tralac Daily News
Manufacturing can play a key role in South Africa’s economic recovery (Engineering News)
The country’s economy is in a dire state, exacerbated by the impact of the Covid-19 pandemic; however, there are signs of opportunities for recovery and manufacturing can play a big role in supporting economic recovery, PwC Africa partner and chief economist Lullu Krugel said during a November 19 webinar hosted by industry organisation, the Manufacturing Enterprise Solutions Association. Krugel said technology was a big disrupter, but also provided opportunities for the industry.
Investment Conference bears fruit (SAnews)
South Africa’s premier two-day Investment Conference recently wrapped up in a time when the world continues to pick itself up amidst the pandemic that has changed life as we know it. Despite the global turmoil caused by the pandemic, the appetite for investing in Africa’s southernmost country was not dampened. “Tough decisions have had to be made on investments, on expansion and on entry into new markets. It is therefore significant that you have all come here – both in person and virtually – to show that this is a country you believe in and want to see succeed,” said President Ramaphosa.
SA urged to pursue cybersecurity frameworks based on global best practice (Engineering News)
South Africa’s digital interactions and cybersecurity, notwithstanding the Cybercrimes Bill 2017 that has not yet been adopted, are currently governed by the Electronic Communications and Transactions Act (ECTA) 2002, as well as the Protection of Personal Information Act 2013. There is still a significant amount of work required to bring South African legislation in line with international principles and standards, says law firm Cliffe Dekker Hofmeyr (CDH) technology, media and telecommunications practice director Preeta Bhagattjee. “Without a well-defined legal framework, it is more difficult, but not impossible, to prosecute people or organisations implicated in cyberattacks and crimes, which weakens enforcement. Data protection legislation often goes hand in hand with cybersecurity laws.”
President Uhuru Kenyatta has reiterated the Government’s commitment to the modernisation of the country’s security apparatus. The President said despite competing national interests, including the fight against COVID-19, the Government will continue investing in equipment, technology and training to enhance the effectiveness of the police and other security agencies. “We understand that in a dynamic operating environment characterized by emerging and asymmetrical threats, investment in modern technology and cutting-edge training is instrumental for 21st Century law enforcement,” the President said.
The Standard Operating Procedures (SOPs) developed by Kenya Association of Manufacturers (KAM) seek to ensure better and more efficient entry operations to facilitate trade and enhance the fight against illicit trade. Speaking at the Launch yesterday, Cabinet Secretary, Ministry of Industrialization, Trade, and Enterprise Development Betty Maina highlighted the Government’s commitment to sustain the fight against illicit trade in the country. “Our ports and other points of entry play a fundamental role in facilitating global trade. The development of these SOPs is therefore an integral part of a successful quality system,” said CS Maina.
Zambia is seeking a compromise solution with bondholders and does not expect them to seize its mining assets even though it defaulted on $42.5 million in Eurobond debt last week, Mines Minister Richard Musukwa said on Thursday. The government in September requested a six-month deferral on interest payments for three commercial eurobonds worth $3 billion. But it missed the $42.5 million interest payment due on one bond on October 14, prompting ratings agency S&P to declare the country in default.
Govt imports drop to lowest level in years (Daily Monitor)
Government imports declined to an all-time low for the first time in over three years, according to details contained in the Bank of Uganda report for the month ended September. According the report, government imports fell to $4m (Shs15b), which was a drop from the monthly average of $56m (Shs210b). During the month, formal private sector imports formed the largest part of the import bill with mineral products (excluding petroleum products), which stood at $176.4m (Shs661b) taking the biggest share, while $115m (Shs431b) was spent on importation of vehicles and accessories.
Rwanda’s garment export revenues hit record high (The New Times)
Rwanda’s textile and garment sector has recorded unprecedented growth since 2018 when the US government suspended Rwanda from the list of countries whose apparel exports enter the American market duty-free under the African Growth and Opportunity Act (AGOA). Donald Trump’s administration suspended AGOA for Rwandan apparel products following a decision by Kigali to raise tariffs on second-hand clothes to protect the local industry. However, the local apparel export defied the odds between 2018 and 2020, growing at 83 per cent in value.
Egypt’s Prime Minister Mostafa Madbouly has reviewed proposals, during a high-level ministerial meeting, to facilitate the movement of goods between Egypt and Africa, and to enhance transport networks. Madbouly said Egypt is keen to strengthen relations with African countries, and increase trade exchange across the continent to achieve mutual benefit for all parties involved. He also said that increasing the volume of trade exchange requires developing the means and methods of transportation across Africa, in order to reduce the final costs of goods.
Experts meet to validate two documents (The Point)
Permanent secretary at the Ministry of Agriculture, Ebrima Sissaho, has pointed out that the ECOWAS region has experienced strong growth in agricultural production over the last 20 years particularly compared to the rest of the continent. However, he said despite these gains, food insecurity remains a major challenge. According to him, the Food and Agriculture Organisation (FAO) statistics has indicated more than 34 million people are undernourished in the sub region and the countries hardest hit are also poorest and the most fragile ones.
Africa Industrialisation Day: highlights
Time to turn COVID-19 into an opportunity (sardc.net)
The COVID-19 pandemic that has affected the global socio-economic landscape has brought to the fore the need for Africa to industrialize and trade more with itself than the outside world. Regional integration experts said an industrialized Africa has the capacity to shield itself from any global commodity volatilities that have continued to dictate the direction of Africa’s trade and economic progress. Furthermore, industrializing the continent would mean less raw resources being shipped and traded elsewhere, enabling African countries to fully benefit from their natural resources, as well as create employment for its citizens.
On this day, the 20th November, the Southern African Development Community (SADC) region joins the rest of the world to commemorate Africa Industrialization Day. This year’s commemoration is under the theme “Inclusive and Sustainable Industrialisation in the era of the Africa Continental Free Trade Area (AfCFTA)”. The theme underscores the importance of policy harmonization and alignment across national borders as a pre-requisite for cross border investment and for the movement of goods, capital and people.
SADC understands that industrialization, with strong linkages to domestic economies, will help SADC Member States and African countries, to enhance productivity, diversify their economies, achieve high growth rates, and thus, reduce exposure to external shocks. SADC has over the years been at the forefront in driving the industrialisation agenda by putting in place policies and strategies to boost and catalyse industrialisation and transformation of the region. The transformation of SADC economies aims to create decent jobs, promote value adding development approaches, and improve the welfare of citizens, and ultimately eradicate poverty in the region.
UN reaffirms commitment to Africa’s industrial development (Premium Times)
The UN Secretary-General, António Guterres, has reaffirmed the organisation’s commitment to “inclusive, resilient and sustainable” industrialisation in Africa. “The COVID-19 crisis hit African economies well before the pandemic spread across the continent, with falling demand for African commodities and products, disruptions in trade and travel, reduced remittances and foreign investment, and vast job and income losses. Economies were expanding and poverty was in decline. Technology and innovation were being embraced across the continent, and progress had been made in unity and economic integration. The entry into force of the African Continental Free Trade Area (AfCFTA) promised a strong boost in intra-African trade,” he said. Mr Guterres emphasised that the response to the pandemic was an opportunity to address “structural inequalities and vulnerabilities” and promote transformative change for a more resilient Africa.
The growing demand for legitimate, quality and timely statistics has in recent years been a priority at the national, regional and continental levels leading to the adoption by the African Union Member States in 2018, of the revised Strategy for the Harmonization of Statistics in Africa (SHaSA 2). The African Charter on Statistics serves as a comprehensive policy framework for the development of statistics in Africa. Its ratification and domestication and the full implementation of SHaSA, are expected to leapfrog the continent to generate reliable and harmonized statistics covering the environmental, social, economic, cultural and political dimensions of sustainable development through the implementation of a coordinated strategy at the continental level.
At the commemorative events, the African Union Commission also launched the third edition of the African Trade Statistics Yearbook, a time-series of annual trade data for the period from 2013 to 2019. The Yearbook acknowledges that harmonized and high-quality trade statistics data are critical to support trade negotiations. It fulfils the need for comprehensive, detailed and reliable statistics on merchandise trade in African Union.
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Last year African countries signed an agreement aimed at increasing trade between them. If implemented successfully, they believe it could create a single African market of over a billion consumers. According to Trudi Hartzenberg, executive director of the Trade Law Centre (Tralac) in Stellenbosch, South Africa, negotiations between African nations are ongoing virtually, but they have now hit “some sensitive issues”. “The negotiations are pretty complex because the countries who are negotiating would lose tariff revenues. Reducing the tariffs means the import duties are lower so they would be gathering less revenues than before,” she explains.
Managing partner for research firm – Indago Africa, Gordon Biaku, is urging businesses to conduct a comprehensive market research of countries they wish to invest in, before participating in the African Continental Free Trade Area (AfCFTA).”First and foremost, understand your trade locally. Number two, of which of all the countries you want to venture, Nigeria, South Africa and the like, get local knowledge. If possible, get local partnerships, they can help with local knowledge,” he said.
The UN Economic Commission for Africa (ECA) on Thursday welcomed Nigeria’s ratification of its membership of the African Continental Free Trade Area (AfCFTA). Last week, Nigeria’s Federal Executive Council (FEC) ratified the country’s membership less than a month before the December 5 deadline. Vera Songwe, Executive Secretary of the ECA, said the move by the continent’s largest economy and most populous nation was a serious indicator about Africa’s desire to strengthen intra-African trade. “This sends a strong signal that the African continent is serious about regional integration and lays a robust foundation for successful implementation of the AfCFTA,” Songwe said.
The coming into force of the African Continental Free Trade Agreement (AfCFTA) in January will add more responsibility to Customs Administrations in Africa, Mr Ammishaddai Owusu-Amoah, Commissioner-General, Ghana Revenue Authority (GAR), has said. He said it would be prudent for Customs Administrations on the continent to have additional resources in performing their roles diligently. The meeting under the auspices of the AfCFTA Secretariat was on the theme: “Operationalization of the AfCFTA Custom Provisions.”
Foreign Affairs Minister, Shirley Ayorkor Botchwey, says the implementation of the African Continental Free Trade Agreement (AfCFTA) offers an opportunity for Ghana and South Africa to boost its trade relations. According to the Minister, the AfCFTA further express optimism that the business community in both countries will take advantage of the large market to invest.
In response to a request by the Bureau of the African Union Heads of State and Government under the leadership of H.E. Cyril Ramaphosa, Chairperson of the African Union and President of South Africa, the African Development Bank (AfDB) has approved a grant of US$27.33 million to the Africa Centres for Disease Control and Prevention (Africa CDC). Awarded under three key components – technical assistance and capacity building (US$19.33 million), institutional support (US$7 million) and contribution to the African Union COVID-19 Response Fund (US$ 1 million) – the grant is to support implementation of the Africa Joint Continental Strategy for COVID-19 Outbreak.
Tingg: Changing The Digital Economy’s Narrative In Africa (Premium Times)
By leveraging technology, tech-savvy youth and a vast majority of Africans with mobile devices – phones, tablets, laptop computers etc. – now carry out transactions seamlessly. This is fundamentally why a digital payments system is one of the five operational instruments of the African Continental Free Trade Area (AfCFTA). The objectives of the AfCFTA include creation of a single continental market for goods and services, with free movement of business persons and investments, aided by a digital payments system that eliminates the need for cash transactions.
Africa’s development models must change (ISS Africa)
As the world grapples with COVID-19, analysts have had to review their forecasts of development in Africa. There is now much discussion of V-shaped or U-shaped or L-shape recovery patterns and what these might mean for what was a generally positive outlook for the continent – an ‘Africa Rising’ narrative. However, circumstances over the past decade or more suggest that the socio-economic development models used by the major multilateral financial institutions and development agencies need to be reviewed. They should align with the fact that most African economies lie beyond current legal frameworks and the law, and are subject to informality, poor land management and pernicious organised crime networks.
After two days spent in Paris meeting with representatives of the French Government, heads of community institutions, representatives of international institutions, donors and private investors, CEMAC can boast of significant economic success. Under the leadership of HE Mr. Clément Mouamba, Prime Minister, Head of Government of the Republic of Congo, the institution has succeeded in raising 3.8 billion euros to support the financing of integration projects for the economic development of the region.
Lake Victoria: East Africa sitting on untapped trade worth $60b (The East African)
The development of Lake Victoria ports is the biggest project in implementing the East African Community Inland Waterway Transport infrastructure development agreed by partner states to strategically link Uganda, Tanzania and Kenya to both the Northern and Central transport corridors. However, while all three countries have expressed interest in reviving the Lake Victoria water transport to unlock the economic potential of the region and integration, official launch of Kisumu, set for August 2019, has been postponed several times, because of underestimation of infrastructure layout needed and inability of Uganda and Tanzania to complete their corresponding facilities on time.
Cane farmers want Comesa import safeguards extended (The Standard)
Sugarcane farmers are pushing for the extension of restrictions on sugar imports. The Kenya National Alliance of Sugarcane Farmers Organisation says with the looming expiry of import safeguards by the Common Market for Eastern and Southern Africa (Comesa), farmers might lose market for their produce. The safeguards allow Kenya to limit duty-free sugar imports from Comesa countries to a maximum of 350,000 tonnes annually. “If the sugar imports keep coming without restrictions, it will not safeguard farmers and the prices of sugar will be depressed. In the end, the sugar industry will die,” the organisation’s chairman Saulo Busolo said.
Economics alone isn’t holding back West Africa’s Eco (ISS Africa)
The Eco – the proposed single currency for members of the Economic Community of West African States (ECOWAS) – was scheduled to launch in July this year. The failed launch of the Eco in July will be the fifth attempt in about two decades. This time there’s no new date and instead, discussions are being held on a new roadmap. Official reasons for the delay are mainly economic – member states have been unable to meet the convergence criteria for launching the single currency. These include inflation, debt-to-GDP ratio, budget deficits and their financing, reserves and exchange rate stability. But even if these hurdles are overcome, political problems will probably still prevent the currency from taking off.
Global markets and spirits are up with the news that two COVID-19 vaccines have shown to be more than 90% effective in late-stage clinical trials. But while there is growing confidence that an end to the health pandemic is in sight, an UNCTAD report published today warns that a viable vaccine will not halt the spread of economic damage, which will be felt long into the future, especially by the poorest and most vulnerable. The report, “Impact of the COVID-19 Pandemic on Trade and Development: Transitioning to a New Normal”, provides a comprehensive assessment of the economic knock-ons, projecting that the global economy will contract by a staggering 4.3% in 2020 and warning that the crisis could send an additional 130 million people into extreme poverty.
The UN on Thursday urged Africa to develop clear competition and consumer protection rules for African Continental Free Trade Area (AfCFTA) in order to boost trade. Mukhisa Kituyi, secretary general of United Nations Conference on Trade and Development (UNCTAD) told a trade forum in Nairobi that lack of adequate competition laws leads to distortion practices that undermine cross-border trade. “We need to have clear competition laws regulating cross border trade so that enterprises and trade can thrive in Africa,” Kituyi said.
The international trading system has proven surprisingly resilient during the COVID-19 pandemic, with global supply chains adapting after initial disruptions and goods continuing to flow across borders, Deputy Director-General Yonov Frederick Agah said on 18 November. In a speech to the Asian Logistics, Maritime and Aviation Conference in Hong Kong, China, DDG Agah said keeping markets open to trade is an essential step to ensure that a strong economic recovery takes hold after the pandemic.
The COVID-19 pandemic and associated global recession have had a devastating effect on international trade. In the second quarter of 2020, global trade was down 18.5 percent, a far sharper drop than was seen for GDP. Much of the economic activity that continues in a pandemic – health services, housing services, utilities – is not traded internationally, while the widely traded goods such as cars, electronics, and tourism are cut back as people face an uncertain future. The main question addressed in this essay is, what is the likely evolution of supply chains and international trade in the medium to long run after the COVID-19 pandemic?
African countries face another debt crisis and will need more long-term help than the latest G20 debt plan offers them to ward off trouble ahead and keep much-needed investments coming in, according to policymakers, analysts and investors. Around 40% of sub-Saharan African countries were in or at risk of debt distress even before this year, while Zambia became the continent’s first pandemic-era default last Friday. G20 countries have offered the world’s poorest countries relief until at least mid-2021 and sketched out rules for rescheduling government debt to help fend off the risk of default. But these plans to provide near-term breathing space might not go far enough.
New IMF staff research looks at possible innovative sovereign debt instruments that could do both: help creditors and debtors reach agreement on how to restructure debt by sharing some upside potential, and make a country’s debt portfolio more resilient to future shocks. The pandemic might be the force that catalyzes long overdue innovation in sovereign debt instruments that could facilitate restructurings and even help avoid them in the future.
Lending by the International Bank for Reconstruction and Development (IBRD) for middle-income borrowers rose to $27.9 billion in FY2020, up 20% over the previous year and evidence of a fast if limited response to the crisis this spring. Lending is projected to rise to $35 billion in FY2021, and then decline to $26 billion in FY2022. This response is well below IBRD’s nearly tripling of lending in 2009 after the global financial crisis, and even higher lending in 2010. IDA and the African Development Fund will have to dial back lending in the next two years without more help.
A new United Nations Environment Programme (UNEP) report says that type of unbridled international trade is having a damaging effect not only on rainforests but the entire planet. The report, which called for a raft of new Earth-friendly trade rules, found that the extraction of natural resources could spark water shortages, drive animals to extinction and accelerate climate change – all of which would be ruinous to the global economy. “We have to make sure that our global trade policies protect the environment not only for the sake of our planet but also for the long-term health of our economies,” said Inger Andersen, Executive Director of UNEP.
Central & Eastern Europe and EU-Africa Relations After 2020 (Chatham House)
With negotiations for a new post-Cotonou Partnership Agreement and a renewed Joint Africa-EU Strategy due to be concluded in 2021, there is the potential for a critical reset in the relationship between the EU and Africa. This paper finds that the transition perspectives of Central and Eastern European member states can help shape the EU’s evolving partnership with Africa, in line with the ambition to move away from a donor-to-recipient dynamic towards a more equal engagement based on trade, investment and partnership.
Kenya, Britain $11m climate change war chest ahead of Glasgow meeting (The East African)
Kenya and the United Kingdom have entered into an agreement to combat climate change, even as Kenya was challenged to take on higher nationally determined contributions (NDCs) as a leader in the region, ahead of the 26th UN Climate Change Conference of the Parties (COP26) in Glasgow. The UK announced $11 million support to Kenya for new climate initiatives as part of the UK Pact Green Recovery Challenge Fund for projects meant to help countries accelerate their low-carbon transition. The UK said it was doubling its international climate finance to $15.4 over the next five years.
The East African Business Council (EABC) said Thursday its pursuing partnerships with Chinese firms in order to boost the competitiveness of the region. Peter Mathuki, CEO of the EABC told Xinhua in Nairobi that companies in East Africa face great competition from goods produced in regions that have advanced industrial technologies. “The East African business community is seeking to forge partnership with Chinese in order to benefit from the latest innovations required to compete favorably in the international market,” Mathuki said.
Kenya is not a dumping ground for US plastic (The Africa Report)
The new administration of US president-elect Joe Biden must resist pressure from US oil and chemical companies to use Kenya as a dumping ground for plastic waste. In April, the American Chemistry Council (ACC), members of which include Shell, Exxon, Total, DuPont and Dow, proposed investments in recycling in Kenya, provided that the recipient country accepts US plastic waste. Researchers led by Jenna Jambeck have estimated that Africa’s total mismanaged plastic waste may more than double from 4.4 million metric tons in 2010 to 10.5 million metric tons in 2025.
The Acting Deputy Administrator of the U.S. Agency for International Development (USAID), John Barsa, announced on November 17, 2020, the launch of a new Africa-wide trade and investment program under the “Prosper Africa” initiative. Worth up to $500 million for over five years, depending on the availability of funds, “this flagship program will offer new and expanded support services to increase two-way trade and investment between Africa and the United States substantially,” USAID said. The program will provide coordinated services that are aligned with private sector needs “through a continent-wide approach”.
How can policies on trade strengthen resilience in countries that are particularly vulnerable to disasters? Experts and senior government officials grappled with this question at a virtual session during the World Trade Organization (WTO) Trade and Environment Week on 18 November, focusing particularly on the role that trade facilitation can play in the process. Bain said trade can “play a vital role” in easing access to food, medicines, building materials, and equipment when a disaster strikes, and in laying the foundations for the post-crisis recovery.
Africa shrugs off net-zero push without finance to follow (Thompson Reuters Foundation)
As more countries, cities, investors and businesses set net-zero emissions goals, they now cover about half of the world’s economy – but Africa is largely left out of the picture so far. Failure to revamp policies to benefit from a global low-carbon shift may mean Africa misses out on investment, said Wendy Hughes, a carbon markets manager at the World Bank Group. But officials from the continent noted that with sub-Saharan Africa currently producing less than 4% of global emissions, “carbon-cutting” goals have limited relevance, with most African nations focused instead on creating jobs and economic growth.
Some 169 million bags of coffee were produced in the 2019/2020 coffee year, according to the International Coffee Organization. But about 60% of wild coffee strains worldwide are in danger of extinction, according to a study by the US journal Science Advances. Not only is coffee indigenous to Africa, it is also the region with the most coffee-producing countries. Ethiopia, along with Uganda, Tanzania and Kenya produce 80% of Africa’s total coffee exports, according to the UN Conference on Trade and Development.
The year 2020 was meant to be a key milestone on the road to meeting the goals of the Paris climate agreement. That is particularly true for climate finance and for the agreement between higher- and lower-income countries that if governments took steps to limit carbon emissions, they would be supported with technical and financial assistance. Due to a lag in reporting, it will take another two years to know for sure whether high-income countries have met their commitment to provide $100 billion of climate finance to lower-income countries per year by 2020.
No matter which way you look at it, Africa is becoming a force to be reckoned with in business. As a continent, it boasts eight of the world’s 15 fastest growing countries, including one of the globe’s exploding middle-class communities. Local trade between Africa and the UK stood at £35.5bn in goods and services in the year to the end of quarter one, 2020. That was the subject of this week’s Doing Business in Africa virtual panel session – the latest event hosted by BusinessLive in partnership with the Department for International Trade.
The Global South’s Pandemic Path to Self-Reliance (The Daily Star)
Covid-19 continues to have a devastating impact on public health and to rattle the global economy with structural shocks. But the current crisis could offer developing countries a path toward greater economic self-reliance. This is partly because developed countries have in general borne the brunt of the pandemic’s health effects so far. The OECD estimates that external private finance inflows to developing economies could decrease by USD 700 billion year on year in 2020, exceeding the impact of the 2008 global financial crisis by 60 percent. Today, developing countries have more opportunities to become self-reliant.
The British and European Union teams negotiating a post-Brexit trade deal will continue to hold discussions remotely after a member of the EU team tested positive for COVID-19, a British government spokesman said on Thursday. “The UK and EU teams have agreed to continue to negotiate remotely for the time being,” the spokesman said. “The talks will resume in person when it is judged safe to do so. The health and welfare of our staff are our priority.”