Building capacity to help Africa trade better

tralac’s Daily News selection


tralac’s Daily News selection

tralac’s Daily News selection

Tomorrow: President Ramaphosa engages African business leaders on the impact of COVID19

Members of the AU Bureau, other invited Heads of State and/or Government, the African Centre for Disease Control and Prevention and business leaders from some of Africa’s largest firms are expected to participate in the meeting. The engagement aims to foster business support for the African Union’s Joint Continental Strategy for the COVID-19 outbreak; and will discuss the development of a continent wide initiative to assure the resilience of the African economy, and Africa’s joint capacity to manage the economic consequences of the pandemic.

Julia Spies, Maria Cantero: Strengthening African value chains in medical supplies (ITC)

Some of the key suppliers of health products to Africa have recently introduced export restrictions, complicating the continent’s access to these essential materials. Access to goggles is particularly difficult as on average, 76% of African imports are subject to temporary trade measures. As a response to these shortages, African countries could consider ramping up regional production by adding value to available inputs and by cooperating with regional and global partners. Currently, only one in six litres of Africa’s disinfectant imports come from regional suppliers. By strengthening regional and global cooperation, this share could grow.

  • Disinfectants require three inputs: ethanol diluted with distilled water, glycerine, and plastic bottles. Africa already produces ethanol, plastic bottles and caps in sufficient quantities. Providing nearly half a million bottles and caps corresponds to a fraction of Africa’s monthly exports of these products (0.2% and 0.1%), with Egypt and South Africa being the main suppliers. Likewise, the required 374,000 litres of ethanol constitute only 1.5% of the continent’s current monthly exports.

  • Local glycerine production, however, might be insufficient to meeting the requirements for disinfectant production, calling for a global sourcing strategy in the short run². South Africa, the continent’s only net exporter of disinfectants, sources glycerine mostly from Malaysia and Argentina. An alternative supplier could be Germany with an unrealized export potential for glycerine of $2.9 million to South Africa, and $6.7 million to all Africa.

  • For surgical gloves, Africa currently relies almost entirely on imports from non-African suppliers. Malaysia, China and India account for 84% of total imports. While surgical grade gloves can be produced using different types of materials, the most common one is latex. Some African countries have abundant rubber resources and could envisage dedicating some to the production of gloves. By using less than 1% of its monthly exports of latex, Côte d’Ivoire could produce the 13 million gloves that African health responders require each month to face COVID-19. Ghana and Cameroon also have relevant exports of latex but currently do not export any surgical gloves.

African regulatory agencies, ethics committees to expedite COVID-19 clinical trial reviews (WHO Africa)

National regulatory authorities and national ethics committees from across Africa have agreed to combine their expertise to expedite clinical trial review and approvals for new multinational preventive, diagnostic and therapeutic interventions to the COVID-19 pandemic. However, joint reviews are based on voluntary cooperation between the national regulatory authorities and ethics committees. Each country is solely responsible for granting regulatory approval. The agreement was reached during a virtual meeting convened by the World Health Organization (WHO) on 1 April 2020 under the platform of the African Vaccines Regulatory Forum (AVAREF), one of the Continental Technical Committees of the African Medicines Regulatory Harmonization Initiative.

WTO’s DDG Wolff: Policy coordination needed to address pandemic challenges

Is the post Covid 19 world going to be different? What is likely? What will the result be of a reevaluation by the private sector and by governments of global value chains? Will governments turn to what Pascal Lamy has called “precautionnisme”, the antithesis of the dominant motivating force that led to the creation of the multilateral trading system seven decades ago. To what extent will the urge to promote self-sufficiency, onshoring spread? How is this to be accommodated or shaped? Will the pressure for a number of countries to replace lost revenues result in a widespread desire to raise tariff rates (which in the case of many developing countries can be consistent with existing WTO obligations as applied rates are now at levels well below contractually bound rates)? Will a standstill be effective to resist a wave of trade-restrictive measures or will a positive counter, a trade liberalizing initiative be necessary? Where is leadership for the multilateral trading system to be found, and how should it best be expressed? To what extent is investment in the system required by all? Is participation in the system driven to some extent by altruism or is altruism, in reality, informed pragmatism? Is it useful to discern and seek to define common purposes?

UNCTAD’s Robert Hamwey: Environmental impacts of coronavirus crisis, challenges ahead

With the emergence of import restrictions in export markets and sharp declines in the availability of cargo transportation services, the coronavirus crisis has led to increased volumes of un-shippable agricultural and fishery commodities. Many export-oriented producers produce volumes far too large for output to be absorbed in local markets, and thus organic waste levels have mounted substantially. Because this waste is left to decay, levels of methane (CH4) emissions, a greenhouse gas, from decaying produce are expected to rise sharply in the crisis and immediate post-crisis months. As exports of agricultural and fisheries products have declined, production levels have plummeted, causing unemployment levels in both sectors to grow substantially. Many post-harvest processing workers in these sectors are women supporting households, causing extreme hardships, particularly for low-income women in developing countries where social safety nets are not in place.

IATA media briefing on COVID-19: remarks of Alexandre de Juniac

There is a group of passengers—about 60% who will return to travel relatively quickly. But an important 40% are telling us that they will likely wait six months or more. And an even larger portion—nearly 70% are saying that they want to see their financial situation stabilize before returning to the skies. This caution is being seen in the behavior of Chinese and Australian travelers. The virus transmission there is largely seen to be under control. But we have not seen a return of air travel. And indictors from the US domestic market—the world’s largest—align with this. This means that confidence-building measures will be needed to deal with a slower recovery than we had previously anticipated.

  • The looming recession means that government stimulus will be critical.

  • And government and industry must be aligned and coordinated in measures to ensure that travel is safe

Specifically related to the measures that we will need to take, as we mentioned last week, IATA is hosting a series of regional summits to focus on the industry re-start. These bring together governments and key stakeholders. The aim is to help governments and the aviation value chain to work together for an orderly re-start. [IATA chief economist, Brian Pearce: Assessing prospects for domestic markets (pdf)]

Asia’s airports at ‘rock bottom’ as number of passengers plummets 95% (SCMP)

Asia’s airports have reached “rock bottom” almost four months into the Covid-19 pandemic, with the number of passengers at about 5 per cent of last year’s figures, the global airports’ representative has said. Airports Council International (ACI) Asia-Pacific said new data up to mid-April from 18 of its hubs in “major aviation markets” showed a 95 per cent collapse in passenger volumes year on year. Hong Kong International Airport was on track for a 99.5 per cent decline, according to preliminary official data.

COVID-19 updates:

National trade facilitation committees as coordinators of trade facilitation reforms (pdf, UNCTAD)

This new study, National Trade Facilitation Committees as Coordinators of Trade Facilitation Reforms, aims at updating, and building and expanding on the previous two studies,. The study further incorporates new research areas including monitoring and evaluation, regional integration and e-commerce in the context of the mandate of NTFCs. Information from 52 countries were collected from July 2019 to September 2019 via a standardized questionnaire distributed to chairpersons and secretariats of NTFCs around the world. Analyzing the data collected revealed twelve major trends currently predominant in the evolution of NTFCs around the world. These trends have been categorized into three main pillars: institutionalization, functioning, and financing of NTFCs. National trade facilitation Committees are fast evolving to meet the challenges at hand. This is evident in comparing the results of the past two studies with the outcome of this new study. By comparing the results of this study to those of UNCTAD studies in 2015 and 2017, this study sheds light on how National Trade Facilitation Committees are evolving in terms of mandate, scope, institutional framework and composition, among others, while adapting to new and emerging needs. These leading 12 trends are further elaborated in the study. Extracts:

  • As reflected in Table 1, 42% (22 countries) are African NTFCs, 25% are American (13 countries), 17% (9 countries) Asian, 12% (6 countries) European and 4% (2 countries) are from Oceania.

  • The majority of NTFCs (52%) affirm to be in contact with other NTFCs in their respective region. There is a positive correlation between the level of development of a country and the probability of being in contact with other NTFCs in the region. As such, 75% of developed countries report to be in contact with other NTFCs in the region, while this figure drops to 56% for developing countries and 36% for least developed countries.

OECD and donor countries working to focus development efforts on Covid-19 crisis (OECD)

The OECD and member countries that provide foreign aid are exploring how they can work to help the most vulnerable countries to weather the Covid-19 crisis, as new data showed a rise in Official Development Assistance in 2019, particularly to the poorest countries. ODA from members of the OECD’s Development Assistance Committee totalled $152.8bn in 2019, a rise of 1.4% in real terms from 2018, according to preliminary data collected from official development agencies. Bilateral ODA to Africa and least-developed countries rose by 1.3% and 2.6% respectively. Excluding aid spent on looking after refugees within donor countries – which was down 2% from 2018 – ODA rose by 1.7% in real terms.

Total ODA in 2019 was equivalent to 0.30% of DAC countries’ combined gross national income, down from 0.31% in 2018 and below a target ratio of 0.7% of ODA to GNI. Five DAC members – Denmark, Luxembourg, Norway, Sweden and the United Kingdom – met or exceeded the 0.7% target (the same five countries as in 2018.) Among non-DAC donors, which are not counted in the DAC total, Turkey provided ODA equivalent to 1.15% of its GNI. ODA rose in 18 DAC countries, with the largest increases in Austria, Finland, Greece, Hungary, Japan, Korea, Norway and Slovenia. It fell in 11 countries, most notably in Poland, Portugal and Sweden, in some cases because of lower spending on refugees. Net ODA has risen for the most part steadily in volume terms from just below $40bn in 1960. Despite the 2008 crisis, ODA rose by 69% in real terms between 2000, when the Millennium Development Goals were agreed, and 2010, as donors committed to increases. Extract: 2019 ODA statistics in detail (pdf). Preliminary data in 2019 show that net bilateral aid flows from DAC members to Africa were $37bn, representing a slight increase of 1.3% in real terms compared to 2018. Within this total, $31bn were for sub-Saharan Africa, an increase of 1.1% in real terms.

Piracy and armed robbery a threat to ships’ crews, warns IMB (ICC)

Seafarers face continuing threats from pirates and armed robbers on the world’s seas, says the International Chamber of Commerce’s International Maritime Bureau, reporting 47 attacks in the first three months of 2020, up from 38 in the same period last year. Pirates boarded 37 ships in the first quarter of 2020. The Gulf of Guinea remains the world’s piracy hotspot. Seventeen crew were kidnapped in three incidents in these waters, at distances of between 45 and 75 nautical miles from the coast. IMB’s latest global piracy report shows zero hijackings in the last two quarters, and no incidents around Somalia.

New agreement to facilitate Sino-Africa trade (NewsGhana)

The South Africa-China Economic and Trade Association (SACETA) and Africa Oil & Power (AOP) on Monday signed an agreement that will introduce Chinese corporations to African projects and firms, SACETA said on Monday. SACETA said the partnership will see the Chinese build critical new commercial links within the private and public sectors. SACETA has over 160 Chinese companies based in South Africa in the sectors of energy, finance, infrastructure, mining, ICT and among others.


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