tralac Daily News
AfCFTA: Alive With Possibilities (SAnews)
The South African government says it will maximise the opportunities presented by the African Continental Free Trade Area (AfCFTA), which came into operation on 1 January 2021, following the adoption of the Johannesburg Declaration by the African Union (AU). Delivering the 2021 State of the Nation Address on Thursday, President Cyril Ramaphosa said South Africa was already at work to reindustrialise the economy. This, the President said, was being done through initiatives such as the Ford Motor Company’s investment into the economy. The company recently announced a R16 billion investment in the South African market, which is expected to majorly bump up jobs and local production.
In last year’s State of the Nation address (Sona), President Cyril Ramaphosa said that he was fixing fundamentals: fixing public finances, growing the economy and fixing the country’s electricity problems. But before he could even begin his work, the pandemic hit. His focus shifted to protecting lives, while struggling to keep the economy from plunging deeper into the doldrums. Now his focus is back to fixing the economy.
In his address, Ramaphosa said infrastructure investment projects worth R340-billion are ongoing. The projects will be in the energy, water, transport and telecommunications sectors. “Construction has started and progress is being made on a number of projects,” said Ramaphosa. The president also spoke about increasing local production and making South African exports globally competitive. He said this will lead to increased local production, which will spur the revival of our manufacturing industry. This emphasis on localisation comes on the back of the African Continental Free Trade Area agreement, which kicked in last month.
Business welcomes govt commitment to infrastructure investment (Eyewitness News)
The President referenced the R100 billion infrastructure fund in his address on Thursday night, saying it’s now in full operation, and funding projects like the rehabilitation of major highways. Business remains concerned about implementation, but it’s hopeful government was at least on the right track with its focus on infrastructure development.
Border jumpers reversing lockdown gains (The Southern Times)
Experts worry that rampant irregular migration through illegal crossing points are counteracting efforts to contain the spread of COVID-19 across borders. The closure of the South Africa-Zimbabwe border at Beitbridge to curb spread of COVID-19 resulted in a 95 percent drop in legal cross-border movements, and an almost 100 percent surge in border jumping, according to official figures.
“The quantity of tea exported decreased from 44,724.70 metric tonnes in September 2020 to 43,655.91 metric tonnes in October 2020. The value of exported tea also dropped from Sh10.1 billion to Sh 9.9 billion over the same period,” KNBS notes in its data. China continued to dominate as the top import source market for Kenya during the period, accounting for Sh293.1 billion worth of goods that came into the country, followed by India where the country purchased Sh156.8 billion worth of goods.
What next for Uganda’s agricultural surplus? (Kampala Dispatch)
The Government of Uganda has advised farmers to take seriously complaints from regional and international markets about the quality of Ugandan produce. Ugandan products have undergone a series of rejection over the last three years from the regional markets of Kenya, Rwanda and Tanzania over quality concerns and dumping. Finance Minister Matia Kasaijja says the country is facing a problem of market for local goods which has resulted in surplus, yet farmers are ignoring calls for change. Some of the rejected products include milk, eggs, sugar and maize among others. According to statistics from the Ministry of Trade and Industry, Uganda produces 510,000 tons of sugar. However, only 360,000 tons are consumed locally. The surplus of 150,000 tons is exported within East Africa, COMESA regions and DR Congo. However, due to the import restrictions in neighbouring countries over quality concerns, over 50,000 tons of sugar are flooding causing a drop in the price from 150,000 to 130,000 for a 50 kg bag of sugar.
Investments in Rwanda fall by 47pc (The East African)
The value of investments in Rwanda fell drastically by almost half from $2.46 billion in 2019 to $1.3 billion in 2020 primarily due to the coronavirus pandemic that affected the economy and investors worldwide. The new numbers released by Rwanda Development Board (RDB) on Thursday represent a sharp investment decline of 41 percent, as both local and foreign investors spent less in a year plagued by the coronavirus pandemic. Foreign direct investments (FDI) to Rwanda, however, increased by 51 percent of the total investments from 37 percent in 2019. The figure is a notch higher than the 49 percent fall in global FDI registered in the first half of 2020.
Kenya, Uganda renew milk export dispute as ties sour (The East African)
Kenya and Uganda trade relations are on the verge of straining once again with Kampala accusing Nairobi of stopping its milk from accessing the country, and threatening to drag the matter to the East African Court of Justice. Uganda’s State Minister for East African Affairs Julius Maganda said his country is not ruling out taking Kenya to the regional court over continued trade blockade of many of its farm products. Kenya has in the last one year had trade related tensions with its landlocked neighbour, especially on milk products, which saw the Nairobi confiscate hundreds of tonnes of Lato milk from Uganda in 2020.
Kenya Railways adds cargo storage space (Business Daily)
The Kenya Railways Corporation (KRC) has added more cargo storage capacity at its Nairobi Railways station warehouse, offering a major boost to small traders in the country. The warehouse, dubbed the National Cargo Deconsolidation Centre will enhance capacity of de-consolidated cargo from the initial five 40-foot to fifteen 40-foot containers. The facility is an expansion of the corporation’s Transit shed launched last November by President Uhuru Kenyatta.
KRC said the number of containers being cleared at the facility is later expected to increase to 300 containers per month during the post-Covid period. The old warehouse has been serving up to 200 small scale traders since its launch. The cargo clearance plan is expected to be faster compared to the initial approach where the consolidated goods were cleared as a single container unit at the Inland Container Depot.
Construction of Tanzania–Uganda roads expected to begin soon (Construction Review)
The construction of the multinational Tanzania–Uganda roads (Masaka through Kyotera to Mutukula, Mutukula to Kyaka, and Bugene through Kasulo to Kumunazi) is expected to begin soon following the conclusion of the feasibility study and detailed engineering design. Undertaken by LEA Consulting Ltd, the designs covered 89.5 kilometers of the Masaka to Mutukula road section in Uganda, a 30 km section from Mutukula to Kyaka linking to a 133 km Tanzania section from Bugene to Kumunazi via Kasulo.
Speaking during the handover ceremony of the designs report, the East African Community (EAC) Deputy Secretary-General in charge of Planning and Infrastructure, Eng. Steven Mlote said that the EAC Secretariat will now focus on mobilization of funds to construct the road, as well as cooperation with other regional, continental and global efforts to improve road transport services and safety.
The African Development Bank and the Mozambique Liquefied Natural Gas (LNG) Area 1 Project have been jointly awarded the prestigious Global Multilateral Deal of the Year 2020 award by the Project Finance International (PFI).The AfDB disclosed this in an email statement seen by Nairametrics on Thursday evening. The Multilateral bank disclosed that the project is the largest foreign direct investment in Africa to date with a value of over $24 billion, and “will exploit Mozambique’s immense offshore natural gas reserves, which can potentially transform global energy markets. “
Shippers in the country have lamented the absence of a national shipping flag carrier. They said the reliance on foreign shipping lines had cost the shipping sector huge losses while clogging the clearing procedures at the ports. A former Chairman of Ship Owners Association of Nigeria, and Chief Executive Officer of Starzs Shipping Company, Greg Ogbeifun, said Nigeria had lost its place in the global industry. The shipping expert who who spoke in a virtual meeting heralding his birthday said Nigeria loses over $41m daily to other countries. He said, “Nigeria used to be a very active player in the global shipping industry. The Federal Government owned the Nigerian National Shipping line in the ‘70s, 80s and early 90s. We had Africa Ocean lines and a few others. “With those platforms, the country was able to participate in some opportunities created by the United Nations Conference on Trade and Development.”
The Lagos State Government through its newly constituted Traffic Management Enforcement Team to resolve Apapa gridlocks and the Nigerian Port Authority Security Team has identified 7 parks as holding bay for trucks around the metropolis. This is as they set out to put an end to the indiscriminate parking of trucks and trailers across the bridges and major roads which obstruct the free flow of traffic and cause environmental hazard.
Fayinka, who is also a Special Adviser to the Lagos State Governor, on Transportation, said that the team had been able to design a road map and the strategy to be adopted in tackling the issue. He said, “We are in discussion with the various stakeholders; the Nigerian Ports Authority (NPA), Nigerian Shippers’ Council (NSC), Terminal Operators and Association of Trucks Union on the best way to do business around Apapa Ports without the breakdown of law and order.
The Chartered Institute of Logistics and Transport (CILT) Ghana has proposed some policy imperatives needing urgent government policy directives and action. The leading professional body in logistics and transport, CILT Ghana’s proposals span from the rail sector, road, maritime and the country’s air space. According to the institute, these interventions are imperative in order to promote the growth of the logistics and transport space to contribute to socio-economic development of the country.
The Egyptian government is leading efforts to build a road linking Egypt with nine African countries as part of efforts to boost development and bolster Egypt’s exports to Africa. Transport Minister Kamel el-Wazir told the House of Representatives on Jan. 31 that his ministry is working to carry out several road projects to connect with Egypt’s neighbors. “We will complete the Cairo-Cape Town Road that will cross through nine African countries as part of Egypt’s efforts to connect with neighboring countries,” Wazir said. The pan-African highway would begin in Egypt from the coastal city of Alexandria and go through Cairo on its way to the Arqin crossing on the Egyptian-Sudanese border.
Uganda retains 10th position in Absa Index (Daily Monitor)
Uganda has retained the 10th position in the Absa Africa Financial Markets Index (AFMI) involving 23 African countries. The Absa Africa Financial Markets Index, is a toolkit for African countries seeking to strengthen their financial markets. Speaking during the launch of AFMI report earlier in the week, Bank of Uganda Deputy Governor, Dr Michael Atingi-Ego noted that Uganda’s overall ranking of 10th from 2017 to date could be regarded by pessimists as stagnation, but for an optimist like himself, “it speaks to stability and resilience.” The national score also increased from 50 in 2017/18 to 52 out of 100 in 2019/20, but even though Uganda somewhat consolidated its ground, he believes a lot of room remains to be covered.
Over 77% Rwandan Importers From RRA Golden Card Scheme (Taarifa Rwanda)
Over 77% of Rwanda’s importers and exporters are benefiting from the Gold Card Scheme, a scheme from which only those who are tax compliant and trustworthy get special exemptions during custom procedures. Rwanda Revenue Authority’s Commissioner for Customs Services, Felicien Mwumvaneza, says that there are special exemptions that are granted to importers and exporters who belong to the Gold Card Scheme which among them include a 5% VAT exemption and immediate release of their consignment from the customs offices upon arrival. Mwumvaneza noted that this is an achievement not only to those who have earned this prestige but also to the government that has tirelessly invested in an advanced customs technology to improve customs procedures as well as tax compliance.
The Minister-designate of Foreign Affairs, Shirley Ayorkor Botchwey has explained that Ghana is not yet seeing the benefits of the African Continental Free Trade Area (AfCFTA) agreement, especially as the host country because of the COVID-19 pandemic. Addressing Parliament’s Appointments Committee on Thursday, February 11, 2021, the Foreign Minister-designate said, “Ghana’s successful candidature to host the AfCFTA secretariat will go a long way to help the country. It will impact our economic development. As the host country, there are several benefits, including employment, when it is at its full capacity of operation”.
News from Africa and Africa’s international trade relations
Sometime soon, thanks to a deal struck under the COVAX Facility, African nations may start receiving larger shares of the Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines. As they do, their economies can move further toward post-coronavirus growth and recovery. This good news comes as the continent hits another economic milestone: On Jan. 1, the African Continental Free Trade Area (AfCFTA) – the world’s largest free trade area – officially went into force. The moment was decades in the making; since the Lagos Plan of Action of 1980, creating an “African Common Market” has been a major regional goal. Despite the lofty achievement, though, Africa’s envisaged free trade area still faces many hurdles.
See the tralac Blog: Trade under AfCFTA Rules started on 1 January 2021, but hard work lies ahead
AfCFTA states terms for members in other pacts (The East African)
African countries negotiating free trade agreements with parties from other parts of the world will be required to grant the same preferences or better terms to African Continental Free Trade Area (AfCFTA) member states. The AfCFTA Secretary General Wamkele Keabetswe Mene, referring to Kenya, which is currently negotiating a free trade agreement with the US, said the same preferences granted to America should be given to African countries. “Any country, any state party is within their legal rights to negotiate with a country outside of the AfCFTA Treaty, as long as you provide better or similar treatment to the AfCFTA party that you are intending to provide to a third party,” said Mr Mene.
On 1 January 2021, trading formally began in the African Continental Free Trade Area (AfCFTA). The AfCFTA aims to create a continental market for goods and services, with free movement of people and investments intended to help deepen the economic integration of the African continent and promote development. Easier movement of persons on the continent would make African labour markets more efficient, enabling companies to bridge skills gaps by recruiting from neighbouring countries, and greater conditions for mobility of workers has the potential to lower unemployment rates.
EABC policy agenda to spur Intra-EAC trade to 30pc (Kenya Broadcasting Corporation)
The East African Business Council (EABC) in partnership with the Federation of German Industries (BDI) has convened trade and policy experts from the EAC Partner States virtually to chart out a joint regional policy advocacy agenda geared to spur intra-EAC trade to 30%. COVID-19 pandemic has disrupted regional and global supply chains leading to contraction of intra-EAC trade and costing USD 37billion to USD79 billion output losses for the region.
Total EAC exports decreased by 4.7 percent to USD 14.0 billion in 2018 from USD 14.7 billion in 2017 of which, intra-EAC exports accounted for 22.4 percent. The trade deficit for the EAC region increased by 39.4 percent to USD 24.3 billion in 2018 from USD 17.4 billion registered in 2017. (EAC Trade & Investment Report, 2018).
Elimination of persistent Non-Tariff Barriers (NTBs), implementation of trade dispute settlement mechanism; harmonized product standards and work permit regimes; liberalization of trade in services, free movement of capital, harmonization of domestic taxes in the region are top of the EABC Policy Agenda 2021/22 geared to boost intra-EAC trade and investment in the region.
Pandemic clips airlines’ wings (The Southern Times)
Intercontinental passenger carrier Emirates announced Monday it would be suspending its four weekly frequencies into Harare and Lusaka, as RwandAir pulled out of four SADC destinations Tuesday, citing a surge in COVID-19 cases in the region. Other airlines have grounded or trimmed flights across the region in response to falling passenger numbers since the pandemic intensified. However, Airlink is adding a route in Southern Africa in March when it starts connecting Cape Town and Harare.
Three COMESA Countries Egypt, Mauritius and Seychelles have rolled out the COVID-19 vaccinations. According to the COMESA Early Warning System (COMWARN) report, countries in the COMESA region have however, been slow to roll out COVID-19 vaccination. The slow rollout in Africa generally has been attributed to the costs of procurement, availability and safety concerns. Most developed countries that had earlier procured COVID-19 vaccines from the bigger pharmaceuticals started vaccinating their citizens earlier in the year.
Covid19: Supporting Africa’s micro businesses to help them survive (The Africa Report)
Africa is full of talented people who, with capital and training, can deliver outsize returns and drive the economic change that is needed. The past year has not been a complete catastrophe for entrepreneurs. The diverse and dynamic alumni network we have at Tony Elumelu Foundation have reached remarkable heights across Africa in the wake of the pandemic, with inventions like Pad Up – a social enterprise that has produced and distributed over 100,000 breathable sterile face masks to medical personnel in Nigeria; and in Sierra Lone, Lili Tap by Light Salone Innovation – a safer way of opening and closing water taps with a foot working down a lever system. In 2020, a Uganda fashion designer, Juliet Namujju, was featured on CNN African Voices as a “Changemaker” and she has since then manufactured reusable, washable and biodegradable anti-viral face masks as an alternative to single-use face masks which are made of plastic.
Specialized institutions established under the COMESA Treaty are among the best rated in the African continent with some attracting membership beyond the regional bloc. The Secretariat and the institutions are developing a cooperation agreement to guide their relationship to not only keep pace with the changing dynamics but ensure the interest of other stakeholders are safeguarded. Over 10 institutions have been established since the creation of the regional bloc, firstly as the Preferential Trade Area for Eastern and Southern Africa, the precursor to COMESA. They specialize in different aspects of regional integration including finance, insurance, industry, investment, competition policy, women affairs, energy among others. In coming up with a cooperation framework, the Secretariat and the institutions seek to create a nexus that balances the institutions’ responsibilities to COMESA, and the interests of the other external stakeholders.
The AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) program has agreed a partnership with the African Guarantee Fund (AGF) to unlock $1.3 to 2 billion in loans to women-owned Small and Medium Sized Enterprises(SMEs) in Africa, by working with financial institutions to enhance their ability to lend to women. The move signals the launch of AFAWA’s Guarantee for Growth (G4G) program, which aims to make available up to $3 billion in financing for women entrepreneurs through de-risking and technical assistance measures. Already, financial institutions in Cameroon, Democratic Republic of Congo, Kenya, Rwanda, Tanzania and Uganda are signing on to the program.
The Southern African Development Community (SADC) enjoys long standing cordial relations and strong cooperation with the European Union Delegation (EU) in the Republic of Botswana, SADC Executive Secretary, Her Excellency Dr Stergomena Lawrence Tax, has said. Speaking during her virtual meeting with Mr Stefano Gatto, Senior Inspector at the European Union External Action Service on 9 February 2021, H.E Dr Tax indicated that, while the region continues to cooperate with the EU and highly appreciates the cooperation and support rendered to the region, it will be prudent to re-orient and enhance the existing cooperation by focusing more on impactful partnership and timely delivery of programmes.
On achievements, Dr. Tax cited the Tripartite Transport and Transit Facilitation Progamme (TTTFP), and Support to Peace and Security in the SADC Region (SPSS) programmes, to have contributed to SADC integration agenda. In relation to TTTFP, she indicated that he programme has contributed to the development and harmonisation of transport and transit policies aimed at promoting trade facilitation in the SADC, EAC, and COMESA Tripartite area. Through EU support, Tripartite Guidelines for Trade and Transport Facilitation were developed and adopted to ensure continuous movement of essential goods and services during COVID-19 pandemic.
Currency union on intra-regional trade (Graphic Online)
The Economic Community of West African States (ECOWAS) comprises eight Francophone, five Anglophone and two Lusophone countries. These countries were categorised into two zones namely: the West African Economic and Monetary Union (WAEMU), formed as an African colony of France during the colonial era; and the West African Monetary Zone (WAMZ). Comparatively, the WAEMU uses the CFA, as a common currency, and the WAMZ uses their sovereign currencies. Additionally, the WAEMU intra-trade averages 13.7 per cent above the overall average for the ECOWAS, although the WAMZ is the economic hub of the sub-region. Therefore, the use of sovereign currencies by countries in the WAMZ could be a barrier to trade.
How China can help Africa’s economy recover from Covid-19 (Quartz Africa)
Much international coverage of Ethiopia last week focused on its request for debt relief under a new framework agreed to last year by the Group of 20 countries, including China. The initiative is designed to help poorer countries deal with the impact of the Covid-19 pandemic. While the question of how Ethiopia deals with its debts – particularly through this program – is extremely important, it is just one aspect of the country’s recovery from the pandemic, and future prosperity. A major challenge is how it can increase trade and exports, which currently contribute only 7.9% to its GDP, one of the lowest in Africa. This is a major goal of Teshome Toga, Ethiopia’s ambassador to China for the last two years.
China-Africa: The growing battlefield for digital dominance (The Africa Report)
The first wave of telecoms growth in Africa made millionaires – in some cases, billionaires – of investors who bet on Africans spending on mobile phones. No one is underestimating the potential of the next wave – interlocking trade, digital money and communications. Certainly not the Chinese, whose technology, communications and finance companies are heavily invested.
Trade and investment factsheets (GOV.UK)
A snapshot of the UK’s trade and investment positions with individual trading and investment partners overseas. These factsheets summarise the latest statistics on trade and investment between the UK and individual overseas partners. Trade statistics inform how we meet the challenges of trade policy and promotion in the UK. The factsheets provide statistics between the UK and its partners on:
- exports, imports, and total trade
- trade by commodity and service type
- regional trade in the UK for goods
- UK market share for trading partners
- VAT-registered businesses trading goods
- foreign direct investment (FDI)
- ‘Ease of doing business’ rankings
- summary trade and investment data as reported by each partner
- economic data and projections
UNCTAD's Trade and Development Board Multi-year Expert Meeting on Commodities and Development Twelfth session took place virtually on 8 and 9 February 2021 from Geneva. A background note from the UCNTAD Secretariat titled “Recent developments, challenges and opportunities in commodity markets” was prepared to highlight key commodity market trends and to analyse factors, including the significant effect of the pandemic, that contributed to the trends in commodity prices observed in 2020.
A suite of TRAFFIC reports into high-value African marine products highlights yet another burgeoning, under-reported, unsustainable, and illegal trade that threatens the long-term survival of key marine species and the potential for sustainable human development. TRAFFIC’s policy brief A response to trade in high-value marine products between Africa and Asia summarises studies into seahorse, sea cucumber, and fish maw (dried swim bladder) trade; painting a picture of population declines, inadequate regulation, stretched law enforcement, and local communities impacted by illegal and unsustainable catch and trade.
As rich countries ramp up their vaccination efforts, there is a lot of concern over the when and how of developing countries also receiving and distributing vaccines in a timely manner and finally getting this horrible pandemic behind us. The concerns are real, and the task of vaccinating the poorest of the poor requires a massive global effort by rich and poor countries alike. First and foremost, it is a moral argument. Given that the vaccine itself already exists – albeit with different levels of effectiveness – every day that goes on results in preventable deaths that must be avoided. Instead, the rich countries have engaged in “Vaccine Nationalism,” paying for doses in short supply in quantities that more than cover their own populations. When it comes to saving lives, leaving the distribution of vaccines purely to the market is absurd as no one is safe until all of us are safe. But beyond the moral argument, there are also compelling arguments on the possible very scary consequences of leaving developing countries behind when it comes to vaccinations. Some of these arguments are excellently spelled out in this piece, which includes the following three points.
WTO and its role in reducing the economic shock of the pandemic (Observer Research Foundation)
Commentators and academics have regularly drawn attention to the importance of the World Trade Organisation (WTO) in regulating trade and reducing barriers. However, the role that the institution has played – and continues to play – in reducing the economic shock of the COVID-19 pandemic, and thereby mitigating its adverse impacts, merits more attention. The WTO has helped in absorbing this blow in a three-pronged manner: First, by helping members coordinate their trade policies; second, by ensuring transparency with regard to pandemic-related measures; and lastly, by monitoring members’ trade responses to the pandemic.