Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News
Photo credit: Mail & Guardian

National news

the dtic and CDE to Host Webinar on SEZS as Drivers of Economic Growth and Industrialisation

The role of the Special Economic Zones (SEZS) as drivers of economic growth and industrialisation, will come under the spotlight at a webinar that will be hosted by the Department of Trade, Industry and Competition (the dtic), in partnership with the Centre for Development and Enterprise (CDE), on 29 September 2020. “The webinar will provide government, potential investors and SEZ operators with an opportunity to discuss how SEZs, as drivers of economic growth and industrialisation, can be used as a bedrock for sustained job creation; enterprise development; innovation and technology; and skills development, and to consequently enable a guaranteed safe environment for investments. It will also look at regional industrialisation benefits including ways to increase exports to neighbouring countries and the rest of the African region,” says Majola.

Related: SA’s SEZs create decent jobs (The Mail & Guardian)

The Special Economic Zone programme is one of the important tools that the South African government has introduced to drive economic growth and regional development. More importantly, the SEZ programme is used as a critical tool for accelerating the country’s industrial development agenda. This programme is mandated by the SEZ Act, which was proclaimed in February 2016. To complement the DTI’s SEZ strategy, a package of tax incentives will be available to companies located in certain SEZs, subject to specific criteria.

South Africa’s economic recovery complicated by costs of prohibition (Africa Times)

The head of South Africa’s tax authority (SARS) has warned that it may take years to dismantle the criminal networks that have flourished during the alcohol and tobacco ban implemented as part of the country’s response to coronavirus. SARS Commissioner Edward Kieswetter said that the ban – which was established as part of the government’s wider Covid-19 strategy – has allowed illegal operators to infiltrate the market, marketing counterfeit products to unwitting customers. The ban has been compared to the US government’s attempt to introduce prohibition in the 1920s; that policy backfired spectacularly, ushering in a lucrative bootlegging industry and empowering the country’s criminal networks.

SA, Mozambique to host trade investment webinar (SAnews)

South Africa and Mozambique will on Tuesday host a two-day virtual Trade and Investment webinar. The webinar will be held under the theme ‘Developing Afrocentric Solutions and Forging Partnership in Response to COVID-19’. Trade, Industry and Competition Deputy Minister, Nomalungelo Gina and Mozambique Deputy Minister of Commerce and Industry, Ludovina Bernardo, are expected address the virtual seminar. The webinar will focus on trade and investment opportunities available in Mozambique and also discuss strategic issues regarding Mozambique’s investment plans to stimulate the country’s economic growth amid the COVID-19 pandemic.

Osinbajo: We will soon reopen the land borders (TheCable)

Vice President Yemi Osinbajo says the federal government will soon reopen Nigeria’s land borders. In October 2019, President Muhammadu Buhari ordered the closure of land borders to check smuggling goods and arms into the country after a partial closure of the Seme border in August 2019. Speaking during a webinar organised by The Africa Report on Thursday, Osinbajo said the federal government is working towards reopening the borders. The webinar, which was themed ‘Bouncing back: Nigeria’s post-pandemic recovery plan’, focused on issues regarding government frameworks to be adopted towards economic recovery following the coronavirus pandemic which affected countries globally.

Egypt’s government to launch initiative to repay exporters’ arrears at 15% discount: Finance minister (Ahram Online)

Egypt’s government is set to launch an initiative within the coming days that allows instant and cash repayment of the entirety of export companies’ arrears from the Export Development Fund (EDF) before the end of 2020 at a discount of 15 percent, Minister of Finance Mohamed Maait announced on Sunday. “The initiative will be implemented in collaboration with the banking system, as the finance ministry will deposit a guarantee at the Central Bank of Egypt (CBE) to allow for the payment of the arrears through the end of September for export companies that are willing to pay their entire dues, but with a repay acceleration discount of 15 percent,” according to Maait.

Zambia’s call for debt relief triggers fear of domino effect across Africa (The Africa Report.com)

While the world’s second largest copper exporter has asked for a delay in paying its interest, Chad, Congo and Angola are also facing serious financial difficulties due to falling oil prices and the pandemic. Will Zambia be the first African state unable to pay its debts after the coronavirus crisis? On 22 September, the world’s second largest copper producer asked its private creditors to defer payment of interest until April. This deferral, which represents a sum of $120m, concerns three bond issues totalling $3bn issued in 2012, 2014 and 2015.

Kenyan horticulture exporters expect a full bloom (Logistics Update Africa)

The pandemic saw a decrease in the volumes of Kenyan horticultural produce as a result of the massive reduction in demand for flowers in Europe which led to a near closure of the flower auctions. The horticulture sector foresees a shift in production mainly from flowers to diversify into production of a variety of other horticultural produce to protect the farmers from reliance on one produce. As the markets open up, the industry is expected to rebound, though at a slow pace. The stakeholders are building packaging solutions, adding freight capacity to meet the growing demand for the upcoming peak season. To support the Kenyan exporters and ensure compliance to European Union (EU) standards, the government is planning to build a fumigation facility at Jomo Kenyatta International Airport (JKIA), which is expected to be operational by Q1 2021.

Regional and continental news

Stakeholders brainstorm on African free trade pact, 3 months to kick-off (Daily Trust)

As preparations for the operationalisation of the African Continental Free Trade Area (AfCFTA) scheduled for January 2021 gains traction, Nigeria’s National Action Committee AfCFTA is engaging stakeholders on the best ways the country can maximise the accruable benefits from the deal. At the first strategic stakeholders sensitization seminar held in Abuja, the Central Bank of Nigeria (CBN) however said integrating African banks into the pact was key to the success of the deal. The Director of the Monetary Policy Department at CBN, Dr. Hassan Mahmud, said: “There are about 700 banks in Africa, however, they only account for about five per cent of the global banking network. Continental integration in the banking system is key to strengthening the sector as a whole in Africa.” Secretary of the Committee and Special Assistant to the President on Public Matters, Francis Anatogu, said: “The stakeholders are an integral part of the AfCFTA drive that would ensure a smooth, seamless and beneficial implementation of the agreement.”

African countries ask for Moratorium extension ‘until 2021’ (Africanews)

African nations came out swinging during the United Nations General Assembly, calling for dramatic fiscal measures, in order to help economies survive the impact of the coronavirus pandemic. African countries estimate they need an annually support of $100 billion for the next three years, pointing out it is only a fraction of the trillions of dollars, some richer countries are using to revive their economies. “I take this opportunity to commend the efforts made by the members of the G-20, the World Bank and the International Monetary Fund in the context of the initiative for the suspension of debt servicing. I would call on the African Union to continue its efforts to attain this moratorium to 2021,” said Amadou Ba, Senegal Minister for Foreign Affairs and Senegalese abroad.

EAC Tables USD 97.6M budget proposals to EALA for 2020/2021 Financial Year

The EAC has presented to the East African Legislative Assembly, the long-awaited Budget estimates for the Financial Year 2020/2021, totaling $97,669,708, at a sitting held via virtual conference. The 2020/2021 Budget is themed: “Stimulating the economy to safeguard livelihoods, jobs, businesses and industrial recovery.” According to the Chairperson of the EAC Council of Ministers and State Minister for EAC, Republic of Rwanda, Hon Prof Nshuti Manasseh, the Budget estimates are presented at a time when EAC region as well as the globe is still reeling from the effects (and after-effects) of the Covid 19 pandemic, leading to lockdowns and a slowdown in economic activities. “The impact of the Pandemic on EAC Partner States, though not yet assessed fully, is no doubt surmounting,” the Minister said. He reiterated the EAC Budget would complement the efforts of Partner States and development partners to spur economic recovery arising from the Covid19 disruptions.

COMESA, Mauritius Considers Post Covid-19 Regional Recovery Plan as Priority

COMESA and the Mauritius have agreed on the prioritization of a post-Covid-19 regional recovery plan to assist Member States get their economies back on their feet. In a meeting conducted virtually between COMESA Secretary General Chileshe Kapwepwe and the Mauritian Minister of Foreign Affairs, Regional Integration and International Trade Hon Nandcoomar BODHA, the two agreed on the need for resource mobilization efforts to support the plan. Secretary General hailed Mauritius for setting the best example in the region in the management and containment of the Covid-19 pandemic. The country has flattened the curve and has no active Covid-19 cases. She said COMESA was actively engaged with development partners including the African Development Bank, the European Union and the World Bank to support Member States during the pandemic and after.

SADC Executive Secretary highlights region’s major achievements in its 40-year history

Peace and security, political stability, solidarity, establishment of a free trade area and increasing intra-regional trade are some of the major achievements in Southern Africa over the past 40 years, the Southern African Development Community (SADC) Executive Secretary, Her Excellency Dr Stergomena Lawrence Tax, has said. In an interview with Dr Shaka Ssali on Voice of America’s, Straight Talk Africa, H.E. Dr Tax highlighted SADC’s major successes over the past 40 years, saying these were underpinned by peace and security.

Another major achievement for SADC on the economic front, H.E. Dr Tax said, was the establishment of the Free Trade Area in (2008) which had managed to improve intra-trade. Intra-SADC trade rose from 16.3 percent in 2008 to 21.6 percent in 2016, but slowed down to 20.0 percent in 2017 and again to 19.3 percent in 2018. While performance has been mixed, at times, the speed was slow, there is hope that intra-SADC trade would grow and that Member States needed to improve their competitiveness by addressing the supply-side constraints, including strengthening cooperation in cross-border infrastructure, she said. “And now the orientation has been on industrialisation. Notwithstanding having a Free Trade Area, we realized that we need to enhance our competitiveness and productive capacities to utilize the free market which we have established,” she said.

Momentum drains from West African common currency plans (France 24)

Hopes raised by West African leaders of finally launching this year their “Eco” common currency, in the pipeline for three decades, have faded as the coronavirus crisis and squabbling over severing the remaining monetary ties to former colonial ruler France snarl progress. Chiefs of the 15-nation Economic Community of West African States (ECOWAS) regional bloc said last year the Eco would be set up in 2020 but the short time frame was not enough for the sheer logistics involved. Niger’s President Mahamadou Issoufou, whose country also uses the CFA franc, urged fellow leaders at a September summit to “come up with a new roadmap, sticking to a gradual approach for launching the common currency”.

Renewed push for African medicine body (New Era)

Health minister Dr Kalumbi Shangula this week re-introduced a motion seeking the establishment of an African Medicine Agency (AMA), which will serve as the continental regulatory body of medicines and medical products. The AMA treaty was initially introduced to the National Assembly two months ago, but debate on the issue was disrupted by the mid-year recess for parliamentarians. The treaty would enable Africa to ensure that the continent controls the illicit trade of medicine within the envisioned African Continental Free Trade Agreement (AfCFTA). “In the current Covid-19 era it is the ideal body to assess the Covid-organics offered by Madagascar and make a recommendation that would assist African states to make an informed decision on this product. It is envisaged that the AMA will provide a better environment for legitimate manufacturers to flourish and improve local manufacturing of quality products,” Shangula noted.

African civil society response to the COVID-19 outbreak; Initiatives and Lessons Learned (African Union)

The African Union’s CIDO-supported webinar series focused on community let initiatives from several African countries aiming at bringing attention to their efforts in alleviating the Covid-19 outbreak’s impact. On June 11, 2020, CIDO held the ‘African civil society response to the COVID-19 outbreak; Initiatives and Lessons Learned’ webinar gathering prominent figures from the African civil society to exchange best practices and expertise from different countries in relation to the pandemic and to the great initiatives that were implemented during the sanitary crisis. The webinar served to promote the role of civil society and provide them with a platform to share their initiatives. It aimed as well to sort out a log for lessons learned and challenges faced by CSOs.

Greener Africa: Women – The face of a digital and green revolution? (The Africa Report.com)

Africa’s digital revolution is gathering strength, buoyed by the continent’s success as the world’s pioneer in mobile money. In 2019, African technology start-ups, especially in Fintech (financial technology), raised a record level of venture capital – close to half a billion dollars. The continent has registered some of the world’s fastest internet penetration and usage rates and has increased the volume of cashless transactions and the extent of financial inclusion. However, digitalisation is not happening at uniform pace or scale and women are the missing face of Africa’s digital revolution.

The scramble for Africa’s seaports (The Star)

African governments are grappling with corruption, internal conflicts, failure in health and education sectors while at the same time trying to catch up with the urgent need for infrastructure development. This is 50 years after gaining political independence. This has caused a huge delay in infrastructural development of seaports. Consequently, most of the African countries remain dependent on ports built before the 1960s, while the current demands and standards are completely different. Currently, larger deep draught vessels require a depth of 10 or more meters while previous vessels required a minimum of seven meters.

In addition, the previous establishments are often major trade hubs that are congested and lack basic handling equipment in rapidly growing economies, coupled up with poor and corrupted managing systems of the existing ports. According to a PWC report, new port development is multifaceted in that they are increasingly multi-sectoral in nature, involving a number of ancillary projects across the broad range of sectors linked by other modes of transport.

International news

Unprecedented Virtual Summit for African Business Leaders to Access Resources to Grow Their Businesses with the United States (APO Group)

Africa.com is convening thousands of leaders of African businesses, and the highest ranks of U.S. agencies that support African business, to present opportunities for growth through trade, investment and technical assistance. This virtual summit, Africa’s Portal to Doing Business with the United States, will take place virtually on October 14, 2020.

For decades, The United States Government has funded a number of agencies and platforms to support African companies to do business with both the U.S. Government itself, and with the U.S. private sector. This is a unique opportunity for African business leaders to hear from these resources together, at one time, in one place, and to hear from other African business leaders themselves who have engaged with the United States.

The OPEC Fund approves US$20m for SMEs in East Africa (APO Group)

The OPEC Fund for International Development (the OPEC Fund) has signed a US$20 million term loan in favor of East African Development Bank (EADB). EADB will use the loan to support small- and medium-size enterprises (SMEs) and infrastructure projects in East Africa. “We are very pleased to support private sector development in East Africa, which goes to the core of our mandate,” said OPEC Fund Director-General Dr Abdulhamid Alkhalifa. “We have partnered with EADB since 2001 and we appreciate the opportunity to strengthen our relationship. SMEs are critical to achieving progress toward Sustainable Development Goal (SDG) 8 on decent work and economic growth. Efficient infrastructure, as part of SDG 9, improves access to social services, reduces business and production costs, supports trade, and will ultimately provide East Africa with a more competitive business environment.”

US-Africa trade relations: ‘Why is AGOA better than a bilateral free trade agreement?’ (Brookings)

In recent months, the U.S. began negotiations for a bilateral free trade agreement with Kenya. These negotiations are aligned with the current administration’s vision for trade reciprocity rather than unilateral trade preference programs. Although these negotiations could produce the first bilateral trade agreement between the U.S. and a sub-Saharan African country, a shift from regional preferential trade agreements to bilateral free trade agreements could undermine the growth of smaller countries, who may not be of enough economic interest to the United States. Bilateral agreements could also undermine efforts to create a regional economic bloc through the African Continental Free Trade Area (AfCFTA). When President Bill Clinton signed the African Growth and Opportunity Act (AGOA) in 2000, African countries were given a competitive edge by providing unilateral duty-free exports for 6,500 products from Africa to the United States.

Twenty years after AGOA was first adopted, we see that it has created long-term, sustainable growth by stimulating the private sector and creating jobs in a region where many countries are battling high unemployment, thereby addressing structural challenges the region faces. Additionally, in choosing a regional approach for the trade agreement, Clinton empowered both big players like South Africa and smaller players like Lesotho. In many ways, this approach aligns with the “trade not aid” mantra.

Suspension of US aid to Ethiopia is yet another example of Trump’s disregard for Africa (The Conversation)

America’s Department of State recently suspended $130 million worth of aid to Ethiopia because of “a lack of progress” on negotiations pertaining to the construction of the Grand Ethiopian Renaissance Dam on the River Nile. According to state department officials, the decision to cut aid came as a result of a direct “guidance” from President Donald Trump. The decision to suspend aid to Ethiopia comes after almost 10 years of regional and international efforts to mediate the dam dispute between Egypt and Ethiopia. Almost 60% of Ethiopians do not have access to electricity. The renaissance dam is critical to expand energy sources across the country. The country will also export hydroelectric power to its neighbours.

We need new criteria for financial support to vulnerable small states in the wake of COVID-19 (The Commonwealth)

Ministers and senior officials have called on the international community to reform the financial system and the ways it offers support to small states in the wake of the COVID-19 pandemic. Representatives of Commonwealth member countries met in the margins of the United Nations General Assembly to discuss the urgent need for improved access to financial resources and debt relief to secure small states’ economic resilience and maintain progress on their sustainable development goals (SDGs) and Nationally Determined Commitments (NDC) for tackling climate change. Commonwealth Secretary-General Patricia Scotland said: “Given the wide ranging impact of COVID-19 we need a new set of criteria for the financial support we offer to vulnerable small states and we must urgently reassess the methods we use to classify countries for official support.”

Saudi Arabia to hold virtual G20 summit on November 21-22 (Reuters)

The G20 leaders summit will be held virtually on Nov. 21-22, Saudi Arabia said on Monday, as the COVID-19 pandemic thwarted Riyadh’s hopes of hosting the gathering in the kingdom to boost its international standing. Saudi leaders had hailed the kingdom’s G20 presidency as proof of its leading role in the global economy, but the majority of the meetings have been held virtually due the novel coronavirus. The summit will focus on “protecting lives and restoring growth, by addressing vulnerabilities uncovered during the pandemic and by laying down foundations for a better future,” the statement said.

Leading Chinese fintech injects fresh impetus into world economy (China.org.cn)

As many small and medium-sized enterprises (SMEs) worldwide have been hit hard by the COVID-19 pandemic, fintech is expected to provide them opportunities to shake off the negative impact and thus inject new momentum into the global economic recovery. Besides the demonstration of innovative applications of fintech in China, more than 40 online and offline sessions were held at the three-day INCLUSION Fintech Conference in Shanghai, covering global inclusion and openness, innovative fintech, global ecosystems and partners, and green solutions and sustainability. Although the world economy remains shrouded in the gloomy shadow of the coronavirus, the financial inclusion and technological innovation brought by China’s fintech industry have offered a silver lining.

Gove heads to Brussels as EU trade talks resume (BBC News)

Cabinet Office minister Michael Gove is heading to Brussels at the start of a week of talks about the UK’s future relationship with the European Union. Mr Gove will meet European Commission Vice President Maros Sefcovic to discuss implementation of the Brexit divorce deal. And on Tuesday formal negotiations will resume as the two sides attempt to agree a post-Brexit trade deal. The last set of talks between the two sides ended acrimoniously when the UK government introduced the Internal Market Bill which would allow the UK to override parts of the original Brexit divorce deal – known as the withdrawal agreement.

pdf United Kingdom Internal Market Bill - 30 September 2020 (365 KB)


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