tralac Daily News
A Strengthened Partnership for Post-COVID-19 Economic Recovery (US Embassy in South Africa)
The Department of International Relations and Cooperation hosted the 11th Annual Bilateral Forum (ABF) on 9 and 10 September 2020 under the theme “A Strengthened SA-US partnership for post-COVID-19 Economic Recovery.” The purpose of the ABF is to review progress in sectoral cooperation, identify challenges, and make recommendations for future cooperation that advances the interests of both countries. The meeting resolved that both countries would work to address challenges and identify opportunities in the bilateral trade and investment relationship, with a view to increasing the levels of trade and investment to assist in economic recovery.
Closing tax leakage from illicit alcohol trade critical for post-lockdown economic recovery (Rising Sun Chatsworth)
The alcohol industry notes the recent media reports attributed to the SARS commissioner, Edward Kieswetter, confirming that the illicit trade of alcohol is thriving and that it could take years to dismantle the criminal networks that entrenched themselves as a result of the ban on the sale of alcohol during the COVID-19 lockdown. The report stated that the retail ban on alcohol sales and closure of tourist accommodation facilities were notable drags on trade activity, with consumer spending on alcohol and cigarettes falling by 92, 4 percent.
The South African Reserve Bank on Thursday announced that the current account of balance payments switched from a surplus of R63.4 billion in the first quarter of 2020 to a deficit of R103.6 billion in the second quarter of 2020. According to the Reserve Bank, this was the only surplus since the first quarter of 2003. The Reserve Bank pointed to merchandise exports decreasing more than imports for the deterioration of trade balance. “Consequently, the current account balance as a ratio of gross domestic product (GDP) reverted to a deficit of 2.4% in the second quarter of 2020 from a surplus of 1.2% in the first quarter,” the Reserve Bank said. South Africa’s trade surplus more than halved from R201.7 billion in the first quarter of 2020 to R91.5 billion in the second quarter.
In recent EU negotiations, a clear shift in narrative from “development” to “fostering partnerships” is apparent – as seen during the 10th African Union – European Commission meeting in Ethiopia early this year. Botswana’s sound macroeconomic policies, its legal and regulatory frameworks, and strong economic and political institutions make the country a safe and desirable investment destination. With growing infrastructure development and geographically in a central location, Botswana is seen by some as the gateway to doing business in the region, and a credible entry point to access the entire continent.
New Namibian terminal 100% operational (Port Strategy)
A new container terminal at a Namibian port is now fully operational, according to a report by the African Development Bank (ADB). It noted “the expansion has steered Walvis Bay towards becoming a logistics hub for southern Africa that aims to meet the growing demand for freight ,while promoting new maritime access to serve the landlocked countries of the Southern Africa Development Community (SADC)”. The ADB provided a ZAR2,982m loan representing over 70% of the project funding.
Firms, KRA fail to strike tax rise deal on 31 goods (Business Daily)
A meeting between the Kenya Revenue Authority (KRA) and manufacturers over planned increases in taxes on more than 30 goods including fuel, bottled water, juice and beer from October failed to reach an agreement on Thursday. KRA said it needs time and legal advice on a petition by the Kenya Association of Manufacturers (KAM), which seeks to freeze the automatic tax adjustment from October 1. The manufacturing sector lobby last week urged the taxman to pause implementation of the annual inflation adjustment tax that affects excisable goods, citing economic hardships as a result of Covid-19 crisis.
New KRA app to allow tax payment through M-Pesa (Business Daily)
Workers and businesses can file their returns and pay taxes through their mobile phones after the Kenya Revenue Authority (KRA) launched an app for accessing its services in the race to ease duty payments and boost collection.The Kenya Revenue Authority (KRA) said the app, dubbed KRA M-Service, that will mainly use M-Pesa is aimed at making tax transactions easier and cut the cost of compliance through removal of intermediaries.
Besides cost, what is good in digital tax? (Daily Monitor)
Whereas manufacturers, and genuinely so, are concerned on the cost that comes with digital tax stamps, government insists, the conversation should be beyond cost. The focus, government argues, should be on the advantages therein, key among them curbing the increasing rate of counterfeits, balancing the tax equation and widening the tax base. For close or more than a year now, the exchange between government, particularly Uganda Revenue Authority (URA) and manufacturers has been too loud.
Farmers’ lobby wins first round in sugar rules case (Business Daily)
The High Court has temporarily stopped implementation of new regulations aimed at reviving the ailing sugar sector. In his ruling, Justice Roselyne Aburiri ordered that implementation of the Crops (Sugar) General) Regulations, 2020 be stopped pending the hearing and determination of a case filed by a farmers’ lobby group. “Undoing an implemented regulation will be an uphill task and will render the pending petition nugatory and the petitioner will be rendered a mere pious explorer in the pursuit of justice,” said judge Aburiri.
Oil spill threatens Mauritian blue economy, will take “decades to recover” (Southern African News Features)
An oil spill off the coast of Mauritius in July is threating the island nation’s efforts to attain a blue economy. “We are talking of decades to recover from this damage, and some of it may never recover,” notes Mauritian oceanographer, Vassen Kauppaymuthoo. Mauritius relies heavily on tourism, a sector already heavily impacted by the ongoing Covid-19 pandemic. The sector is the third pillar of the economy after manufacturing and agriculture. It is estimated that more than 100,000 domestic and international tourists annually visit the Blue Bay, where the spill occurred.
Sudan declares state of economic emergency after sharp fall in currency (The East African)
Sudan declared an economic state of emergency on Thursday after its currency fell sharply in recent weeks, setting up special courts to prosecute what officials called a “systematic operation” to vandalise the economy. The transitional government, in charge of the country since the ouster of Omar al-Bashir last year, will criminalise purchasing, selling, possessing or smuggling raw gold or precious minerals, key hard-currency earners. “We are able to simply say what happened is an open war against the revolution, the economy, the government,” Information Minister Faisal Saleh told a news conference.
President Buhari has warned the Central Bank of Nigeria against implementing any plans geared towards providing forex for the importation of “food items and fertilizers” into the country. The President made this remark via his twitter handle on Thursday, September 10th as he presides over the National Food Security Council meeting yesterday at the State House, Abuja.
Regional and continental news
Following a meeting convened by the Pan-African Private Sector Trade and Investment Committee (PAFTRAC) and hosted by the Afreximbank, a communiqué addressed to members of the WTO and the eight candidates who have been shortlisted as the institution’s next Director General was released yesterday calling for a wide range of reforms. The communiqué was formulated following numerous consultations with PAFTRAC members, its institutional partners, and through a comprehensive survey of the African private sector. Within it, the Committee have highlighted a number of recommendations to ensure the institution is more effective in growing global trade but doing so in a manner that is fair to all.
A survey of 200 CEOs was commissioned by PAFTRAC, and conducted by African Business magazine in partnership with the Afreximbank. It revealed that: African CEOs explicitly called for a fairer system governing global trade that will support developing countries; 37% of the CEOs surveyed feel WTO as it stands is ineffective; 65% of the CEOs feel the global trading system is unfair to Africa; The CEOs were also optimistic about the future outlook: Over 50% of CEOs believe global trade will increase over the next 12 months; and over 70% of CEOs believe intra-Africa trade will increase over the next 12 months
The African Union-Economic, Social and Cultural Council (AU-ECOSOCC, Nigeria), on Thursday, said it is considering common currency and market for over 50 countries in the continent as part of its development plans under ‘Agenda 2063′ Nigeria’s Representative for AU-ECOSOCC, Dr Tunji John, disclosed this in Abuja. “The African Union ‘Agenda 2063′ is a brain work for development. The slogan for that agenda is when you say African Union, you will say “Africa we want”. What type of Africa are we envisaging in the next 50 years? We are saying that we need an Africa with a common currency, common market.”
How Africa can manufacture to meet its own pharmaceutical needs (Africa Renewal)
The PMPA business plan underscores the urgency in addressing the challenges facing the industry. One such challenge is a lack of affordable financing and modern technology, which hampers business expansion. Other challenges are Africa’s small fragmented markets and weak regulatory frameworks. The good news is that some opportunities are available to be explored. For example, the African Continental Free Trade Area (AfCFTA), if successfully implemented, will address the challenge of small fragmented markets that have for a long time disincentivized pharmaceutical manufacturing investors.
How bitcoin gained currency in Africa (The Japan Times)
Four months ago, Abolaji Odunjo made a fundamental change to his business selling mobile phones in a bustling street market in Lagos: He started paying his suppliers in bitcoin. Odunjo sources handsets and accessories from China and the United Arab Emirates. His Chinese suppliers asked to be paid in the cryptocurrency, he said, for speed and convenience.
The Economic Commission for Africa (ECA) on Thursday launched a new COVID-19 cross-border trade report urging governments on the continent to adopt and harmonize policies that will help continent strike an appropriate balance between curbing the spread of the virus and facilitating emergency and essential trade. Titled pdf Facilitating cross-border trade through a coordinated African response to COVID-19 (2.16 MB) , the report says continued inefficiencies and disruptions to cross-border trade presented significant challenges for Africa’s fight against COVID-19, and risked holding back the continent’s progress towards the attainment of the sustainable development and goals and Africa’s Agenda 2063. Maintaining trade flows as much as possible during the pandemic will be crucial in providing access to essential food and much-needed medical items and in limiting negative impacts on jobs and poverty, said Mr. Stephen Karingi, Director of the ECA’s Regional Integration and Trade Division (RITD) that penned the report.
Representatives of the African Development Bank, governments, Development Finance Institutions, the private sector and professional associations joined a September 8 workshop to discuss how the Bank can strengthen support for Public Private Partnerships and channel greater investment toward economic and social infrastructure. “Before the COVID-19 pandemic, African infrastructure was already struggling to structure projects tailored for the private sector and at the same time achieving value for money for the public sector including affordability for users. It is therefore imperative that hybrid solutions such as PPPs must be seen and promoted as a way of building back better, stronger, greener, by clawing back private capital to infrastructure while creating much needed fiscal room for governments to address multiple other demands including building health systems’ resiliency,” Bank Vice President Solomon Quaynor said in his opening remarks.
The Africa Nexus: Intra-Trade and Investment as drivers of African Development (Brand South Africa)
Brand South Africa today hosted an Africa nexus research reference group webinar with key objectives to determine insights and perspectives on how the African Continental Free Trade (AcFTA) could enable economic recovery and development in the context of the impact of the COVID-19 pandemic. The purpose of the research reference group was to bring South African companies together that have experience of doing business in peer African markets. Over the years Brand South Africa has conducted extensive research in peer markets to determine the reputation, and profile of South Africa as an investor and trade partner. Through this research it has emerged that market entry strategies adopted by South African companies when they enter peer markets is a critical focus area if the country is to deepen its business relations across the continent.
Lack of available financing was already one of the most important challenges for the hospitality industry in Africa prior to the Covid-19 crisis. While Africa still accounts for relatively few Covid-19 deaths compared to the rest of the world, the economic impacts of the pandemic on the continent continue to grow.
The Kenya-US trade deal is lopsided and will only benefit the latter, the United Nations Conference on Trade and Development (UNCTAD) undersecretary Mukhisa Kituyi has said.In an exclusive interview with the Star, the UNCTAD head, said the US market is already open for Kenyan products under the Africa Growth Opportunity Act (AGOA) that expires in 2025.Kituyi wondered what market Kenya is set to create in the US under the planed Free Trade Agreement, considering it is yet to exhaust existing market openings under AGOA.
Trump admin bets millions on rural African e-commerce startups (Quartz Africa)
The United States’ International Development Finance Corporation (DFC) has backed two fledgling e-commerce startups operating in East Africa as part of its latest quarterly $3.6 billion investment spend. The DFC confirmed a $5 million equity investment in Copia Global, a Kenya-based e-commerce and logistics startup that focuses on under-served consumers in rural areas. The timing of DFC’s investments is consistent with the uptick in the adoption of digital services, including e-commerce, as a result of the Covid-19 pandemic and the lockdown measures instituted to restrict the virus’ spread. Inadvertently, those restrictions have been a boost for e-commerce on the continent with more Africans shopping online out of necessity and safety.
Kenya’s Amina Mohamed promises to deliver if elected director-general of WTO (African Business Magazine)
While some commentators are worried about whether the World Trade Organization (WTO) will survive a move towards protectionism in more developed markets, Kenya’s former minister of foreign affairs and international trade remains upbeat about the uses and benefits of multilateralism. Mohamed said: “I definitely think that an African director-general would be a good arbiter of any tensions within the multilateral system.” The fact that African countries have created the largest multilateral trade area in the form of the African Continental Free Trade Area (AfCFTA) since the creation of the WTO in 1995 – while other blocs are showing signs of disintegration – is presented as evidence that the mantle for multilateralism may have passed to the continent.
WTO members have highlighted the negative impact of the COVID-19 pandemic on the participation of developing countries in world trade. At a meeting of the Committee on Trade and Development on 7 July dedicated to Aid for Trade, members noted that developing countries’ exports of goods and services have been badly affected by a global decline in demand and disruptions in production chains. WTO Deputy Director-General Yonov Frederick Agah, who oversees development matters in the WTO Secretariat, said: “The economic fallout from the COVID-19 pandemic risks reversing progress made in their trade integration and economic development. We are following very closely the impact of the pandemic and the measures that members are taking in response to it.”
A majority of destinations around the world (53%) have now started easing travel restrictions introduced in response to the COVID-19 pandemic. Though many remain cautious in view of the development of the pandemic, the seventh edition of the UNWTO “COVID-19 Related Travel Restrictions: A Global Review for Tourism” confirms the ongoing trend toward the gradual restart of tourism. “Starting to ease restrictions on travel opens the doors for tourism’s social and economic benefits to return. While we must remain vigilant and cautious, we are concerned about those destinations with ongoing full travel restrictions, especially where tourism is a lifeline and economic and social development are under threat.”
Container shipping is closely correlated with developments in the world economy, manufacturing, and consumption. Consequently, containership port call patterns could generate useful insights into the underlying macroeconomic trends. As highlighted by data on port calls and shipping schedules, there seems to be a pickup in shipping activity since the third quarter of 2020. Preliminary results from UNCTAD's nowcast that tracks global merchandise trade shows a similar development, estimating steep declines during the second quarter and forecasting a partial recovery in the third quarter.
Africa has been listed, in a new International Energy Agency (IEA) report, as one of the locations that could emerge as dominant in the production of green hydrogen, which the agency says is required to extend the decarbonisation reach of renewable electricity to industries where the direct use of power is difficult, such as steel manufacturing and aviation. Published on September 10, the IEA’s ‘Energy Technology Perspectives 2020’ report says the global capacity of electrolysers, which produce hydrogen from water and electricity, will need to rise sharply as part of a broader, multi-technology effort to align the global energy system with international climate goals.
Hopes and Challenges for the First Ever Food Systems Summit (Inter Press Service)
Building inclusive and healthier food systems, and safeguarding the health of the planet will be some of the key priorities at the first-ever Food Systems Summit next year. “Food is more than what satisfies our hunger, it’s more than what nourishes our bodies and brains,” Kalibata, former Minister of Agriculture and Animal Resources in Rwanda, said in a passionate speech in February. “Food is…economics, politics.” Kalibata has ambitious plans for the Food Systems Summit. She said there’s a U.N. Task Force dedicated to the summit that will be guiding existing research “so that nothing falls through the cracks”, and it will be collaborating with experts examining scientific data from around the world.
EU Logistics In The BRI Maps: Synergy of BRI and TEN-T (Modern Diplomacy)
Deepening integration processes within the Union and building up mutual economic and social ties have revealed bottlenecks in European logistics in the form of disparate national projects for its development, lagging in the introduction of intermodal transport technologies, and insufficient coordination of the development of individual modes of transport and improving their environmental friendliness. In order to eliminate these bottlenecks, the EU adopted the Trans – European transport network development program (TEN-T), designed up to 2050.