Building capacity to help Africa trade better

tralac’s Daily News selection


tralac’s Daily News selection

tralac’s Daily News selection

The Bureau of the Council of Ministers of the AfCFTA will convene a virtual meeting on Wednesday to discuss AfCFTA implementation issues and a trade response to COVID-19. Senior officials will meet tomorrow.

AfroChampions AfCFTA Year Zero report: highlights (Modern Ghana)

Ghana has been ranked as the fifth most committed country to the implementation of the AfCFTA by the policy and advocacy think tank, AfroChampions. But Ghana did not feature in the top 10 with respect to implementation readiness, according to the group’s AfCFTA Year Zero report. In the combined ranking of Commitment and Implementation Readiness, Ghana was in the sixth spot. The reported noted that some of the most committed countries such as Ghana, Mali, Togo and Uganda “are not necessarily the most prepared in terms of trade infrastructure, customs efficiency and access to credit for industry.” The report added: “Conversely, some of the least committed countries (such as Botswana, Namibia and Tanzania) performed very strongly in terms of implementation readiness.”

The most AfCFTA committed country is Rwanda which scores 83.93% on the commitment scale, and the least committed country is Eritrea with a score of 0.85%. The country with the best implementation readiness is South Africa, with a score of 68%. In the combined ranking of Commitment and Implementation Readiness, Rwanda emerged top of the table. The report further noted that none of the three largest economies on the continent; South Africa, Egypt and Nigeria, feature in the top ten overall country performance. [Note: The report has not yet been posted on the AfroChampions website]

Related:  pdf Will COVID-19 Derail AfCFTA Start of Trading? Preliminary Assessment and Recommendations by AfroChampions (2.97 MB)

How the AfCFTA will improve access to “essential products” and bolster Africa’s resilience to respond to future pandemics (Brookings)

The pandemic has also highlighted the importance of digitalization for accelerating intra-African trade. As noted above, the inability of the AfCFTA to continue remote negotiations is directly related to poor broadband connectivity on the continent. Moreover, e-commerce is proving critical for businesses to continue to operate and for consumers to access essential goods and services. Creating a thriving environment for e-commerce and e-transactions requires investment in a well-functioning telecommunications infrastructure, in addition to regulatory frameworks that create the enabling environment for e-commerce. This highlights not only the importance of negotiations in telecommunications services, but also the critical importance of pursuing negotiations in Phase III on e-commerce. [The authors: Landry Signé, Colette van der Ven]

Postponing AfCFTA would be a mistake: this is how we can avert it (African Business)

In an open letter to the continent’s political leaders, prominent figures from the world of African business explain why a full-blown postponement of AfCFTA would be a mistake and how some aspects can be rescheduled. “There are aspects of AfCFTA that can be rescheduled because of Covid-19 but there are aspects of the July start of trade that must be implemented – not in spite of but because of COVID-19. This is the conversation we should be having. Which aspects should be rescheduled; and which aspects must start in July 2020?”

ICC joins global trade organisation heads for summit on impact of COVID-19 on Africa

ICC Secretary General John W.H. Denton participated in a historic summit last week to discuss the impact of COVID-19 on the AfCFTA. Convened by Africa investor (Ai), the summit brought together the heads of global trade organisations and recognised the importance of pioneering partnerships and collaboration with the private sector and international organisations in restoring trade confidence and flows in the fight against COVID-19, and in building trade resilience in anticipation of future pandemics. The importance of accelerating the adoption of African eTrade, Paperless Customs and RegTech innovation also featured highly on the agenda.

The Summit, which took place on 30 April, highlighted the urgent need for harmonised regulation to help the African private sector – in particular SME’s – to digitise their businesses, to be able to trade and compete in the ‘Post COVID-19 Contactless Economy’, where ‘Trade and Customs Distancing’ will be the new normal. The African private sectors’ AfricaPLC Industrial eTrade Platform initiative was welcomed as a critical African eTrade and Finance enabler.

South Africa: ABSA’s commentary on the March merchandise trade figures (pdf, ABSA)

Last Thursday, the South African Revenue Service reported a record merchandise trade surplus of R24.3bn in March, up from a downwardly revised surplus of R13.7bn in February (previously: R14.2bn). This was well above the Thomson Reuters consensus of R9.0bn and our forecast of R10.0bn. The March surplus reflects both import compression and stronger exports. Following a robust February balance, exports rose by 8.5% m/m to R118.5bn, but imports fell 1.3% to R94.2bn. The rise in exports was mainly due to the value of precious metals and stones rising a further 21.0% m/m to R26.0bn, fuelled by surging palladium and rhodium prices that hit a record high in February. Meanwhile, imports declined mainly as a result of the value of textiles falling by 35.0% m/m to R3.0bn. We believe that the fall in the textile imports value in March was likely reflecting early COVID-19 supply disruptions from China. The March data bring cumulative merchandise trade surplus for Q1 to R270.6bn on a seasonally adjusted and annualised basis, equivalent to 5.1% of GDP. Assuming the structural ‘invisibles’ balance remains at -3.3%, we now forecast a current account surplus of 1.7% in Q1.

Trump administration pushing to rip global supply chains from China - officials (Reuters)

The Trump administration is “turbocharging” an initiative to remove global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak, according to officials familiar with U.S. planning. “We’ve been working on [reducing the reliance of our supply chains in China] over the last few years but we are now turbo-charging that initiative,” Keith Krach, undersecretary for Economic Growth, Energy and the Environment at the US State Department told Reuters. “I think it is essential to understand where the critical areas are and where critical bottlenecks exist,” Krach said, adding that the matter was key to US security and one the government could announce new action on soon.

The United States is pushing to create an alliance of “trusted partners” dubbed the “Economic Prosperity Network,” one official said. It would include companies and civil society groups operating under the same set of standards on everything from digital business, energy and infrastructure to research, trade, education and commerce, he said. The US government is working with Australia, India, Japan, New Zealand, South Korea and Vietnam to “move the global economy forward,” Secretary of State Mike Pompeo said April 29. These discussions include “how we restructure supply chains to prevent something like this from ever happening again,” Pompeo said.

Doug Barry, spokesman for the US-China Business Council: “Diversification and some redundancy in supply chains will make sense given the level of risk that the pandemic has uncovered. But we don’t see a wholesale rush for the exits by companies doing business in China.”

Trade Dialogues on Food: remarks by WTO Deputy Director-General Alan Wolff (WTO)

1 in every 6 people around the world depends almost entirely on international trade to be fed and I want to expand on that. That’s 17% of humanity or 1.3 billion people. Currently, there are over 30 countries in the world that must rely on imported food, not to increase their food variety, but to avoid starvation. There are many reasons for this situation that include poor agricultural productivity, and serious land and water limitations. Many of these countries lie in Africa, and some are in the Middle East.

Globally agriculture uses up around 40% of the global land area, and about 70% of the world’s total freshwater, mostly for irrigation. International trade in food is trade in land, trade in water and trade in energy. As the United Nations Development Program tells us, were a country such as Egypt to aim for food self-sufficiency it would need three River Niles not one. So I hope that this helps our viewers visualize just how critical it is to keep international trade in food flowing. Trade in food is not a luxury, but a must. Now reliance on international trade for food security is only likely to grow. According to the Potsdam Institute for Climate Impact Research, if you roll the clock forward, by the year 2050, around 50% of humanity could depend on international trade to be fed and not just today’s 17%. [Trade Dialogues on Food]

Africa looks to build food self-sufficiency as COVID disrupts global supply chain (Cornell Alliance for Science)

“The Covid-19 pandemic provides a golden opportunity for Ghana to optimize our potential for food production to meet domestic needs, grow our agricultural exports and create jobs for the youth of this country,” Dr. Owusu Afriyie Akoto, Ghana’s Minister for Food and Agriculture, told a media briefing in the capital Accra. “In the wake of export bans in countries from where we import a large chunk of our food items like rice and poultry, it provides a compelling situation for us to put strategic measures in place to ramp up production for all our key staples,” the minister added. “It also gives us the opportunity to intensify agro-processing, thus reducing post-harvest losses and ensure year-round food availability, whilst creating the needed jobs.”

Africa’s poultry industry, for example, has struggled over the years because imported products are usually less expensive than those that are home-produced. This has led to the local poultry industry collapsing in many African countries. Isn’t it curious that poultry products produced in France and shipped across the Atlantic Ocean, all the way to Togo, could cost about 50% less than chicken meat produced in the capital city of Lome?



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