tralac Daily News
South African Retailers Turn From China to Source Local Clothes (Bloomberg Quint)
South African retailers including The Foschini Group Ltd. and Woolworths Holdings Ltd. are increasing investment in local clothing manufacturers – both to reduce a dependency on Chinese imports and secure a supply chain thrown into disarray by Covid-19 restrictions. The companies have signed up to an industry plan that includes a target to source 65% of their goods from local manufacturers within the next decade. While progress toward the goal varies per chain, the spread of the coronavirus has sharpened their collective focus. The pandemic caused “such disruptions to the supply chain that everyone’s sitting back and saying do we ever really want to be that reliant on China ever again?” TFG Chief Executive Officer Anthony Thunström said in an interview.
Export taxes becoming more prevalent globally (The Herald)
South Africa has joined the bandwagon in imposing export taxes to either collect more revenue or alter the flow of goods across borders. The Customs and Excise Duty Act has been amended to allow the minister of finance to impose an export duty whenever he deems it expedient in the public interest. This amendment becomes effective from March next year. And on April 1 South Africa will introduce an export tax on nine tariff codes on scrap metal. There has been talk about a 30 percent export tax on chrome and further export duties on iron ore, leather and maize. However, no implementation dates have been announced.
Poor road network and lack of transport and quality market are among challenges farmers in rural Kenya have grappled with for years, making agriculture less profitable though it is the source of livelihoods for millions in the countryside. These challenges had pushed many people to farm closer to urban areas like Nairobi where they can easily access good market and the road network is better. However, the advent of online marketplaces where farmers are selling their produce is eliminating many of the challenges for rural farmers, in particular access to quality market.
Rwanda’s GDP declines by 12.4pc in the second quarter (The East African)
Rwanda’s economy has been hit severely by the pandemic with various sectors registering a significant drop in production and consumption of services despite ongoing efforts by the government to revamp the economy. While there has been an increase in economic activity, it is yet to significantly improve the country’s economic prospects as some sectors of the economy remain closed. From July to September, the second quarter, Rwanda’s Growth Domestic Product (GDP) dropped by 12.4 per cent compared to the same period in the previous year, partly due to the prolonged impact of the total lockdown imposed in March for almost two months.
Covid exposes Kenyan banks’ bad loans (The East African)
Kenyan banks are figuring out how to recover as they face lower end-of-year bonuses and reduced dividends for shareholders. The banks are weighed down by the Covid-19 pandemic, the spillover effects of rate caps, stringent loan loss provisioning, demands of the international financial reporting standard (IFRS 9), and challenging economic conditions that have seen the government downgrade the growth prospects of this year to a record low of 0.6 percent, from 2.6 percent.
Uganda should not use the excuse of import substitution to promote protectionist tendencies, according to Mr Ramathan Ggoobi, a lecturer at Makerere University Business School. Mr Ggoobi, who is also an economist, said there has been a clamor for import substitution, which apparently focuses on saving the country from spending on imports, which could be viewed as a form of protectionism. Government, in the 2020/21 budget introduced high import duties on some imports as a way of safeguarding local industries. While presenting findings of a research titled Import Substitution: Uganda’s Post-Covid-19 Industrial Policy Strategy in Kampala last week, Ggoobi said government should use industrial policies such as production subsidies, preferential access to credit and equity instead of using trade policies such as high tariffs, quantitative restrictions and import prohibition under the guise of promoting import substitution.
Trade and Industry Stakeholders have said that the reported re-opening of the borders to allow Dangote and BUA companies to trans ship their goods across the closed borders was lopsided and amounted to a ‘selective decision’ that would engender monopolies. Key stakeholders made this assertion in a communique issued on Sunday after a Webinar and Physical “Stakeholders’ Review Meeting on the Recommendations of the Policy Dialogue on Border Closure and Matters Arising”.
The Natural Resource Governance Institute (NRGI) has cautioned government to avoid granting tax breaks to companies in the oil and gas sector. The institute’s latest briefing, which assessed the risk of a “race to the bottom” in how oil- and gas-producing countries manage tax issues in the pandemic context, said with the drop in oil prices, some countries will likely have to decide whether they will give tax breaks to oil and gas companies to attract or retain investment.
GHS21billion spent to clean up the financial sector-Veep (BusinessGhana)
Vice-President Dr Mahamudu Bawumia says government has spent GHS21billion to clean up the financial sector. He said 99 per cent of depositors of the affected banks, microfinance and savings and loans companies had been fully settled. The Vice-President was speaking at the 12th Edition of the Nation Building Updates at the Cedi Conference Centre, Department of Economics, University of Ghana. The event was on the theme, “Future of Ghana’s Economy”.
‘AfCFTA creates a new trade and integration reality’ (Global Trade Africa)
Industry experts meeting last week for a virtual discussion focused on resetting, retooling and restarting regional integration in Africa in the wake of the COVID-19 pandemic, underscored the importance of putting small scale traders at the heart of any initiatives. The joint webinar, organised by the African Development Bank and Korea Customs Service (KCS), looked at service sectors, e-commerce, digital platforms and value chain development as critical factors for accelerating trade and investment in Africa against the backdrop of the global pandemic.
“AfCFTA creates a new trade and integration reality…integrating unequal partners across the continent,” said Trudi Hartzenberg Executive Director of the Trade Law Center (TRALAC). Trade facilitation enjoys specific focus within the AfCFTA, with digital, e-payments, and e-commerce particularly
Strategy to ensure Namibia benefits from AfCFTA (New Era Live)
Namibia is in the process of developing a National Africa Continental Free Trade Area (AfCFTA) Implementation Strategy and Action Plan. Once implemented, this strategy is expected to enable the country to identify key value addition and trade opportunities while attending to operational constraints to optimally benefit from the AfCFTA. Minister of Industrialisation and Trade, Lucia Iipumbu, said the strategy will provide the private sector with important entry points into the regional markets as well as to alert the state to the required support to stakeholders.
Stakeholders outline how Nigeria should mobilise for AfCFTA (The Eagle Online)
Trade and investment stakeholders in Nigeria at the weekend outlined ways the country could effectively mobilise for the Africa Continental Free Trade Area (AfCFTA). They made the submissions at a virtual ‘Nigeria Investment Conference’. Awe, who is the Chairman of NACCIMA’s Export Group, noted that the government cannot do everything given the myriad challenges it faced, as such the Organised Private Sector (OPS) should work around the challenges in the system, to effectively position its members for the AfCFTA.
African tech startups have been invited to apply for the AfCFTA Vision Challenge, which offers them the opportunity to secure investment from development finance institutions while also putting them in prime position to benefit from the opportunities offered by the African Continental Free Trade Agreement. The AfCFTA Vision Challenge, part of the broader Vision Initiative to boost access to funding and technological capacity for startups, SMEs, innovators and entrepreneurs across the continent, has been launched alongside the Sankoree Institute of AfroChampions, and is open to startups working in any one of eight critical issue areas, including education, health, agriculture, infrastructure, good governance, manufacturing and environment.
The United Nations Economic Commission for Africa (ECA) and Portulans Institute, a research and educational think tank based in Washington DC, have teamed up to launch the results and rankings of the think tank’s latest edition of the Network Readiness Report (NRI 2020) in a bid to assess how countries are leveraging information technologies for future readiness. Titled, ‘Accelerating Digital Transformation in a Post-COVID Global Economy’, the Report will be launched virtually on 30 November.
Spectre of debt defaults haunts EA as Covid-19 shrinks exports, taxes (The East African)
East African countries face a higher risk of debt defaults as governments grapple with shrinking tax revenues, lower export earnings, as well as limited access to external resources. The Covid-19 pandemic has amplified this vulnerability with debt-to-GDP ratios exceeding 50 percent. Latest data by the United Nations Economic Commission for Africa (UNECA) shows that on average over 10 percent of export revenues and primary income in the region is spent on debt repayments. The debt levels have been brought into sharp focus by recent developments in the region.
The Africa Industrialization Week 2020 (AIW 2020) climaxed with a high-level session commemorating the African Industrialization Day 2020 (AID 2020), where President Mahamadou Issoufou of the Republic of Niger cum AU’s President Champion of the African Continental Free Trade Area (AfCFTA) was honoured for his transformational leadership of the AfCFTA process. The week-long commemoration saw deliberations on key topics pertinent to the continent’s inclusive and sustainable industrialization. Pertinent issues discussed during the course of AIW2020 include Africa’s need for renewable energy and circular economy; Place of quality infrastructure in Africa’s trade, industrialization and economic policies; Place of micro, small and medium enterprises (MSMEs) sector as a game changer in Africa’s industrialization process, amongst many other crucial topics.
COMESA Council of Ministers has granted Kenya a two year extension of the sugar safeguard beginning March 2021 to February 2023. In its 41st meeting conducted virtually on Thursday, 26 November 2020, the Council urged Kenya to share the modalities used in calculating the projected sugar deficit with other member states by 30 November 2020. In its decision, the Council urged Kenya to give priority to COMESA originating sugar noting that the region produces enough to meet the deficit.
Securing Africa’s Energy Future in the Wake of Covid-19 (Modern Diplomacy)
African ministers from countries making up 70% of Africa’s total primary energy supply, nearly 70% of its GDP and more than half of the continent’s entire population met with global energy leaders via videoconference on 24 November 2020. A revitalised energy sector is key to Africa’s economic transformation. Participants agreed on the urgent need to enhance actions to ensure sustainable economic recovery and significantly scale up energy investments in Africa over the next three years in the wake of Covid-19.
Kenyans prefer US development model despite China forays (Business Daily)
Over the past five years, China has pumped billions of shillings into Kenya’s mega infrastructure projects covering roads and rails. From the Sh31 billion Thika Road, the Sh327 billion Standard Gauge Railway to the ongoing Sh59 billion Nairobi Expressway, road and rail networks have expanded, traffic jams alleviated and commuting hours slashed. Despite the improvements, nearly five in every 10 Kenyans still prefer the US’s development model over China’s, a survey shows. “43 percent of Kenyans rank the US model as ideal followed by China (23 percent),” the Afrobarometer report shows. This comes at a time Washington’s is warning of rising China’s debt on poor countries. Zambia could be the first country on the continent to default on its foreign debt after it failed to pay more than Sh4.4 billion last month.
The Covid-19 global pandemic may result in 2020 seeing the worst year of growth for the global economy in 40 years, but there remains “huge untapped potential” in the trade relationship between Southern Africa and Europe. This was the overwhelmingly positive message from an upbeat seventh edition of the Southern Africa Europe CEO Dialogue, held, this year, in a hybrid physical and digital format in Johannesburg.
Ngozi Okonjo-Iweala offers WTO global and local experience (The Africa Report)
The global economy faces profound uncertainties, particularly in the face of the COVID-19 pandemic. In addition, faith in the efficacy of international bodies such as the World Trade Organisation (WTO) has been weakened by a power struggle between China and the US. As the process for appointing a new head of the organisation moves into its final phase, it’s worth considering what front runner Ngozi Okonjo-Iweala could bring to the complex role of managing an international organisation, including designing and implementing reforms.
Matshidiso Moeti, WHO Regional Director for Africa highlighted the importance of strong planning and preparation for successful inoculations –against COVID-19. “The largest immunization drive in Africa’s history is right around the corner, and African governments must urgently ramp up readiness. Planning and preparation will make or break this unprecedented endeavour,” she said. “We need active leadership and engagement from the highest levels of government with solid, comprehensive national coordination plans and systems put in place,” added Dr. Moeti.
Increased partnerships between non-governmental organizations and the private sector has been touted as the key to achieving more impactful development goals. This is according to the findings of a recently released report dubbed “Private Sector Partnerships for Sustainable Development: A Guide to NGO/CSO – Private Sector Collaboration in Kenya” by Finnish Development NGOs – Fingo. “Private sector partnerships provide NGOs/CSOs with an opportunity to drive social-economic interventions, improve approaches to solution creation and implementation and leverage on mutual strengths to accelerate impact,” the report notes.
The WTO launched today (27 November) the second edition of “A Handbook on the WTO TRIPS Agreement”, which describes the historical and legal background to the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS), its role in the organization and its institutional framework. The publication coincides with the 25th anniversary of the entry into force of the Agreement.