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tralac Daily News

tralac Daily News

04 Sep 2020

National news

Pace of reform to determine shape of SA’s capital-equipment export recovery (Engineering News)

About 40% of capital equipment exported from South Africa has been affected by the lockdowns and restrictions on movement because of Covid-19, while capital equipment manufacturers have reported 30% to 40% lower turnover during June and July, says industry body and public-private partnership agency South African Capital Equipment Export Council (SACEEC) director and CEO Eric Bruggeman.

“Exports enable companies to link to other markets and different growth trajectories, while supporting local manufacturing, labour and commerce. There is significant potential to tap into regional and international trade to bolster the growth of local companies. “However, exporting requires stability in the country of manufacture and a consistent presence of companies in export markets. This is where government’s role is vital – to ensure that the trade environment is conducive to long-term trade, such as enabling the movement of skilled people, goods and finances between South Africa and the countries to which local companies export.”

South Africa’s tax policies viewed through the prism of Covid-19 (Moneyweb)

South Africa is attempting to paddle in a big pond. But with the degree of corruption and lack of capacity to bring its tax criminals to book – not to mention the fiscal hole created by government policies that have hampered trade and had a knock-on impact on excise duties and other taxes collected – how can it discuss tax policy reform in isolation?

Taxpayers note tax audit process improvement – PwC survey (Engineering News)

South Africa’s tax administration system has undergone significant change in terms of leadership, structure and policy over the past two years, professional services firm PwC reports. It notes that, more recently, the government has introduced several economic measures, including tax measures to protect businesses and vulnerable employees during the Covid-19 lockdown period and after the lockdown has been lifted. It notes that, added to this, companies are seeing an increase in tax audits and disputes and that all signs point to even more intense focus by the tax authorities in the future.

Electronic tariff platform goes live in Eswatini (World Customs Organisation)

On 1 September 2020, the Eswatini Revenue Authority (SRA) held an inauguration ceremony to announce the official launch of a national electronic tariff platform. In his opening remarks, Honorable Minister Mancoba Khumalo recalled that Eswatini had ratified the WTO Trade Facilitation Agreement as early as 2017 and was committed to the full implementation of the standards enshrined therein. He stressed that the online tariff platform will complement that important endeavour, emphasizing the particular relevance of online tools for the ongoing digitalization of Customs processes.

Zimbabwe Corn Deliveries Soar on Improved Payments to Farmers (Bloomberg.com)

Corn deliveries by Zimbabwean farmers have soared thanks to more speedy payments, boosting supplies of the scarce staple, according to the country’s Grain Marketing Board. “Farmers are now able to use their money on time before it’s eroded by inflation,” Mutenha said. “We have also increased our collection points to reduce the traveling distance for farmers.” The southern African nation’s grain stockpile has dwindled amid a prolonged drought, recession and soaring inflation, while a chronic shortage of foreign currency has limited the government’s ability to import food. The World Food Programme estimates 8.6 million Zimbabweans, or 60% of the population, will be food insecure by the end of this year.

FG approves $3.1 billion for automation of Customs, targets $176 billion revenue (Nairametrics)

The Federal Government has approved $3.1 billion for the automation of the operations of the Nigerian Customs Service (NCS). The main objective is to completely automate every aspect of the customs business and institutionalize the use of smart and emerging technologies to boost the statutory function of the Nigerian Customs Service in the area of revenue generation.

Morocco’s trade deficit eases by 18.2% in July (The North Africa Post)

Morocco’s trade deficit in the first seven months this year eased by 18.2% as foreign demand on Moroccan industrial exports curbs imports, the foreign exchange office said. The office also cited a significant drop in energy imports triggered by lower prices in international markets. By July, Morocco’s energy imports slid 31, while equipment purchases dropped 18%.

Removing impediments to export-led growth in Senegal: Groundnuts, fishing, textiles, fruits, and vegetables (Brookings)

Senegal has a lot going for it: Its stable democracy, great irrigation potential, religious tolerance, and proximity to markets in Europe and North America all suggest the West African country is poised to take off. Yet, economic performance since independence in 1960 has been disappointing. In fact, Senegal’s exports have grown much more slowly than global trade and have become increasingly capital-intensive, while its trade deficit has steadily worsened. To understand this paradox, recent research has focused on the impediments holding back specific industries where Senegal has comparative advantage – fishing and groundnuts, fruits and vegetables, and textiles.

Pathways to structural transformation of the Ghanaian economy – and some roadblocks (Brookings)

While Ghana’s economic growth over the last decade has been comparatively strong – annual economic growth averaged approximately 6.8 percent for the period 2010-2019 – this growth has largely been driven by minerals and crude oil production rather than by the manufacturing sector, which has a higher propensity to create more jobs. One particular bottleneck for Ghanaian firms seeking to increase production and diversify into knowledge-intensive products is inefficiency at ports and transit points within the Economic Community of West African States (ECOWAS) region.

Kenya initiates talks to solve Uganda border cargo stalemate (The Star)

Kenya through the EAC ministry has initiated diplomatic talks to solve the cargo standoff at the Busia and Malaba borders. The move follows reports that the Ugandan government has issued new directives requiring all truck drivers entering the country through Busia and Malaba to undergo another Covid-19 test irrespective of whether they possess another from Kenya. Effective September 1, truck drivers have to part with $65 (Sh7,039) to get tested for Covid-19, a move that will push up the already high cost of transport and doing business in the region. The Ugandan government has reversed its earlier decision for free testing of truck drivers and facilitation of the movement of goods.

Uganda Harmonizing Cocoa Standards to Facilitate Trade in EAC (ChimpReports)

Uganda Coffee Development Authority (UCDA) in collaboration with Uganda National Bureau of Standards (UNBS) hosted the national expert technical committee to discuss and draft the East African Standards for Cocoa and related products. “The reason for harmonization of standards is to promote uniformity across the EAC. This will make it easy for Uganda to trade in cocoa and related products within the EAC partner states and outside the East Africa region. In addition, the standardization will ensure that cocoa and its products are safe for consumption,” said Ms. Pamela Akwap, UNBS Senior Standards Officer.


Regional and continental news

EAC urged to collaborate, drive region’s trade (The Star)

There is need for deeper collaborations between the public and private sector to boost intra-EAC trade and investment, industry players have said, as the region wades through Covid-19 effects on economies. During a consultative CEOs roundtable meeting organized by the East African Business Council (EABC) in collaboration with GIZ, in Arusha, the industry captains noted that the region's economies are interdependent hence need close collaboration. Dubbed 'Creating Perspectives Project', the Thursday forum brought together company chief executives in Arusha, with the aim of deliberating on approaches that the private sector can explore to revamp their businesses amid the pandemic.

pdf EABC calls for deeper collaboration between the public and private sector amid the global economic disruptions - 3 September 2020 (142 KB)

During the meeting, EABC CEO, Peter Mathuki called upon businesses to re-purpose their business models to tap into the new emerging opportunities such as e-commerce, digital technology and biotechnology. “Innovation, value addition, embracing our local content and tapping into our regional supply value chains are some of the imperative solutions that will drive us towards economic growth,” he said.  

ECOWAS holds regional sensitisation workshop on AfCFTA for organised private sector

The Economic Community of West African States (ECOWAS) in collaboration with the Organised Private Sector, held a virtual regional sensitisation workshop on the African Continental Free Trade Area (AfCFTA) for the Private Sector on Wednesday, September 2, 2020. Mr. Mamadou Traore noted that to achieve the success and implementation of the AfCFTA, Member States/Regional Economic Communities (RECs) must actively engage with the private sector and allow members of the sector to share their reflections and on-ground experiences. The President of the Federation of West Africa Chambers of Commerce and Industry (FEWACCI), Hajia Saratu Aliyu, observed that the private sector actors are the actual traders and investors responsible for moving goods and services across borders and pledged their commitment to supporting the regional AfCFTA negotiation and implementation mechanisms.

Ministerial Statement on the Impact of COVID-19 on People on the Move in the IGAD Region

The Ministers for Internal Security and Ministers in charge of Migration Issues of the Member States of the Inter-Governmental Authority on Development (IGAD) held a virtual ministerial meeting on 2 September 2020 with representatives from international organizations working on migration and displacement.

pdf Ministerial Statement on the Impact of COVID-19 on People on the Move in the IGAD Region - 2 September 2020 (100 KB)

“After considering the report of the deliberations of the High Level Meeting of Experts and recommendations therein, we hereby solemnly declare to: Enhance cooperation and coordination with the countries of destination and transit, as well as relevant agencies and partners, to guarantee the immediate provision of humanitarian assistance, and facilitation of safe and urgent release, return and reintegration; Promote inclusive public health and socio-economic response and recovery strategies that integrate the protection of and assistance needs for people on the move;...”

Private sector acquires a taste for African power (African Business Magazine)

Over recent years, private investors have started to scale up their involvement in the sector. Power Africa, an initiative backed by USAID, has more than $54bn of commitments from its more than 140 private sector partners. The need for private investment will grow even more acute in light of the coronavirus pandemic’s impact on the continent. From the perspective of Africa Infrastructure Investment Managers (AIIM), which manages $1.9bn of investments in 19 countries across the continent, the outlook for investment remains nuanced and varied between countries. If African economies are to make the most of the opportunities, they will need to continue to double down on reform.

African Continental Qualifications Framework (ACQF) mapping study reports (AUDA-NEPAD)

The African Continental Qualifications Framework (ACQF) is a vital policy initiative of the African Union, aimed to enhance transparency and portability of qualifications of all sub-systems and levels of education and training, to align with national and regional qualifications frameworks and finally to contribute to CESA 2025 and the continental integration agenda of AfCFTA. The ACQF is in development (2019-2022), in a process supported by the EU, GIZ and ETF. To build on a well-grounded evidence base, the AQCF process started with a continental mapping study exploring the state-of-pay and perspectives of qualifications frameworks and systems. A collection of national and REC reports has emerged, useful for reference and sharing among peer institutions and stakeholders.

Gender should be central to Africa’s COVID-19 economic recovery initiatives (UNECA)

Unless a gender perspective is embraced in COVID-19 recovery initiatives, the ongoing global health pandemic will amplify existing gender disparities leading to worse outcomes for women in terms of livelihoods and well-being. This was said Thursday by Ms. Thokozile Ruzvidzo, Director of the Gender, Poverty and Social Policy Division at the Economic Commission for Africa (ECA), in remarks made during a Gender is My Campaign, (GIMAC) online campaign on the gendered effects of the coronavirus pandemic. “Women in African countries are in general concentrated in necessity-driven entrepreneurship in the services sector, market activities and cross-border trade in the informal economy. It is expected that the knock-on effects of border closures and market restrictions to deal with COVID-19 will be significant,” she said.


Global news

AGOA Coalition warns Congress: Duty-free imports sought by US apparel makers would vitiate Africa trade

We write to convey our deep concern regarding proposed changes to the US Generalized System of Preferences program (GSP) which threaten to vitiate key provisions of the African Growth and Opportunity Act (Agoa), the genuinely bipartisan measure that for the past 20 years has been the cornerstone of US economic engagement with the nations of Africa. If adopted when GSP is renewed, as it needs to be by the end of the year, these changes would cause gratuitous hardship in a region already reeling from the impact of COVID-19.

The encouraging Agoa-stimulated trends we have seen in African supply capacity and exports to the US will be reversed, threatening to push millions back into poverty, the majority of them women, as the continent grapples with the human and economic toll of the novel coronavirus. And the damage will not be restricted to Africa. The pain will be felt by our hemispheric neighbors as well.

G20 Foreign Ministers to strengthen international cooperation in response to the COVID-19 pandemic

The G20 Foreign Ministers held an extraordinary meeting to discuss enhancing international cooperation to recover from the impacts of COVID-19 pandemic as well as strengthening preparedness for future pandemics. His Highness Prince Faisal bin Farhan Foreign Minister stated that “Reopening borders, in accordance with all the protective measures and national regulations, will help our economies to thrive, people to prosper, and will of course bring hope for humanity to have faith in cooperating to overcome the pandemic.”

How can we build supply chains fit for an uncertain future? (World Economic Forum)

Seven months into the COVID-19 pandemic, businesses of all kinds are devising ways to protect themselves from future shocks by making their supply chains more resilient. We have seen protectionism intensify. Some emergency moves are clearly temporary. They were put in place by governments to ensure access to the medicines, machines and protective equipment required to contain or treat the virus. In other cases, the aim was to guarantee adequate food supplies for local populations. As economies around the world emerge, unevenly, from the pandemic, we can expect demand to begin to strengthen. As it does, trade flows, carrier schedules and inventory levels will start to normalize, and supply and demand will find a new equilibrium.

UK sees just 30%-40% chance of Brexit trade deal – The Times (Reuters)

Senior officials in British Prime Minister Boris Johnson’s office see only a 30%-40% chance that there will be a Brexit trade agreement with the European Union due to an impasse over state aid rules, The Times reported. “Inside No 10, they now think there is only a 30 to 40 per cent chance that there will be an agreement,” James Forsyth, political editor of The Spectator, wrote in a column. “The sticking point isn’t fish – I’m told that there is a ‘deal to be done’ there – but state aid.” Talks on the trade deal are due to resume in London next week.

New study shows benefits, limits of cash transfers (Devex)

Cash transfers to young people in Rwanda were more effective than a job training program in helping them build assets, increase savings, and improve productivity, according to a new study released Thursday. This latest research adds to the small but growing body of knowledge about cash benchmarking, or using the impact of cash as a baseline for program evaluation. “Cash benchmarking is the next revolution in how we get more rigorous about doing more good than handing over budgets and letting people spend it,” GiveDirectly Managing Director Joe Huston said.

COVID-19 will widen poverty gap between women and men, new UN Women and UNDP data shows

The COVID-19 crisis will dramatically increase the poverty rate for women and widen the gap between men and women who live in poverty, according to new data released today by UN Women and the United Nations Development Programme (UNDP). “Women are bearing the brunt of the COVID-19 crisis as they are more likely to lose their source of income and less likely to be covered by social protection measures. Investing in reducing gender inequality is not only smart and affordable, but also an urgent choice that governments can make to reverse the impact of the pandemic on poverty reduction,” said Achim Steiner, UNDP Administrator.

Make COVID recovery ‘a true turning point’ for people and planet, Guterres urges, calling for concerted action by G20 (UN News)

UN Secretary-General António Guterres has called on governments to incorporate “meaningful” climate action in all aspects of recovery from the global pandemic. Addressing ministers at a virtual meeting on sustainable recovery from COVID-19 on Thursday, the UN chief said that the world is confronting two urgent crises: COVID-19 and climate change. The Secretary-General outlined six climate-positive actions for a sustainable recovery, including investing in green jobs; not bailing out polluting industries; ending fossil fuel subsidies; accounting for climate risk in all financial and policy decisions; working together; and – most important – leaving no one behind.

Global food prices rise in August (Food and Agriculture Organization)

Global food prices rose for the third consecutive month in August, influenced by generally firmer demand and a weaker U.S. dollar, according to a report released today by the Food and Agriculture Organization of the United Nations. The FAO Food Price Index, which tracks the international prices of the most commonly traded food commodities, averaged 96.1 points in August, up 2.0 percent from the previous month and reaching its highest level since February 2020.