tralac Daily News
African states are progressing with trade regimes that are past due in a bid to bolster trade within the continent, Deputy Director General at the Department of Trade Industry and Competition’s Trade Policy, Negotiations and Cooperation branch Ambassador Xavier Carim told Parliament on Tuesday. “Although intra-Africa trade is low, Africa is by far the second-most important export market for most African countries, behind the EU. Seven African countries count Africa as their main export market and 25 count Africa as their second-most important market,” said Carim.
The Covid-19 crisis offers South Africans opportunities to tackle the unfinished agenda of transforming society into a more equitable, resilient and prosperous democracy that promotes the wellbeing of all people, according to academic and businesswoman Dr Mamphela Ramphele. She focused on three key issues in her virtual address: leadership in challenging times, the process of emerging from the Covid-19 crisis, and education as a platform for innovation and resilience.
Hon. Gwede Mantashe opened day two of AOW Virtual (7-8 October), an online summit from the team behind Africa Oil Week. In his address, Minister Mantashe did not shrink from addressing the devastating effects of COVID-19 on South Africa, having only recovered from the disease himself a few months previously. Though South Africa allowed the energy sector to operate at full capacity following the nationwide lockdown, a decrease in demand for petroleum products over an extended period meant some refineries were still forced to close.
The Uganda Revenue Authority (URA) realized sh1 trillion surplus in the first quarter of the financial year after telecoms and imports performed beyond expectation. The taxman collected sh4 trillion from July to September 2020 beating targets of sh2.99 trillion. International trade tax collections were sh1.7 trillion, performing at 138.87% with a surplus of sh479.79b. Compared to the same period last FY, and customs tax collections grew by sh23.93b (1.42%) year on year.
Eswatini Rail Link project progressing, developers say (Engineering News)
The Eswatini Rail Link (ESRL) project is on track to advance economic development and intra-African trade, the developers noted in a statement on October 12. The project is a joint inter-railway strategic initiative between Transnet Freight Rail (TFR) and Eswatini Railways (ESR) to create a dedicated general freight business (GFB) corridor for Transnet, while providing much-needed additional capacity for ESR. It is expected to be a catalyst for economic development, improve regional integration and promote intra-African trade.
Senators engaged in a heated debate on Tuesday on the 2021 Appropriation Bill presented by President Muhammadu Buhari for consideration and approval. The fiscal document has a total revenue projection of N7.88trn with a deficit of N5.20trn. Senate Leader Yahaya Abdullahi (APC, Kebbi) said a budget deficit of this size, requiring more indebtedness, was not healthy for the long-term development of the country.
Manufacturers, importers accuse Customs of frustrating business at ports - LCCI (Maritime Info 247)
The Lagos Chamber of Commerce and Industry (LCCI), has called for urgent and imperative reforms for the Nigeria Customs Service (NCS), accusing the service of frustrating trade at seaport. “Customs processes and procedures for the clearance of cargo at the ports is one of the biggest challenges currently faced by the business community. It is severely hurting investors and adversely affecting economic recovery efforts. The situation calls for urgent intervention and reforms of the Nigerian Customs Service. There are issues of undue delays, weak application of technology, arbitrariness in valuation, impunity, uncertainty of international trade transactions, cost escalation, negative investment climate perception, ineffective mode of seeking redress, pervasive human interface, among others,” Dr. Yusuf said in a statement.
DPR Upbeat about Oil Reserve, FDI Inflow (THISDAYLIVE)
The Department of Petroleum Resources (DPR) has restated its belief in a brighter future for Nigeria’s oil and gas industry. The agency also expressed optimism about the realisation of the anticipated 40 billion barrels oil reserves and increased Foreign Direct Investments (FDIs) to the country. “Nigeria is positioned to optimally develop its oil and gas resources for the benefit of stakeholders who are the ordinary Nigerians. “Government’s target to increase our oil condensates and gas reserves by 2025 is realistic and achievable with the programmes and policies being put in place,” Director of DPR, Mr. Sarki Auwalu said.
We meet today under a “new normal” caused by the outbreak of the COVID19 pandemic. Indeed, the COVID-19 pandemic has over-stretched our already weak public health systems to it limits. The pandemic has also caused unimaginable impact to the socio-economic landscape thereby undermining the gains that we have made thus far. It came as no surprise therefore that the economic forecasts predicted that the Continent will experience a recession this year due to the COVID-19 pandemic, for the first time in over two decades.
The gains that we have achieved thus far in the successful implementation of the Joint AU Continental Strategy should galvanize us on as the Continent to continue to pool our resources until the scourge is defeated and beyond.
It must be noted that this health crisis has dramatically exposed our weaknesses and amplified our fragilities. The state of our externally-oriented economies, denounced, since the 1960s, by many development economists, came to light. The inability of our industries to produce goods and services, whose importance has proved vital for the survival of our peoples, emerged as an unbearable structural weakness.
Specifically I’m referring to medicines, test kits, masks, single-use or multiple-use suits, respirators, ICU beds that we have, either received as donations or had to import, with all that this entails in terms of increased dependency but also in terms of foreign currency outflow. All of this proved challenging.
This health crisis is, therefore, an opportunity for a well thought-out and resolute reorientation of our manufacturing capacities by giving priority to import substitution, at a time when we are preparing to operationalise the African Continental Free Trade Area.
New investments to lead Africa agri-development (The Herald)
At a time when the rest of the world is re-thinking its approach to commercial agriculture, Africa has a clear opportunity to refresh its approach to the sector and become an emerging force. Big shifts are already happening in food production, land and water use, and the integration of agri-tech and product tracing. If African firms take an early lead during this transition, they will be well placed to compete globally by building enduring assets and commercial advantages beyond primary production. “Without continued advances in agricultural productivity, the whole project of African advancement is at risk,” according to Linda Manda, sector head agribusiness, corporate and investment banking at Stanbic Bank’s parent company, Standard Bank.
Covid-19 and AfCFTA: Africa’s path out of recession? (Oxford Business Group)
With a view to stimulating an economic recovery from the coronavirus pandemic, African governments are pushing ahead with plans to implement a continent-wide free trade zone, with a particular emphasis on e-commerce and digital payments. In late September Wamkele Mene, the secretary-general of the African Continental Free Trade Area (AfCFTA) Secretariat, told a business conference in South Africa that AfCFTA negotiations over e-commerce and digital trade would be fast-tracked, with Covid-19 heightening the need for an adequate legal and governance framework.
Uganda court decision rattles East Africa’s syndicated loans market (The East African)
East Africa’s nascent syndicated loan markets have been upended after a Ugandan High Court declared cross-border lending illegal if done without the permission of the Central Bank. The development could freeze an estimated $130 million worth of intra-EAC lending and undermine the on-going regional financial integration process. Kenya Bankers Association (KBA) said its members will, for the time being, approach syndicated loans with caution until the interpretation of the Ugandan law on the matter is clarified by the Court of Appeal.
The 7th COMESA Annual Research Forum will take place from 19 – 21 October 2020 and this year, the focus is how intra-COMESA Trade can be harnessed through interface with the African Continental Free Trade Area (AFCFTA). According to the COMESA Director of Trade, Dr Christopher Onyango, the theme is motivated by renewed impetus towards consolidation of a single continental market and the role of COMESA in the realization of this goal. COMESA is the largest economic bloc with a membership of 21 member States, a combined GDP of US$ 769 billion, a combined population of over 583 million and therefore a critical pillar in the realization of the African Economic Community.
The East African Business Council (EABC) is calling for mutual recognition of COVID-19 certificates among East Africa Community (EAC) Partner States and restocking of reagents at border posts, to minimize traffic snarl-ups at the Busia and Malaba border posts. “It is very critical for transporters in the region to also embrace the recently launched Regional Electronic Cargo and Driver Tracking System (RECDTS) to improve the truck turnaround time and allow Partner States to electronically share truck drivers’ COVID-19 test results, thus minimizing the need for multiple COVID-19 tests in a single trip.”
The Chief Executive Officer, Ecobank Transnational Incorporated (ETI), Ade Ayeyemi has reiterated the need for African countries to adopt a continent-wide approach to business and also focus on wealth creation. This, he said would make businesses in the continent to be relevant in the global value chain. The Ecobank CEO emphasised that, “no country is so poor that it has nothing to give and no country is so rich that it has nothing to receive. All of us must come together to become better.” Also speaking, the Executive Director/ Chief Executive, Nigeria Export Promotion Council (NEPC), Segun Awolowo, said with a market of 1.2 billion people and combined GDP of $3 trillion, there was huge potential for Nigeria to increase its export to Africa.
Tough times for Africa’s upstream oil and gas (African Business Magazine)
Getting upstream oil and gas projects off the ground in sub-Saharan Africa was challenging before the Covid-19 pandemic. Now the operating environment is even tougher, as the industry contends with labour restrictions, disrupted supply chains and the long-term impact on revenues and investment of the collapse in global demand for energy products. Global oil prices have recovered from their lows, with Brent crude trading at almost $40 in early September, up from lows of $20 in mid-April, indicating demand recovery that could bolster investment. It will still be a tough task. Most of the African oil and gas projects for which final investment decisions were originally planned for 2020 require an oil price of $40 and upwards – some much higher – just to break even.
Trans Gambia Corridor Strengthening Pavement Project, Others Launched (Foroyaa Newspaper)
President Adama Barrow, on a series of engagements had on Thursday 1st October, 2020 laid the foundation stone for the second phase of the 24kilometers road, Trans Gambia Corridor Strengthening Pavement project. The road, when completed in 18 months, is expected to boost trade between Gambia, Senegal and beyond. Furthermore, it will also help in the flow of busy traffic around that part of the country.
African trade to be impacted by No-deal Brexit and Covid-19 (Africa Feeds)
A No-Deal Brexit compounded by the COVID-19 pandemic could see UK GDP fall by 6% and lose £134 billion pounds annually according to The Outlook for Trade after Brexit report. The report forecasts the combined economic costs of Brexit and the COVID-19 crisis on the UK economy as well as addressing particular issues relating to exports of four key industries: automotive; consumer goods; healthcare; and technology.
Virusha Subban, Partner specialising in Customs and Trade at Baker McKenzie in Johannesburg, noted that there was strong consensus that the years of deliberation around Brexit had added to the geopolitical and economic uncertainty of investing in Africa, especially when it came to finalising the terms under which African countries were going to trade with the UK after Brexit. This uncertainty has been exacerbated by the impact of COVID-19 on trade in the region, which resulted in a twin supply-demand shock, mass production shutdowns and supply chain blockages across the continent.
Zimbabwe has ratified the Economic Partnership Agreement (EPA) with Britain that allows Zimbabwean exporters access to UK markets free of tariffs and quotas and is expected to boost trade and investment between the two countries as Government’s re-engagement drive continues to bear fruit. The ratification of the EPA follows the withdrawal of the UK from the European Union, meaning it can no longer trade under the Eastern and Southern Africa-EU EPA.
The COVID-19 pandemic has highlighted the importance of strong EU-African relations, Iratxe García, the leader of the Socialist and Democrat group in the European Parliament, told EURACTIV as her political group launched its Africa week (13-15 October). “We are advocates of value addition and inclusion of Africa in the global value and supply chains; we have in the past, made input to this effect towards the EU-AFRICA strategy. We are of the strong belief that shifting economic models from extraction to manufacturing benefits both continents…. Having said that, it is also important to ensure that the natural resources are used to the benefit of the population, and not just a few.”
Regulators, UN agencies, market actors and officials from 10 countries will gather virtually on October 9th to launch the Dialogue on Global Digital Finance Governance, implementing one of the key recommendations of the UNSG Digital Finance Task Force, to catalyse international and corporate governance innovations to ensure BigFintechs benefit all. “Many positive developments have happened that align fintech with sustainable development, which need to be built upon. BigFinTechs present a different challenge in that their size and scope present much greater potential for both positive and negative impacts. Strengthening the opportunities and mitigating the risks with governance innovations will ensure that BigFinTechs and fintech follow a similar path in supporting the greater good” noted Achim Steiner, cochair of the Digital Finance Task Force and UNDP Administrator
Turkish companies say they are facing new delays in recent weeks exporting clothing to countries in North Africa where one, Morocco, has amended a trade deal allowing it to raise duties by up to 90% on such goods. The exporters of ready-to-wear clothes have complained about unusual requests for paperwork and delays of up to five times the norm clearing customs in Morocco and Algeria, three sector groups told Reuters. Morocco’s government, worried that a 2004 free trade deal with Turkey has harmed its manufacturers and retailers, said last week that talks that began with Ankara in January led to an amendment in August. A trade ministry source said the amendment allows Morocco to raise duties by up to 90% on 1,200 products including textiles and clothing for five years.
China leads the way in boosting South-South cooperation (China.org.cn)
In the face of the continuing COVID-19 pandemic, the relevance of South-South Cooperation (SSC) has further increased when the virus has compounded social and economic problems of poor, developing and developed countries alike. As the largest developing nation, China has assumed a greater role in realizing the SSC vision by supporting LDCs and developing nations. South-South cooperation is a central part of developing countries’ endeavor to seek strength through unity. China’s role in realizing the development aspirations of countries within the framework of SSC while shedding light on their joint commitment to building a harmonious and
In our latest World Economic Outlook, we continue to project a deep recession in 2020. Global growth is projected to be -4.4 percent, which is a small upgrade from June. This upgrade owes to somewhat less dire outcomes in the second quarter, as well as signs of a stronger recovery in the third quarter, offset partially by downgrades in some emerging and developing economies.
Emerging markets and developing economies are having to deal with this crisis with far fewer resources. These economies will need to prioritize critical spending for health and support for the poor and also ensure maximum efficiency, but they will also need continued support in the form of international grants, concessional aid, and in several cases, debt relief. Now where debt is unsustainable, it should be restructured sooner than later to free up finances to deal with this crisis.
In a joint statement, the International Labour Organization (ILO), Food and Agriculture Organization (FAO), International Fund for Agricultural Development (IFAD) and World Health Organization (WHO) highlighted that tens of millions are at risk of falling into extreme poverty. “Now is the time for global solidarity and support, especially with the most vulnerable in our societies, particularly in the emerging and developing world,” the statement said. “Only together can we overcome the intertwined health and social and economic impacts of the pandemic and prevent its escalation into a protracted humanitarian and food security catastrophe, with the potential loss of already achieved development gains”.
COVID-19 has spread rapidly around the world and in many emerging markets and developing countries (EMDCs) over the past six months. We continue to face a highly uncertain economic outlook. Securing economic recovery is expected to be protracted with likely scarring damage to productive capacity.
At this critical juncture, we are encouraged by the efforts of the G20, World Health Organization, World Trade Organization, and International Financial Institutions (IFIs) to deepen global cooperation to support all countries – in solidarity – confronting the inter-related health, social and economic crises brought about by the COVID-19 pandemic
It is crucial to support developing countries manage their worsening debt vulnerabilities to avoid a debt crisis that seriously sets back development progress. We welcome the G20’s Debt Service Suspension Initiative (DSSI) and encourage advanced economies as well as emerging markets with fiscal space to extend DSSI support beyond 2020.
Airports Council International (ACI) World and the International Air Transport Association (IATA) reinforced the urgent call for governments to use testing as a means to safely re-open borders and re-establish global connectivity and to prevent the systemic collapse of the aviation industry with non-debt generating financial support. The dual measures would protect countries from the importation of COVID-19 cases, avert an employment crisis in the travel and tourism sector, and ensure that the critical aviation structure remains viable and able to support the economic and social benefits on which the world relies.
Surging global demand for everything from hazmat suits to work-from-home technology has allowed China, which contained the virus months ago, to capture record market share of global exports by quickly reopening its factories while the rest of the world grappled with lockdowns. It’s a striking reversal from the first two months of the year when China’s exports contracted by 17.1%. “China’s export performance during this crisis is indeed a proof of its solid status as the world’s factory,” said Yao Wei, China economist at Societe Generale SA. “It is reliable, as the quick and effective containment of the outbreak in China allowed its manufacturing sector to resume operations way ahead of others.”