tralac Daily News
Retail trade confidence edged up in Q3 – Bureau for Economic Research (Business Report)
The Bureau for Economic Research (BER) on Monday said that retail trade confidence edged up in the third quarter of this year after plunging to a 29-year low of 11 index points in the second quarter. The BER, however, said retailers noted that underlying business conditions remained tough. BER said the improvement in sentiment across the entire trade sector can certainly be attributed to the eased lockdown restrictions since the bureau’s second quarter survey, when the sector registered record low levels across all categories.
South African poultry producers have invested more than half of the funds they committed as part of a so-called master plan to grow the industry as the government earlier this year raised tariffs to counter cheap imports. Around R1 billion ($60.2 million) of the R1.7 billion pledged for expansion by 2022 has already been invested and 5% more chickens are being produced for slaughter each week, Izaak Breitenbach, a general manager of the South African Poultry Association, said Tuesday in an emailed statement.
Botswana’s Financial Stability at Risk (Botswana Gazette)
Experts say that If the pandemic becomes more protracted, it will further elevate risks to financial stability; in particular potential increase in default of bank loans and insurance premiums payments or contributions to pension funds, as well as, early pension withdrawals emanating from loss of employment and, the Financial Stability Council (FSC) said. Overall, not-withstanding the challenges engendered by the onset of the COVID-19 pandemic, the domestic financial system continues to be resilient, characterized by strong capital buffers, liquidity position and profitability. The enduring stability of the financial system according to FSC is supported by a sound macroeconomic environment, efficient market infrastructure and effective le-gal and supervisory frameworks.
Kenya’s shipyard to boost regional maritime scene (Business Daily)
The construction of one of the largest slipway in East Africa by the Kenya Navy is expected to be a major boost to maritime operations in the region. The facility, which is being put up at the Mtongwe Navy Base in Mombasa, is one of the flagship projects in new plan to revamp Blue economy. The project which is expected to be completed by June 2021 will be able to handle vessels with a capacity of up to 4,000 tonnes and measuring 150 metres high and 30 metres wide.
TANZANIA and Rwanda have committed to address trade barriers in order to strengthen bilateral and economic ties that would ultimately enhance business and competitiveness. According to the United Nations COMTRADE database on international trade, the two East African nations have been for many years having great trade relations that accelerated investments between the two countries. However, despite the challenges, the records show that Rwanda imports from Tanzania were 224.54 million US dollars while Rwanda exports to Tanzania were 5.1 million US dollars last year.
Containment measures enacted earlier this year to stop the spread of COVID-19 in the country’s three most affected cities have directly impacted informal businesses and the most vulnerable households. “During the period of restriction where the incomes of these vulnerable households are affected, social safety nets are a way to help families meet their basic food needs, avoid selling their assets or sacrificing their livelihood to survive, protect their human capital, while respecting the rules of confinement,” explained Julia Rachel Ravelosoa, World Bank Senior Social Protection Economist for Madagascar.
Developed by the Cash Working Group, the platform bringing together the government, technical and financial partners and social protection actors of which the World Bank has been a member since its establishment in Madagascar in 2016, this cash transfer program will be extended to prepare the period of deconfinement and the reopening of schools in order to better protect the already fragile human capital. For the World Bank, an additional financing is underway to expand the cash transfer program to more geographic areas and reach more vulnerable people.
Headline Inflation has assumed a new pattern over the last three months, primarily driven by pressures in the food basket, reflecting a shock to crop cultivation from covid-19 restrictions and border closures. In addition, more recent developments in currency markets, where the Naira has weakened, as well as the increases in petrol prices following the removal of blanket subsidies have underpinned inflationary expectations. Looking ahead, sizable increases in electricity tariffs which came into effect in September as well as continuing fuel price pressures could see inflation head towards 14% levels in Q4 2020. Given the supply-side driven nature of the inflationary bout as well as the recent pivot to unorthodox monetary policies (which include liquidity tightening measures via CRR debits) it is likely that the CBN will ignore these numbers and persist with its current stance.
Unstable laws affecting flow of foreign investments into oil sector, says NNPC (The Guardian Nigeria)
The oil and gas sector might not attract the needed foreign direct investments (FDIs) except the country reviews its regulatory framework, the Nigerian National Petroleum Corporation (NNPC) said yesterday. “We need to act quickly to move from this unstable situation to a very stable one, and the only way is for us to get the Petroleum Industry Bill (PIB) to work so that countries and investors can work with us,” the GMD stated.
Manufacturers worry about rising inflation, access to forex for raw materials (The Guardian Nigeria)
Local manufacturers have expressed concerns about rising inflation in Nigeria, considering that prices are further spiked by challenges in supply chains, occasioned by the inability to access foreign exchange for the importation of critical raw materials. According to the operators, the trend is expected to continue till the year end, except macro-economic changes are implemented. While they predicted an inflation rate of between 15 and 18 per cent, the Central Bank of Nigeria (CBN), said inflation would likely rise up to 14.15 per cent at the end of December.
The economic challenges triggered by the COVID-19 pandemic and accompanying issues from foreign exchange illiquidity coupled with the existing structural and regulatory imbalances in the economy constrained the operations of the big players in the paints and coatings industry in the first half of the year. The knock-on effect of the COVID-19 induced lockdown on the global and domestic value chain like other sectors in the economy took a huge toll on the activities of the producers in the paint and coating industry, as the pandemic disrupted their operations and also their trade segments, and this in extension led to a fall in demand, sales volume, revenue and underlying profits of the players.
Regional and continental news
South Africa’s Minister of Finance, Mr Tito Mboweni, chaired the 4th joint Finance and Trade Ministers’ virtual Ministerial Retreat meeting on 21 September 2020. The Ministers agreed on refined development priorities for the Southern African Customs Union (SACU) within the changing global and regional developments that have impacted on the Union; as well as agreed on activities that could be prioritised for SACU going forward and their sequencing. Ministers observed that much disagreement remains around issues involving the Revenue Sharing Formula (RSF) and Tariff Setting architecture, respectively. However, in the spirit of unity, they were unanimous that specific attention should be put on those issues that propel SACU forward.
In August 2018, a report on the state of cryptocurrency regulation across Africa came back with one obvious conclusion: most countries were undecided on what to do.In fact, 21 African countries had made no public stance on cryptocurrency regulation at the time, while only two had shared favorable stances about potential regulation. But, in what represents a major shift, Nigeria and South Africa—two of the continent’s largest economies—are stepping up regulatory plans.
In April, South Africa took its first steps towards creating cryptocurrency laws by publishing a framework proposal and, more recently, Nigeria laid out plans to regulate cryptocurrencies through its Securities and Exchange Commission. This is a marked turnaround from two years ago when the Nigerian lawmakers asked the central bank to “investigate” bitcoin.But progress remains uneven across the continent. Kenya, which has typically been at forefront of adoption of financial technology solutions in Africa, has not set out concrete plans for regulation since its central bank warned local banks against cryptocurrency dealings.
‘Africa must tap the incredible opportunity before it’ – Sayeh (The Africa Report.com)
COVID-19 has disrupted our lives and livelihoods at a pace and scale not seen in living memory. The pandemic threatens to wipe out almost a decade of development progress in Africa, as the effect of weaker health systems, lockdowns, commodity price drops, trade collapse, evaporating tourism and shrinking remittances hit the region – all at the same time. To secure a sustainable long-term recovery, leaders must make the right policy choices and mobilise investments in the region.
Dr. Akinwunmi Adesina, President of the African Development Bank (AfDB), will deliver the keynote address at the Agriculture Summit Africa (ASA) 2020 holding between September 23rd and 24th. Agriculture Summit Africa, an annual event organized by Sterling Bank since 2018, is one of the continent’s leading, privately funded platforms dedicated to increasing the value of the agribusiness value chain. It creates a convergence of private and public sector interests, development finance institutions, agribusiness investors, and players every year. The theme of this year’s Summit is, ‘Fast Forward Agriculture: Exploiting the Next Revolution.’
The Chief Executive Officer, Ecobank Transnational Incorporated (ETI), Ade Ayeyemi has reiterated that African countries must adopt a continent wide approach to business and also focus on wealth creation to be relevant in the global value chain. According to Ayeyemi, for the African Continental Free Trade Agreement (AfCFTA) to become a reality, there must be commitment and readiness for trade facilitation by the individual nations. Ayeyemi who was speaking at the Ecobank virtual Regional Trade Conference 2020, noted that Ecobank is fully committed to Africa as the foremost Pan-African Bank to Unequivocally support the implementation of AfCFTA, readiness to use its unique pan-african platform to facilitate trade, payment and business and deployment of its strong Africa knowledge to support governments and businesses.
President of the Senate, Dr. Ahmad Lawan, has stated that the need for necessary legal backing for the African Continental Free Trade Agreement (AfCFTA) to become effective. He also stressed that for the agreement to yield expected results, it must be backed by the right policies and robust implementation. According to Lawan, aside facing the challenges of unemployment and underemployment, which have been a trigger for both regular and irregular migration, the economies of African countries have been characterised by low productivity, reduced efficiency, and the problem of limited resources. He, therefore, described the African Continental Free Trade Agreement as “a step in the right direction for the growth of African economies through limited restrictions, leading to the stimulation of trade, commerce, and industry.
CEMAC: Towards the creation of a mixed inter-state customs brigade (Business in Cameroon)
Cameroon’s Directorate-General of Customs recently hosted a meeting aimed at ensuring the consistency of the draft regulation on the creation, organization, and operation of a mixed inter-state customs brigade within the CEMAC region. During the meeting, “relevant” proposals were made for the purpose. For instance, it was suggested that the legal status of the staff employed by the brigade should be clarified, the nature of their works and the instrument they will need should be estimated as well as the means to evaluate their works elaborated. The participants also suggested that integration be promoted via facilitation of the transport and transit of goods and the promotion of free movement of people.
German-funded project to develop a green hydrogen atlas across Southern Africa is integrating the Southern African Development Community (SADF) region ahead of the projected opening up of a trillion dollar market going into the future. Funded €5.7-million by the Germany Federal Ministry of Education and Research (BMBF), the Green Hydrogen Atlas-Africa project is also placing Southern Africa on the road to contributing meaningfully to global sustainable development goals. “We’re moving really fast,” Sasscal executive director Dr Jane Olwoch commented to Engineering News & Mining Weekly in a Zoom interview, in which she described the green hydrogen atlas project as the starting point of a process to firm up data and validate green hydrogen sweet spots.
How African nations worked together to control the coronavirus (The Christian Science Monitor)
At a lecture to peers this month, John Nkengasong showed images that once dogged Africa, with a magazine cover declaring it “The Hopeless Continent.” Then he quoted Ghana’s first president, Kwame Nkrumah: “It is clear that we must find an African solution to our problems, and that this can only be found in African unity.” The coronavirus pandemic has fractured global relationships. But as director of the Africa Centers for Disease Control and Prevention, Mr. Nkengasong has helped to steer Africa’s 54 countries into an alliance praised as responding better than some richer countries, including the United States. “Africa is doing a lot of things right the rest of the world isn’t,” said Gayle Smith, a former administrator with the U.S. Agency for International Development.
Fuelled by smart technologies, mobile devices, and 24/7 connectivity, the way consumers browse, shop, and pay is moving towards digital. In response to these evolving consumer practices, commerce itself is undergoing a profound transformation, with businesses looking at digital solutions to improve sales, acquire new customers, and reduce costs. Cross-border sales have opened the door to a world of opportunity and e-Commerce companies are eager to storm through. Digitalization brings new opportunities. Digital services and platforms are helping to digitize many of Africa’s small businesses and can offer a pathway towards formalization. However few entrepreneurs really go regional, much less global as they lack the relevant skills, have not yet seen the benefits of the digital economy or have concerns about more formalized trading.
Global trade news and Africa's global relations
President Cyril Ramaphosa has called on the international community to support the rollout of a comprehensive stimulus package for African countries. Addressing a virtual sitting of the 75th United Nations General Assembly debate on Tuesday, President Ramaphosa, who is also the Chairperson of the African Union (AU), said the stimulus package will enable African countries to mitigate the health impacts of COVID-19 and aid the continent in the immense task of rebuilding its shattered economies. “We must boldly pursue avenues of redistribution and redress as a means of advancing shared prosperity. We must deal decisively with the rot of corruption that is robbing our people of the opportunities and services that are their right,” he said.
Transforming Agriculture for Food, Nutrition and Livelihoods (IDN-InDepthNews)
COVID-19 has turned a bad situation to worse. Smallholder farmers lost effective markets for their produce against increasingly difficult trading conditions and the impact of climate change on the production. In a new assessment, in May 2020, the United Nation warned that the coronavirus pandemic could precipitate a “global food emergency”. “The impact of COVID-19 on food systems is significant,” Dhanush Dinesh, Global Policy Engagement Manager, at CCAFS told IDN, pointing that the pandemic has affected the production and distribution of food through disrupted input supplies and market and distribution networks.
US sets lower annual apparel import cap under AGOA (Apparel Sourcing & Textile Industry News)
The US has set new – lower – annual limits on duty and quota-free imports of apparel articles assembled from regional and third-country fabric under the African Growth and Opportunity Act (AGOA) in the upcoming fiscal year. The new figures are released by the Committee for the Implementation of Textile Agreements (CITA) for the 12 months from 1 October 2020 to 30 September 2021. The annual limits are set out in the AGOA Acceleration Act of 2004, and are calculated based on the volume of all apparel articles imported into the United States in the preceding 12-month period.
In a recent interview with the BBC, Tibor Nagy, the US assistant secretary of state for African Affairs remarked: “For too long when investors have knocked on the door, and the Africans opened the door, the only person standing there was the Chinese.” African countries are redefining the nature of trade relations with the US. Some are pursuing a bilateral arrangement with the US as they don’t find the US approach of multilateralism useful anymore. Kenya and the US are negotiating a Free Trade Agreement (FTA). If the FTA goes through, it will be America’s first bilateral trade agreement with a country in sub-Saharan Africa. U.S. Trade Representative (USTR), Ambassador Robert Lighthizer, has said the deal will become a model for future trade agreements with other African nations.
Covid-19 resurgence in Europe worries horticulture traders (Business Daily)
Kenyan fresh produce exporters are concerned about the possibility of a second Covid-19 lockdown in Europe, which would hurt their sales ahead of the peak season. The head of the Horticulture Directorate Benjamin Tito said that should the UK and other European countries – which are major markets for fresh produce – go into new lockdowns due to rising Covid-19 cases , local producers will face devastating consequences, especially if this entails closure of the European airspace. “We are keenly monitoring the development in the UK, if it will involve the cancellation of flights, then it might have a huge impact on our horticulture sector,” said Mr Tito.
the UK and Kenya will not stand still and are working at pace to secure an agreement before the end of UK’s transition period with the EU at the end of the year,” Trade Cabinet Secretary Betty Maina said yesterday.Such an agreement would provide a transition mechanism for Kenya and enable other EAC partner states to join when they are ready to do so while negotiations continue, the CS said.UK’s exit from EU has a timeline of December 31, and failure to have a trade deal will expose Kenyan exports to higher tariffs, as the EAC-EU EPA terms will not be applicable in UK.”This will provide the strongest possible platform for the United Kingdom, Kenya and, ultimately, the whole EAC, to expand our trading, investment, tourism and historical relationships in the future,” CS Maina said on the ongoing talks.
In the latest data, the steepest declines were recorded in Europe (‑21%) and North America (‑20%) while Asia was relatively less affected (-7%). The nominal dollar value of merchandise trade also plunged in the second quarter, falling by 21% year-on-year. In comparison, the decline in merchandise trade values during the financial crisis was deeper with a 33% drop recorded in the second quarter of 2009.
Paul Kagame reminded the delegates that 25 years ago the World Conference on Women in Beijing charted a “transformative agenda on gender equality” but acknowledged that “true gender equality has still not been attained in any country”. And although the Sustainable Development Goals