tralac Daily News
Loss of capacity and skills in cotton value chain costs SA R20bn (Cape Business News)
Despite the solid growth that the South African cotton industry has experienced in the last seven years, the country still lacks the capacity and skills within the value chain to take full advantage of local beneficiation. This means that most of the land’s lint cotton is exported for processing before the final product is imported again. This translates into an opportunity loss of about R20,4bn of beneficiation in the local cotton value chain based on the 2018/19 production year’s output of 51,000 tonnes of lint cotton.
President Cyril Ramaphosa will today open and address the Infrastructure South Africa (ISA) Project Preparation Roundtable and Market Place at the Gallagher Convention Centre in Midrand, Gauteng. The Infrastructure South Africa Project Preparation Roundtable and Market Place aligns with the first priority President Ramaphosa presented last month at the joint sitting of Parliament on the South African Economic Reconstruction and Recovery Plan.
South Africa: Necessary measures needed to avoid Covid resurgence (The Africa Report)
South Africa’s stringent lockdown earlier this year may have saved lives by containing the spread of COVID-19. New COVID-19 infections have been declining and lockdown restrictions relaxed. But this has triggered fears of a new wave of infections. More must be done to reinforce these preventative behaviours to avoid a surge in infections. This is particularly urgent given that South Africa’s early strict lockdown resulted in tremendous social and economic costs to the country.
Total South African new-vehicle sales declined by 25.4% in October, to 38 752 units, compared with the 51 968 vehicles sold in the same month last year. The new-passenger-car market also fell by 25.4%, to 26 793 units. Some good news is that the car rental industry accounted for “an encouraging” 12.8% of passenger car sales in October, says National Association of Automobile Manufacturers of South Africa (Naamsa) CEO Mikel Mabasa.
Agricultural prices improve by 5% as economy recovers (East African Business Week)
According to the June 2020 Uganda Bureau of Statistics report, food crop growing activities registered a growth of 4.3 per cent in 2019/2020, compared to the 1.5 per cent growth in 2018/19, while livestock growing activities grew by 7.7 per cent in 2019/2020 compared to 7.3 per cent in 2018/19. “The 5 percentage points price improvement, is largely attributed to the gradual recovery of activities in the agricultural sector and the economy as a whole, case in point is the improved price of Matooke and other foodstuffs,” noted Evans Nakhokho the Chief Manager Agribusiness at Centenary Bank during a thought-leadership forum hosted by Bank under the theme: Interventions for Agribusiness Development.
Broke Kenya eyes extra Covid-19 loan from IMF (BusinessDaily)
Kenya has for the second time in less than six months reached out to the International Monetary Fund (IMF) for budget support to weather the coronavirus economic hardships. The type of credit Kenya has sought from the IMF is a quick-disbursing facility where money flows straight into the budget to top up the public purse and is used at the discretion of the government. Kenya’s economy shrank by 5.7 percent in the second three months of 2020, its first quarterly contraction since the global financial crisis 12 years ago, as the Covid-19 pandemic shut businesses and kept people at home. The Treasury expects growth of less than 2.5 percent compared to 5.4 percent last year, and international institutions are making lower forecasts.
Zimbabwe records trade deficit in September (China.org.cn)
Zimbabwe recorded a trade deficit of 42.6 million U.S. dollars in September 2020, the Zimbabwe National Statistics Agency (Zimstat) said on Monday. According to the statistics agency, the country exported goods worth 398.8 million dollars during the month, less than the value of its imports which stood at 441.4 million dollars. The imports were up by nine percent compared to August, while exports increased by 2.4 percent from 389.3 million the previous month.
Make Ghana pharmaceutical hub in Africa – President (Graphic Online)
President Nana Addo Dankwa Akufo-Addo has given an assurance that the government will work actively and speedily to ensure that the pharmaceutical industry takes advantage of the African Continental Free Trade Area (AfCFTA) agreement to become the drug manufacturing hub in Africa. He said the industry held tremendous opportunity and called for coordinated efforts among industry players, financial institutions and the government to position Ghana to take advantage of the great new opportunity that was beckoning. ”The pharmaceutical society and the pharmaceutical industry are clear growth points for the future of Ghana’s economy, and I think it is my duty to be out there battling for everything that we can do to assist with that growth. There is a great deal that comes from you for the country,” he said.
Government has called on the business community in Ghana and Rwanda to take advantage of their vast economic potentials to explore business opportunities in all sectors of the economy. The government also encouraged the Rwandan government and businesses to invest in Ghana for mutual benefits. Mrs Shirley Ayorkor Botchwey, the Minister of Foreign Affairs and Regional Integration said Ghana was among the countries across the continent with a conducive investment climate coupled with good incentives provided under the Ghana Investment Promotion Centre Act 2013, Act 865. She mentioned that the establishment of the African Continental Free Trade Area (AfCFTA) presented new opportunities to both countries to expand trade relations at the bilateral and continental levels.
The Bank of Namibia 21st Annual Symposium will take place on Thursday, 05 November, under the theme: Positioning Namibia to reap the benefits of the African Continental Free Trade Area (AfCFTA). The Minister of Industrialisation and Trade, Hon. Lucia Iipumbu, shall deliver the keynote address at the event. The symposium aims to unpack challenges, namely: limited manufacturing activity, infrastructure constraints as well as tariff and non-tariff barriers that, amongst others, hinder trade between Namibia and the rest of Africa.
The price of Brent crude dropped by 3.43 percent to $36.64 per barrel on Monday after some European countries imposed another round of lockdown to slow the spread of the coronavirus. COVID-19 infections have been spreading in various parts of the world as scientists and health professionals warn of a second wave of the outbreak. Crude oil earnings account for a large portion of Nigeria’s revenue and the economy is projected to enter its second recession in five years on the back of low oil prices and reduced economic activities due to a lockdown imposed to stop the spread of the virus. To combat the crude revenue drop, the Nigerian government is already making effort to shore up non-oil revenue.
Kenya is hoping the end of sanctions the US had imposed on Sudan could stabilise its tea market and open up investment opportunities for Nairobi’s firms. The US announced this week that it was dropping sanctions imposed on Khartoum 23 years ago after it designated Sudan as a State sponsor of international terrorism. “We have been trading with Sudan under many formations including Comesa,” Johnson Weru, the Trade Principal Secretary, told the Nation, referring to the Common Market for East and Southern Africa, a trading bloc of 14 countries in the region. “We shall definitely improve our trade especially on products that we mutually cumulate.”
The AfCFTA is set to create a single continental market for goods and services for more than one billion, two hundred million people on the African Continent. In addition to the creation of a single African market, will free movement of business, persons and investments across the continent ultimately lead to the emergence of a customs union? The World Trade Organisation (WTO) sanctions and recognises that trade associations formed along regional lines can be instrumental as units of development suitable for both advanced and developing economies.
The African Development Bank (AfDB) must put in place a directive excluding the financing of fossil fuels, and publish it without delay on its website. This is the subject of an open letter from environmental civil society organisations to AfDB President Akinwunmi Adesina. The latter is called upon to sign a note from which his financial institution will no longer finance and provide financial and technical support to coal, gas and oil projects on the African continent. This call comes as a prelude to the “Finance in Common Summit”, which the AfDB will attend from 9 to 12 November 2020 in France.
AU chief seeks proactive gender-responsive to African infrastructure growth (The Nation Nigeria)
African Union (AU) Commissioner for Infrastructure and Energy Dr. Amani Abou-Zeid has canvassed the need to integrate gender-responsive approaches in infrastructure planning and implementation for Africa to reach its full potential. Commissioner Abou-Zeid spoke at the opening of the Gender-Responsive Infrastructure Development Webinar hosted by the African Network for Women in Infrastructure (ANWIN). According to her, the COVID-19 pandemic has revealed the deficiencies across the various sectors of infrastructure in Africa. “The impact of the global pandemic worsens the constraints women face, due to the already challenging infrastructure landscape in the continent,” she said, referring to the disproportionate burden African women shoulder due to infrastructure deficits.
Jumia opens logistics service to third parties (Logistics Update Africa)
Jumia has made its logistics service available for use by third party businesses who wish to leverage its network, technology and expertise for last mile deliveries across 11 countries in Africa. Till now, Jumia’s logistics services were reserved for ecommerce and food vendors operating on its marketplace. “Businesses across the countries are re-examining their costs, especially during Covid-19. For many, logistics is a major cost driver and headache to manage. We have the right infrastructure, people, partnerships and technology required to help third parties and partners solve logistics and marketing challenges. We believe we can provide better quality of service at lower cost,” Kumar said.
In the last decade, the impact of financial technology (fintech) on Africa’s financial sector and other key sectors has been phenomenal. As a key driver of growth in the region, fintech is a viable alternative to traditional banking in urban and rural areas. In Africa, fintech creates an enabling environment that opens up the financial sector’s value chain and promotes efficiency gains. In Sub-Saharan Africa (SSA), fintech is a catalyst for growth in financial inclusion and innovation. Although poverty is prevalent in SSA, with a large proportion of low-income households in the region, the remarkable growth in digital financial services has created a new fangled market that allows the people in the region to access reliable, affordable and sustainable financial services.
Despite the COVID-19 pandemic, not all of the economic news in Africa has been negative. We continue to see promising developments. We address the value of investment activity in our upcoming 2021 Africa Energy Outlook. “Investments are required to convert resources in the ground to revenue and value,” the report says. “The investments represent jobs and business for a plethora of oil field service providers and is therefore an important metric to the wider activity level around the oil and gas industry.” While the report describes widespread declines in capital expenditures in the continent’s oil and gas industry, it notes that they are taking place, primarily, because of COVID-19. An investment rebound is possible after the pandemic, the report says, if oil prices exceed current expectations.
A judiciary that is independent and impartial is the bedrock of a democracy and the rule of law, and is the last line of defence against any encroachment on rights and freedoms under law. Based on the current Africa Integrity Indicators, the continent is making progress, albeit slowly, on judicial independence. However, to fight corruption effectively also requires an enabling legal framework, which most Southern African Development Community countries don’t have. The unspoken tragedy in Africa that keeps corruption alive is that the proceeds of crime and illicit money are the raw material for election campaigns and election buying, says the writer.
The 11th Africa Day for Food and Nutrition Security (ADFNS) was commemorated virtually on 30th October 2020 under the theme “Resilient Food Systems toward Healthy Diets for the Vulnerable during Emergencies: Lessons from the COVID-19 pandemic”. The focus of the 11th ADFNS is to uncover the underlying benefits and potential that investment in resilient food systems can create with special focus on situations dictated by emergencies such as the Covid-19 pandemic.
In an October 2020 online article, South Africa’s Mail & Guardian said that while US president Donald Trump’s mission was to make America great, his administration had “largely remained disengaged” with Africa. In contrast, as US influence lost ground under Trump, who the article noted hasn’t travelled to Africa, China “further accelerated its influence” on the continent. The newspaper said: “Trade between Africa and China has grown rapidly, reaching US$166 billion in 2011, according to the United Nations.” But it didn’t give any more recent figures that could have included the Trump years. Trump took office in 2017. As the US votes on 3 November, does this number stand up to closer scrutiny? What is the most recent volume of trade? And is there a rivalry between the US and China for Africa? We went in search of answers.
The World Trade Organisation’s (WTO) efforts to elect a new leader next week could be delayed for at least another month because of the rapid spread of COVID-19 in Switzerland. While some in-person meetings may be virtual, it was gathered that senior WTO officials are discussing whether to postpone their plan to formally confirm Nigeria’s candidate, Dr. Ngozi Okonjo-Iweala, as the next director-general of the WTO. According to Bloomberg, on Sunday, Geneva’s cantonal authorities announced strict new lockdown measures amid a surge in infections and hospitalisations in the Swiss city.
The tariff wars of U.S. President Donald Trump’ administration have garnered enormous press coverage over the past four years, and rightly so. They have pitted America against the other major economies in the world in head-to-head high-stakes disputes. Global trade practitioners, however, have been equally focused on a battleground far from the eye of the general public the World Trade Organization. The WTO, made up of 164 members, is tasked with trying to bring new global trade agreements and resolve disputes over existing trade activity. This has been a longstanding aspiration. With the WTO director-general post now open, the Trump team has hit the pause button. The two finalists are Yoo Myung-hee, trade minister of South Korea, and Ngozi Okonjo-Iweala, a Nigerian-born economist and international development expert who also holds U.S. citizenship. The consensus candidate backed by the overwhelming number of member nations is Okonjo-Iweala. She has a director-general’s dream resume.
The Labour party has urged the UK trade secretary, Liz Truss, to end delays over rollover deals with Kenya and Ghana to prevent them being slapped with high tariffs when the UK leaves the EU on 1 January. Negotiations with Kenya and Ghana have yet to be signed off with only nine weeks to go before the UK’s transition deal with the EU comes to an end, when import charges would be imposed on goods worth £2.6bn from the African countries. With EU trade talks hanging in the balance and discussions with the US barely started, the trade department signed a deal with Japan last month that the shadow trade secretary, Emily Thornberry, warned massively favoured the world’s third-largest economy.
UK companies explore energy opportunities in Egypt (Oil Review Africa)
The UK Department for International Trade (DIT) and the Scottish Development International (SDI) have organised the first virtual energy event to explore business opportunities for UK-Scottish companies in Egypt’s transition to net zero. Undersecretary, Minister’s Technical Office, Ministry of Petroleum & Mineral Resources, Osama Mobarez said, “Egypt and the UK enjoy longstanding ties with special strategic partnerships in the oil and gas sector. The Egyptian Ministry of Petroleum and Mineral Resources has adopted several reforms and policies to ensure energy security, financial stability and enhance the investment environment to avail more opportunities. These reforms have resulted in several successes providing more opportunities to our partners and driving further achievements.”
Josep Borrell: Why Are EU-African Relations a Strategic Issue (EuBulletin.Com)
For European foreign policy, there are, perhaps, just three issues that truly qualify as ‘strategic’: the extent we manage to shape events in our neighbourhood; the way we navigate the growing strategic competition between the US and China and the nature of our future partnership with Africa and the kind of social-political model that will prevail on that continent. It is necessary to think about EU-Africa relations in these terms, as a strategic issue that deserves the highest level of attention.
The United Nations Office on Drugs and Crime (UNODC) has challenged Kenya to embrace use of technology if it is serious about fighting massive corruption in public and private sectors. In Kenya, the main corruption loophole, according to audit reports, is manipulation of procurement system and other transactions that have increased the cost of doing business. Experts say the technology allows full traceability of transactions while building the roadmap to identify illicit activities or malfeasance. It also reduces illicit financial flows, strengthening the recovery and return of stolen assets, substantially reducing bribery and corruption, and developing effective, accountable and transparent institutions at all levels.
COVID-19: Remittance Flows to Shrink 14% by 2021 (World Bank)
As the COVID-19 pandemic and economic crisis continues to spread, the amount of money migrant workers send home is projected to decline 14 percent by 2021 compared to the pre COVID-19 levels in 2019, according to the latest estimates published in the World Bank’s Migration and Development Brief. Remittance flows to low and middle-income countries (LMICs) are projected to fall by 7 percent, to $508 billion in 2020, followed by a further decline of 7.5 percent, to $470 billion in 2021. The foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.
“In putting forward this revision, I am mindful of the Trade Negotiations Committee guidelines that negotiating chairs, through the negotiating process, should aim to facilitate consensus and to seek to evolve consensus texts,” the chair said, noting that the revised consolidated text is without prejudice to any member’s position. The chair called on members to approach the revised text with a mindset focused on compromise. Given the ongoing COVID-19 pandemic and related containment measures, the chair asked members to remain flexible on arrangements for discussions on the revised consolidated text and said they will be informed once concrete plans are in place.