tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: CCTTFA

02 Sep 2019

The following African trade policy events began today:

The African Union’s AfCFTA trade in services signalling conference (Cape Town)

The UNECA’s ad-hoc expert group meeting to review the methodological approach to produce the AfCFTA Country Business Index (Addis Ababa)

The 6th COMESA Research Forum, on the theme Promoting intra-COMESA trade through innovation (Nairobi). Download the programme here (pdf)

The African Continental Qualifications Framework inaugural workshop (Addis Ababa)

Diarise: Second Policy Dialogue facilitating implementation of the Programme for Infrastructure Development in Africa (24-26 September, Malabo). Download the draft agenda here (pdf)

Updates from the Global Logistics Convention held last week in Kigali

  1. Abhishek Sharma, TMEA’s Senior Director for Transport, highlights consequences of unsolved logistic challenges in the EAC. The biggest impact on trade logistics is on the poor. And I will explain how. Consider that there are two containers moving from the port of Dar es Salaam. One has electronics and another has rice. Two containers coming from Dar es Salaam to Kigali. The value of goods inside the container carrying electronics will be somewhere around $150,000 to $200,000 while the value in the rice container will be around $30,000 to $40,000. Now, if there are delays or the cost of container transport increases, the total logistics cost of sending a container to Kigali is about $3,000 and if you look at the percentage of price that logistic cost will be in the final price of the commodity you find that your rice will be 10% while for electronics it will be 1% or 2%. So, for high value goods consumed by the rich part of the population the cost of logistics does not make much difference but every time there is an increase in the cost of logistics you will find that the price of the basic commodities will increase significantly. That is why it is very important that we work very hard to reduce the cost of logistics.

  2. Freight forwarders commend removal of cash deposit on containers. Regional freight forwarders on Friday penned two vital agreements with foreign associations including one removing the longstanding burden where companies were compelled to pay a cash deposit fee of $2,000, per container, before leaving the port. This came after a Memorandum of Understanding was signed between the Federation of East African Freight Forwarders Associations and the Dubai-based National Association of Freight and Logistics. Fed Seka, Chairperson of FEAFFA, who signed the deal with Alexis Perinet-Marquet, Director of Product and Business Development at Switzerland-based Viaservice SA, at the end of the third Global Logistics Convention, told Sunday Times that it is a big relief to Rwandan and regional businesses. The longstanding issue of container guarantees charges at the port, Seka said, was impeding business as the amount charged per container was too much. Now that it has been removed, he said, the cost of doing business will also reduce. The second MoU signed on Friday was between FEAFFA and the Ethiopian Freight Forwarders and Shipping Agents (EFFSAA), to provide a framework of cooperation so as to, among others, lobby for a favorable business environment within the two regions.

  3. TradeMark East Africa, FEAFFA sign $3.5m deal. The four-year EAC Logistics Sector Skills Enhancement Program funded by the United States Agency for International Development (USAID) through TradeMark East Africa, and implemented by FEAFFA; will address existing skills gaps in the region. FEAFFA president Fred Seka said the funding will facilitate introduction of a higher-level qualification that will build on the success of the certificate program, such as exposing practitioners to global practices and position them as global logisticians.

  4. CNBC Africa interview with Dieudonne Dukundane (Executive Secretary of the Central Corridor Transit Transport Facilitation Agency)

South Africa: Imperial Logistics seeks partner for African freight growth (Bloomberg)

Imperial Logistics Ltd. is looking to expand into air and sea transportation as the Africa-focused logistics group offers more services to multinationals with sales on the continent. The Johannesburg-based company delivers goods for the likes of U.K. drugmaker GlaxoSmithKline Plc and Dutch brewer Heineken NV mainly via land routes to countries in sub-Saharan Africa. Now, it wants to add the ability to pick up products from manufacturing sites in Asia to complete the supply chain. The lack of freight operations is “leaving that margin on the table,” Chief Executive Officer Mohammed Akoojee said in a phone interview on Tuesday. Options include an acquisition, a joint venture or integrating with a third party, he said.

South Africa’s Naspers may lead $55m round in Indian logistics startup, ElasticRun (Economic Times)

Logistics and distribution startup ElasticRun is in talks to raise $50-55m, led by South African internet and media group Naspers, valuing the company at $250m, multiple people aware of the matter told ET. Pune-based ElasticRun is an asset-light transportation network that caters to industries including consumer goods, online retail, manufacturing, automotive and hospitality. The company, which is based on the shared economy concept, aggregates spare logistics infrastructure capacity from businesses like kirana (corner) stores, local couriers, and small and medium businesses to fulfill customer orders. “Naspers believes that this model is the most capital efficient way to build a scalable technology logistics network in India. The intent for Naspers is to double down on the investment in the next eight to twelve months,” said one person directly aware of the deal.

Leading vehicle tracking and telematics provider, Ctrack, has joined forces with to create the Ctrack Logistics Barometer, an economic indicator and performance gauge of the South African logistics and supply chain industries. An industry first, the monthly Ctrack Logistics Barometer is an accurate co-incident indicator of the state of the South African economy, particularly in terms of the goods economy. The number of heavy trucks that passed through the Tugela toll gate increased 3,6% in July compared to the same month a year ago. Heavy truck volumes on the N4 and N1 freeways recorded 6% comparative growth during the month. Rail freight volumes, which were primarily comprised of bulk commodities, recorded 3,9% growth in July. The country’s pipeline volumes grew 2,8% for the quarter to July 2019, compared to the same period in 2018. Sea freight saw a decline of -1,1% in volumes for the three months to July 2019 compared to a year ago, while air freight slipped -0.6% over the same period. In Ctrack’s view, both transport modes are feeling the impact of a slowing world economy. Incidentally, exported container traffic is down -11,8% in the last three months versus the same period a year ago.

New-vehicle sales continue to decline; exports set new record. South Africa’s top exporters in August: Volkswagen Group South Africa (15 659), Mercedes-Benz South Africa (8 869), Ford Motor Company of Southern Africa (7 032).

South Africa: Joint ministerial statement on the ongoing spate of violence in the road, freight and logistic sector (GCIS)

The Ministers of Employment and Labour, Police, Transport and Home Affairs condemned the ongoing violence and agreed that it is nothing but economic sabotage threatening the economic viability of the SADC region. The meeting emphasised that the acts of sabotage are spearheaded by criminal elements that are responsible for the blockages, burning of trucks and assets, as well as the intimidation and killing of truck drivers in the sector. The outcome of these discussions are as follows: Law enforcement will ensure that the authority of the state is not undermined and increase visibility in violent hotspots; The Ministers agreed that through the Department of International Relations and Cooperation, regional counterparts should be engaged to address this matter; There will be continuous joint inspections taking place in all provinces to ensure compliance in the sector; The task team has agreed to develop a clear action plan and to provide regular updates on the progress made to the joint inter-ministerial task team.

Africa has it all! OSBP as an instrument to trade facilitation (AU-PIDA)

To strengthen the development and operations of One Stop Border Post (OSBP), in each REC, ‘‘training of trainers (ToT) and data collection seminar for RECs’’ took place in Kigali from 29-31 July 2019. The objective of the seminar was for the REC participants to share knowledge and experiences in the development and operations of OSBPs. The seminar was co-sponsored by AUDA-NEPAD and JICA, and hosted by the EAC. REC participants were trained on the use of the African Infrastructure Database (AID) as a monitoring tool for infrastructure development in the continent. Hence in order to keep the database up to date, the delegates were requested to populate the data base with updates. This also acted as, a practical training in the use the facilities, ‘Virtual PIDA information Centre’ and AID.

Tanzania: Multi-sector taskforce set to spur ease of doing business (IPPMedia)

The government is to establish a multi-sector taskforce to address new businesses challenges and facilitate the ease of doing business in the country. Minister for Trade and Industry Innocent Bashungwa revealed this over the weekend at a breakfast meeting organized by the Confederation of Tanzania Industries. The taskforce will be dealing with handling on-the-spot challenges as well as offer advice on various issues related to doing business in the country. The taskforce according to the minister will include officials from key institutions involved in day to day facilitation of ease of doing business namely the Tanzania Revenue Authority, Tanzania Bureau of Standards, and umbrella bodies of the private sector such as CTI and the Tanzania Private Sector Foundation. “Our aim is create strong operational systems which will help us reach the goal of industrialization we are pursuing, and specifically for government institutions we want to see them facilitating business rather than frustrating it,” he said. During the meeting, participants lamented the presence of counterfeit goods in the market which hurts competition, insisting on the need for immediate solutions. CTI First Vice President Paul Makanza said the manufacturing sector was ready to work with the government in combating counterfeits as they have a massive impact on business. This shall also help to ensure the dream of making Tanzania an industrialized economy becomes a reality, he said. The manufacturing sector which contributes about 8.1% of the GDP, is growing at a rate of 8.3% and is major target of the campaign for ease of doing business in the country, he said.

@Trade_Kenya: Kenya Trade Remedies Agency has identified textile industry, building and construction, poultry and paper industry as sectors which need countervailing and safeguard measures in accordance with WTO regulations to save them from imminent collapse.

Peter Fabricius: Southern African states strategise over post-Brexit deals (Daily Maverick)

Trade officials from South Africa, five other Southern African countries and the UK are due to meet this week in Botswana to try to finalise a free trade agreement before Britain’s expected departure from the European Union on 31 October 2019. If they fail to reach a deal, some exporters from this region, including car manufacturers, will suffer when the UK drops out of the EU, either with or without its own Brexit deal with Brussels. South Africa’s chief trade negotiator, Ambassador Xavier Carim, is however optimistic that South Africa, Botswana, Namibia, eSwatini, Lesotho and Mozambique will secure a deal with the UK this week. At most he suggests there might be a few loose ends left to be tied up later at a higher level.

New UNCTAD publications:

  1. A special issue on Special Economic Zones (Transnational Corporations, Volume 26, 2019, Number 2). Using special economic zones to facilitate development - policy implications; SEZs and economic transformation: towards a developmental approach; Change and continuity in special economic zones: a reassessment and lessons from China; Are special economic zones in emerging countries a catalyst for the growth of surrounding areas?; Structural transformation through free trade zones: the case of Shanghai; The success and failure of Russian SEZs: some policy lessons; Special economic zones: methodological issues and definition by François Bost

  2. International classification of Non-tariff Measures – 2019 version. To address the growing complexities of international trade, the MAST group, other experts and government officials refined the 2012 version from 2015–2018. The group revised existing chapters A to I and chapter P and worked on the definition and taxonomy of the classification for chapters J to O, which lacked a disaggregated taxonomy. The MAST group created six open working groups to address the following areas: