Building capacity to help Africa trade better

tralac’s Daily News selection


tralac’s Daily News selection

tralac’s Daily News selection


  • International Organisation of Employers digital conference, tomorrow, on the impact of COVID-19 on global trade, supply chains and employment

  • The IMF will release its April 2020 World Economic Outlook on the 14 April and its April 2020 Fiscal Monitor the following day

Competition in Dar, Kenya sends Choppies out of East Africa (The East African)

Choppies—the Botswana-based supermarket chain that about four years ago embarked on an aggressive expansion drive across Africa—has beat a hasty retreat to cut mounting losses in new markets. The retail chain has, in a circular to shareholders, announced discontinuation of operations in several African countries, among them Kenya and Tanzania. Choppies Enterprises Ltd (CEL), which is listed on the Botswana Stock Exchange and cross-listed on the Johannesburg Stock Exchange, has also shut down its operations in Mozambique and placed its South African business on auction, with a plan to concentrate on growing its market share in its home country. It has also restructured its outstanding loan estimated at $56 million, as part of tactical measures intended to breathe life into a firm weighed down by deepening losses attributable to stiff competition in the retail space.

Kenya shields dairy farmers with import levy (The East African)

Kenya has introduced a 1% import levy on dairy products to protect the industry from unfair competition. The Ministry of Agriculture published dairy industry regulations that introduce stringent conditions for the importation of dairy products to stop dumping, particularly from Uganda. The government also plans to introduce price controls to protect farmers from exploitation by processors. “We have been pushing for predictable pricing for raw milk and farmers will not complain if the prices are set fairly,” Gideon Birgen, Kenya Dairy Farmers Association chief executive told The EastAfrican. Last week, Brookside Dairy adjusted raw milk prices upward by one shilling per litre to Ksh36 ($0.34) from Ksh35 ($0.33) to cushion farmers from the effects of the Covid-19 pandemic.

pdf WCO-WTO joint statement on COVID-19 related trade measures (51 KB)

Within our respective mandates, we have already invited Members to increase transparency by sharing information on new trade and trade-related measures introduced in response to the COVID-19 pandemic. To the extent appropriate, we are making such information publicly available through our respective websites. We are also willing to establish a coordinated approach in support of initiatives that facilitate cross-border trade in goods, in particular those key to combat COVID-19. This would allow that essential goods can quickly reach those most in need, including in least developed and land-locked countries.

As COVID-19 continues to spread globally and governments consider new measures to protect the health and well-being of their citizens, we urge Members to ensure that any new border action is targeted, proportionate, transparent and non-discriminatory — as agreed by G20 leaders. We stress that these measures should be temporary, and we encourage Members to rescind them once they are no longer needed, especially if they restrict trade. We welcome initiatives to facilitate and simplify cross-border procedures and urge our Members to prioritize those for exporting and importing essential goods.

Key food prices are surging after virus upends supply chains (Jakarta Post)

As the coronavirus pandemic penetrates more deeply into global supply chains, prices for key staples are starting to soar in some parts of the world. Rice and wheat – crops that account for about a third of the world’s calories – have been making rapid climbs in spot and futures markets. For countries that rely on imports, this is creating an added financial burden just as the pandemic shatters their economies and erodes their purchasing power. In Nigeria, for example, the cost of rice in retail markets soared by more than 30 percent in the last four days of March alone. It’s unclear what the biggest drivers were for the retail prices, whether it was a trickle-down effect from grain futures or local logistical choke points or panic buying, or a combination.

After Trump threat, India lifts export ban on COVID-19 treatment drug (Japan Times)

India has partially lifted a ban on the exports of a malaria drug after US President Donald Trump sought supplies for the United States, according to government officials with knowledge of the matter. Exports of hydroxychloroquine and paracetamol will be allowed depending on availability of stock after meeting domestic requirements and existing orders, said the government officials, who asked not to be identified citing rules. Shipments will be restricted and permission will be on humanitarian grounds, they added.

Employers call for mobilising resources for the UN-led global Covid-19 fund (IOE)

The global employer community, united in the International Organisation of Employers, supports UN Secretary-General António Guterres’ Covid-19 response plan to assist governments in safeguarding jobs, maintaining liquidity, avoiding bankruptcy of companies particularly SMEs, providing social protection and wage support schemes, and preparing for the swift resumption of economic activity and international trade as soon as the pandemic is under control. The UN and its related financial institutions must help all member states affected by the crisis. In the face of an unprecedented health emergency and economic collapse, the world must assist businesses, especially small and medium enterprises, and their workers, as well as the most vulnerable people, including the self-employed and non-permanent, casual and informal workers to prevent a humanitarian crisis.

Latin America: Multilateral entities coordinate response to the regional impact of COVID-19 (OAS)

The economic effects of the interruption of value chains in Latin American countries, the contraction of international trade and the decline of tourism in the Caribbean are seen as key problems. Taking into account this context, sources of support should be sought to protect employment and income, avoid the bankruptcy of MSME’s, and meet the needs of the population in poverty, which in its majority it does not have health coverage. It was requested that a joint regional voice be brought before the G20 and that middle-income countries also be taken into account when making loans more flexible. The countries of the Caribbean, despite the fact that most of them are classified as middle-income, have special vulnerabilities: the pressure of external debt and the recurrence of natural disasters. It is absolutely essential that they have financial relief to cope with the effects of the COVID-19 pandemic.

Participants warned that it will be necessary to have a financial package that can assist countries to address the crisis and that it is important that the region act in a unified manner to promote this approach. The situation of women was especially considered by the multilateral organizations gathered, given that they are multiply affected and extremely vulnerable to this crisis, firstly because they occupy the majority of jobs in the health sector and, therefore, are largely heroines because day-by-day they face the COVID-19 pandemic and are more exposed. [COVID-19 response calls for heightened ASEAN cooperation, mainstreaming biodiversity in health sector]

Sierra Leone: IMF concludes 2019 Article IV Consultation

While the Sierra Leonean economy has great potential, the immediate outlook is overshadowed by the rapidly unfolding global COVID‑19 pandemic. Based on programmed policies, growth was projected to average around 4.5% over the medium term. However, prospects for the remainder of 2020 are subject to considerable uncertainty. The magnitude of the impact will depend heavily on the extent of vital prevention and containment measures—nationally, regionally and globally—and the associated economic spillovers. With the fragile Sierra Leonean economy still recovering from the Ebola health crisis and past lax macroeconomic policies, the COVID‑19 shock will add to the country’s vast development challenges. Avoiding long‑lasting scarring and continuing the economy’s promising development trajectory will require significant support from development partners.

Covid-19: African competition authorities respond to crises (IOL)

The increase in confirmed Covid-19 cases in Africa has led to innumerable complaints of anti-competitive conduct from customers and consumers across the continent, who have expressed concerns over sudden price hikes of healthcare and hygiene products as well as identified essential products. Numerous competition authorities in Africa are aware of the effects of unjustified price hikes and excessive pricing on already vulnerable economies. They have responded by establishing specialised investigation teams, refocusing existing resources to Covid-19 specific complaints and introducing new competition regulations – as is the case in South Africa. African competition authorities have further noted that collaboration between themselves and consumer protection authorities, as well as between competing essential service providers, is essential in order to enable countries to adequately respond to the Covid-19 crisis. Unprecedented times appear to have called for unprecedented measures for competition authorities across Africa.

Carlos Lopes: The world in reset mode (Institut Amadeus)

The current crisis, provoking one of the most drastic economic contractions of the modern times, took about three weeks to get to the dramatic falls in economic throughput attained by the Great Depression in three years. Most developing countries depend on foreign income in a combination of exports of goods, tourism, investments and remittances: all are expected to collapse. Government revenues are linked to the formal sector of the economy. Tax revenue will equally fall while informal transactions will be purged by the social distancing imposed by Covid-19. In short, the flatter you want the contagion curve to be, the more you need to block your country. The larger fiscal space needed to mitigate the deeper recession that will result will be unreachable. At the same time, access to international financial markets will become prohibitive for developing countries as lenders and investors rush to the safety of assets issued by central economies. The ones that can afford to print money and give it away in historical stimulus packages based on the policy of “whatever it takes”. In other words, just when developing countries need to manage the pandemic, most have seen their fiscal space evaporate. Just when they need access to more external finance the doors close.

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