tralac Daily News
While South Africa’s trade surplus increased in August, concerns of a second wave of Covid-19 infections could see countries implement restrictions again with consequences for international trade, an economist warned. The South African Revenue Service on Wednesday released trade statistics for August. It showed that the trade surplus increased to R38.9 billion, slightly up from the R37.2 billion reported in July. This is attributed to rising exports, which rose by 8.8% year-on-year. On a month-on-month basis exports increased by 6.6%. The increase in exports is in line with improvements in global demand, noted Investec economist Lara Hodes. “Specifically, the implementation of renewed restrictions in certain countries to try and curb second waves of Covid-19 infections would impede the pace of global recovery and thus international trade,” Hodes said.
Covid-19 has made inequality worse, researchers find (Bizcommunity)
The Covid-19 pandemic and the nationwide lockdown have deepened inequality, especially in the job market and in education, according to a major survey released on Wednesday, 30 September. An alarming finding of the National Income Dynamics Study – Coronavirus Rapid Mobile Survey (NIDS-CRAM), was that the job losses may be long lasting. The 2.8 million jobs lost after February had not been recovered by June, according to this second NIDS-CRAM survey, based on the responses of 5,700 people. NIDS-CRAM researchers found that about one-million people who lost their jobs during the Covid-19 pandemic fell into poverty. “The Covid-19 pandemic is a health crisis that will exacerbate the South African unemployment crisis,” they said.
The Deputy Minister of Trade, Industry and Competition, Ms Nomalungelo Gina will deliver keynote address during the 2020 Innovation Summit’s ‘Investors Garage’ information session, where she will cast the spotlight on innovation, technology and the impact of COVID-19 on world economies during a first of its webinar that will take place on Thursday, 1 October 2020.
As the country’s international borders start to reopen on Thursday, a travel ban will remain in place for leisure travellers from 57 countries deemed to be high risk. The government made the list known on Wednesday. Countries on the high-risk list include the United Kingdom, the United States, India, Russia, France and the Netherlands. Business visitors, diplomats and people with high-skills visas from high-risk countries will, however, be allowed in, as well as all travellers from the African continent.
Zimbabwe borders remain closed (The Chronicle)
Zimbabwe’s borders remain closed to general human travel and the lockdown regulations as announced by the Government have not changed despite South Africa announcing the opening of its borders. Zimbabwe and South Africa closed their borders to general human traffic, including Beitbridge Border Post, in March when they effected their first 21-day lockdowns to curb the spread of Covid-19. Government recently lifted the ban on domestic and international air travel. Domestic and foreign travel, which were banned on March 30 as Government imposed measures to curb the spread of Covid-19, are set to resume today. However, strict Covid-19 measures will be adhered to in the opening up of the aviation sector.
On 18 September 2020, the National Trade Facilitation Committee (NTFC) of Zambia under the auspices of the Ministry of Ministry of Commerce, Trade and Industry, launched the Time Release Study (TRS) for the Chirundu One Stop Border Post. This TRS was rolled-out with technical assistance of the WCO and focused on imports – considering the Chirundu border post collects the majority of the county’s import taxes.
Tanzania import bill for July down (Dailynews)
The total import of goods and services decreased to 9,687.4 million US dollars in the year ending July from 10,185.8 million US dollars in the corresponding period a year earlier. According to the Bank of Tanzania (BoT) monthly economic review for August, all categories of imports increased, with the exception of transport equipment, machinery, oil and fertilizer, which decreased slightly. The oil imports accounted for 18.7 per cent of goods import, having decreased by 13.3 per cent to 1,507.1 million US dollars due to a decline in oil prices in the world market. On monthly basis, import bill for goods decreased slightly to 620.3 million US dollars in July this year, from 765.2 million US dollars in the corresponding month last year, partly reflecting disruption of global supply chain following the outbreak of Covid- 19.
Kemsa rejected price discounts on Covid-19 kits (Business Daily)
The management of the Kenya Medical Supplies Agency (Kemsa) rejected discounts by suppliers of Covid-19-related items, a special audit has revealed, raising the red flag on the controversial tendering which may cost taxpayers up to Sh2.3 billion. A forensic audit by the Office of the Auditor-General found that Kemsa officials chose to pay Sh4,500 for a pack of 50 face masks, way above the Sh3,183 quoted by suppliers — a variation equivalent to 41.37 percent. The Auditor-General said that besides the inflated prices, Kemsa failed to conduct a comprehensive needs assessment of the Covid-19 purchases, leaving it stuck with stocks worth about Sh6.34 billion in its warehouses.
Namibia to ratify continental medicines agency treaty (The Namibian)
The National Assembly will this week be expected to discuss and ratify an agreement to establish a continental medicines regulatory authority in Namibia.The agency to be known as the African Medicines Agency (AMA) is aimed at strengthening the capacity of medical products regulation in Africa and the harmonisation of regulatory systems, “as a foundation for the establishment of a single medicines regulatory agency in Africa”. “The agency offers a continental focus for certain activities, such as the opportunity to assess special classes of medicines for example advanced therapies, active pharmaceutical ingredients and products that are not regulated in many African countries, among them invitro diagnostic products and devices and vector control products,” Shangula said.
The spread of the COVID-19 virus across the world has drastically influenced the way we live, work, and do business. Economies slowed globally down as countries shut economic activities to fight the pandemic. In Africa, nations are still trying to flatten the curve of the outbreak and also to protect their economies from collapse. The African Development Bank (AFDB) already projects the continent’s GDP to contract by 3.4%. Nigeria has introduced measures to minimize the impact of the economic contraction, suppress pressure on the naira, and create a soft landing for citizens and businesses. However, all of these are not nearly enough.
The third review of the trade policies and practices of Zimbabwe takes place on 30 September and 2 October 2020. The basis for the review is a report by the WTO Secretariat and a report by the Government of Zimbabwe.
The African Union has amplified action to tackle non-tariff barriers and increase small businesses’ use of the tradebarriers.africa tool through its new online platform. The African continent is about to become the world’s largest free trade area. If not addressed, non-tariff barriers (NTBs) may slow down this effort. Although the negative impact of NTBs on intra-regional trade is recognized, so far there has been limited success in addressing them. “The success of the AfCFTA depends in part on how well governments can track and remove non-tariff barriers,” said Ambassador Albert Muchanga the African Union Commissioner for Trade and Industry. A new campaign to spotlight and remove non-tariff barriers (NTBs) in intra-continental trade launches this week. The #TradeEasier campaign aims to promote the uptake and use of the African Union’s tradebarriers.africa, a non-tariff barriers reporting mechanism tool.
At the initiative of the United Nations Economic Commission for Africa (ECA), through its sub regional office for West Africa (SRO-WA), in partnership with Afreximbank, Africa Centres for Disease Control and Prevention (Africa CDC) and African Union Special Envoy, Strive Masiyiwa, a High-Level Stakeholder Webinar on Africa Medical Sales Platform (AMSP) was organized on Tuesday. Taking the floor on behalf of Dr Vera Songwe, Executive Secretary of the ECA, the Director of the sub regional Office for West Africa of ECA, Ngone Diop explained that “To fully harness the opportunity of AMSP and African Continental Free Trade Area (AfCFTA) initiatives, it is crucial that the member states ratify the African medicine agency treaty (AMA) to effectively regulate and harmonize medical products so that the continent can mitigate standards medicine circulating in the region and preserve life”.
Zim, Malawi bolster ties (The Herald)
President Mnangagwa yesterday urged SADC countries to harness natural resources abundant in the region so as to improve the lives of their citizens through production and productivity. “It is important that we leverage on the natural resources within our countries to grow our economies and improve the quality of life of our people,” the President said. “The ongoing consultations between our officials to establish a Zimbabwe-Malawi Business Forum to facilitate increased trade cooperation should be speedily concluded. It is commendable that Malawian companies always exhibit at our Zimbabwe International Trade Fair.
The East African Business Council (EABC) is calling for equal treatment of all citizens entering Kenya from Tanzania, irrespective of whether they are truck drivers or ordinary citizens. Currently, ordinary citizens entering into Kenya from Tanzania are allowed to proceed once they produce a COVID-19 certificate while the truck drivers are subjected to both production of the certificate from Tanzania and also another testing at the border point and allowed in only after the results are out. This, a process which border officials from the Tanzanian side and truck drivers claim is taking more than a week, hence subjecting goods to further delays.
SGR Nairobi-Mombasa trains double as demand increases (Business Daily)
Kenya Railways has doubled the frequency of standard gauge railway (SGR) passenger service between Nairobi and Mombasa, signalling rising demand for travel after the easing of Covid-19 lockdown. SGR service was scaled down to a single trip in July when it services resumed after Kenya suspended operations in April to curb the spread of coronavirus. But the easing of the restrictions, including allowing travel in and out of Nairobi and Mombasa has triggered a rise in demand, prompting Kenya Railways to up frequencies.
The implementation of the “Eco” common currency under the Economic Community of West African States (ECOWAS) could now be delayed by five years due to the effect of the coronavirus pandemic. Leaders of ECOWAS said last year the Eco would be set up in 2020 but the short time frame coupled with logistics constraints stalled the implementation process. The economic hit from COVID-19 has further disrupted the bloc’s timetable for the implementation of the common currency which has been in the works for two decades now.
Curbing capital flight and other illicit financial flows from Africa can generate $88.6 billion a year. As most countries in sub-Saharan Africa are dependent on exports of raw commodities, commercial flows of commodities are a focal area in the study of IFFs. UNCTAD estimates that the persistent gap between what African countries report as commodity exports and what their trading partners report as imports (also known as export under-invoicing), was at least $40 billion in 2015, with gold exports representing 77% of the total. As an illicit outflow, trade misinvoicing contributes to capital flight and lost taxes, eroding the resources available for African countries to respond to crises such as COVID-19.
Why is Africa lagging behind? (African Business Magazine)
In 2015 the WWF, the international conservation organisation, together with the University of Queensland and the Boston Consulting Group, released a report titled “Reviving the Ocean Economy: The Case for Action – 2015”, which estimated that the key ocean assets were valued at $24trn. “If we are to truly unlock Africa’s potentials, we must acknowledge that despite the successes, Africa is still facing numerous challenges in developing the Blue Economy agenda,” says Vincent Meriton, the Seychelles’ Vice President. “These range from financial barriers to limited access to technology, and they are preventing some states from fully implementing their plans.”
Each year an estimated 116,000 people in Sub-Saharan Africa die as a result of substandard and fake anti-malaria drugs with the World Health Organisation indicating that out of all counterfeit medicines that were reported to the institution between 2013 and 2017, 42% of them were found in Africa. The global trade estimated to be worth $200 billion annually affects up to 120 countries. “Health remains one of the most crucial yet hugely neglected and underfunded sectors in most African countries. The impacts of this lack of investment are far-reaching occasioning brain drain and the continent being one of the most expensive for patients seeking medicare with the bulk of its population unable to access even basic healthcare. This has fanned the unprecedented trade in counterfeits that have not only bled the sector but triggered ripple effects across multiple sectors and crippled economies,” said Dr. Harrison Mueke from Kenya’s Maseno University School of Medicine.
More than half of the population of sub-Saharan Africa works in the agriculture sector, but most farmers in the region still do not have access to formal financial services. Limited access to these services makes it more difficult for farmers to take advantage of business opportunities, invest and save for the future, and insure against risks. To analyze this issue, on September 24, the World Bank released the report Digitization of Agribusiness Payments in Africa: Building a Ramp for Farmers’ Financial Inclusion and Participation in a Digital Economy. The report argues that digitization of agribusiness payments can help advance financial inclusion of farmers, analyzes the current status of digitization, and recommends key actions that can help accelerate digitization.
Good governance is the lynchpin for African progress (news.trust.org)
COVID-19 has joined the climate emergency at a time when Africa is facing what Mo Ibrahim calls “a crisis in leadership and governance.” This crisis seems all the worse when we define governance as the delivery of goods and services that citizens legitimately expect their governments to deliver. Citizen’s expectations relate to the promotion and support of human rights and participation, safety and rule of law, socio-economic opportunities and human development. In view of the very mixed progress made so far in meeting these entirely reasonable expectations, the permanent question is how to apply Africa’s abundant wealth in natural and human resources – especially its women and youth – towards rapid recovery and sustainable development.
This second edition of the Report on Labour Migration Statistics in Africa summarizes statistical information for a period of ten years (2008-17), building on the first edition, which captured data from 2008 to 2015. The focus of this report is on emerging patterns and trends in the stock of international migrants living in African countries. The report attempted to bring to the fore the evidence of the contribution of remittances to the development of migrants’ countries of origin, particularly towards alleviating poverty and social inequality in the recipient households and communities of origin. Unfortunately, it is essential to note that the magnitude of remittances entering African countries continue to be underestimated due to the proliferation of informal remittance networks to avoid high transaction costs affecting many migrant workers.
African policymakers must resist the urge to find shortcuts to ensuring an abundance of cheap consumption; they must either invest in production or be forced to enjoy poverty. Importantly, and controversially, African policy makers should prioritize local production over efficiency and low consumer prices. Even the very poorest will benefit from increased labor demand, higher wages and technical skills development brought by healthier local industries. This trumps the recent instinct to keep the people poor but ensure they have cheap rice and gadgets – courtesy of imports from Asia or Europe via a prematurely liberalized trade border. Steps are being taken to consolidate Africa’s markets into a vast and liberalized free trade zone. This is a positive step, but must be followed by focused, concerted effort on ensuring African manufacturers produce the bulk of the goods that get traded within the AfCFTA.
Nigerians Not Benefiting From US duty-free Export – NEPC (Economic Confidential)
The Nigerian Export Promotion Council says only few Nigerian exporters have benefitted from the United States duty free trade opportunity despite several sensitisation carried out by the council. The Executive director, NEPC, Segun Awolowo, said this during an African Growth and Opportunity Act webinar for Nigerian exporters organised by West African Trade and Investment Hub in collaboration with NEPC and the Feed the Future Nigeria on Tuesday. In order to increase the participation of exporters, he noted that training in certification and capacity improvement of manufacturers were key issues that should be addressed.
Rwanda’s efforts to boost its domestic garment industry have seen it fight a lonely, and continuing, trade battle with the US that dates back to 2015. Back then the six members of the East Africa Community (EAC) block of countries – Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda – announced that they would all put in place high tariffs on the import of second-hand clothing or “chagua”. The idea behind the de-facto ban was to stop the importation of large quantities of cheap used clothing, mostly from the US and the UK, which the African nations said were stifling the growth of their nascent garment industries. Keen to hang on to its share of these exports, the US responded that the proposed ban would violate free-trade agreements, and it threatened to remove the EAC countries from the African Growth and Opportunity Act (Agoa).
Kenya and France sign three bilateral deals to boost economic ties (Business Daily)
President Uhuru Kenyatta kicked off his official visit to France on Wednesday evening at Elysee Palace where he was received by his French counterpart Emmanuel Macron. Together with his host, they witnessed the signing of three bilateral agreements before leading their delegations to a State banquet hosted in honour of the visiting Kenyan leader. Among the agreements reached is a public private partnership (PPP) for the construction of the Nairobi-Nakuru-Mau Summit highway signed between KeNHA and Vinci Concessions. The highway is one of the largest PPP projects in Eastern Africa. Others were agreements for the development of the Nairobi central business district (CBD) to Jomo Kenyatta International Airport (JKIA) commuter railway line and the 400kV Menengai-Rongai electricity transmission line
South Africa is in the process of acceding to the Treaty of Amity of the Association of South East Asian Nations (ASEAN), the fifth-largest economy in the world. The potential for future trade, investment and a host of other cooperation agreements is exciting. One way for Africa-ASEAN reciprocal trade and investment to flourish is to forge agreements with regional blocs, more specifically through the African Continental Free Trade Area Agreement (AfCFTA). There have to date been no trade agreements between ASEAN and African regional economic communities. In 2008, seven ASEAN nations with diplomatic representation in SA forged the ASEAN-Pretoria Committee (APC) in an effort to boost trade and investment with South Africa. These are concerted efforts by ASEAN to boost trade and investment with Africa in general and South Africa specifically. It is imperative that SA develops a clear strategy to optimally benefit from accession to the TAC by means of increased cooperation, trade, investment and tourism.
The UK Department for International Trade (DIT) and Egyptian British Chamber of Commerce (EBCC) organised their first retail webinar to explore retail and e-commerce opportunities for British companies in the Egyptian market. More than 50 attendees joined the webinar, among them Sir Jeffrey Donaldson, the UK Trade Envoy to Egypt, who highlighted the growth in opportunities for UK brands in overseas markets Sir Jeffrey Donaldson said: We view Egypt as a country with huge potential, and one worth investing in. We consider it as our gateway to Africa especially with its advantageous location, the good international and domestic transport links, and all the existing trade agreements with Africa, the EU, and the Arab Region.’ Following the implementation of major economic reforms, Egypt has seen notable macro-economic improvements and was named one of the fastest growing economies in the world in 2019.
The international community can assist entrepreneurs in displacement settings to recover from COVID-19 and prepare for future shocks through adaptation, digitization, and cooperation. That was the conclusion of “Perspectives on Economic Resilience for Business in Displacement: Lessons learned from COVID-19 to prepare for future shocks”, an ITC online event that heard from entrepreneurs in Botswana, Colombia, Gaza, and Kenya held on 3 September 2020.
Finding Balance: The Post-COVID Landscape for Financial Institutions (Baker McKenzie)
COVID-19 represents one of the greatest ever shocks to our economies and, in consequence, to the business models of financial institutions and the way they do business. While many changes to business processes and operations were already taking place prior to the pandemic, COVID-19 has given many added impetus and urgency. Decision-makers must choose between adapting a wait-and-see approach or implementing more proactive strategies to safeguard and, if possible, grow their businesses. “Finding Balance: The Post-COVID Landscape for Financial Institutions” seeks to map the post-pandemic environment that financial institutions need to navigate as we move to the new normal. We look at how different industry sectors are experiencing profoundly distinct impacts on their balance sheets and markets, with very different timescales and pinch points. We also consider how the global economy will be impacted directly and indirectly in the years ahead.
Undaunted by the global forces shaping their societies and challenging their very existence, the leaders of small countries – which comprise about half of the United Nations membership – took centre stage in the General Assembly today, reminding the world of their service to bygone power structures and outlining visions for progressive cooperation that favours their ingenuity and mettle.
José Ulisses de Pina Correia e Silva, Prime Minister and Minister of Reform of Cabo Verde, said that, given the COVID-19 pandemic, “humanity is confronting its greatest challenge in more than a century”. Rich countries are responding to the coronavirus with hundreds of billions of dollars in economic stimuli, but Africa and small island developing States lack the savings required to recover and relaunch themselves. Nobody wins when Africa becomes more impoverished, but everyone wins if African countries can access the resources that they need to overcome the crisis and enter a new era of structural transformations that will strengthen their economies and lift their positions in the Human Development Index. In such a context, access to a COVID-19 vaccine should be equitable and universal and external debts should be forgiven, he said.
Recognizing that the continued deterioration and degradation of the world’s natural ecosystems were having major impacts on the lives and livelihoods of people everywhere, world leaders called for increased resolve to protect biodiversity at the UN today. A record number of countries – nearly 150 countries and 72 Heads of State and Government – addressed the first ever Summit held on biodiversity to build political momentum towards the post-2020 global biodiversity framework, to be adopted at COP15 in Kunming, China next year.
President Cyril Ramaphosa's address (The Presidency)
The COVID-19 pandemic is having a devastating impact across the globe, posing significant threats to sustainable development gains and efforts to eradicate poverty, reduce inequalities and build resilient societies. The pandemic has exposed challenges in governance which require collective action and solutions. By focusing on accountability and integrity, and by holding public and private sector actors to higher standards of ethical conduct, the G20 Leaders can improve response and recovery efforts, fight corruption in government and business, and build more inclusive and equitable societies.
We urge the G20 Leaders to commit more explicitly to accountability and anti-corruption efforts to ensure the impact and effectiveness of response and recovery efforts to COVID-19. We call upon the G20 Leaders to adopt the following measures to improve integrity and to reduce corruption in the age of a global pandemic:
ICC Sec Gen sets out 3 priorities to revive COVID-hit global economy (International Chamber of Commerce)
ICC Secretary General John W.H. Denton AO has outline three priorities for reviving the global economy as quickly and as safely as possible in the COVID-19 era. “We cannot respond to COVID-19 based on fear, distrust and entrenched global isolationism. But rather we must build on creativity, connectivity and mutual benefit. That is how we achieve long-term gains for everyone, such as inclusive growth and sustainability,” he said. “If much government discourse around supply chains is perhaps exaggerating a problem to justify a solution, there is not enough attention on the systemic problems in trade finance markets and very few proposed solutions,” Mr Denton said. “Simply put: if the world is banking on a trade-led recovery, we better make sure the banks can finance global trade. And that will require a possible US$5 trillion to flow to the real economy – something that just won’t happen without major, coordinated public interventions.”