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Building capacity to help Africa trade better

tralac’s Daily News Selection

News

tralac’s Daily News Selection

tralac’s Daily News Selection

Rwanda to scrap visa fees for over 90 countries (New Times)

Rwanda is considering scrapping visa fees for citizens of the Commonwealth, as well as the African Union and La Francophonie member countries, President Paul Kagame has announced. President Paul Kagame made the announcement yesterday at the International School for Government at King’s College in London, while speaking about Rwanda’s transformation journey. The conversation was moderated by Alexander Downer, the Executive Chair of the institution. The President emphasised Rwanda’s commitment to trade with the rest of the world. “We are soon considering exempting citizens of the Commonwealth, as well as the African Union and the Francophonie, from paying visa fees when entering Rwanda,” he said. The move is expected to ease access to Rwanda for a significant section of the international community. Commonwealth has 53 members while Francophonie has 54 member states across the world. To date, only 17 African countries were exempt from paying visa fees.

The Eco and the CFA franc: four weddings and a funeral (The Africa Report)

Economist Kako Nubukpo believes that “when someone pretends to die, we have to pretend to bury them” and envisions four possible scenarios of how the Eco’s replacement of the CFA franc could play out. They are:

  • The Eco as simple avatar of the CFA franc
  • An Eco based on real convergence: GDP per inhabitant
  • The Eco-naira
  • The Eco, a common, but not single, currency.

South Africa: SARS targets illicit traders (SANews)

SARS Commissioner Edward Kieswetter has committed the revenue collector to work closely with other government agencies to stamp out illicit trading plaguing various sectors. “The losses in tax revenue and the negative impact on our domestic economy affects industries, erodes employment opportunities and generally denies the most vulnerable in society the social and economic wellbeing they deserve,” said Kieswetter on Thursday. SARS, he said, has found that importers and exporters in these sectors are using various ways to avoid paying the import/export duties. Under-declaration of customs value in this sector has increased from R5.2bn in 2014 to R8.52bn in 2018, with the under-declared customs value in 2017 and 2018 representing 34% and 35% of the declared customs value respectively.

The revenue collector said some of the cases of non-compliance that customs has come across recently in this area include declaring complete garments at values as low as 0.02 US cents; excess cargo; fictitious importers’ addresses and misclassification of goods. In one instance, more than 80% of a container was not declared. SARS forms part of an inter-agency working group with the Department of Trade and Industry, and National Treasury, focusing on the clothing, textile, leather and footwear industry.

South Africa: Cement imports accelerate (Moneyweb)

Cement imports into the South African market are accelerating. This is as local producers scurry to finalise applications to the International Trade Administration Commission for the imposition of tariff protection, and to the Department of Trade and Industry for the designation of cement. The designation of cement will make it mandatory for local cement to be used in all government contracts. David Metelerkamp, a senior economist at construction market intelligence firm Industry Insight, says cement imports during the first 11 months of last year increased 7.6% year on year to 971 623 tons after having escalated 84% year on year in 2018. The volume of imports has remained at a very elevated level and is even higher than the surge seen in 2018, he says, while the currency has remained relatively unchanged.

Metelerkamp says imports of cement clinker increased by 137% in the first 11 months of last year to 210 485 tons. The origin of these imports has changed from mainly Vietnam in 2017 to the United Arab Emirates and Saudi Arabia in 2018 and 2019. He adds that cement producers in Pakistan reported a 22% year on year increase in export volumes during the second half of 2019 to 4.38 million tons compared with an increase of just 3.5% in domestic consumption.

Metelerkamp says there was a notable increase towards the end of last year in the number of proposals for the construction of new cement plants in Pakistan. “After being hit by tariffs imposed by South Africa on Pakistan cement imports, Pakistan exported 40 000 tons to South Africa in October 2019 [first time since May 2019] and a total of just over 80 000 tons in 2019 compared to a total of 201 680 tons in 2018. A total of 34 million tons was exported from Vietnam during 2019, representing an increase of 6.3% year on year. Vietnam is currently the largest threat to local cement producers,” says Metelerkamp. It is responsible for over 70% of total imports into South Africa, with a total of 687 284 tons imported into the country up to November 2019, he adds.

Rwanda: Government prioritises six agricultural products to reduce trade deficit (New Times)

The Ministry of Trade and Industry has said that they are prioritising agro-processing for six products; sugar, aquaculture, edible oils, rice, fertilizer and maize so as to recapture the domestic market and lower the imports. Sam Kamugisha, the Director-General for Industry at the Ministry of Trade and Industry, said that the efforts are part of a Made-in-Rwanda policy instituted in 2017 to drive the recapturing of the domestic market. Priority in processing sugar, fertilizer, edible oil, dried fish, maize and rice could save the country $112m (approx.Rwf104 billion) annually, the ministry says. In an interview, Kamugisha said that there are efforts to add value to other different agricultural products. She cited Community Processing Centres including the current six for leather, dairy, Irish potato, wood, ceramics and honey.

George Wachira: Munya has what it takes to turn around fortunes of Kenya’s agriculture (Business Daily)

Peter Munya’s appointment as the Cabinet Secretary for Agriculture was both timely and appropriate. Timely, because agriculture had of late lost momentum and also direction. Appropriate, because Mr Munya’s experience in previous dockets equips him with the right understanding of critical pinch-points in agriculture. Having been a governor of an intensely agricultural Meru county, the CS understands what motivates and disappoints farmers. His previous docket of Industrialisation has hopefully given him the understanding of why new agro-industries are essential for increased produce value. The experience he gained in external trade empowers him to respond to threats posed to local production by irregular food imports. Hopefully he also now understands why we need to urgently correct imperfections in crop (coffee, tea) export marketing to increase net farmer’s earnings. His recent involvement in developing new crop export markets (e.g. avocados) will be a strong advantage.

In short, the CS does not need much induction and should therefore hit the ground running. In respect of critical food security produce - maize, sugar, rice, milk - Mr Munya should seriously consider publishing recommended minimum producer prices based on real cost of production and farmer’s return on investment. No matter the IMF opinion, food security cannot be left to the mercy of free market forces which permit uncontrolled competition from imports. Let us question the value of regional trade pacts if the net value of these protocols to Kenya is negative. In respect of farm inputs, fertiliser importation is understood to be an area where quality over-specification by our standards authorities is making fertilisers unduly expensive for Kenya’s food security. It will be even wiser if we can support local fertiliser manufacturing. Fertiliser subsidies may be politically popular but these are neither effective, nor sustainable.

WTO DDG Wolff: It is time to update the WTO rulebook for agriculture (WTO)

The world needs a smoothly operating agricultural machine, and the parts of that machine, national agricultural policies need to complement each other, not run at cross purposes. Trade rules provide the necessary guarantee that food will be available at affordable prices when needed thereby ensuring livelihood security, particularly for rural households. Trade rules also help to ensure that food is safe by allowing countries to impose appropriate sanitary and phytosanitary measures without unnecessarily restricting trade. In short, trade rules allow all countries to take care of their food security by working cooperatively with each other.

The WTO Agreement on Agriculture rests on the unstated recognition by all WTO Members that the agricultural policies of others matter. This is true whether the Member involved is a net importer or a net exporter, whether it is developed or developing. Also unstated is the conclusion reached that no bilateral or regional agreement can be sufficient to address many of the most pressing issues of agricultural trade, particularly domestic support. Only a multilateral approach is possible. Multilateral trade agreements will be needed to meet these challenges. Solutions will be needed in at least six areas: [Dr Mukhisa Kituyi, Secretary-General of UNCTAD: Trade wars are huge threats to food security; US Agriculture Secretary says no need for more farm aid after China trade deal]

India, China have taken ‘tremendous advantage’ of their developing country status: Trump (Mint)

Ahead of his proposed visit to India in February, the US President Donald Trump on Wednesday said India and China have taken “tremendous advantage” because of their developing country status and that he would hold discussions with WTO chief for reforming the global trade body. “We have dispute running with the WTO for quite a while because our country has not been treated fairly. China is viewed as a developing nation; India is viewed as a developing nation; we are not viewed as a developing nation. As far we are concerned, we are a developing nation too. But they get tremendous advantages by the fact that they are considered developing and we are not. They shouldn’t be, but if they are, we are,” Trump said addressing media at the World Economic Forum in Davos.

With WTO chief Roberto Azevedo by his side, Trump said he will soon hold discussions with Azevedo to bring in dramatic changes in the trade body. “We are talking about a whole new structure about the deal. The WTO has been very unfair to the US for many many years. Without it, China wouldn’t be China. China would not be where they are right now. That is the vehicle that they used. Roberto and I have a tremendous relationship and we are going to do something. I think it would be very dramatic. He will be coming with a lot of his representatives to Washington sometime next week or the week after and we will start working on it,” Trump said.

Speaking from the same forum, Azevedo said if the WTO is to deliver and perform its role in today’s global economy, it has to be updated. “It has to be changed, it has to be reformed. This is an agenda that is squarely before members. I don’t think anybody in Geneva misses the point. I think they understand that they system has not been functioning properly in many areas. That’s something that we are trying to address. This is something we are serious about,” he added. [Bertelsmann Stiftung: The WTO at 25]

Dubai launches World Logistics Passport to boost south-south trade (Govt of Dubai)

Dubai is bringing together Government leaders and heads of major corporations from Asia, Latin America and Africa for the Davos launch of the World Logistics Passport, a major initiative to boost South-South trade. The World Logistics Passport links Customs World, DP World, and Emirates Group to enhance connectivity through Dubai and, through expertise sharing and process development, directly between partner countries. A pilot project operational since July 2019 has already increased trade by participants by 10%. The World Logistics Passport has been designed to overcome the non-tariff trade barriers, such as logistics inefficiency, that currently limit the growth of trade between developing markets. Designed as a points loyalty scheme, the initiative has been set up to incentivise companies and traders to use Dubai’s world-leading logistics facilities in return for cost and time savings and enhanced customs clearances.

South African logistics updates:

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