Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News
Photo credit: Bloomberg

Country focus

20 borders fully reopened, 30 remain closed (SAnews)

South Africa’s 20 land borders, which have only been partially operational for the past month, will now be fully open from today, Cooperative Governance and Traditional Affairs (COGTA) Minister, Dr Nkosazana Dlamini Zuma, has announced. However, the 30 land borders which were closed, will remain so. The closure of the land border posts was introduced last month as the country was seized by a rise in COVID-19 infections. The list of the borders scheduled to reopen can be accessed on: http://www.dha.gov.za/index.php/corona-virus-information

There’s a big problem with South Africa’s plans for digital tax (BusinessTech)

As the economy sheds jobs and business closures mount because of the Covid-19 pandemic, South Africa has its work cut out in attempting to expand the tax base. This would be difficult, but not impossible to achieve, says Robyn Berger, executive of Tax at law firm Bowmans – but government should step lightly to avoid spurring any trade wars. “Taxing the digital economy and the informal economy could potentially bring many new taxpayers into the net, although both routes could pose considerable challenges,” she said. Of the two, taxing the digital economy would likely face the biggest hurdles – particularly if SARS follows through on its proposal to unilaterally tax the gross revenues that digital companies make in South Africa, Berger said.

60-Year-Old Rand Trades Far Outside South Africa’s Borders (Bloomberg)

For a currency that’s lost more than half of its value against the dollar in the past decade, South Africa’s rand may be an unlikely choice when receiving payment for goods and services abroad. But the currency, which marks its 60th anniversary this weekend, is accepted in informal and formal trade across most of southern Africa. It is legal tender in a common monetary area that includes Lesotho, Namibia and Eswatini -- all of which peg their currencies to the rand -- and it’s used in at least five other countries in the region.

Zambia’s efforts to enhance consumption of local products get heightened attention (CGTN Africa)

Zambia’s efforts to promote the consumption of local products is now getting the maximum campaign and recognition across the country. Various stakeholders are now appreciating the fact the promotion and consumption of local products are good for the growth of the economy.

Recently, President Edgar Lungu expressed happiness that more local products are being sold in shops and that more people are consuming the products. “This is patriotism. It is also a clear indication that our ‘Proudly Zambian Campaign’ has taken root,” he said when he addressed the National Assembly on the progress made on the application of the national values and principles.

Let’s focus on import substitution: Minister (The Herald)

There is need to implement the import substitution strategy for cooking oil if the country is to cut foreign currency leakages, achieve economic growth and employment creation, Industry and Commerce Minister Dr Sekai Nzenza has said. The strategy will also help the country meet its national demand for cooking oil of 150 million litres per year. Dr Nzenza said this in Harare yesterday during a tour of Pure Oil Industries to assess the firm’s operations during the Covid-19 lockdown period. Pure Oil Industries manufactures the ZimGold cooking oil brand, margarine, baker’s fat and washing soap, among others. Minister Nzenza said importing crude de-gummed oil is a major drain on foreign currency and it perpetuates low capacity utilisation of the country’s crushing capacity.

Expert Seeks Improved Ease of Doing Business (THISDAYLIVE)

As part of efforts to strengthen ease of doing business in the country, an expert, Olugbenga Ojo, has inaugurated a platform – Eximtradeoptions – to boost trade in Africa and across the world. Announcing the platform during a virtual event held recently, Ojo, who was an alumnus of the Harvard Law School said unveiling of the new platform was necessary to provide an enabling environment for Nigerian business community, who are keen about exploring foreign markets.

“The trade platform which is structured to manage the end to end of the supply chain for both importers and exporters from any part of the world with a protection of the legal framework and insurance against losses, provides array opportunities, with four payment and service packages to accommodate every business interest in the area of international trading,” he stated.

COVID-19: Obasanjo cautions Africa on agric-business, manufacturing sectors - Daily Post Nigeria

Former governor of Imo State and Senator representing Imo West Senatorial district, Rochas Okorocha has urged the Federal Government to take advantage of huge potentials inherent in the entertainment industry. Speaking with journalists in Abuja on his bill, “Establishment of University of Creative Technology, Orlu, Imo State”, which is before the Senate for debate, he said the time for government to diversify the economy was now. He said the country was fast growing in population with the revenues depleting due to forces that were natural, stating that diversification would force other developed economies to bring in investments that will make Nigeria one of the best in the world.

Ugandan govt boosts participation of local firms in EACOP (Indpendent)

Uganda has started implementing a Shs 1.85bn project seeking to build technical skills of local micro, small and medium enterprises eyeing businesses during the construction phase of the East African Crude Oil Pipeline (EACOP). Funded by the African Development Bank (AfDB), the project intends to support Ugandan and Tanzanian small businesses interested in tapping business opportunities along the oil pipeline, enabling them to access new market opportunities, and building linkages with larger, national, regional and international companies. The construction of the EACOP is expected to start anytime soon once the Final Investment Decision is reached. The East African nation hopes to start oil production by 2024.

Uganda maintains 10th spot in ABSA’s Africa Financial Markets Index (Independent)

Uganda has for the fourth consecutive year maintained the 10th position in the Absa Africa Financial Market Index 2020, signalling a stagnation in performance. The report, released by Absa Bank shows that Uganda scored 52 out of 100 in 2019/20 compared with 50 out of 100 scored in 2017/18, but still lagged behind a number of countries in Eastern and Southern Africa. Ridle Markhur, a senior economist at Absa Group, said Uganda’s growth prospects in line with the AFMI will now largely depend on how the government continues to manage the spread of COVID-19, performance of the services sector, inflation, exchange rate movements and performance of imports and exports.

Kenya, Uganda trade sugar and juice in new deal to settle tax dispute (The East African)

Kenya and Uganda have agreed in principal on a bilateral agreement that could put an end to the persistent trade dispute in sugar, fruit juices and pharmaceuticals between the two neighbouring countries. The EastAfrican has learnt that under the agreement, Kenya has agreed to a demand by Ugandan authorities to allow more Ugandan sugar in the country in exchange for relaxation of duty on Kenyan exports of fruit juices and verification fees on pharmaceuticals to Uganda.

“On sugar we have sorted out the issues they (Uganda) notified us about and most likely there will be a government delegation going to Uganda to check a few things. We have been invited and we are now constituting ourselves to go. This was a mutual invitation,” Mr Weru told The EastAfrican in an interview last week.

News from Africa and Africa’s international trade relations

Africa’s Continental Free Trade Area Irons Out Movement Logistics (Africanews)

With the launch of the African Continental Free Trade Area, the 3 regional blocs are accelerating the process of regional integration The council of ministers of the economic blocs Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) discussed — among other topics, the draft guidelines of the three-part mechanism on safe movement in the region. An important conversation in light of the effects of the COVID-19 pandemic — in addition to the approach to accelerating and implementing the Tripartite Free Trade Area.

Will The AfCFTA Be The Heartbeat Of The Global Economy? (Forbes Africa)

At midnight on 31 January 2020, the withdrawal of the United Kingdom (UK) from the European Union (EU) officially came into force. The decision – Brexit – made by 52% of the British population resulted in the EU losing its second-largest economy and the Union Jack isolating itself in terms of trade, effectively quarantining in its own home. But for Africa, the move holds opportunities. Untapped export potential to the UK is large as is untapped UK export to Africa; the latter is worth more than $8 billion.

Yet, it is the new trade agreement implemented in Africa where interest should really be directed; 54 of the 55 African Union states on the continent have signed up for the African Continental Free Trade Area agreement (AfCFTA) which came into effect on the first day of 2021. Eritrea is the only country that chose to sit out – and there are various explanations as to why not unconnected to power and politics.

Technology and supermarket chains can help strengthen southern Africa’s food systems (The Conversation Africa)

Agriculture and agro-processing value chains have been under pressure during the COVID-19 pandemic. This has been particularly marked where they remain underdeveloped, as is the case in South Africa and the rest of the region. Regulatory responses to the pandemic disrupted agriculture and agro-processing activities. For example, agro-processing systems have been slowed down by rigorous border checks. Some countries, including South Africa, closed land border posts. Curfews and social distancing protocols also caused labour shortages, which in turn affected productivity.

The development of stronger and more localised agriculture and agro-processing systems is crucial for food security, fostering rapid industrialisation and economic diversification, and job creation beyond the crisis. New technologies and supermarket supplier development programmes can help overcome weaknesses. They can be used to promote smallholder farmers and SME agro-processors in the region.

Reprieve for regional importers as court stops Kenya’s SGR rule (The East African)

Importers using the port of Mombasa are now free to use road transport to haul cargo to their respective destinations, after a five-judge bench quashed a government directive requiring all cargo imported through the port be transported to Nairobi and the hinterland exclusively by the Standard Gauge Railway (SGR).Kenya Transporters Association’s Mercy Ireri said all transporters from any country in East Africa using the port are now free to choose mode of transporting cargo. “The ruling applies to all transporters irrespective of their country of origin. This ruling is a big relief to Kenyan and Uganda transporters who were mostly affected because they are regular transporters,” said Ms Ireri.

Health sector investments must be on top agenda at EAC summit (The Star)

The East African Community ordinary Heads of State meeting has been scheduled for February 27. EAC secretary-general Liberat Mfumukeko said apart from the appointment of his successor, infrastructure development for 2021-24 is top on the agenda for the Summit.

The chairperson of the Council of Ministers, Nshuti Manasseh, added that the EAC partner states are looking into ways of dealing with the effects of Covid-19 on the region’s economy. This comes at a time when countries across the world are rolling out Covid-19 vaccine campaigns with renewed hope of returning to normalcy. While governments in the region have made efforts to strengthen various aspects of the health system to cope with the pandemic, the significant impact of the virus on the health systems is evident.

British MPs delay nod of Kenya, UK trade deal over EAC disputes (Business Daily)

The British Parliament is seeking more time to ratify a new trade deal between Kenya and the UK, exposing tensions over the move between Nairobi and its East Africa Community (EAC) partners. The House of Lords -- Britain’s upper house of Parliament -- backed a proposal by its International Agreements Committee for a 21-day extension of the initial February 10 ratification deadline amid concern that the UK government had not addressed risks of the new pact with Kenya and its impact on regional cohesion in East Africa. The delay proposal is also attributed to the fact that the UK government has not explained what other options it considered for ensuring continuity of trading arrangements with Kenya and why it chose not to replicate the EU’s Market Access Regulation (MAR) that guided economic partnerships between the two sides prior to Britain formally ditching Brussels in December 2020.

SADC COVID-19 Pandemic – An Opportunity to Strengthen Governance (GGA)

To many in the research community, Africa remains an anomaly, as it has experienced less of the coronavirus burden than many other regions in the world. According to the Africa Centre for Disease Control (AU CDC), as of 27 January 2021, at least 40 countries are experiencing a second wave of the pandemic, including all countries in the SADC region. As of 2 February 2021, the confirmed number of Covid-19 cases from 55 African countries reached 3,582,328. On the continent, South Africa is the outlier, with the highest percentage of recorded active cases of the coronavirus. Based on the available data, South Africa is the epicentre of the pandemic on the continent, and as such the South African Development Community (SADC) finds itself, by extension, in the same situation.

While the COVID-19 pandemic has hampered both social and economic activities in SADC countries to varying degrees, it has also had a detrimental impact on the governance capacity in the region. Since the end of 2020 and the start of 2021, SADC member states have lost ten cabinet Ministers from four countries who succumbed to the coronavirus.

Here’s why China’s trade deal with Mauritius matters (WEF)

2021 marks the start of two important trade policy developments in Africa. Firstly, the African Continental Free Trade Agreement (AfCFTA) has been signed by 54 of 55 African Union member states and ratified by 31 so far. The agreement unites an estimated $3 trillion market and is expected to foster intra-African trade over the coming decades. Second, New Year’s Day marked a major step in China-Africa relations in the form of the China-Mauritius bilateral free-trade agreement (FTA), a first FTA between China and an African state. In September Senegal will host the Forum on China Africa Cooperation (FOCAC), a triennial head of state gathering of Africa and China’s leaders. Since China is not only Africa’s largest external trade partner, but also has a pattern of approaching regional trade policies elsewhere via a “small state first” approach, it is timely to reflect on the China-Mauritius FTA in a China-Africa context.

Related tralac Blog: Preferential trade with Mauritius: market access for the UK, China, and state parties of the AfCFTA

UAE and Africa non-oil trade hits $40.7b in first nine months of 2020 (Gulf Today)

The value of non-oil trade between the UAE and Africa totalled $40.7 billion in the first nine months of 2020, compared to $36.9 billion in the same period of 2019, underscoring the growing trade between the UAE and African countries despite the coronavirus (COVID-19) pandemic. In an interview with the Emirates News Agency (WAM), on the occasion of the launch of “Dubai Week in Africa-Kenya” forum on Monday, Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, said that the value of non-oil trade between the UAE and Africa amounted to $50 billion in 2019, compared to $33 billion in 2015. He said that the commercial exchange between the UAE and Kenya has witnessed significant growth from 2015 to 2019, amounting to nearly $2.7 billion, compared to $1.5 billion in 2015.

20th International Economic Forum on Africa - 22 February 2021 - OECD

The global economic recession triggered by COVID-19 is hitting African countries hard. In 2020, 41 African economies experienced a decline in their gross domestic product (GDP). Although situations vary across the continent, this crisis has made clear that post-COVID strategies need to tackle two major obstacles to Africa’s long-term sustainable growth: dependence on external markets, and the incapacity of the formal economic sectors to create enough quality jobs. The African Continental Free Trade Area (AfCFTA), now open for business, provides a platform to accelerate productive transformation, create regional value chains and spur continental integration. Its effective implementation, however, depends on African economies’ capacity to create fiscal space and boost private investment in quality infrastructure and sustainable projects. What are the key priorities for implementing the AfCFTA and accelerating Africa’s productive transformation? How can African governments strengthen their borrowing capacity and improve their debt management? How can bilateral and multilateral co-operation facilitate the process? The 2021 edition of the Forum will gather all key actors to share their views and solutions for action.

Global economy

History is made: Ngozi Okonjo-Iweala chosen as Director-General (WTO)

When she takes office on 1 March, Dr Okonjo-Iweala will become the first woman and the first African to be chosen as Director-General. Her term, renewable, will expire on 31 August 2025. “This is a very significant moment for the WTO. On behalf of the General Council, I extend our warmest congratulations to Dr Ngozi Okonjo-Iweala on her appointment as the WTO’s next Director-General and formally welcome her to this General Council meeting,” said General Council Chair David Walker of New Zealand who, together with co-facilitators Amb. Dacio Castillo (Honduras) and Amb. Harald Aspelund (Iceland) led the nine-month DG selection process.

“I am honoured to have been selected by WTO members as WTO Director-General,” said Dr Okonjo-Iweala. “A strong WTO is vital if we are to recover fully and rapidly from the devastation wrought by the COVID-19 pandemic. I look forward to working with members to shape and implement the policy responses we need to get the global economy going again. Our organization faces a great many challenges but working together we can collectively make the WTO stronger, more agile and better adapted to the realities of today.”

WTO: Our ambition is to operate on world stage, says trade minister (TheCable)

Niyi Adebayo, minister of industry, trade and investment, says Nigeria’s trade agenda is to operate on the world stage, noting that the country has outgrown Africa.

Adebayo said this on Monday during an interview on Arise TV. Speaking on the emergence of Ngozi Okonjo-Iweala as the new director-general of the WTO, the minister thanked President Muhammadu Buhari for insisting on her candidacy. The WTO members, on Monday took the decision to appoint Okonjo-Iweala as the director-general of the WTO, at a special meeting of the General Council, following a selection process that initially included eight candidates. “It is a thing of pride for us as Nigerians that a Nigerian, not only as a Nigeria but for the first time in history of the WTO, an African is occupying that position and not only is it in Africa for the first time, it’s also the first time a woman will occupy that position,” Adebayo said.

UNCTAD Report Highlights Achievements in Mobilizing Domestic Revenues Through Trade Facilitation (IISD)

The UN Conference on Trade and Development (UNCTAD) released a report on the Automated System for Customs Data (ASYCUDA) Programme, which supports countries in mobilizing domestic revenues through implementing trade facilitation policies while simultaneously promoting efficient procedures, regional integration, capacity building, and safeguarding of natural resources. The report shares achievements under the Programme in 25 user countries and territories. The report titled, ‘ASYCUDA Partnerships for Sustainable Development: Compendium 2020,’ presents case studies on a number of topics, ranging from system deployment basic practices to regional integration. Cases from around the world describe challenges, UNCTAD and ASYCUDA’s assistance, solutions developed following collaboration between the ASYCUDA Programme and trade stakeholders, and results.

Major airlines join forces with UNICEF to support ‘monumental’ COVID-19 vaccine roll-out plan (UN News)

The world’s leading airlines are backing a landmark UN Children’s Fund (UNICEF) initiative to prioritize delivery of COVID-19 vaccines, essential medicines and other critical supplies across the globe.

The global problems Biden can’t avoid (CNN)

In his first days in office, President Joe Biden has prioritized immediate actions in America and for Americans. This is what he promised. But he has also committed to reestablishing international US leadership, with "humility and confidence" as Secretary of State Antony Blinken put it, and started with executive orders on issues like refugees and the pandemic. These measures lay the foundation for urgent action needed now more than ever in the world's proliferating humanitarian crises, mired in the triple threat of untended conflict, unmitigated climate change and the scourge of Covid-19.


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