tralac Daily News
The International Trade Administration Commission (ITAC) has completed an initial investigation into the supply of scrap metal as an input to the domestic steel producing industry, and has made certain changes to the Price Preference System (PPS), to improve access to affordable scrap metal for the domestic steel and other metal producing industry. During the Covid-19 National State of Disaster, the Department of Trade, Industry and Competition (the dtic) received representations from the domestic consuming industry that the PPS was not achieving the intended objectives, causing severe harm to the industry and affecting its recovery from the effects of the COVID-19 global pandemic. The representations requested that urgent action be taken to remedy the situation, retain jobs and capability in the metals sector.
South Africa’s post-COVID-19 economy must be centred on stimulating innovation and the digital economy, says Nomalungelo Gina, deputy minister in the Department of Trade, Industry and Competition (DTIC). Gina made the comments during one of the sessions at last week’s annual South African Innovation Summit, which took place online this year. She pointed out that old economic methods are now dying a natural death, and the digital economy, whose bedrock is innovation, is taking over. “Innovation and digitisation will be a necessary condition for building this economy, and will help build various SMMEs of the economy. It is not an exaggeration that the symbiosis of innovation and digital economy is now a pervasive juggernaut that is globally tearing down any inhibitive firewalls.”
South Africa’s one-size-fits-all mining legislation is losing vital jobs for the country in the job-intensive alluvial diamonds space that requires regulations tailored to junior mining to survive, South African Diamond Producers Organisation (Sadpo) reiterated on Monday. Because there are so many alluvial deposits in South Africa, Sadpo is asking for alluvial diamonds to play a more prominent role in the economy in general and job creation in particular.
South Africa’s renewed focus on the poultry masterplan (PoultryWorld)
The South African Poultry Association has welcomed a renewed focus on the poultry sector masterplan, despite the severe impact that Covid-19 has had on the local poultry industry. South Africa’s Trade Industry and Competition Minister, Ebrahim Patel, and Agriculture Minister, Thoko Didiza, have been praised for the progress made to date. The poultry sector masterplan aims to stimulate local demand, boost exports, and protect the domestic chicken industry.
South Africa Air’s Savior Is In Ethiopia, Study Says (BloombergQuint)
South Africa should act to preserve its insolvent national airline and seek to partner the carrier with Ethiopian Airlines Group, according to a study commissioned for ruling-party lawmakers. The assessment, seen by Bloomberg, was prepared by African Aviation Services Ltd. and dated Oct. 4. It was presented to a group of African National Congress lawmakers on Monday, according to an ANC official
Private sector growth hits 29-month high on rising demand (Business Daily)
Kenya’s private sector activity jumped to a 29-month high in September lifted by rising local and foreign consumer demand following the gradual re-opening of the economy in the wake of the Covid-19 pandemic. The Markit Stanbic Bank Kenya’s Purchasing Managers’ Index (PMI) – a monthly measure of private sector activity – increased to 56.3 in September from to 53 a month earlier, the highest level since April 2018. “The PMI indicated further improvement in business confidence and operating conditions this (September) month, thanks in large part to the lifting of some domestic Covid-19 containment measures,” Stanbic Bank head of Africa research Jibran Qureishi said in the PMI report.
Kenyan coffee risks losing global appeal on chemicals (Business Daily)
Kenya’s coffee risks losing its top spot in the world market following its rejection in Japan and South Korea due to high levels of chemical contamination.The chemical levels of Ochratoxin have exceeded the allowable minimum, resulting in rejection at the two countries’ border points. The coffee, which is highly sought after by roasters for blending with lower quality beans from other parts of the world, has been banned for three years with local stakeholders now raising concerns that if this is not reversed, then the produce could face total ban. “The flagging of Kenyan coffee by the key markets due to high levels of contamination does not augur well for the sector. The government has to move fast in addressing this challenge,” said Peter Gikonyo, the association’s chairperson.
Fuel prices are expected fall with the completion of the new Kipevu Oil Terminal (KOT), according to the Energy and Petroleum Regulatory Authority (EPRA). EPRA said demurrage charges are likely to drop as the new facility will be able to berth four vessels (three petroleum and one LPG) at once, hence save on the vessel queuing time. Kenya Ports Authority latest project update indicates the new facility, being developed at a cost of Sh40 billion, is about 63.22 per cent complete, and should be ready in twelve months. “The project is fully financed by the Kenya Ports Authority and once complete will expand our capacity to serve our increasing needs as well as the needs of our neighbouring countries that rely on Mombasa port for oil imports,” KPA management told the Star.
Govt won’t suspend COVID-19 testing at Airport – Oppong Nkrumah (Ghanaian Times)
The government has urged stakeholders to cooperate and support testing of Coronavirus (COVID-19) at the airport which is a public private partnership between the airport company and Health Frontiers. The Minister of Information Kojo Oppong Nkrumah, in an interview said the antigen tests currently underway at the airport for passengers arriving into the country were helping to save lives against the spread of the virus. The minister also announced that the government had no plans of suspending the tests at the airport, changing the company or suspending the contract.
Nigerians borrow to survive COVID-19 economic crunch (Nairametrics)
As Nigeria celebrates her 60 years of independence, it is important to examine how the economy has fared in these past decades. A cursory look at data (spanning 40 years) obtained from both the CBN and the National Bureau of Statistics (NBS) showed that despite the huge growth potential in Nigeria, the nation’s economy only grew at an average rate of 3.33% between 1982 and 2020 (Year to date). Since Nigeria switched to oil exploration as the mainstay of the economy, export earnings from the commodity have risen to over 90%. Meanwhile, the dependency on oil may be doing more harm than good, as growth remains on the ebb.
Djibouti is capitalizing on its strategic location on one of the world’s busiest trade routes to build Africa’s largest free trade zone area. The Horn of Africa nation controls the Bab el-Mandeb (“Gate of Tears” in Arabic) which is a crucial chokepoint at the entrance to the Red Sea and the Suez Canal from the Indian Ocean. The Bab el-Mandeb is the world’s fourth most frequented maritime route used by some 30,000 ships every year. Also, after the Ethiopia-Eritrea war, Djibouti has become a gateway for 90% of Ethiopia’s imports, a trading volume that accounts for 90% of Djibouti’s port traffic. The $3.5-billion China-backed initiative will span 4,800 hectares when completed and it will become the biggest free trade zone area on the continent. “The volume of goods traveling to East Africa keeps increasing. Every time a product arrives in the continent without being transformed it is a missed opportunity for Africa,” said Aboubaker Omar Hadi, chairman of the Ports and Free Zones Authority.
President Cyril Ramaphosa will, in his capacity as the African Union (AU) Chairperson, convene the 6th virtual meeting of the AU Bureau of the Assembly of Heads of State and Government, since the outbreak of the devastating COVID-19 pandemic. The meeting, which will take place on Tuesday, will assess the situation on the continent in relation to the COVID-19 pandemic and implementation of the Africa Joint Continental Strategy for COVID-19.
At this time of COVID-19-induced economic and social woes, the AfCFTA has been hailed as a continental comeback strategy, and as a way for Africa to reposition itself on a global stage. The formation of new markets, the projections for higher employment numbers, more diverse products and the stimulation of industrialisation pathways are part of the vision for the AfCFTA as African economic integration is realised. The COVID-19 pandemic has induced a crisis in the ‘real economy’ of production and not merely within the financial sphere (as was the case in the 2007- 2009 global financial crisis). This makes it is even more important that the AfCFTA reinforces counter-cyclical interventions that reposition African economies within a global economy faced with the threat of a long-term deflationary period.
The African Trade Policy Centre (ATPC) of the United Nations Economic Commission for Africa (ECA) today hosted the first of a series of five virtual experts group review meetings on innovative new research on preferential trade arrangements in Africa. The project is in partnership with the Organization of African, Caribbean and Pacific States (ACP). The five studies, which gathered primary survey and interview data virtually over mid-2020, look to provide new answers to some of the critical challenges to how African traders use preferential trading regimes in Africa. “A large number of challenges remain for businesses to satisfy standards in intra-African trade, including labelling issues that raise compliance costs, and that these challenges are greatest among Africa’s MSMEs,” said Tulo Makwati, Coordinator of the SADC Business Council.
How can the African air transport sector bounce back? (African Union)
“Recovery of aviation is essential to rapid and sustainable recovery of Africa economies post-COVID19. Restoring confidence, stimulating demand, consistency and harmonization in applying health measures, as well as innovation are building blocks for successful restart,” stated H.E. Dr Amani Abou-Zeid, Commissioner for Infrastructure and Energy at the opening of the High-Level Webinar on African Aviation in the Aftermath of COVID-19. According to the AU Commissioner, the COVID-19 Pandemic has resulted in unprecedented downturn in air transport activity risking economies and livelihoods dependent on travel and tourism. “As countries begin to open their economies and assess the damage from the pandemic, our focus at the AU is to advise governments on best approaches for air transport sector to bounce back and contribute to rapid recovery,” said Dr Abou-Zeid.
MPs and Council set for showdown over $104m EAC budget (The East African)
The East African Legislative Assembly is set on a collision course with the EAC Council of Ministers and the Secretariat after it approved a $104 million budget, $6 million more than the $97.6 million budget proposed in the Council’s Appropriation Bill for the 2020/2021 financial year. The Council’s reduction translated into allocation to the Assembly of $16.7 million. The Eala committee reinstated its sittings with corresponding amounts increasing their allocation to $23.06 million, an addition of $6.3 million. The higher budget is also occasioned by different allocations to the EAC Secretariat, Eala and the East African Court of Justice (EACJ).
At the end of the meeting, Minister Téte António said that integration is a profound theme, which does not depend solely on diplomacy, but on the people. According to the government official, each state has the responsibility to enforce the implementation of the treaty. In his turn, the ECCAS chairperson, Gilberto Veríssimo da Piedade, said that there were some ideas on how integration should be implemented, but that they needed to be validated, that is why they are counting on Angola to help consolidate those intentions.
The Covid-19 pandemic crisis has caused disorder in all economic activities. At a time of economic recovery, the equation of people’s mobility remains a complex subject on which States take concerted but not always consistent action. The webinar organized by the African Performance Institute (API) was an opportunity for experts to discuss innovative solutions with digital to offer Africans the opportunity to move more freely within the continent. Ivorian Lacina Koné, Managing Director of Smart Africa, argues that this digital project should allow tourists to travel and stay unhindered during the pandemic. “The establishment of a sub-regional regulatory environment is all the more important to govern this initiative across the African Union. This allows us to act with other parts of the world such as Europe or the USA.”
Exponential growth possible for Africa’s automotive industry (New Business Ethiopia)
The development of regional value chains could see new vehicle sales increase from 1 million to 5 million units a year across Africa, according to Afreximbank. Speaking at a recent online seminar to promote the African continent’s premier trade event, the Intra-African Trade Fair (IATF2021), to be held in Kigali, Rwanda, from 6-12 September 2021, senior trade facilitator Gainmore Zanamwe, said there were bright prospects for the sector. The Automotive Tradeshow and African Association of Automotive Manufacturers (AAAM) Automotive Forum at IATF under the theme “Building Bridges for a successful AfCFTA”, would be a critical base from which to drive growth through the development of intra-African partnerships, Zanamwe said.
SWIFT pilots new service for low-value cross-border payments (East African Business Week)
SWIFT has announced plans for a new service to help banks improve the experience for small and medium-sized enterprises (SMEs) and consumers who send low-value payments across borders. The service will enable these bank customers to make faster, easier, predictable and competitively priced payments all around the world. SWIFT is working with over 20 banks to develop the service, which builds on the strength of SWIFT gpi and the high-speed rails that have already transformed the business of high-value payments. This new initiative will enable consumers and SMEs to benefit from predictable payments, with costs and processing times known upfront, and real-time status available to both originator and beneficiary customers via their financial institutions.
Accelerating winds of change in global payments (McKinsey & Company)
For the global payments sector, the events of 2020 have reset expectations and significantly accelerated several existing trends. The COVID-19 public-health crisis and its many repercussions – among them, government measures to protect citizens and rapid changes in consumer behavior – changed the operating environment for businesses, large and small, around the world. For the payments sector, global revenues declined by an estimated 22 percent in the first six months of the year compared with the same period in 2019. Over the past several years, payments revenues had grown by roughly 7 percent annually, which means this crisis leaves revenues 11 to 13 percent below our pre-pandemic revenue projection for 2020. The insights provided in the full report are informed by McKinsey’s proprietary Global Payments Map, which has provided a granular, data-based view of the industry landscape for more than 20 years.
Economic transformation is crucial to poverty reduction, through transforming production opportunities, lowering the costs and increasing the variety of consumption and enabling government services and other factors to provide better services. Digitalisation affects all of these channels in fundamental ways. This paper develops a framework to understand how. It argues that digitalisation can have positive and less positive or even negative effects in all of these channels but with likely overall net positive effects, sometimes large. It applies the framework to the cases of Kenya and Cambodia. It also argues that policy matters greatly for whether these positive effects materialise.
The International Air Transport Association (IATA) warned that the damage being done to the African aviation industry and on economies by the shutdown of air traffic owing to the COVID-19 pandemic has deepened. “The breakdown in air connectivity in Africa has severe social and economic consequences for millions. No income means the lack of a social safety net for many. Governments need to do all they can to reconnect the continent safely. Keeping borders closed, or imposing measures such as quarantines, that deter air travel, will result in many more livelihoods being lost and further economic shrinkage along with hardship and poverty,” said Muhammad Albakri, IATA’s Regional Vice President for Africa and the Middle East. To minimize the impact on jobs and the broader African economy, an accelerated recovery of air transport across the region is paramount. This can be achieved through COVID-19 testing as an alternative to restrictive quarantine measures.
CBK says shilling manipulation fears ‘misplaced’ (Business Daily)
The Central Bank of Kenya (CBK) has dismissed fears of manipulation of the Kenya shilling amid the ongoing talks for a bilateral trade agreement between the United States and Nairobi. CBK Governor Patrick Njoroge said Kenya does not and will not manipulate the shilling for competitive gain and hence such concerns are “misplaced.” The comments were triggered by the US seeking an undertaking that Kenya will let market forces influence the rate of exchange of the currency to the dollar as part of the trade agreement.
The African Development Bank organized a high-level session on fostering inclusivity and circularity in Africa’s post COVID-19 recovery. The virtual event was part of the 2020 World Circular Economy Forum Online, an annual conference hosted by the Finnish Innovation Fund SITRA, which attracted more than 5,000 business leaders, policymakers and experts to present the world’s best circular economy solutions. “Centralized platforms like the African Circular Economy Alliance will build the momentum for circular economy engagement and foster continental and regional partnerships,” Nyong said.
WTO Director-General contender Amina Mohamed outlines her vision & plans (Eyewitness News)
One of the contenders to be the next World Trade Organisation (WTO) Director-General, Dr Amina Mohamed, from Kenya, on Monday said the China-US trade tensions were among her main priorities. Mohamed is one of five remaining candidates and two African women vying for that position. “The WTO has managed trade tensions before, and they were between big players. I believe strongly that if it’s a trade dispute the place to resolve it at is the WTO,” Mohamed said.
European Union Backs Okonjo-Iweala for WTO DG (THISDAYLIVE)
The European Union (EU) governments yesterday expressed support for Dr. Ngozi Okonjo-Iweala, Nigeria’s candidate for the position of the Director-General (DG) of the World Trade Organisation (WTO) as the race enters the final month. In addition, Bloomberg disclosed that the EU governments selected the South Korean candidate, Yoo Myung-hee, who is the country’s trade minister, as the second contender for the job, the bloc would be supporting. The WTO’s General Council is expected to meet today to reduce the five candidates still in the race for DG to two.
IMF approves aid for world’s 28 poorest countries (CGTN Africa)
The International Monetary Fund on Monday approved new emergency aid for 28 of the world’s poorest countries to help them alleviate their debt and better cope with the impact of the coronavirus pandemic. The announcement, which follows a similar measure passed in mid-April for 25 countries, is intended to help the countries cover their debt repayments to the IMF for the next six months and “free up scarce financial resources for vital emergency medical and other relief efforts” during the pandemic.
Across the African continent, there have been several economic success stories built over the last few decades, and accelerated poverty reduction and human development have been considerable as well. While the direct impact of COVID19 – the “health crisis” – has been lower than feared in Africa, the economic crisis triggered by the lockdowns across the continent has slowed down the journey towards the Sustainable Development Goals (SDGs). It is widely acknowledged that a weak health system has enormous economic costs. However, in the specific context of COVID19, a strong and responsive health system has a key role, not just in the sense of the long-term quality of human capital, but also as a key guarantor of a resilient economy. It is in this context that India’s health sector partnerships with Africa need to be seen, which have the potential to build and strengthen a key pillar of the African economic success story and to gain from it.
The global digital economy has had far-reaching and irrevocable consequences for financial services in South Africa. The financial services sector – and the way it is regulated – is no exception. The need to adapt and respond rapidly has become non-negotiable. According to the Financial Services Conduct Authority (FSCA), regulation needs to keep up with the times, all while ensuring that consumers are treated fairly. In a media release, the regulator states that “digital disruption is forcing specialist financial services functions and support to become more vigilant and agile.”
On the role of women trade trainers (Trade 4 Dev News)
In trade for development, more female trainers could make a big difference. Developing countries tend to have far fewer women in decision-making roles overall, which in the trade context creates greater obstacles for women to become part of global value chains – to highlight a major, practical trade example. According to the International Trade Centre, women face such gendered barriers as official bans to holding certain jobs, maternity obstacles and employment restrictions – all despite doing twice more unpaid care work. This results in working much longer hours than men when considering care work, despite having lower access to capital and productive resources. For example, in agriculture, women tend to be engaged in subsistence production that is consumed within the house, or in the case of being engaged in marketable production, not to have rights to monetary compensation for their work. As a result, there is undoubtedly a male monopoly on trade-related jobs on the ground.
State Trading Enterprise policies are an integral part of the regulatory environment set by the rules of the World Trade Organization (WTO). The STEs have the potential to influence markets significantly. They can be operated in ways that can create distortions to international trade. STEs-related policies are therefore increasingly important in the context of WTO accession negotiations. In collaboration with the WTO Secretariat, two workshops were organized this month for Uzbekistan’s Government officials representing the Ministry of Investments and Foreign Trade (MIFT), the State Assets Management Agency, the Ministry for Foreign Affairs, the Ministry of Economic Development and Poverty Reduction and the Antimonopoly Committee.
The increase in global trade over recent decades through the expansion of production networks and the integration of newly industrialised economies within global value chains (GVCs) has contributed to unprecedented socioeconomic gains and reductions in poverty. But socioeconomic development’s reliance on fossil fuels has led to climate change and environmental damage, which ultimately leads to social and economic cost. Lockdown policies to limit the spread of Covid-19 may provide lessons for a global and simultaneous climate change impact: bringing to a standstill or drastically reducing supply through GVCs. While the global and sudden disruption the virus has caused is of a scale and immediacy that is greater than any currently experienced climate impact, there are nonetheless lessons to be learnt from the Covid-19-induced disruption for climate resilience, given projected abrupt changes in our climate.
The COVID-19 outbreak shows the necessity of multilateral responses, international cooperation and global solidarity. In this regard, the strategic partnership centered on mutual-benefits and economic development between Turkey and Africa has been maintained even during the pandemic. Turkey’s bilateral trade volume with Africa increased fourfold from 2003 to reach 22 billion dollar. And, Turkish direct investments in Africa exceeded 6 billion dollar (USD) in 2019, while it was only 100 million dollar in 2003. And Turkish investments, mainly in the sectors of textile, food & agriculture, iron-steel, cement, energy, mining, consumer durable goods, tourism and hotel, have created over 100 thousand jobs.
Intellectual property is embedded in our lives. Creations and inventions spark the development of new products and services; which can generate business opportunities, jobs, and economic growth. We know that intellectual property is an important component of global value chains. WTO research shows that, for example, 91% of the price of a man’s jacket is linked to intangible assets, of which intellectual property rights are an important component. Technology, economic integration, and consumer preferences continue to transform trade and the world economy must react to shocks like the current pandemic. But history shows us that situations like the COVID-19 pandemic ultimately make us leap forward and adapt; and that having clear rules enhances international cooperation. The TRIPS Agreement remains the most comprehensive multilateral agreement on intellectual property, and it is the first WTO Agreement to be amended in response to public health concerns.
Communication from India and South Africa: pdf Waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19 (133 KB)