News
tralac’s Daily News Selection
Updates on African air traffic, cargo (IATA)
African airlines’ traffic soared 9.9% in June. Capacity rose 7.1%, and load factor jumped 1.7 percentage points to 64.3%, although this still was the lowest among regions. Conditions in the region’s two largest economies have continued to diverge, with business confidence in Nigeria rising sharply in recent months, while South Africa’s economy fell into recession in the first quarter. African carriers had the fastest growth in year-on-year freight volumes, up 31.6% in June 2017 and a capacity increase of 7.6%. This contributed to freight demand growing 25.9% in the first half of 2017 – the fastest of all regions. Demand has been boosted by very strong growth on the trade lanes to and from Asia which have increased by nearly 60% in the first five months of 2017. Capacity grew 11.2% in the first half of the year. Seasonally adjusted growth has levelled off in recent months; however growth is set to remain in double digits for the remainder of 2017.
TFTA update (Xinhua)
COMESA Secretary General Sindiso Ngwenya said the remaining five countries that are yet to ratify the agreement have made tremendous progress toward domesticating the deal. In addition, two African states have also expressed interest in joining the economic bloc. “By the end of the year, Somalia and Tunisia will also come on board to join the Tripartite Free Trade Area,” Ngwenya said. Somalia also plans to resume its membership in COMESA, which it lost due to the outbreak of civil war. “Now that stability has begun to return to Somalia, the Horn of Africa nation will become a member of COMESA again during the COMESA Heads of State and Government Summit to be held in October,” Ngwenya said.
Tarah Shaanika: African countries must even out trade to promote integration (Southern Times)
The impounding of over 400 Namibian, Tanzanian, South African and Congolese trucks by Zambian authorities from February to July 2017 has raised serious questions on two important matters confronting Africa, namely; (i) The need to protect our natural resources with a view to generate maximum commercial benefits from such resources. (ii) The importance of facilitating trade within the continent and with the outside world, in a manner that creates maximum ease of doing business and promotes genuine regional and continental economic integration.
The ease of movement of goods and people remain the most important ingredient for a genuine regional and continental economic integration. Africa needs to trade with itself as much as it trades with the outside world. But intra-Africa trade will be difficult to increase until our governments demolish their trade restrictions behaviours. We cannot want to create an integrated market within the continent but still act unilaterally on business and especially trade matters. We can still protect our natural resources and achieve local value addition without creating unnecessary and self-harming barriers to trade. What happened in Zambia should never be allowed to happen anywhere else in the future. Africa must act as one if it wants to be one. [Shaanika is CEO of the Namibia Chamber of Commerce and Industry], [SADC integration under threat as Botswana impounds Zambian trucks]
Kenya exports to Dar drop 34% as standoff persists (Business Daily)
Kenya’s exports to Tanzania have dropped by 34% in the first five months of the year raising concerns over negative impacts of the long-running trade standoff. Exports to Tanzania plunged by Sh4.35bn to Sh8.2bn in the period to May compared to Sh12.55bn recorded in similar period last year, shows data released on Friday by the Kenya National Bureau of Statistics. Tanzania has been Kenya’s second largest market in the region after Uganda, providing outlet for a range of products that include palm oil, soap, medical drugs, cooking fats, iron sheets, sugar confectionery, and margarine. According to the KNBS data, exports to Uganda have continued to grow, firming up the country’s position as the single largest destination for Kenya’s manufactured goods. [For the Jan-May data: see Table 13(a): Major destinations of domestic exports]
Kenya, Tanzania strike deal on wheat and gas imports (Daily Nation)
According to a joint communique issued by the Kenya’s Ministry of Trade, the Tanzanian products had been prevented from entering Kenya due to a number of administrative issues. “Tanzanian LPG and wheat should flow without restrictions to Kenya with immediate effect,” the ministry said on Friday. Kenya’s Trade principal secretary Chris Kiptoo said that regarding LPG imports into Kenya, the delay in the implementation of the directive issued on July 28 to allow free flow of LPG from Tanzania was due to an administrative challenge. He added that Tanzanian wheat imports were restricted from entering Kenya due to an existing East African Community legal provision. “Therefore, the 26 trucks currently stopped at the border should be released immediately since the legal lacuna has been resolved,” Kiptoo said.
Anzetse Were: Ride on imports to grow domestic industrial base (Business Daily)
Kenya is an import economy – imports just about everything from garlic and oranges to construction material and heavy industrial machinery. The general view, which I largely accept, is that an import economy constrains economic growth and development due to several reasons. The first is that an import economy dampens the ability of local manufacturing to meet the needs of the local market: instead foreign nations meet the country’s needs. As a result, imports lock out local manufacturers from benefitting from domestic demand. Secondly, an import economy essentially creates a situation where domestic demand generates jobs and income for foreign countries. As a result, local job creation is muted because the market has been captured by foreign entities. That said, since we are importers it is important to find means through which the situation can be leveraged for economic growth, as there are some benefits to the status quo.
Fears of sugar mills collapse as Kenya opens import doors (Business Daily)
The recent opening of the duty free sugar import window could be the final nail in the coffin of local millers. The May 2017 gazette that permitted cheaper imports without restrictions on the quantity or on specific importers has now sent shockwaves to local industries as it emerges that several sugar shiploads are headed to Mombasa port this month alone. Next month, the quota management for European Union sugar production will end, leaving Kenya - which now accepts imports from outside the Comesa markets - further exposed to more cheap sugar. Millers that are old, inefficient, debt-ridden and facing sugarcane shortage have been depending on handouts doled out occasionally by the government to sustain their operations as they await privatisation, which has been pending since 2014.
Kenya to build high speed expressway to boost Eastern African trade (New Times)
Kenya plans to build a high speed expressway to boost trade in the Eastern Africa region, officials said on Saturday. Kenya National Highway Authority Director General Peter Mundinia said that the 473km expressway will vastly improve the connectivity, efficiency and safety of road transport between Nairobi and the country’s main seaport of Mombasa. “It will serve as a central part of Kenya’s national transport system, helping to promote trade and development in Kenya and further into Uganda, Rwanda and Democratic Republic of the Congo,” Mundinia said in a statement released in Nairobi. The road will be completed in ten sections in the next six years.
World Poverty Clock data: Kenya trails Ethiopia, Tanzania (Business Daily)
Kenya’s economy is lifting only 30 people out of extreme poverty every hour, making it a poor performer compared to neighbouring Ethiopia where 300 people get out of the debilitating condition per hour. Vienna-based World Poverty Clock says 11 million Kenyans are living below the $1.90 (Sh197) per day extreme poverty threshold and accounting for 22.7% of the national population now estimated to stand at 48.6 million. Kenya also trails Tanzania where 66 people are escaping extreme impoverishment every hour.
Uganda, Tanzania start work on construction of $3.5bn oil pipeline (Reuters)
The leaders of Tanzania and Uganda laid a foundation stone on Saturday for the construction of a $3.55 billion-crude export pipeline that would pump Ugandan oil for international markets. The 1,445 km-project - set for completion by 2020 - will stretch from landlocked Uganda’s western region, where crude reserves were discovered in 2006, to Tanzania’s Indian Ocean seaport of Tanga. The project will become “the longest electrically heated crude oil pipeline in the world,” said Guy Maurice, Senior Vice President of Africa at Total Exploration and Production. Total is one of the owners of Ugandan oilfields, alongside China’s Cnooc and Britain’s Tullow Oil.
‘Nigeria must now localise its industrial strategies’ (BusinessDay)
Tony Ejinkeonye is the president of Abuja Chamber of Commerce and Industry and national vice-president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA). In this interview with BusinessDay’s Harrison Edeh, the business leader gives his thought on viable economic models that can support Nigeria’s industrialisation and revenue diversification.
Nigeria introduces new cabotage policy (Premium Times)
The Director-General of NIMASA, Dakuku Peterside, said that with the NCCS regime, NIMASA would no longer consider applications for grant of waiver on manning for prescribed categories of officers in vessels engaged in cabotage trade. “The era of foreigners taking over jobs that Nigerians are qualified for in the maritime sector is over. “The NCCS will point a new direction to our cabotage regime as the agency will no longer consider application for grant of waiver on manning requirements for vessels engaged in coastal trade. “This is with regards to 2nd officer, 2nd engineer, 2nd mate, down to able seamen, ratings and stewards,” he said.
Ghana: GUTA not satisfied with mid-year budget review (GhanaWeb)
The Ghana Union of Traders Association (GUTA) has expressed dissatisfaction with the mid-year budget review presented at Parliament on Monday, by Finance Minister, Mr Ken Ofori-Atta. GUTA said the budget failed to capture policies needed to flush out foreign illegal traders in the retail industry, one of the key challenges facing domestic traders. Most of these foreigners, he noted, acted under the mask of the ECOWAS and other international protocols on the free movement of goods and people, which was wrong, as they “fail to obey trade laws governing our state”. [Ghana’s second National Policy Summit on trade and industry will take place on 14-15 August]
India revises draft plan on trade facilitation for services (Mint)
India has moderated the level of ambition in its proposal on trade facilitation for services at the WTO by informing its counterparts that the proposed TFS agreement will only apply to the existing commitments scheduled under the General Agreement on Trade in Services, according to the latest proposal reviewed by Mint. After facing headwinds from both developing countries, including allies such as South Africa, as well as many industrialized countries on the earlier TFS proposal, India has now floated a revised draft proposal which is largely moderated so that it remains as a bargaining chip during the current negotiations on the domestic regulation barriers in services, according to a trade official who asked not to be quoted. In the 18-page restricted job document issued on 27 July, India has maintained that it is “in the spirit of constructive engagement.”
India caps toor daal imports to 2 lakh MT per annum (Economic Times)
In a move to shore up domestic prices of pigeon pea (toor daal) amid high production, the government on Saturday capped its import at two lakh tonnes a year. “The restriction will not apply to government’s import commitments under any bilateral/regional agreement,” Directorate General of Foreign Trade said in a notification. India is world’s largest importer of lentils and buys pigeon pea from Tanzania, Mozambique, Myanmar and Malawi. Last year, India signed long-term contracts with various countries for import of pulses to augment domestic availability of pulses in India and thereby stabilise its prices.
Economic Survey of Latin America and the Caribbean 2017 (UN)
The Economic Survey of Latin America and the Caribbean 2017 foresees that, after two years of contraction, nearly all countries in the region will experience, on average, 1.1% positive growth rates in 2017 – except for Venezuela, whose GDP is seen falling -7.2%; and Saint Lucia and Suriname, which is forecast to contract -0.2%. According to the report, as in prior years, different growth dynamics are projected among countries and sub-regions. While the GDP of South America is expected to grow 0.6% this year, the economies of Central America and Mexico are seen expanding 2.5% on average, thanks to an increase in remittances income and improved growth expectations for its main trading partner, the United States. Meanwhile, 1.2% growth is forecast for English- and Dutch-speaking Caribbean economies, following a -0.8% contraction in 2016.
