa includes support to the AfCFTA, which will help the world’s largest trading area finalise key negotiations between member states and move the agreement into operation. The Africa Food Trade and Resilience programme is working to build the resilience of food systems across the region, which will help to address some of the priorities set out at the Dakar 2 ‘Feed Africa’ Summit in January 2024. We will also facilitate investment into Africa by supporting engagement with BII and British Investments Partnership (BIP) tools across Africa as well as supporting delivery of the UK-Africa Investment Summit in April 2024.
Arab-Africa Trade Bridges Program invests $1.5bn in food security initiative (FoodBev Media)
The Arab-Africa Trade Bridges Program (AATB) – a programme aimed at promoting and increasing trade and investment between African and Arab member countries – has launched a $1.5 billion programme to address ongoing challenges amid the global food security crisis.
During a hybrid launch event, which took place at the headquarters of the African Export-Import Bank in Cairo this month, members of the AATB’s executive committee emphasised the relevance of the new food security programme to their member countries.
With the launch of the programme, AATB hopes to leverage its expertise, resources and partnerships to implement targeted actions that address the specific food challenges faced by each member country. The programme is centred around AATB’s four pillars: Trade, Investment, Insurance and Infrastructure.
Digital Skills Provide a Development Path for Sub-Saharan Africa (Harvard Business Review)
Sub-Saharan Africa is urbanizing with massive rural-urban migration. But unlike the urbanization of the Western world, Sub-Saharan Africa is missing a critical component: industrialized urban cities. Because of this, these urban areas have become overcrowded with substandard housing and severely inadequate infrastructure to cope with unplanned population growth.
Fortunately, a new development playbook to solve this problem is already evolving, and it is anchored on the young people equipped with advanced digital skills in Sub-Saharan Africa. These young workers are digitally savvy, creative, and can lead a massive transformation — if they’re equipped and supported to unlock their potential.
They can export digital skills to Western Europe, United States, and Asia through the unbounded and unconstrained opportunities the internet has provided through “digital jobs” from music to software development to prompt engineering. But to scale this and make it a success, changes must be taken into consideration at both the policy level and in implementation in the areas of quality digital education, tax treaties and harmonization, and outsourcing-focused startups.
Growing telecom infrastructure in Africa is a huge opportunity (Bizcommunity)
One of the key findings of a market study by TeleGeography is the substantial increase in transit route capacity across the continent and the growth of intra-Africa traffic. More digital content is being serviced within Africa than ever and at a rapidly growing rate.
The expanded capacity in both subsea cable and terrestrial fibre has translated into large IP bandwidth growth, price declines in bandwidth, growth in localised data centres and, as a result, enhanced connectivity and improved user experiences.
Subsea cable, terrestrial fibre and data centre investments are making Africa the top-growing bandwidth market globally, with projected compound growth of 42% between 2022 and 2029, surpassing the global average projections of 32%. Content providers have experienced 80% compound annual growth rates in African bandwidth between 2018 and 2022.
Introducing new submarine cable systems is expected to increase capacity for coastal and landlocked countries, increase the number and size of intra-African routes, decrease transit prices along key African routes, and boost localised digital content growth.
The report also highlights that despite the historical internet traffic routes from Europe to Africa, South Africa has become a growing regional hub for intra-Africa internet capacity, with the percentage of traffic servicing sub-Saharan Africa becoming more intra-Africa than traditionally serviced from Europe.
Russia-Africa summit: Here’s what Vladmir Putin and Moscow stands to gain (The East African)
Forty-three African heads of state attended the 2019 Russia-Africa summit. They had high hopes that Russia would emerge as a new source of investment and trade for the continent. Russian President Vladimir Putin promised to double Russian trade with Africa in five years to US$40 billion.
Since then, Russian trade with the continent has contracted to US$14 billion. It is lopsided, with Russia exporting seven times as much as it imports from Africa. Additionally, 70% of this trade is concentrated in just four countries: Egypt, Algeria, Morocco and South Africa.
Russia invests very little in Africa. It accounts for 1% of the foreign direct investment that goes to the continent. Mauritius is a larger source of foreign direct investment for Africa. Additionally, Russia’s gross domestic product has shrunk in value from US$2.3 trillion in 2013 to US$1.8 trillion in 2021.
Despite these diminishing economic ties, Russia’s influence in Africa has rapidly expanded since 2019. It has deployed troops to the continent and become the dominant external partner in a handful of countries. Russian disinformation campaigns in at least 16 African countries are shaping the information environment on the continent.
Caricom pleased with African talks (Jamaica Observer)
The Caribbean Community (Caricom) Secretary General Dr Carla Barnett says there has been progress in trade and investment between Africa and the 15-member regional integration grouping following the commitment given by the leaders during their first Caricom-Africa summit in 2021.
In a virtual address to the annual Global Africa People-to-People Forum 2023 held over the last weekend, Barnett described the inaugural summit in 2001 as a “landmark occasion” allowing both regions to engage on matters of mutual interest and determine the direction for deeper cooperation.
“Caricom and Africa have made progress in trade and investment relations, with strong support from Afreximbank. A formal partnership has been established, and the Caribbean headquarters is scheduled to be opened in Barbados in a few weeks’ time,” Barnett said. She said this will allow Caricom countries to access financing for trade promotion in a range of sectors.
“The possibility of utilising the pan-African payment and settlement system as a method of intra-regional payments within the Caribbean is also being explored,” she said, adding that as a a follow-up to the summit’s discussions on strengthening trade and investment.
Global Economy on Track but Not Yet Out of the Woods (IMF)
The global economy continues to gradually recover from the pandemic and Russia’s invasion of Ukraine. In the near term, the signs of progress are undeniable. The COVID-19 health crisis is officially over, and supply-chain disruptions have returned to pre-pandemic levels. Economic activity in the first quarter of the year proved resilient, despite the challenging environment, amid surprisingly strong labor markets. Energy and food prices have come down sharply from their war-induced peaks, allowing global inflation pressures to ease faster than expected. And financial instability following the March banking turmoil remains contained thanks to forceful action by the US and Swiss authorities.
Yet many challenges still cloud the horizon, and it is too early to celebrate. Under our baseline forecast growth will slow from last year’s 3.5 percent to 3 percent this year and next, a 0.2 percentage points upgrade for 2023 from our April projections.
The slowdown is concentrated in advanced economies, where growth will fall from 2.7 percent in 2022 to 1.5 percent this year and remain subdued at 1.4 percent next year. By contrast, growth in emerging markets and developing economies is still expected to pick-up with year-on-year growth accelerating from 3.1 percent in 2022 to 4.1 percent this year and next.
This average, however, masks significant differences between countries, with emerging and developing Asia growing strongly at 5.3 percent this year, while many commodity producers will suffer from a decline in export revenues.