tralac’s Daily News Selection
Diarise: 2020 International Women’s Day (8 March). The International Trade Centre has developed a campaign that features inspiring women entrepreneurs from across the world supported by ITC, its funders and partners.
Concluding today: ILO’s technical meeting on achieving decent work in global supply chains. Download the background report here.
South Africa risks forfeiting tariffs on about R70bn ($4.5bn) worth of trade when the AfCFTA kicks in, according to the country’s tax commissioner. South African imports totaled R1.27 trillion in 2019, according to preliminary data from the tax agency, including about R152bn from the rest of the continent. Of that, R70bn imports came from outside the duty-free SACU and SADC, and the tariff income on that is at risk, Edward Kieswetter, the head of South African Revenue Service, said in an interview in Cape Town. Africa’s most-industrialised economy made an estimated R56.3bn from customs duties in the current fiscal year, almost double what it collected from dividends tax. “The impact is rather small in terms of the quantum that we’re now opening it up to,” said Kieswetter. The revenue agency is more concerned about how rules of origin, which determine the nationality of goods, will be set because that could create opportunities for abuse, he said.
Kenya-Uganda milk trade war: Counting the losses (Daily Monitor)
It has been such a rough ride in the dairy sector and the damage is there for all to see. Yes, it might be too early to tell the extent of the losses but with all certainty, the Uganda-Kenya milk trade war, will have some lasting impact on Uganda’s dairy sector. Kenya has silently stopped milk exports from Uganda from entering its market on claims that Uganda cannot produce enough milk for the local and export markets. Trade Minister Amelia Kyambaddee yesterday seemed to have no update on what action government had decided to take in the face of continued hostility. “Wait, we shall communicate to you when we decide,” she said in a brief phone interview after Daily Monitor had requested for updates specifically on the protest note, which had expired without any response. Amid all the uncertainty, the cost and impact seem to be well spread and will hurt even much further if no solution is provided in the short term.
Kenya has already locked out two milk exporting companies from its market with the latest being Lakeside Dairies, which produces Dairy Top milk, in western Uganda. The company had been exporting about 80,000 liters of UHT milk to Kenya every day with yoghurt produced for the local market. Last week, according to information obtained from URA, the company was forced to return 10, 40 feet truck-loads of milk after Kenya authorities acted hostile on its products some of which had been seized while others were outrightly denied clearance. Already, according to information availed to Daily Monitor, Pearl Dairies, which produces Lato Milk has shut some of its production lines in western Uganda and cut its production capacity to under 20%. Lakeside Dairies is also counting losses and has subsequently, closed its UHT milk production line.
South Africa: Spur to continue with its successful recipe as it expands in Africa (Business Day)
Spur is looking to the rest of Africa to expand its footprint, which will include opening more of its popular RocoMamas outlets thanks to increasing profits from the continent. CEO Pierre van Tonder said the success in Africa, where many retailers like Shoprite struggle with hyperinflation and constrained consumers, was using local business people to run the franchised restaurants. Spur reported a 27.5% increase in profit in its Africa and Middle East outlets. In the past year, Spur opened six restaurants in Mauritius leading to 18 in total in the island state and three in Zambia, which will bring the total there to 16. Restaurant turnover for the Africa and Middle East operations, which accounts for 82.3% of total international turnover, increased by 9.6% in the six months to the end of December. By contrast income growth in SA, where it has 559 restaurants, was up 4.7% in the second half of last year. In the next six months the group plans to open 17 restaurants outside SA, “with our international expansion focusing primarily on Africa and the Middle East”. Six new restaurants are planned for Zambia, three in Saudi Arabia (Riyadh), two each in Nigeria, Kenya and Eswatini and one each in Zimbabwe and Ghana.
Rwanda: Mara Phone’s dream to sell first Africa’s smartphone takes shape (New Times)
It’s been four months down the road since the factory opened shop in Kigali at the Special Economic Zone, Gasabo District. “We have been producing an average of about 10,000 (smartphones) per month based on demand,” Eddy Sebera, the company’s chief executive officer told The New Times in an interview on Wednesday. That, he added, is based on market demand that is growing gradually. As of last month, the firm says it has exported to 53 countries worldwide with Germany being their largest market outside Africa. “We are not localizing ourselves just as an African (company) but we are also producing for the global market,” Sebera notes, arguing that they have created a name in a way that they are changing the narrative. According to Mara Phone boss, changing narrative is currently the biggest task ahead of them. He doesn’t dismiss the idea that people are so comfortable owning the likes of iPhones, Samsung, Huawei and other Chinese affordable smartphones. “The biggest problem we are facing is perception,” he says.
Tanzania: Freight charges to drop 40% when SGR starts operation (The Citizen)
Freight charges in Tanzania will decrease by 40% when the Standard Gauge Railway becomes operational, a top bank official has said. The modern railway will also be able to haul up to 10,000 tonnes of freight, equivalent to 500 lorries, per trip. “Through connecting Tanzania with Burundi, Rwanda and the DRC, it would enhance regional trade,” said Sanjay Rughani, the CEO of Standard Chartered Bank Tanzania. He told the bank’s clients and business stakeholders here on Tuesday evening that the multi-million dollar project has already created more than 8,000 direct jobs to the locals.
In a major step to reducing air pollution and climate emissions in the region, the environment and energy ministers of all the 15 countries of ECOWAS, met on 6 – 7 February in Ouagadougou, and adopted a comprehensive set of regulations for introducing cleaner fuels and vehicles in the region. All vehicles that are imported, both new and used, and petrol and diesel, will need to comply to a minimum of EURO 4/IV vehicle emissions standard from 1 January 2021. An age limit forused vehicles of 10 years was also agreed to, with a recommendation of a five-year age limit for light duty vehicles. A plan to improve the fuel efficiency of imported vehicles was also adopted, with a target to double the efficiency of the fleet from an average of 8 litres per 100 kilometres today to 4.2 litres per 100 kilometres by 2030. An intermediate target of 5 litres per 100 kilometres by 2025 was also agreed. The vehicle fuel efficiency plan or roadmap includes proposals to introduce fiscal incentives to attract low and no emissions vehicles to the region, measures to promote electric vehicles, and a new harmonized label for newly imported vehicles showing the vehicle fuel efficiency and CO2 emissions to support consumer awareness.
The African Development Bank Group’s Country Strategy Paper 2020-2024 lays out the strategy that will guide Bank support to the country for the achievement of sustainable and inclusive growth. The Bank’s Committee on Operations and Development Effectiveness discussed the strategic thrust of this CSP during its consideration of the CSP 2014-2018 Completion Report on 8 November, 2019.
Priority Area 1: Support Economic Governance for Improved Enabling Business Environment.The main objective of Priority Area 1 is to improve Namibia’s enabling business regulatory environment and competitiveness through improved economic governance. This objective will be achieved through sustaining macroeconomic stability; improving the ease of doing business; enhancing provision of pro-growth public services; and expanding support to SMEs to spur industrialisation.
Priority Area 2: Support Infrastructure Development and Promote Value Addition. The main objective of Priority Area 2 is to remove infrastructure bottlenecks that increase production costs, constrain Namibia’s competitiveness and thereby stifle private sector development. These include shortages of electricity and water supplies, and an aging rail network. The Bank’s other objective is to support private sector investments in value adding economic activities with emphasis on commercialising agriculture and agri-business to create decent jobs along value chains, especially for the youth and women. In the transport sector, the priority will be on improving connectivity through upgrading the rail network(including to meet SADC standards) to reduce the network capacity constraints.
With increased local production of fertiliser expected within the next few weeks, operators in the petrochemical space have said Nigeria would be able to save up to $500m from import substitution and earn about $400m from the export of products.
Côte d’Ivoire has partnered with UNCTAD and Germany to assess its readiness for e-commerce. The assessment seeks to identify opportunities, challenges and actions required to improve the e-commerce ecosystem in the country. An assessment mission led by UNCTAD in collaboration with the Universal Postal Union, International Trade Centre and Consumers International is slated for 2 to 6 March in the capital, Abidjan.
Traders at the Tunduma-Nakonde OSBP can now use Tanzanian and Zambian currencies on each side of the border without having to convert them, thanks to a new arrangement to cut inconveniencies and boost trading activities.
A few weeks after the ban on commercial motorcyclists by the Lagos State government, freight forwarding group under the aegis of the Association of Concerned Freight Forwarders and Logistics has accused the state government of the not considering the plight of the practitioners before coming up with such policy.
The government of Mozambique has asked the IMF to send a technical team to start a discussion on resuming its support programme for the country’s State Budget, said the minister of Economy and Finance.
China’s foreign trade faces challenges as small- and mid-size firms in its supply chains battle financing difficulties amid trade curbs, lack of raw materials and delayed payments during a coronavirus outbreak, the commerce ministry said on Thursday. A ministry survey showed more than 90% of roughly 7,000 companies engaged in foreign trade faced delays in shipping and payments because of the outbreak, the ministry told reporters in an online briefing. Many companies faced significant risks of cancelled orders and rejections in product delivery and payments, said Li Xingqian, director of the ministry’s foreign trade department, calling for "urgently needed" export credit insurance for them. "The ministry will introduce further assistance measures in a timely manner," Li added, without specifying a timeframe. But there has not been a major shift of supply or manufacturing chains out of China, ministry officials said, adding that some foreign companies were continuing to invest, betting on the long-term prospects of the Chinese market.
UK SME exporting trends: finance and trade (pdf, British Business Bank)
The UK Export Strategy, released in 2018, sets out an ambition to increase the share of GDP from exports by 5 percentage points to 35%. This report assesses the attitudes of, activities undertaken by, and barriers faced by SMEs at key stages in the export cycle, and to understand whether and to what extent a lack of finance or insurance is preventing viable SME exports. The evidence presented is intended to support Government in achieving its objectives in the Export Strategy by harnessing the potential of the 99% of businesses with less than 250 employees. Many of the findings in this report are based on the SME Export Finance Survey of 1,198 British SMEs, conducted between July and August 2019 specifically for this report.
Many SMEs with a history of exporting subsequently stop, but often temporarily. The SME Export Finance Survey observed a high rate of transition between exporters and non-exporters and vice versa. Around one-fifth of SMEs who have exported between 2016 and 2018 had not done so in the past 12 months, although BEIS’s Small Business Survey shows that many will restart again in future. DIT specifically recognises the need to ‘sustain’ current exporters, which can help achieve higher levels of consistent exporting by supporting SMEs with a proven ability to sell internationally.