Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: AngloGold Ashanti

JETRO’s 2018 survey on business conditions of Japanese-affiliated firms in Africa: Chinese companies emerge as top competitors for the first time (JETRO)

Regarding cooperation with third country companies, South Africa, India and France were promising. As a regional base, South Africa is attractive because of the know-how and market networks accumulated by local companies have a head start in regional development. It was suggested that India’s appeal lay not only in its excellent strategy in the African market, where there is much affinity for the country, but also in the fact that Japanese companies could launch operations in Africa utilizing their Indian bases. For France, expectations were heard regarding the potential for cooperation in French-speaking African countries.

Chinese companies emerged in the top ranks as competition for the first time in the past four surveys. The ratio responding that they compete with Chinese companies increased from 3.7% in 2007 to 22.9% in 2018 (pdf). More than 40% of companies, when asked about China and its strengthened economic relations with Africa, responded that competition has intensified and is having an effect on their own companies. On the other hand, about 20% of respondents answered that “the situation is bringing about business opportunities and benefits,” with comments including, “We can utilize infrastructure developed by China.”

Nigeria’s Q4 2018 foreign trade in goods (NBS)

During the fourth quarter of 2018, Nigeria’s total merchandise trade stood at N8,606.0bn. Compared to its value of N9,066.9bn recorded in the third quarter, total trade in Q4 2018 was lower by N460.96bn, or 5.1%. The total export component of this trade was recorded at N5,023.7bn, representing an increase of 3.5% over Q3 2018, and 28.5% over Q4 2017. The import component stood at N3,582.3bn in Q4 2018 showing a drop of N631.6bn, or 15.0%, compared to Q3 2018, but an increase of 69.6% when compared with the corresponding quarter in 2017. The increase in export value and decrease in import value (relative to Q3 2018) resulted in a favourable trade balance of N1441.0bn, or 125.5%, over the preceding quarter. By year end 2018, the country recorded a total trade value of N32.264.7bn, representing a 39.3% increase over the corresponding period in 2017. The volume of total merchandise trade in 2018 was the highest recorded since 2014, nearly double pre-recession levels

Zimbabwe-Botswana in diamond deal (Bulawayo24)

Zimbabwe has struck a deal with Botswana to start processing its diamonds at the world-renowned Diamond Trading Company in Gaborone, in a move that is expected to see the country get the maximum possible value from its precious stones. The diamond deal was one of the agreements sealed during the high-level Zimbabwe-Botswana Bi-National Commission summit held in Harare last week. Implementation of the deal will start immediately, with diamond experts from DTC — which is regarded as the world’s most sophisticated diamond sorting and valuing hub — expected in the country this month. Through the bilateral arrangement, Zimbabwe will ship its diamonds to Botswana for processing, cleaning and polishing before they are placed on the market. The MoU for cooperation in geology, mining and metallurgy signed between the two countries provides the bilateral pillars to support the deal. [Botswana credit line to Zimbabwe unpacked]

Zim-bound truckers stuck at Beitbridge after duty hike (NewsDay)

Several Zimbabwe-bound truckers are parked on the South African side of the Beitbridge Border Post as importers ponder their next move following a sharp increase in excise duty by government. The new duties are likely to see an upsurge in fraudulent documentations as importers try to cheat their way out. A shipping agent yesterday said a lot of importers had not anticipated the steep adjustment of duty after government finally conceded the surrogate bond currency was not at par with the United States dollar. “Many drivers have been on the South African side since Friday (last week) when duties were adjusted. Importers are running around to raise duties required now,” the shipping agent said. “We have not been receiving many documents and some are contemplating returning the goods to manufacturers and study the market.” Customs and excise duties shot up threefold to the bond note value last Friday following government’s gazetting of Statutory Instrument 32 of 2019, ushering in the new currency, the real time gross settlement dollar.

South Africa-Eswatini bilateral relations: update (GCIS)

The two leaders [President Cyril Ramaphosa, King Mswati III] directed the ministers of international relations and cooperation in the two countries to convene the Joint Bilateral Commission on Cooperation that oversees the implementation of signed agreements between South Africa and eSwatini. They further directed that ministers should ensure that the issue of congestion at border posts and other outstanding issues are attended to. [SA signs 21 bilateral agreements with eSwatini]

A flood of Chinese screws, nuts and bolts has hit South Africa: now government may strike back (Business Insider SA)

The government has confirmed that a surge in Chinese imports of bolts, nuts and screws is inflicting serious injury on local producers. After launching an investigation last year, the International Trade Administration Commission of South Africa is now satisfied that imports of iron and steel Chinese fasteners is posing a real problem. In a notice in the government gazette on Friday, Itac – the government body responsible for import and export control – says there is enough evidence of a significant sharp surge in imports, and that it is causing serious harm to local producers. Next, the commission will decide whether a “safeguard” is needed.

SA’s chicken sector could hatch 30 000 jobs: if government bans imports (IOL)

That is according to the SA Poultry Association, which believes the scrapping of imports would end the crisis in the local chicken industry. Izaak Breitenbach, general manager of Sapa’s broiler organisation, said statistics showed chicken imports reached a record high last year. “Chicken imports totalled 538434 tons, up from the previous high of 528108 tons imported in 2016. Every ton of imports represents South African jobs lost or not created. We have worked out that we could create 30000 jobs by replacing imports, which were worth R6bn last year.” Breitenbach said Sapa could not understand why the government had allowed the wholesale “dumping” of imported chicken in the country, when South Africa ranked among the top producers of chicken in terms of cost and quality. He referred to the Bureau for Food and Agricultural Policy report, which was released last week. The report “reflected the competitiveness of the South African broiler industry”. “The report showed that we were the fifth most competitive producer of poultry in the world. The chicken industry in countries that ranked higher than us, like the US and Brazil, were subsidised by their respective governments. They receive subsidies for maize and soya feed in those countries; after all, feed represents 70% of the input cost to raise chicken. South Africa is a semi-desert country. Therefore, it is more expensive to produce maize and soya, which affects production costs.”

COMESA to develop a regional code on anti-corruption compliance (COMESA)

COMESA will soon develop a Regional Model Code on Anti-Corruption Compliance to help enterprises in the region improve their business environment. The initiative is part of the activities under the COMESA Business Council Integrity Project which is being implemented in partnership with the Center for International Private Enterprise. As part of this initiative, the COMESA Business Council has rolled out an anti-corruption training programme across COMESA Member States under the Business Integrity Project. So far, trainings have been conducted in Ethiopia, Rwanda and Mauritius targeting the private sector. Zambia’s training took place on 27-28 February, with 60 businesses participating.

Money laundering listing worries Business Botswana (Mmegi)

Business Botswana fears the recent placement of Botswana on a high-risk list by the Financial Action Task Force will affect the ease of doing business in the country. Business Botswana is the country’s largest private sector lobby group comprising major corporations and commercial entities. BB president Gobusamang Keebine said the country’s listing implied that legislation dealing with fraud, corruption and money laundering was weak. “The impact on the country’s economy could be relatively wide as it is linked with the international financial system. The private sector does not know how it will unfold, but the response must be integrated and comprehensive involving all stakeholders.”

Lake Victoria Basin: Uganda hands over chairmanship to Rwanda (EAC)

Handing the instruments of chairmanship, Alfred Okot Okidi, the Permanent Secretary, Ministry of Water and Environment, Uganda, outlined to participating delegates to JRPSC, the key achievements registered during his chairmanship. These included, but not limited to, successful completion of two mega flagship projects – the Lake Victoria Water Sanitation Project phase two and the Lake Victoria Environmental Management Project. The incoming chairperson, Fatina Mukarubibi, the Permanent Secretary, Ministry of Environment, Rwanda, commended the good leadership of the outgoing chairperson and committed to keep the pace set by members of JRPSC and LVBC—the latter is the implementer of the decisions and directives of the former. Mukarubibi called for adoption of innovation, effective regional coordination and working extra harder by EAC Partner States as a way of unlocking existent development challenges - climate change, water hyacinth, among others.

Sezibera on Uganda tensions, SA ties and ‘good’ relations with DRC (New Times)

The New Times’ Collins Mwai and James Munyaneza held an exclusive interview with Foreign affairs minister and Government Spokesperson, Dr Richard Sezibera, during which he addressed a wide-range of issues, from troubled bilateral ties with Uganda, Rwanda’s chairmanship of the East African Community, to Kigali’s relations with the new leadership in DR Congo. He also addressed security challenges in light of the recent UN Experts report and military incursions on Rwandan territory, and the ongoing African Union reform effort.

Annual Survey of Mining Companies, 2018 (Fraser Institute)

Nevada is the most attractive jurisdiction in the world for mining investment, followed by Western Australia and the Canadian province of Saskatchewan, according to the Annual Survey of Mining Companies released by the Fraser Institute, an independent, non-partisan Canadian policy think-tank. This year’s survey of mining executives ranks 83 jurisdictions around the world based on their geologic attractiveness for minerals and metals and the extent that government policies encourage or deter exploration and investment. Overall, investment attractiveness improved in most regions around the world.

The median score for Africa on policy factors (PPI) increased this year (pdf). This was also the case for the region’s median investment attractiveness score. In terms of overall investment attractiveness, as a region, Africa ranks as the second least attractive jurisdiction for investment. Two African countries—the DRC (82) and Zimbabwe (76) —ranked in the bottom 10 of the survey rankings this year based on policy. Zimbabwe was also amongst the bottom 10 in the previous six years on the PPI. Ethiopia was the only African jurisdiction in the global bottom 10 based on its overall investment attractiveness. Botswana is again the highest ranked jurisdiction in Africa on policy, ranking 12th (of 83) in 2018, after ranking 21st (of 91) in 2017. Botswana’s increase in its PPI score this year reflects decreased concern over uncertainty concerning protected areas (-24 points), trade barriers (-20 points), and political stability (-18 points). Namibia is the second most attractive jurisdiction when only policies are considered, ranking 36th (of 83) this year. Four other African countries—South Africa, Tanzania, Zambia and Zimbabwe—experienced notable increases in their PPI scores this year.

India: Cash subsidies to now directly reach farm exporters’ bank accounts (Hindustan Times)

The government has decided to directly transfer cash subsidies into bank accounts of farm produce exporters, in an attempt to make Indian agricultural produce globally competitive and boost exports of branded farm products, officials with direct knowledge of the matter said on condition of anonymity. The scheme came into effect on 1 March and will be valid till 31 March 2020. Depending on the response, it could be extended, the officials added.


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