tralac Daily News
With the COVID-19 pandemic having battered the South African fiscus in 2020, President Cyril Ramaphosa has cautioned that the country will have to embrace innovative interventions to rebuild the economy in the New Year. The President said this on Monday in his first weekly newsletter of 2021. “Significantly, the Economic Reconstruction and Recovery Plan that we announced in October last year is based on broad consensus among all social partners on the actions needed to rebuild the economy. This lays a firm basis for effective cooperation that draws on the resources, capabilities and energies of all sections of society,” he said.
South Africa – Import Requirements and Documentation (The Africa Logistics)
South Africa has a complex import process. The South African Revenue Service (SARS) defines approximately 90,000 product tariff codes that are strictly enforced on all imports. New-to-Market U.S. exporters are actively encouraged to engage the services of a reputable freight forwarding/customs clearance agent well versed in South African convention. Customs South Africa (Customs SA), a division of SARS, requires that an importer register with its office and obtain an importer’s code from SARS. This impacts many importers and may cause delays to clearance of goods. SARS uses a Single Administrative Document (SAD) to facilitate the customs clearance of goods for importers, exporters, and cross-border traders. The SAD is a multi-purpose goods declaration form covering imports, exports, cross border, and transit movements.
SA wine exports to the UK leap 23% (Harpers Wine & Spirit Trade Review)
South African wine exports to the UK, its leading export market, surged last year with both value and volume sales up. During 2020, export sales to the UK leaped 23% in value, while the market increased by 7% in volume terms, according to the SA Wine Industry Information and Systems NPC (SAWIS). An increase of 28% by value for packaged wines to the UK was also announced for the same period. “We have seen many importers, retailers and wine commentators go above and beyond to help our industry and make UK wine drinkers aware of the quality and potential of great South African wines… We look forward to welcoming the UK trade back to South Africa as soon as possible,” said Jo Wehring, UK market manager for WoSA.
Development Bank to offer Covid-19 relief loan (The Nambian)
Small and medium enterprises (SMEs) of a year and older will next week be able to apply for bridging capital from the Development Bank of Namibia (DBN).This to cushion the economic impact of the Covid-19 pandemic. According to DBN, it will extend loans to SMEs requiring bridging capital to carry them through the current low-revenue period. Enterprises that wish to restructure their business operations to best survive the changing business environment may also apply.
National carrier Kenya Airways (KQ) has continued to repurpose some of its wide body passenger aircraft into cargo planes to fill the gap caused by passenger shortfalls. In its latest announcement, KQ says that so far, it has fully repurposed one Dreamliner for cargo transportation. Managing Director Allan Kilavuka explained the impact of the move on Monday, during the signing of a commitment of collaboration with players in the fresh produce export business.
Kenya Airways is considering adding new cargo flights to China as Sino-Africa trade grows, an official said on Monday. Dick Murianki, Director of Kenya Airways Cargo told Xinhua in Nairobi that the airline has been experiencing increased demand for air freight between China and the African countries that it operates in. “We currently fly into Guangzhou but we are looking at going into other cities. Shanghai looks interesting but we have not yet made a decision,” Murianki made the remarks when the Kenyan airline signed a cooperation agreement with the Kenya fresh produce exporters.
Tea price stays high despite UK lockdown (Business Daily)
Tea prices at the Mombasa auction remained at a four-month high last week, even as concerns emerge that a new UK lockdown will pull them down in the short-term. A market report shows a kilogramme of the beverage on average fetched Sh211 in the second sale of the year, which is the same value that it attracted in the opening trading of 2021.
Treasury ahead of domestic debt target on Covid (Business Daily)
The Treasury has moved ahead of its domestic borrowing target for the first half of the current financial year after it tapped money from commercial lenders on the back of relatively low interest and reduced economic activity, which cut credit to the private sector. Fresh data published by the Central Bank of Kenya (CBK), the government’s fiscal agent, shows domestic debt increased by Sh310.94 billion in the six-month period to nearly Sh3.49 trillion as at end of December. The amount tapped from domestic investors such as banks and pension funds is an equivalent of 59.26 percent of the Sh524.69 billion net borrowing target for the full-year period ending June 2021.
We are progressing well with e-receipts, says URA (Daily Monitor)
URA recently started implementation of the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), a medium that is being used by all businesses to manage issuance of receipts and invoices for tax purposes. The system was effectively rolled out on January 1, despite pleas from companies for an extension. Ian Rumanyika, the Uganda Revenue Authority (URA) manager public and corporate affairs explains the progress and benefits of the system. EFRIS implementation commenced on January 1. What is the progress so far?
Nigeria’s rail costs exceed AU’s estimates by over 100% (The Guiardian Nigeria)
An investigation has shown that the average cost per kilometer (km) of the newly contracted Kano-Maradi rail line exceeds similar projects under the Programme for Infrastructure Development in Africa (PIDA), as estimated by the African Union (AU) by, at least, 100 per cent. The Federal Government, recently, announced that it signed a Memorandum of Understanding (MoU) with Mota-Engil Group for the construction of the 283.75 Kano-Maradi standard-gauge rail at a contract cost of $1.959 billion. In an AU document titled ‘Towards the African Integrated High-Speed Railway Network (AIHSRN) Development’, the Union puts the estimates of the new railway line needs of the continent at 12, 000km, which are expected to be completed at a cost outlay of $36 billion.
There is, perhaps, no better pointer to the abysmal failure of Nigeria’s border policing and management mechanism than the recent candid confession by President Muhammadu Buhari, as reported in the media on Monday, 22 December, wherein he was correctly described as having given up and ‘handed over Nigeria’s border’s to God’. What we must quickly add, though, is that what has so manifestly frustrated Buhari is his own administration’s self-inflicted conservative police-state approach to border management based on obsolete use of state coercion apparatuses that permits police brutality; inspired by a negative ultra-nationalism and indulging in inherently impracticable tradition of unilateral border closure. But also unacceptably insensitive of Nigeria’s state obligations to neighbouring sovereignties, including two of Africa’s vulnerable landlocked countries, in the interest as much for international relations as common commitment to bilateral cooperation and wider regional integration.
Diversifying export earners via horticulture sector competitiveness (Ethiopian Press Agency)
The higher management of the Ministry of Agriculture and other stakeholders recently held discussion on options of expanding the horticulture investment and the national project of boosting avocado production in areas with potential and suitable climate. Ethiopia has a great opportunity for horticulture development due to the favorable climatic conditions, fertile soils, huge irrigation potential and affordable manpower. The sector has attracted a significant amount of domestic and foreign investment. Ethiopia’s horticulture products have had also a chance to penetrate into the international market in the past two decades. One of the major focus areas of the recent discussion were ways of tapping the huge potential in the sector and the performance so far.
Mineral exports surge 27pc to surpass target (The Herald)
Zimbabwe’s mineral exports, excluding gold and silver, for the year 2020 surged by 27 percent, earning the country US$2,4 billion, the Minerals and Marketing Authority of Zimbabwe (MMCZ) has said. This sets Zimbabwe on course of achieving a US$12 billion mining economy in the next two years, said Mr Muzenda. The mining sector is Zimbabwe’s largest foreign currency earner, accounting for 70 percent of the country export receipts. In 2019, the Government launched a roadmap to grow the mining sector to US$12 billion by 2023 through leveraging on the country’s diverse mineral wealth. The mining roadmap, also known as “Strategic Road to the Achievement of US$12 billion by 2023” targets gold revenue at US$4 billion, platinum group metals at US$3 billion, chrome, iron, steel diamonds and at US$1 billion, lithium at US$500 million, while other minerals are expected to contribute US$1,5 billion.
Angola has announced plans to enter into the negotiation processes of Agreements on Promotion and Reciprocal Protection of Investments (APPRI) with Japan, China and Mozambique. This was announced Thursday by the State Secretary for Planning, Milton Reis, who did not add further details in terms of the agreements. For 2021, the Ministry of Economy and Planning says it has scheduled events and arrangements of joint agreements for bilateral economic cooperation with countries such as the United Arab Emirates, Russia, South Africa, Egypt, Zambia, Cuba, Czech Republic and Germany.
Global uncertainty hampers oil blocks auction in Angola (GCTN Africa)
The COVID-19 pandemic is significantly jeopardizing the intention of Angola’s National Oil and Gas Agency (ANPG) to auction nine new oil blocks concessions, a study by an Angolan consulting company specializing in oil and gas, PetroAngola, revealed on Sunday. According to PetroAngola, the spread of the virus has brought a huge environment of uncertainty in the global oil and gas industry, negatively impacting the main fundamentals of the market. The scenario has forced the cancellation of more than 64 percent of the country’s planned bidding in 2020 worldwide, the company said.
Algeria crude oil output tumbles in 2020 (CGTN Africa)
Algeria’s oil revenues collapsed in 2020, according to energy ministry figures released Sunday, exacerbating an economic crisis in the North African country which is heavily dependent on crude income. “The overall volume of hydrocarbon exports reached 82.2 million tonnes of oil equivalent in 2020, for a value of $20 billion, a decrease of 11 percent and 40 percent respectively compared to 2019,” the ministry said in a statement. The coronavirus pandemic and the ensuing economic downturn hit oil prices hard, battering the economies of producer nations.
Carryout Market Research in Agribusiness Ventures (Taarifa Rwanda)
More people are turning to agribusiness ventures that are involved in the primary production of crops, livestock and poultry. Sometimes these ventures become specialized in the processing or semi processing of agricultural commodities because of having many years of experience and always being informed about the industry’s condition. For one to be a successful owner of an agribusiness venture, it is of great importance to carry out a market research to get an informed view of what to expect when venturing into agricultural businesses. Market research has proven to be a key aspect that each aspiring business owner must undertake before setting up the actual business, it has several informative guidelines that will help to sustain a business.
News from Africa
Can digitalisation create quality jobs and make African economies more resilient to the global recession triggered by the COVID-19 pandemic? The 2021 edition of the Africa’s Development Dynamics report draws lessons from the continent’s five regions – Central, East, North, Southern and West Africa – to develop policy recommendations and share good practices. This virtual, high-level event will take place during the PIDA Week on Tuesday, 19th of January 2021, 15:45 to 17:00 CET | 17.45 to 19.00 EAT
Africa’s infrastructure Ministers convened virtually to discuss the Continent’s infrastructure priorities for 2021-2030 and to validate the outcome of the first extraordinary expert group meeting of the AU Specialized Technical Committee on Transport, Intercontinental and Interregional Infrastructures, Energy and Tourism (STC-TTIIET) held on December 14, 2021. “Annually, we have an infrastructure financing gap of between $60 -$90 billion. We need effective and efficient plans to mobilize resources to fund the identified PIDA projects. The long-term solution in my view is the creation of an Africa Continental Infrastructure Fund under the auspices of the AU to pool resources. Such a fund would focus on a combination of domestic sources and private sector financiers,” said the Rt. Hon. Raila Odinga, the AU High Representative for Infrastructure Development.
As the African Continental Free Trade Area (AfCFTA) Agreement set to solve Africa’s investment hurdles, there is an urgent need to address the continent’s infrastructure shortcomings, a senior official of the United Nations Economic Commission for Africa (UNECA) said on Monday. The statement was made by Stephen Karingi, regional integration and trade division director at the UNECA, ahead of the sixth session of the Program for Infrastructure Development in Africa (PIDA) Week, which kicked off virtually on Monday to review progress, share experiences and build consensus on key infrastructure projects that will take Africa to the next level of development. “New decade, new realities, new priorities - ANGOP positioning PIDA and infrastructure development in Africa’s continued growth and economic recovery.”
The SADC Industrialisation Strategy and Roadmap foresees an increase in manufactured exports to at least 50 percent of total exports in the Southern African Development Community (SADC) by 2030, from less than 20 percent at present, and to build market share in the global market for the export of intermediate products to East Asian levels of around 60 per cent of total manufactured exports. The Industrialisation Strategy and Roadmap foresees the lifting of the regional growth rate of real Gross Domestic Product (GDP) from 4% annually (since 2000) to a minimum of 7% a year. It also seeks to double the share of manufacturing value added (MVA) in GDP to 30% by 2030 and to 40% by 2050, including the share of industry-related services, and to increase the share of medium-and-high-technology production in total MVA from less than 15% at present to 30% by 2030 and 50% by 2050.
The festive season was marked by dramatic scenes of tens of thousands of people amassing at border posts between South Africa and its neighbours where procedures had slowed down due to COVID-19 restrictions. Border posts such as Beitbridge between South Africa and Zimbabwe and the Lebombo border with Mozambique were particularly chaotic, with travellers and trucks delayed for days. Many people used dangerous illegal routes to cross into South Africa after spending Christmas at home. The panic and congestion – potentially aggravating the pandemic – was largely due to a lack of coordination between governments and failure to implement strategies agreed on by Southern African Development Community (SADC) member states. Dialogue at a high level could have averted much of the crisis.
African Development Bank President Akinwumi A. Adesina and 10 African Heads of State and Government were on Friday honoured for their leadership in the African Continental Free Trade Area (AfCFTA) process. The AfCFTA, the largest free trade area in the world, began trading on 1 January 2021 and is expected to speed up the recovery of the continent and enhance its resilience by increasing the level of intra-African trade in goods and services. The award was organised by AeTrade Group in collaboration with the African Union Commission, the African Business Council, the Pan African Chamber of Commerce and Industry, the Federation of West African Chambers of Commerce and Industry, and the East African Chamber of Commerce, Industry and Agriculture.
AMSP opens COVID-19 vaccines pre-orders for 55 African Union Member States (African Export-Import Bank)
Following the announcement by the African Union Chairperson, President Cyril Ramaphosa on the 14th of January 2021 that the African Union has secured a provisional 270 million COVID-19 vaccine doses for Africa through its COVID-19 African Vaccine Acquisition Task Team (AVATT), the Africa Medical Supplies Platform (AMSP), on behalf of the Africa Centres for Disease Control and Prevention (Africa CDC), today commences the COVID-19 vaccines pre-order programme for all African Union Member States. “Afreximbank is proud to expand its support to African economies in their bid to contain the pandemic. Our vaccine financing facility builds on the success of our Pandemic Trade Impact Mitigation Facility (PATIMFA) to open access to COVID 19 vaccines to African states based on a whole-of-Africa approach favoured by the African Union,” said Prof. Benedict Oramah, President and Chairman of the Board of Directors of the African Export-Import Bank.
Africa finds its voice as President signs Factbook (The Herald)
President Mnangagwa yesterday signed copies of The Africa Factbook and accompanying letters, which will be distributed to the heads of state and government of the other 54 African Union countries. The Africa Factbook is Africa’s first ever publication tells the African story from an Afrocentric perspective. It is the continent’s first ever coordinated response to more than 500 years of misinformation and often disinformation against Africa by outsiders and more recently by the global media empires.
African central bankers meeting in the next two weeks amid a resurgent coronavirus may find they’ve used up most of their interest-rate ammunition to lift their economies out of recessions that still affect much of the continent. Monetary policy committees have limited scope to provide stimulus after aggressive easing when lockdowns first shuttered output in 2020, with inflation quickening in Nigeria and Angola and restrictions that would dull the impact of rate cuts continuing in South Africa and Kenya. “I don’t think there is scope for strategic easing of monetary policy in 2021,” said Jibran Qureishi, head of Africa research at Standard Bank Group Ltd. “In the event that economic activity remains sluggish, a bias to cut will persist, but any cuts from these levels will be token.”
Africa’s international trade relations
The EU’s plans to strike a ‘strategic partnership’ with Africa were one the victims of the COVID-19 pandemic. After the European Commission set out its stall in a March 2020 strategic paper, summits were cancelled and it is unclear whether EU and African Union leaders will agree on an agenda with the ambition needed for a genuine ‘strategic partnership’ this year.
UK-Africa trade: What will Brexit change? (Deutsche Welle)
The United Kingdom on Wednesday will host a virtual UK-Africa conference to promote trade and investment opportunities in African markets. The meeting takes place on the anniversary of the inaugural 2020 UK-Africa summit hosted with great fanfare by Britain’s prime minister, Boris Johnson, who famously skipped the World Economic Forum in Davos to lead the event. At last year’s summit, Johnson said Britain had all it took to become Africa’s “obvious partner of choice” for doing business post-Brexit when it was no longer tethered to European Union trade agreements with the continent. Leaving the EU theoretically allows the UK to make independent trade agreements better tailored to individual African nations.
New Initiative: German Automotive Industry intensifies links to Africa (Engineering News)
The German automotive industry sees potential in Africa and strengthens its ties to the continent. The German Association of the Automotive Industry (VDA) joined hands with the African Association of Automotive Manufacturers (AAAM) as part of the “PartnerAfrica” project of the German Federal Ministry for Economic Cooperation and Development (BMZ). AAAM is the first Automotive association with a pan-African approach, established in 2015 by global Original Equipment Manufacturers (OEMs). The partnership-based cooperation between is mutually beneficial: in cooperation with local and regional structures it helps the automotive industry to improve access to sometimes difficult markets and at the same time it is in the interest of German development policy to improve local prospects by involving the private sector and to create sustainable jobs and sustainable mobility in partner countries.
Fate of Kenya-US Free Trade Deal Uncertain (The Maritime Eexcutive)
A cloud of uncertainty has engulfed Kenya’s pursuit of a free trade agreement (FTA) with the United States due to the impending change of guard at the White House. Anxiety in Nairobi has been exacerbated by the unexpected resignation of U.S. ambassador to Kenya Kyle McCarter, who espoused President Trump’s belief in deepening trade and commercial engagements with Africa. “The Trump administration valued bilateral approach to policy but the Biden administration has promised a return to multilateralism and alliance-building. While Kenya might want to continue the pursuit of an FTA, there is no guarantee of Washington being interested,” said Ken Gichinga, chief economist at Mentoria Economics. He added that while the need to neutralize China’s influence in Africa is something the new U.S. administration would want to pursue, the need to broaden the spectrum of trade and commercial interests through the African Continental Free Trade Area (AfCFTA) looks more feasible. Cooperation through AfCFTA will revive the importance of the African Growth and Opportunity Act (AGOA), which has failed to flourish under the Trump administration. Total two-way goods trade between the U.S. and Africa declined from $36.9 billion in 2015 to $34.7 billion in 2019. Of importance to note is that AGOA, which is set to expire in 2025, was renewed during the Obama administration in 2015 when Biden was the vice president. Kenya’s FTA negotiations with the U.S. commenced in July last year, and the target was to have a deal that would allow duty-free access for Kenyan goods to the U.S. market before the end of the year, while the Trump administration was still in office.
As temperatures rise and climate change impacts intensify, nations must urgently step up action to adapt to the new climate reality or face serious costs, damages and losses, a new UN Environment Programme (UNEP) report finds. Adaptation – reducing countries’ and communities’ vulnerability to climate change by increasing their ability to absorb impacts – is a key pillar of the Paris Agreement on Climate Change. The UNEP Adaptation Gap Report 2020 finds that while nations have advanced in planning, huge gaps remain in finance for developing countries and bringing adaptation projects to the stage where they bring real protection against climate impacts such as droughts, floods and sea-level rise.
The World Needs to Wake Up to Long-Term Risks (World Economic Forum)
For the last 15 years the World Economic Forum’s Global Risks Report has been warning the world about the dangers of pandemics. In 2020, we saw the effects of ignoring preparation and ignoring long-term risks. The COVID-19 pandemic has not only claimed millions of lives, but it also widened long-standing health, economic and digital disparities. According to the Global Risks Report 2021, released today, these developments may further impede the global cooperation needed to address long-term challenges such as environmental degradation. Financial, digital and reputational pressures resulting from COVID-19 also threaten to leave behind many companies and their workforces in the markets of the future. While these potential disparities could cause societal fragmentation for states, an increasingly tense and fragile geopolitical outlook will also hinder the global recovery if mid-sized powers lack a seat at the global table.
World Leaders to Meet During Davos Agenda in a Crucial Year to Rebuild Trust (World Economic Forum)
The World Economic Forum Davos Agenda, taking place virtually on 25-29 January, will bring together the foremost leaders of the world to address the new global situation. Heads of state and government, chief executives and leaders from civil society will convene under the theme: A Crucial Year to Rebuild Trust. “In the context of the COVID-19 pandemic, the need to reset priorities and the urgency to reform systems have been growing stronger around the world,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. “Rebuilding trust and increasing global cooperation are crucial to fostering innovative and bold solutions to stem the pandemic and drive a robust recovery. This unique meeting will be an opportunity for leaders to outline their vision and address the most important issues of our time, such as the need to accelerate job creation and to protect the environment.”
COVID-19 Travel Bans Impact Least Developed Countries (Borgen Project)
COVID-19 has made severe global impacts, but impoverished countries are facing the harshest consequences. There are 46 countries identified by the United Nations (UN) as Least Developed Countries (LDCs) due to “severe structural impediments to sustainable development.” These nations have the fewest means with which to fight the pandemic. LDCs have approximately 900 million people and account for less than 1% of recorded COVID-19 cases and deaths. However, these low percentages are not an accurate reflection of the current situation. Without the necessary resources to test people, it is impossible for institutions to gather precise data. COVID’s impacts do not stop with health, either. With global COVID-19 travel bans, LDCs’ economies, heavily reliant on tourism, have disproportionately suffered, as well.
Most Major Economies Are Shrinking. Not China’s (The New York Times)
As most nations around the world struggle with new lockdowns and layoffs in the face of the surging pandemic, just one major economy has bounced back after bringing the coronavirus mostly under control: China. The Chinese economy rose 2.3 percent last year, the country’s National Bureau of Statistics announced on Monday in Beijing. By contrast, the United States, Japan and many nations in Europe are expected to have suffered steep falls in economic output. While the recovery remains uneven, factories across China are running in overdrive to fill overseas orders and cranes are constantly busy at construction sites – a boom in exports and debt-fueled infrastructure investments that is expected to drive the economy in the coming year.
Britons have finally understood (five years too late) why the European Union’s single market and customs union are important: They make EU internal borders invisible. Rather than a tale of a ruler who discovers he is naked, this is the story of a country that is discovering the importance of benefits it had taken for granted because they could not be seen. Invisible benefits are easy to forget and hard to sell politically. They are also easy to dismiss and easy to lie about. But the cost of abandoning them can be steep.
“The Belt and Road Initiative (BRI) is a game changer. In a world where international cooperation has been severely weakened in recent years, the BRI is a testimony of China´s continued support for multilateralism and mutually beneficial relations among countries and regions,” said Alicia Bárcena, Executive Secretary of the United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) on Monday.