Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Kevin Sutherland | Bloomberg

South African trade updates:

(i) South African farmers play chicken with Trump tariffs (Reuters). AGOA grants qualifying countries duty-free access to US markets for thousands of goods and South Africa is among the main beneficiaries. South Africa’s poultry industry agreed to the deal despite the fact its exports remain blocked from entering the US market. It calculates the quota has cost about 6,500 jobs. “It was for the good of the other industries. So we kind of put on a Team South Africa hat in terms of making the rest of the AGOA benefits possible,” said Stander, who is CEO of Country Bird Holdings Ltd - one of South Africa’s top poultry producers. Now that SAPA has filed a lawsuit to force a suspension of the poultry quota, the SA government finds itself in an awkward position. If the anti-dumping tariff is reapplied, South Africa risks retaliation from Washington which could have a more far-reaching impact on the economy as a whole. [The analyst: Joe Bavier]

(ii) Qatar, South Africa trade rises by 70% post-siege (The Peninsula). The SA ambassador said that post-blockade time had seen a huge increase in bilateral trade volume largely on part of imports into Qatar from South Africa. “We have seen 70 increase from pre-blockade to post blockade.” South Africa exports fresh fruit and vegetables, agro-processed food products and other items to Qatar. At present, South Africa is seeking to introduce meat and livestock products in Qatari market as well as opening a meat processing facility here. To formalise the efforts both countries are likely to sign a bilateral animal health agreement, which will ease trade of live animals and chilled meat. Also, South Africa is seeking for Qatari investment in the oil and gas sector and expecting a prominent representation by Qatar at the upcoming International Investor Conference of the SA President Cyril Ramaphosa in Johannesburg in October, according to Moosa. “There is an intention for the President Cyril Ramaphosa to come to Qatar before the end of this year. We are confident that our president will be coming soon accompanied by government ministers, officials and South African captains of industry.”

(iii) Competition Amendment Bill: Concern over act’s security clause (IOL). The business community has raised concerns about the uncertainty created by the Competition Amendment Bill’s “national security interest” clause. The bill was debated in Parliament yesterday. One of the contentious points of the bill has been a new regime for the president to identify a list of national security interests and to establish a committee to assess whether an acquisition by a foreign firm will be adverse to national security. Busa’s economic and trade policy director, Olivier Serrao, said the bill’s national security provisions should not be seen as being exercised arbitrarily or resulting in undue delays in merger proceedings. “In Busa’s view, it is essential that these powers are used responsibly and that the government provides maximum guidance to the market on its approach to national security, how choices are made and communicating interventions,” Serrao said. [Simon Roberts: Faith in market-friendly policies and trust in big businesses hold SA back] [ pdf Competition Amendment Bill, 2018 (992 KB) ]

(iv) Top court to hear appeal on SADC ruling (Business Day). The Constitutional Court will, today, hear an appeal by the state in which it seeks to overturn a high court ruling that declared former president Jacob Zuma’s participation in the suspension of the operations of the SADC Tribunal “unlawful, irrational and unconstitutional”.

(v) @UNCTADKituyi: I agreed with Dr Siyabonga Cwele, South African telecom minister at the G20 Digital Economy Ministerial meeting in Salta Argentina: Africa needs its own “going digital” initiative. @UNCTAD will help do a diagnostic eTrade preparedness study for South Africa

(vi) Note: South Africa’s July merchandise trade figures will be released tomorrow

Zimbabwe: July trade deficit reaches $1,5bn (Daily News)

Latest figures released by the Zimbabwe Statistics Agency show that between February and July 2018, the country incurred a $1,475bn trade deficit after importing goods and services worth $3,431bn against exports of $1,957bn. The statistical agency has not provided trade data for January 2018, which would undoubtedly push the trade deficit for the year beyond the $1,5bn. The figures suggest that the deficit for the full year is set to surpass last year’s levels of around $2,5bn. In July, Zimbabwe incurred a trade deficit of $219m after importing goods and services worth $560m, against exports of $340m. Between February and July, Zimbabwe imported goods worth $1,44bn from South Africa, the country’s largest trading partner, against $917m exports. [Germany to open lines of credit for Zimbabwe]

Zambia: Tobacco exports can grow five times – RITCO (Zambia Business Times)

Zambia’s tobacco production – and in effect exports – can grow five times the current production levels, says Roland Imperial Tobacco sales and marketing director Zabu Mwenda. In an exclusive interview with the Zambian Business Times, Mwenda said that currently about two million people are directly and indirectly employed in the tobacco industry. “Considering that our neighbouring countries such as Zimbabwe do about 200 million tons per year, Malawi does about 150 million tons per year and Zambia only does about 30 million tons a year, there is room and an urgent need to put in place measures that will enable farmers grow more tobacco. It’s a cash crop that benefits the Zambian economy by bringing in the much needed forex through exports and boosts the economy in terms of revenue generation by local farmers.”

Nigeria: Rice production saves Nigeria $800m in two years – BoA (Premium Times)

The Bank of Agriculture has disclosed that the federal government has saved about $800m by encouraging local production of rice in the country. Niyi Akenzua, the Executive Director, Finance and Risk Management, said at a media briefing in Lagos ahead of the “Meet the Farmers Conference” scheduled for 10 October 10 in Lagos. The News Agency of Nigeria reports that the conference, which is organised by Crenov8 Consulting, is aimed at exposing African farmers to the opportunities in agro-export, especially to Dubai and other Middle-East countries. Mrs Bola Oyedele, a representative of Crenov8 Consulting, said Dubai imported over $100bn worth of food in 2017 from Africa and it is expected to rise to about $400bn in the next eight years.

Dr Akinwumi Adesina: Unlocking Africa’s agricultural potential to create wealth

Technologies to achieve Africa’s green revolution exist. For the most part, they are all just sitting on the shelves. The release of water efficient maize varieties now allows farmers to harvest good yields in the face of moderate drought, boosting resilience. Today, rice varieties exist that can yield 8 tons per ha. Cassava varieties exist with yields of up to 80 tons per ha. Heat tolerant and disease resistant livestock and technologies for ramping up aquaculture exist. The challenge is a lack of supportive policies to ensure that they are scaled up to reach millions of farmers. There is no reason why Africa should be spending $35bn a year importing food. All it needs to do is to harness the available technologies with the right policies and rapidly raise agricultural productivity and incomes for farmers, and assure lower food prices for consumers. [AfDB, FAO strengthen partnership]

African trade and investment: various updates on bilateral processes

  1. Two African companies prepare to list on the London Stock Exchange and a new UK-Africa FinTech Partnership is launched; Ambitious new Innovation Partnerships with African countries; PM Theresa May meets Buhari in Abuja, signs key bilateral agreements; UK announces £70m programme to create 100,000 jobs in Nigeria; Theresa May’s visit set to unlock stagnated Kenya-UK trade

  2. Business and migration to shape Merkel’s trip to West Africa; High hopes ahead of Merkel’s Nigeria visit

  3. CSIS’s Judd Devermont: The world is coming to Sub-Saharan Africa. Where is the United States?

IORA Ministerial Conference: outcomes

Ministers and heads of delegations adopted the pdf Balaclava Declaration on Women’s Economic Empowerment and Gender Equality (142 KB) . In his address, the Prime Minister, Mr Pravind Kumar Jugnauth, highlighted that gender equality is a cross cutting issue and permeates the six priority areas which are: maritime safety and security and the blue economy; trade and investment facilitation; fisheries management; disaster risk management; academic science and technology corporation; and tourism and cultural exchange. As the Chair of the IORA and Minister of Small Business Development of South Africa, Mrs Lindiwe Zulu, pointed out IORA enables Member States to share best practices and experiences to enhance the emancipation of women who still face various challenges in the society.

G20 Digital Economy Ministerial: outcomes

The meeting built on the work of the G20 Digital Economy Task Force, which met in in Buenos Aires in February and again in August. The Digital Economy Task Force was established under the 2017 German presidency, based on the decision adopted in Hangzhou in 2016 under the Chinese Presidency. Argentina selected the theme, “Building consensus for fair and sustainable development” for the 2018 G20 Leaders’ Summit and identified the future of work, infrastructure for development, and a sustainable food future as three key issues for the agenda. Extract from the pdf Salta Declaration (593 KB) : Emerging digital technologies.

“We encourage countries to enable individuals and businesses to benefit from digitalization and emerging technologies, such as 5G, Internet of Things, artificial intelligence, distributed ledger technologies, by: (i) considering appropriate policy approaches and flexible legal frameworks that create an environment that empowers entrepreneurs and fosters research, innovation and competition; (ii) promoting the application of emerging digital technologies in manufacturing, agriculture and other vital areas; and (iii) taking into account the challenges that these new technologies may pose in terms of privacy and security, among others, and the opportunities to improve quality of life and foster economic growth.

We face the challenge of capturing the benefits of digitalization to improve productivity that may lead to new business models including sharing economy, economic development, and the realization of broader opportunities for individuals and business. We highlight the importance of supporting entrepreneurs and MSMEs, noting that they employ a significant part of the labor force in G20 countries and that some have low levels of digitalization and research and innovation for new products and services. G20 countries commit to share lessons from their extensive experience and enhance partnership and cooperation in the effective use of emerging digital technologies, in particular regarding adoption and its opportunities and challenges.”

Annexures to the Salta Declaration: Paper 1 - G20 Digital Government Principles; Paper 2 - Bridging the digital gender divide; Paper 3 - Measurement of the digital economy; Paper 4: Accelerating digital infrastructure for development

Related: UNCTAD statement. ”While we are seeing hyper-digitalization in some parts of the world, we still have other parts of the world where millions have not even climbed the first rung of the digital ladder,” UNCTAD Secretary-General Mukhisa Kituyi told the meeting. “Just look at the level of international cooperation: as we talk today, only 1% of all Aid for Trade funding globally goes to ICT-related areas. Similarly, the multilateral development banks; not more than 2% of their total funding goes to ICT-related activities, and of this, only about 4% goes to policy development areas.”

Dan Ciuriak: From digital trade wars to governance solutions – the G20 and the digitally enabled economy (ICTSD)

Layered on this policy architecture challenge are the myriad regulatory concerns raised by the digital transformation. These include preservation of personal privacy, integrity of democratic processes, maintaining the tax base to fund public goods, and economic regulation to address market failure. Even the very definition of national production is at issue, given the ability to locate intangible capital anywhere internationally at the discretion of companies (e.g. to take advantage of low corporate tax regimes). Importantly for the international community, the data-driven economy promises to serve up market failure in abundance. This reflects, inter alia:

Thursday’s Quick Links:

Japan detects weakness in exports for first time in 3 years

Michael Bloomberg’s New Economy Forum (6-8 November) moves to Singapore from Beijing

Ngaire Woods: Britain’s losing trade strategy

Yongding Yu: Why is the Renminbi depreciating?

CFR’s Brad Setser: Can anyone other than the US fund a current account deficit these days?

The Grand Ethiopian Renaissance Dam: Back to the negotiating table

Africa50: Mauritius becomes 30th shareholder

Nigeria to expand visa-on-arrival counters at Lagos airport

Ethiopia and Singapore agree to tighten their relations


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