Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News
Photo credit: Delwyn Verasamy | Mail & Guardian

National news

Covid wave brings second quarter slide (The Mail & Guardian)

South Africans should brace themselves for a further slump in the economy, as gross domestic product (GDP) numbers for the second quarter of the year are expected to plummet. Statistics South Africa is due to release the GDP numbers on Tuesday. The Covid-19 lockdown slowed the economy to a point where businesses across all sectors are operating below capacity. “The only bright spot that we are anticipating in the second quarter numbers is going to come from the agricultural sector because it was one of the few sectors that were permitted.

See also: The SA Daily – Deep damage to 2Q GDP (Standard Bank Research)

Ethiopian in Talks With South African Flag Carrier on Rescue (Bloomberg.com)

Ethiopian Airlines Group is among companies in talks with South Africa’s government about potentially offering support to the country’s insolvent state airline, according to people familiar with the matter. Africa’s biggest carrier is considering ways to help bankrupt South African Airways fly again after more than five months of dormancy, said the people, who asked not to be identified as the talks are private.

South Africa needs to raise more than 10 billion rand ($595 million) to revive SAA, according to a rescue plan compiled by administrators and backed by both the state and labor groups. Yet Finance Minister Tito Mboweni has said the funds should come from private sources, committing only to help “mobilize” the required amount. SAA was placed under administrative protection in December, before the coronavirus crisis hit.

Traders livid as KPA offers transit goods free storage (Nation)

KPA in a Friday notice extended goods free storage time it had announced in May by another 90 days but still left out domestic importers who have four days to clear them or risk hefty penalties. The move is viewed by many stakeholders as favouring goods destined to neighbours such as Uganda essentially making them cheaper. “Kenya Ports Authority wishes to announce to the general public of extension of free storage period to its customers. This is in line with our continuous and deliberate efforts of cushioning our customers on effects of the coronavirus, which have impacted the whole transport logistics chain,” Mr Salim wrote in the notice.

External trade rebounds on easing global restrictions (Business Daily)

Kenya’s expenditure on imports in July rose 14 per cent month-on-month to Sh138.76 billion, signalling increased trade activity in the economy as countries continue to ease measures put in place to reduce the spread of Covid-19. Data from the Kenya National Bureau of Statistics (KNBS) also reveals a continuous increase in the country’s export earnings to Sh52 billion in July from a low of Sh43 billion April. The country’s import bill fell to a low of Sh108 billion in May as a result of the pandemic. Consequently, due to the lower imports in the April to June period, the trade deficit for the first seven months of 2020 narrowed by 19.5 per cent to Sh546 billion from Sh678.9 billion reported over a similar period last year.

Strike deal on revenue formula urgently, senators told (The Star)

ANC party leader Musalia Mudavadi has urged senators to reach a consensus on the revenue-sharing formula. There is a public outcry of despair and governors are now threatening a shutdown,” he said. Mudavadi asked senators to put aside their personal and political differences and break the deadlock on the already overdue third-generation formula.

Poultry farmers scale down operation due to dumping claims (The Standard)

Over 540,000 broiler farmers in the country have been forced to scale down their operation, over alleged dumping of processed chicken by Uganda farmers. The farmers through their lobby group added that lockdown has further affected their market due to the sale restriction of eateries and fast food joints that operate twenty-four hours, seven days in a week.

URA registers sh179b revenue surplus in July (New Vision)

The Uganda Revenue Authority (URA) has registered a revenue collection surplus of sh179b in July 2020 in excess of target. According to the July 2020 Performance of the Economy report released by the finance ministry, the economy has started recovering from the COVID-19 induced economic crisis. URA registered revenue collections of sh1.52 trillion against a target of sh1.49 trillion. Out of the total revenue collections for July, sh1,146b was tax revenue, while sh55.5b was from non-tax revenue.

Foreign airlines record 30 per cent in slow restart (The Guardian Nigeria)

A 30 percent passenger traffic was recorded weekend in Nigeria’s international travel as commercial flight services resume after five months of lockdown. Flight resumption saw the arrival of only two flights at the Murtala Muhammed International Airport (MMIA), Lagos, in two days. The Guardian learnt the Federal Government would soon review the COVID-19 travel protocols towards increasing the number of frequencies and maximum number of passengers allowed at Lagos and Abuja airports daily.

Revving up diversification to overcome post COVID-19 challenges (The Guardian Nigeria)

The impact of COVID-19 in Africa has created a sense of urgency and inspired calls for coordinated response to mitigate it’s devastating effects and lay the foundation for long-term recovery. The economic impact of COVID-19 has been projected to be profound, especially with the fall in the price of crude oil (which has greatly affected the government’s revenue) and the general downturn in major sectors of the economy. Economists at the weekend submitted that diversification both of revenue and gross domestic product (GDP) is critical in a post-COVID-19 era given the volatility of the oil market. They said that despite the emphasis on leveraging the non-oil export particularly the real sector to diversify the economy, earn foreign exchange and create jobs, the implementation of the diversification agenda has continued to suffer setbacks.

Reform: Nigeria is fighting multiple challenges along with COVID-19 – Presidency (Vanguard)

Malam Garba Shehu, the President’s Senior Special Assistant on Media and Publicity has stated that in these trying times, Nigeria is fighting multiple challenges along with COVID-19. The presidential aide stated this in a statement in Abuja on Sunday while reacting to comments on the Buhari administration following an upward review of the pump price of fuel and electricity tariffs in the country. He said: “To stop the mismanagement of taxpayers money, eliminate corruption associated with subsidies on petroleum products, power, fertilizer among others, the administration took the decision to implement long-delayed reforms, withdraw and allow the market to determine their prices.

Egypt keen to enhance regional, international cooperation for industrial integration: Trade Minister

She delivered a speech on behalf of Egypt’s President Abdel Fattah Al-Sisi during the conference, held under the slogan “Glocalisation: Towards Inclusive and Sustainable Global Value Chains”. Gamea indicated that the Egyptian government has undertaken significant efforts to enhance industrial cooperation with many African countries, to implement joint industrial development programmes and projects Gamea pointed out that the manufacturing sector is foremost in importance among Egypt’s industrial sectors targeted by development plans, due to the pivotal role it plays in creating new added value. It can also be used to open the way for the basic industry products to be used in new manufacturing processes.

Regional and continental news

The Unfinished Agenda of Financing Africa’s COVID-19 Response (Project Syndicate)

The continent’s pandemic-response funding gap is likely to amount to some $100 billion annually over the next three years. So far, the African Development Bank, the IMF, and the World Bank have disbursed about $60 billion to Africa. But, in order to frontload support for developing economies over the next two years, they will need to expand their capital base significantly. That is why we are calling for a new replenishment round for the World Bank’s International Development Association, and additional resources for other multilateral development banks and the IMF.

The simple fact is that some countries are far better equipped to respond to the COVID-19 pandemic than others, and in a deeply interconnected global economy, no one can escape this crisis alone. The international community – especially the G7, the G20, and multilateral development banks – must take bold, innovative, and expeditious action to close it.

Authors: Brahima Coulibaly, Ngozi Okonjo-Iweala, and Vera Songwe

Covid-19 lockdowns in Sadc spawn massive smuggling (The Zimbabwe Independent)

Regional revenue authorities have established collaborative partnerships to combat the proliferation of smuggled goods in the wake of Covid-19 transborder restrictions. Information collected from revenue authorities from five countries suggests that illicit trade, mostly in consumables like alcohol, cigarettes and groceries, has boomed in the five months that regional states imposed lockdowns restricting cross-border movements to contain the spread of the coronavirus. This has, however, opened floodgates for illicit trading across the region’s porous borders. This is enabled by the fact that Sadc countries are highly dependent on each other for goods and services given their interconnectedness.

Slow out of the Blocks: Only two SADC states put their money where their mouths are on COVI-19 vaccine (The Southern Times)

Botswana, Mauritius, Seychelles and South Africa – all SADC member states – are the only African countries that have actively entered the race to secure doses of potential COVID-19 vaccines. Of these, just Botswana and South Africa have committed money for purchase of vaccines via a global network that is pooling resources to assist less developed nations secure medication for their citizens.

Buhari attends ECOWAS Summit in Niger Republic, submits Report on COVID-19 (Vanguard News)

President Muhammadu Buhari will depart Abuja on Monday for Niamey, Niger Republic to participate in the 57th Ordinary Session of the ECOWAS Authority of Heads of State and Government. The one-day summit, according to the President’s spokesman, Malam Garba Shehu, in a statement in Abuja on Sunday will deliberate on the Special Report on COVID-19 to be presented by President Buhari. “The President of the ECOWAS Commission, Jean Claude Kassi Brou will present to the West African leaders, the 2020 Interim Report on activities of the sub-regional body including ECOWAS Vision 2050.

The Experts of the ECA West Africa strengthen their capacities in generational economics and NTA methodology (UNECA)

“Capturing the demographic dividend in West Africa is essential for improving the living conditions of our populations through sustainable development and the structural transformation of our economies,” said Ngone Diop. “I encourage my colleagues to familiarise themselves with the handbook for measuring the generational economy, published in 2013 by the United Nations. It will be very useful to us for the achievement of our vision of creating and strengthening our niche, which is to invest in the demographic economics approach”, continued Ngone Diop.

AU-backed app seeks to speed up border re-openings (TechCentral)

Two major African public bodies are promoting a new technology that could connect the continent’s Covid-19 testing centres and ease a re-opening of travel across the region. The African Union and the Africa Centres for Disease Control and Prevention are encouraging member states to integrate the mobile-based PanaBIOS platform that would allow results from facilities across the continent to be centralised. So far, only Ghana is using the service. “Ghana is being used as the pioneer,” the West African country’s communication minister, Ursula Owusu-Ekuful, said in the capital, Accra. “The learnings from the uptake of the app and the usage of the app will be shared with the Africa CDC and be applied by other African countries,” she said.

Covid-19 hits East African agri value chains (African Business Magazine)

With increased global food, financial and health crises plaguing the world, about 1.3 billion people are not able to access sufficient or nutritious food, and close to a billion people suffer from chronic hunger. As a result, many African countries have refocused attention on the agricultural sector, implementing policies that will enhance public and private sector investments, trade, and markets to promote food and nutrition security. Ultimately the goal is to create and grow businesses leading to economic transformation.

Rwanda to host the first virtual AGRF Summit 8-11 September 2020

In light of the COVID-19 pandemic, Hon. Dr. Gérardine Mukeshimana, Minister of Agriculture and Animal Resources Rwanda and Dr. Agnes Kalibata, President of AGRA on behalf of the Government of Rwanda and AGRF partners, announced today at a virtual press briefing that the Tenth Annual AGRF Summit will be held virtually between 8-11 September 2020. The AGRF Summit, which brings together over 2000 delegates from governments, the civil society, the private sector, research community and development partners will be held, under the theme: “Feed the Cities, Grow the Continent – Leveraging Urban Food Markets to Achieve Sustainable Food Systems in Africa.”

‘I don’t understand why Africa is still hungry’: UN envoy’s plan to transform food systems for all (UN News)

Food systems involve all the stages that lead up to the point when we consume food, including the way it is produced, transported, and sold. Launching a policy brief on food security in June, UN chief António Guterres warned of an “impending food emergency”, unless immediate action is taken. The main impetus behind the Food Summit is the fact that the we are off track with all of the Sustainable Development Goals (SDGs) that relate to food systems, principally ending poverty and hunger, and action on the climate and environment. We want to use the Summit to galvanise and engage people, raising awareness about the elements that are broken, and what we need to change; to recognize that we’re way off track with the SDGs, and raise our ambitions; and to secure firm commitments to actions that will transform our current food systems for the better.

Private sector needs to play its part as 2021 debt deadline looms (The Africa Report)

Amidst the COVID-19 crisis, creditor countries are working on the next steps in dealing with African debt burdens. This time, however, they insist that the private sector will have to get involved. “To date, 28 countries, including 20 in sub-Saharan Africa, are benefitting from the Debt Service Suspension Initiative (DSSI) set up by the Paris Club, for a cumulative amount of $2.1bn, and 11 other applications are still being processed,” said the president of the informal organisation, Odile Renaud-Basso, director of the French Treasury, on 1 September. At the same time, according to data from the G20 group of developed countries on 18 July – the latest to date – 42 governments had made a similar request to this organisation, for a total of $5.3bn.

Global news

Media statement: Meeting of the BRICS Ministers of Foreign Affairs / International Relations - 4 September 2020 (Ministério das Relações Exteriores)

The Ministers exchanged views on major international and regional issues in the political, security, economic, trade, financial and sustainable development spheres, as well as reviewed the progress in intra-BRICS activities.

The Ministers acknowledged the Joint Statement by BRICS Trade Ministers on Multilateral Trading System and the WTO Reform on 23 July 2020 and reaffirmed their support for a transparent, open, inclusive and non-discriminatory rules-based multilateral trading system, as embodied in the WTO. They reiterated the importance of WTO reform and emphasized the central role of the WTO in promoting predictability, stability and legal certainty for international trade. They underlined the importance of all WTO Members abiding by WTO rules and complying with their commitments, thus avoiding unilateral and protectionist measures, which run counter to the spirit and the rules of the WTO. The Ministers stressed the urgency of ensuring the restoration and preservation of the normal functioning of the WTO Dispute Settlement System. They noted also the importance of adopting trade facilitation measures to promote trade relations among BRICS countries.

Angolan president defends “Marshall Plan” for Africa (ANGOP)

The Angolan Head of State took this standing when he was participating, by videoconference, in the Third Edition of the Global Manufacturing and Industrialisation Summit. The statesman noted that “Africa is one of the continents with the world’s greatest reserves of natural resources such as water from rivers and lakes, arable land, forests and abundant mineral resources, including some rare and strategic ones, but it is nevertheless, paradoxically, the least developed continent in economic, industrial and technological terms”. President João Lourenço stressed that Africa’s economic, industrial and technological development would depend on a serious commitment to the massive training of qualified staff in the most different branches of knowledge.

The US Versus Chinese Investment In Africa (Forbes)

Chinese Yuan note atop a map of Africa

The United States recently launched negotiations with Kenya for a free trade agreement. The talks are quite a turnaround. From its onset, the Trump administration has been averse to new commerce initiatives with the continent.

Efforts renewed, the US building closer relationships with African countries can be a vital economic lifeline especially during times of financial instability and uncertainty; Covid-19 being the clearest example. China’s relationship with its African partners is complicated, but will hopefully serve as a significant example in the future as the pandemic subsides. China’s flagship global development strategy, the Belt and Road Initiative (BRI), has led to $1 trillion spent in roughly 70 countries. Despite Covid-19, the US-China trade war, the Hong Kong security law, and a decline in global trade, China’s relationship with Africa can help soften the economic blows.

Cross-border mobility, Covid-19 and global trade (The Financial Express BD)

International trade and investment have always relied on the cross-border mobility of individuals. Transporting goods across borders involves humans, and will do so for the foreseeable future despite important technological advances. In addition, face-to-face contact continues to play a critical role in addressing some of the information and transaction costs involved in trading goods internationally.

This note will begin with a brief presentation of the mobility-related measures implemented by WTO members. It then offers an overview of their trade impact and outlines how governments have, in a second-phase response to the pandemic, fine-tuned their policies. It concludes by discussing possible international cooperative paths to build trade resilience for the future.


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