Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

National news

Master plan starts to encourage poultry sector expansion (Engineering News)

South African poultry producers have pledged to invest R1.7-billion towards expansion and improvement of productive capacity in the country. South Africa’s poultry output grew by 5% during the first eight months of the year, compared with the first eight months of last year, despite the challenges to the operating environment that were posed by Covid-19. In a prior statement, the South African Poultry Association said the industry aimed to increase production by between 10% and 20% by the end of 2022, which will require investment in processing facilities as well as farming to produce the chickens.

SA Tourism pins hopes on govt reopening borders soon to help struggling sector (Eyewitness News)

South African Tourism on Monday said that it was looking closely at government to announce a date to reopen the country’s borders.SA Tourism CEO Sisa Ntshona said that the country was now in the “amber” zone, a good space to be in to announce a date. “What we are looking at now is probably the conditions that will come with the opening of the borders.” He said that it would take about two years for the tourism industry to recover.

Illicit trade thriving during Covid-19 (New Straits Times)

When the Covid-19 pandemic hit South Africa in March, the government responded with heavy-handed measures, including a prohibition on alcoholic drinks and tobacco, hoping that strict restrictions would reduce violent crime, social gatherings for a weekend of binge-drinking, and health issues. While the ban made headway with murder rates reported to have been reduced by 63 per cent, it also partly backfired. Illicit trade of alcohol is now booming in the country as organised crime groups have pounced, smuggling in contraband products for a quick profit. The production of counterfeit alcohol has also increased, becoming a potential health threat.

Green industries expected to aid economic recovery (SAnews)

The Green Economy is one of the four sectors that have been prioritised by government to assist with economic recovery, says the Minister of Environment, Forestry and Fisheries, Barbara Creecy. “South Africa has realised that green industries can open up new possibilities for development and assist in creating much needed jobs. The waste management sector has strong potential to innovate and improve socio-economic conditions, and contribute to sustainable development and resource use,” Creecy said.

Eswatini has Developed Trade Facilitation Instruments for Small Scale Border Traders (COMESA)

The government of Eswatini has developed a national Roadmap for the implementation of the COMESA Simplified Trade Regime (STR) as well as the Trade and Transportation Facilitation instruments for the Small-Scale Cross Border Traders (SSCBT). The Roadmap is under consideration by senior management in respective ministries and institutions in the country. Director of Micro- Small and Medium Scale Enterprises (MSME) in the Ministry of Commerce, Industry and Trade of Eswatini, Mr. Mluleki Sakile Dlamini opened the meeting and emphasized the importance of small-scale cross border trade. He outlined the challenges that SSCBTs face in conducting their businesses noting that the MSME sector contributed to incomes and livelihoods.

Ecocash Behind Spiralling Prices Of Basic Commodities – Mnangagwa (NewZimbabwe.com)

President Emmerson Mnangagwa has said the steep price hike for basic commodities experienced in the country in recent months was the creation of mobile money giant, Ecocash. “We went through hardships, where prices were going up every day, the exchange rate was flying,” said Mnangagwa. “We then set up a committee to look into the issue. We then discovered that there was up to $8, 4 billion which was circulating outside the banking system, which money in financial terms is called phantom money.”

Zimbabwe ready for oil, gas drilling (The Chronicle)

Zimbabwe’s economy is headed for exciting times ahead following the recent announcement by Invictus Energy, the Australia listed resources firm that is exploring for oil and gas in the Muzarabani, that it will start drilling Zimbabwe’s first oil and gas wells within its prospective area in October next year. The Muzarabani prospect has ticked all the relevant boxes to warrant millions of US dollar investment into drilling for oil or gas. Thus far, US$3,5 million has been invested in preliminary work and processing of secondary data, but the actual sinking of the first oil and gas wells in the country will cost upwards of US$15 million.

Why Kenya lost Uganda pipeline deal (Nation)

Nearly four years after Uganda abandoned Kenya in building an oil pipeline that would have transported its oil to Lamu, it has now officially signed a Sh410 billion ($3.5 billion) deal with Tanzania, leaving Nairobi to walk alone. The deal signed on Sunday between President John Magufuli and his Ugandan counterpart Yoweri Museveni will see Kampala route its oil exports through Tanzania, through the 1,445-kilometre crude oil pipeline. The construction is expected to start before the end of the year and it will help Uganda exploit oil discovered near Lake Albert in 2006. Reserves in the area are conservatively estimated at some 1.7 billion barrels.

Avoid trade war with Comesa, SADC blocs, Kenya told (The Star)

The EAC has been according preferential treatment to goods from COMESA and SADC under Section 112 of the EAC Customs Management Act, 2004. However, this lapsed in December 31, 2019, a time when member states were expected to have adopted the new trade deal. “We have been instructed by the Commissioner Customs and Border Control to reject all Comesa entries and notify the clearing agent or importers to pay the requisite taxes,” a KRA internal communication seen by The Star read. The KNCCI is now worried the move could lead to a fall-out between Kenya and other trading blocs.

High Taxes And Levies May Slow Down The Tourism Sector Recovery (Soko Directory)

Tourism and hospitality stakeholders have urged the government to scale down taxes and levies in the tourism industry so as to attract more domestic visitors and recreate jobs for the youth. They argue that the industry risks extreme revenue drop unless taxes and levies at the national and county levels are harmonized. “The government needs to reduce too much burden on the hospitality and tourism sector. Kenya risks losing business if prices offered are way above our neighboring competitors for instance Tanzania, Rwanda, South Africa, and other countries,” said Hasnain Noorani, Kenya Coast Working Group Chair and Managing Director for PrideInn hotels.

South Sudan citizens decry skyrocketing food prices (Xinhua)

South Sudan’s citizens on Monday decried skyrocketing prices of basic commodities like food due to the deteriorating economic situation in the country. South Sudan depends significantly on essential commodities imported from neighboring Kenya, Sudan and Uganda. Moses Lado, a vendor at Jebel market, said that food price hike had negatively impacted his business amid the devaluation of the local currency. “Prices of food in the market have doubled in the recent past while destabilizing livelihoods,” said Lado.

Ethiopia is demonetizing its economy with new currency to tackle hoarding and illegal trade (Quartz Africa)

The Ethiopian government has unveiled a set of new bank notes as a part of its efforts to curb cash hoarding, illegal trade activities, and illicit financial flows in an already struggling economy. “Even though changing currency is costly and expensive, it is very important to the economy,” says Wasihun Belay, a development economist based in Addis Ababa. Although demonetization is an economic strategy used from time to time in developing countries to stabilize the currency and ease inflation it is not without its risks. Economists often warn if mishandled it could trigger market chaos and uncertainty as citizens scramble to swap their notes.”

Nigeria reels from twin crises that threaten food availability (Reuters)

Twin crises, floods and maize shortages, come just after movement restrictions and financing difficulties caused by COVID-19 containment measures complicated spring planting. Some farmers and economists say it could push Nigeria, Africa’s most populous nation, into a food crisis. Rice is the country’s staple grain, and chicken is a core protein. “There is a real fear of having food shortages,” Arc Kabir Ibrahim, president of the All Farmers Association of Nigeria told Reuters. “The effect on the food system is going to be colossal.”

Price hikes anger Nigerians as fuel subsidy ends (Eyewitness News)

Tempers have risen in Nigeria along with prices after the oil-rich nation dumped a controversial petrol subsidy system in the face of a coronavirus budget crunch. The cost of fuel at the pump has risen by around 15% in recent days, hitting a record high of 162 naira per litre ($0.42, 0.36 euros), or $1.55 / 1.36 euros a US gallon, after the government pushed on with deregulation. While such prices may sound cheap in many countries, the hike is a major blow to cash-strapped consumers who see cut-price petrol as one of the few tangible benefits they get from their dysfunctional leadership.

Deregulation of Nigeria’s oil downstream sector not possible in 2020 – Investigation (Vanguard News)

There are strong indications that the downstream sector of Nigeria’s petroleum industry would not be fully deregulated in 2020 as the enabling factors, especially structures, institutions and the Petroleum Industry Bill, PIB, are not yet in place. Under a regulated market regime, the prices of petroleum products are supposed to be determined by the forces of demand and supply without much intervention. But investigation by Energy Vanguard, showed that the Petroleum Equalisation Fund, PEF, which has the responsibility to settle the cost of bridging petroleum products from one part of Nigeria to another, under a deregulated regime, was still performing its role, despite claims that the sector has been deregulated.

Regional and continental news

Boosting African regional value chain development in response to COVID-19: The catalysing role of the AfCFTA (Trade 4 Dev News)

COVID‑19 has magnified Africa’s reliance on imported pharmaceuticals (both final and intermediate products) and amplified the urgency to build competitive, resilient and robust value chains in this sector. Not only are many of the main providers of Africa’s pharmaceuticals heavily hit by COVID‑19 (with main sources of imports being the EU-27, India and Switzerland), but many have also limited exports of medical supplies and medicines associated with the pandemic, putting many African countries in perilous positions.

But the African Continental Free Trade Area (AfCFTA) agreement serves as the leading framework for boosting intra-African trade. Swift implementation will be crucial to fast-track the development of “made in Africa” brands embedded in competitive and robust regional value chains. In fact, a leading objective of the AfCFTA is to ‘stimulate production through the development of regional value chains, as well as ensuring that manufacturing, agro-processing and other activities across the continent are stimulated to supply the market’. The AfCFTA therefore offers an opportunity for the continent to recommit itself to industrial development, in a way that will reduce its high trade dependence on non-African partners, and to position itself more strongly in the face of future global shocks.

The authors: Karishma Banga, Jodie Keane, Max Mendez-Parra, Laetitia Pettinotti, Lily Sommer

Judge proposes new approaches to improve on enforcement of decisions of ECOWAS Court (Apanews.net)

A judge of the ECOWAS Court of Justice, Justice Dupe Atoki, has expressed concern at the ‘unsatisfactory’ level of enforcement of the decisions of the Court by Member States, which stood at 34 percent and suggested the involvement of political actors in the enforcement process in order to emulate the best practices from other jurisdictions. In the paper, on the ‘Enforcement of judgments of the ECOWAS Court of Justice,’ Justice Atoki suggested that the President of the Court should also be allowed to provide a report on the Court to the political authorities to apprise them of the judgments of the Court and their enforcement status for a holistic understanding of the Court.

Ghana International Trade and Finance Conference slated for October 27 (GhanaWeb)

The Ghana International Trade and Finance Conference (GITFIC) in partnership with the Accra Metropolitan Assembly (AMA) will a host dialogue on the African Continental Free Trade Area (AfCFTA) on October 27, 2020. The AfCFTA dialogue is also in collaboration with the Association of Ghana Industries (AGI) to raise awareness, empower and encourage all Member States to take actions necessary to build the logistics and the infrastructure critical for the successful outcome of the AfCFTA.

Afreximbank, ITFC Partner with ARSO to Facilitate Intra-African Trade in Pharmaceuticals and Medical Devices, under the Umbrella of the AATB Program (Africanews)

The African Export-Import Bank (Afreximbank) and the International Islamic Trade Finance Corporation (ITFC), have partnered with the African Organisation for Standardisation (ARSO), to launch a new Arab-Africa Trade Bridges Program (AATB) initiative called the Harmonisation of Standards for Pharmaceutical and Medical Devices in Africa, aimed at promoting the quality and safety of medicines and medical devices imported or produced on the continent. Harmonized product standards are critical to the implementation of the African Continental Free Trade Agreement (AfCFTA), ensuring that producers of goods on the continent comply with one shared set of minimum regulatory and customer quality requirements, in turn allowing them to supply the 

The Next Generation Africa Climate Business Plan: Ramping Up Development-Centered Climate Action (World Bank)

Economic growth and shared prosperity in Sub-Saharan Africa will be increasingly undermined if vulnerabilities to climate change are not addressed. Climate impacts, which are already being felt will escalate significantly, as early as 2030, causing many low-capacity countries to be even more vulnerable. Given the climate sensitivities of multiple engines of growth, agriculture, natural capital, and infrastructure, the urgency for countries to ramp up climate-smart development at scale and across the growth spectrum is an imperative. The Next Generation Africa Climate Business Plan provides a platform to further galvanize climate action by prioritizing its focus on the region’s core development challenges and priorities.

How Africa can move from net food importer to exporter (The New Times)

Africa remains a net food importer, meaning that it imports more foods than it exports. And, increased food demand and changing consumption habits are leading to Africa’s rapidly rising food import bill. AfDB said that Africa’s food imports include wheat, sugar, rice, beef, and soybeans, yet, these commodities can be produced on the continent. By continuing to pay for food to be imported, the Bank said that Africa is losing precious foreign exchange, so it must quickly eliminate the negative balance, and start to sow, grow, process, consume, and ultimately to export the food itself. It added that export of primary agricultural production is still very high in Africa compared to other regions of the world.

Global news

Kenya-US free trade deal won’t come easy (Business Daily)

Some 38 African countries are eligible for benefits under the African Growth Opportunity Act (Agoa) and the ongoing negotiations for a Free Trade Agreement (FTA) between Kenya and the US should be a concern to all of them, especially the least developed. The concern is that the model agreement proposed by Washington is a FTA and not a development cooperation agreement such as that signed between the US and the Southern African Customs Union (SACU).

Ethiopia: U.S.-Ethiopia Relations Take A Wrong Turn (allAfrica.com)

The Trump administration’s decision to suspend and delay development assistance to Ethiopia over the filling of the new Grand Renaissance Dam (GERD) is misguided and shortsighted. The move will undermine Washington’s relations and influence in one of Africa’s most significant states. The decision taken in late August was intended to push Ethiopia into accepting a negotiated solution favored by Egypt. At issue is a timetable for filling the new dam and an agreement on how water from the dam will be allocated to Egypt and Sudan.

Related: Ethiopia does not need permission to fill dam – envoy (The Star)

Annual Goalkeepers Report Shows COVID-19 Has Stalled 20 Years of Progress (Bill & Melinda Gates Foundation)

The Bill & Melinda Gates Foundation has launched its fourth annual Goalkeepers Report, featuring new data showing how the ripple effects of COVID-19 have stopped 20 years of progress toward the United Nations Sustainable Development Goals (Global Goals). Because of COVID-19, extreme poverty has increased by 7%. Vaccine coverage, a good proxy measure for how health systems are functioning, is dropping to levels last seen in the 1990s, setting the world back about 25 years in 25 weeks. Economic damage from COVID-19 is reinforcing inequalities. The pandemic has had a disproportionate impact on women, racial and ethnic minority communities, and people living in extreme poverty.

Environment: More can be done to ensure a green recovery from COVID-19 crisis (OECD)

Many governments have included “green” recovery measures in their crisis recovery packages (preliminary OECD estimates suggest these amount to about USD 312 billion) – for example through grants, loans and tax reliefs directed towards green transport, circular economy and clean energy research, development and deployment. They also include new funding and programmes to create jobs and stimulate economic activity through ecosystem restoration, control of invasive alien species and forest conservation. But so far the balance between green and non-green spending is not favourable in terms of the support towards positive environmental outcomes.

Trade as a Tool for an Efficient Recovery (IMF Blog)

As economies now look for paths to recovery from the COVID-19 crisis, new evidence reaffirms that policies for more open and trade-integrated economies could significantly benefit domestic competition and ultimately may help lower costs for consumers in emerging and developing economies. A recent Working Paper, building on the Regional Economic Outlook chapter on competition, competitiveness and growth in Sub-Saharan Africa, examines the effect of trade liberalization using a large firm-level dataset covering about 400,000 firms in 83 emerging and developing economies from 2000 to 2017. The findings support efforts currently underway to increase trade integration among emerging and developing economies. The African Continental Free Trade Area, which was the subject of another Regional Economic Outlook chapter, as well as a recent IMF Staff Discussion Note, will go into operation in January and is a historic opportunity to deepen trade and economic integration.

Oil demand set for slow recovery from virus: IEA (Eyewitness News)

With novel coronavirus cases surging in many parts of the world and more people working from home, the recovery in global oil demand is likely to be slow in the coming months, the IEA said on Tuesday as it lowered its forecasts. Oil demand quickly recovered part of the lost ground from April when much of the world was in lockdown to slow the spread of the virus that causes the COVID-19 illness. But the International Energy Agency said in its latest monthly report it expected the recovery in demand “to decelerate markedly in the second half of 2020, with most of the easy gains already achieved”.


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