Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Country focus

Agricultural exports record second-largest level on record in 2020 (IOL)

The Agricultural Business Chamber (Agbiz) said yesterday that South Africa’s agricultural exports could increase further in 2021 after reaching record levels last year in spite of lockdown restrictions. South Africa’s agricultural exports increased by 3 percent in 2020, registering the second-largest level on record amounting to $10.2 billion (R).This was the second-largest level after the record exports of $10.7bn in 2018.

Alliance calls for sugar tax increase to pay for vaccines (IOL)

An alliance of non-governmental organisations has called on the government to increase the health promotion levy to 20 percent to help South Africa pay for Covid-19 vaccines. The Healthy Living Alliance (Heala) said yesterday that hiking the levy from the current 11 percent could raise billions of rand for Covid-19 in the short-term, and also reduce non-communicable diseases over time. Tax analysts have, however, dismissed possibilities of any significant tax hikes amid expected budget overrun.

Copyright Amendment Bill an issue for trade between SA and US (Business Day)

SA is apprehensive about striking a new trade deal with the US and would rather maintain existing relations with the world’s largest economy, Lionel October, the director-general of in the department of trade, industry and competition has said. “We are working more on continuing GSP preferences, hopefully getting an extension to Agoa, even though we might have to give some concessions – but rather that than a full-blown trade agreement” that may take four to five years to negotiate, he said. Trade in goods and services between SA and the US was valued at $17.8bn (about R258bn) in 2019, while $2bn of exports from SA were cleared under the GSP and Agoa, according to US government data.

South Africa needs a free-trade deal with China, not the Belt and Road Initiative (Daily Maverick)

Of the 54 countries in Africa, only Mauritius has successfully concluded a free-trade agreement with China. Thirty of the continent’s least developed countries have access to a unilateral preferential scheme. The balance, including South Africa, do not enjoy the same kind of preferential access to the Chinese market.

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

Seek EAC consensus for a new Kenya, UK trade deal (Business Daily)

The decision by the British Parliament to delay the ratification of a new trade deal between Kenya and the UK is a wake-up call to negotiators to seek consensus among all parties likely to be affected by the pact. The House of Lords – Britain’s upper house of Parliament – has 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 within the East Africa Community (EAC).

Kenya tipped to reap big from Africa free trade pact (Nation)

Kenya is has been tipped to be among top beneficiaries of the Africa-wide free trade pact that came into force last month. The new deal is expected to provide access to what has been described as the biggest market in the world. According to the World Bank, Kenya will be among the big gainers of the pact with Ivory Coast and Zimbabwe bettering it. The World Bank cited the Kenya’s relatively developed industrial potential and human capital, which it says will give east Africa’s largest economy an edge from reduced trade

Kenya to raise debt ceiling again as headroom reduces (Business Daily)

Kenya will raise its debt ceiling of Sh9 trillion to accommodate gaps in its expenditure needs amid underperforming tax collections, the National Treasury has said, confirming reports that emerged from corridors of Parliament early January. The Treasury says in Medium Term Debt Management Strategy 2021 that it will be tabling changes to the Public Finance Management law for approval by legislators in the near future to raise the cap on debt, without disclosing the fresh limit it is looking at. This comes just over a year since the lawmakers raised the ceiling from Sh6 trillion in October 2019.


Treasury, IMF differ on economic growth status (Business Daily)

IMF, Kenya agree on new $2.4b funding to shore up a battered economy (The East African)

Munya orders sugar stocks audit amid dumping claims (Business Daily)

Kenya is assessing the available stocks of sugar to prevent flooding of the local market with imports. The audit is meant to address concerns by producers that importers are dumping sugar in local market, which has tanked their earnings. Cabinet Secretary Peter Munya, however downplayed the dumping claims, saying so far there was no evidence. “People are making noise because this sugar is coming from Uganda. If it were coming through the Port of Mombasa from other regional countries you would not hear these complaints,” said Mr Munya. Kenya has been at loggerheads with Uganda over sugar imports with local producers arguing that the commodity coming from the landlocked neighbour originates from third party countries.

Uganda’s economic recovery slows down as COVID-19 cases surge (CGTN Africa)

Uganda’s economic recovery has slowed down due to a surge in COVID-19 cases in the East African country, its central bank said. Bank of Uganda (BOU) said in a statement issued late on Monday that since December 2020, the recovery has lost momentum. According to the statement, high-frequency indicators of economic recovery show a growth of about 2.6 percent in the quarter to December 2020, down from a growth of 9.2 percent in the quarter to September 2020. The statement said the medium-term outlook continues to be highly conditional on the timelines of the world-wide vaccine rollout and the course of the virus and its new variants.

Zimbabwe borrowed 1.4 bln USD from Afreximbank between 2017 and 2019: finance minister (Xinhua)

The Reserve Bank of Zimbabwe (RBZ) has borrowed a total of 1.4 billion U.S. dollars from African Export-Import Bank (Afreximbank) between December 2017 and December 2019 with the government acting as guarantor, Finance and Economic Development Minister Mthuli Ncube has disclosed. In general notices issued through the Government Gazette on Saturday, Ncube said the first loan agreement of 600 million U.S. dollars in which the Government of Zimbabwe was guarantor was signed on Dec. 27, 2017 “for the purchase of strategic commodities”. Ncube did not however disclose the nature of the strategic commodities.

Zambian expert urges developing countries to emulate China’s production techniques (CGTN Africa)

Developing countries should emulate how China has managed to boost its production capacity which has boosted economic development, an expert said on Tuesday. Lubinda Haabazoka, president of the Economic Association of Zambia (EAZ), said China has made it possible for developing countries to produce for themselves because the Asian nation has been able to produce cheap production machinery. “Our engineers should be busy copying such machinery in Zambia,” he said in a write-up on the performance of the country’s economy. “The structure of Zambia’s economy is what we need to fix because it’s not sustainable for overall economic development and also maintaining strong economic fundamentals.”

High cost of rice concerns consumers, traders (The Point)

In 2018 President Barrow-led government announced a free trade for rice importers. This policy ensures free duties on rice traders. And in his campaign, he repeatedly promised that if he was elected to the Office of the President, a bag of rice would be sold at D700. In 2019 a 50kg bag of American rice was sold in The Gambia at D1150. In 2020 the price increased to D1250. While in late January 2021, the price jumped to D1300.

Egypt as a gateway for international trade (Al-Ahram)

Egypt has recently signed several bilateral and regional free-trade agreements as part of a comprehensive programme to boost exports and increase access to global markets. The Common Market for East and South Africa (COMESA) and Egypt-EU Partnership Association Agreement are two of the best known, granting access for Egyptian exports to African and EU markets with preferential treatment. However, the geographical coverage of the COMESA agreement is limited to East and South Africa and the departure of the UK from the EU in the so-called Brexit has created concerns in the business community about the future of Egypt-UK trade relations.

Mauritius: An international centre of excellence for investment (BizNews)

Mauritius has evolved from its humble beginnings as a mono-crop agricultural economy to become an attractive global investment destination and a hub for financial services excellence. Additional strategic diversification into tourism, manufacturing and real estate development and construction has supported the idyllic Indian Ocean island’s transformation into an economic powerhouse in relation to its size. The strength of the Mauritian economy helps to sustain the country’s investment-grade rating.

The Mauritian government remains committed to contributing towards the economic development of the African continent through trade. In this regard, Mauritius is party to an extensive network of Investment Promotion and Protection Agreements (IPPA) to facilitate cross-border investment flows and enable global businesses to operate efficiently.

WTO: We need to build capacity for international competitiveness – LCCI (The Sun)

The Lagos Chamber of Commerce and Industry (LCCI) has posited that for Nigeria to take advantage of opportunities offered by the World Trade Organisation (WTO) under the leadership of Dr. Ngozi Okonjo-Iweala, it was important to build capacity for international competitiveness of our products and services. The Chamber also emphasised the need to address trade facilitation issues, especially around port processes, ports infrastructures, international trade documentation, foreign exchange policies, trade policies and industrial policies.

CILT Ghana lists logistics, transport deficiencies as threats to AfCFTA (MyJoyOnline)

The Chartered Institute of Logistics and Transport (CILT) Ghana is urging the government to address all logistics and transport issues associated with the Africa Continental Free Trade Agreement, indicating that they can pose as threats to the trade pact.Even though the trade agreement has been implemented, President of the institute, Dr. Ebo Hammond says it can only yield the needed results if there exists a coherent supply chain management strategy and implementation plan. “Because of the Africa Trade Area that has been created, we believe that the entirety of Africa must be wired up in terms of road networks and communication.” he said in an interview on the MarketPlace on Joynews.

Buhari to Ambassadors: Strive to promote trade, foreign direct investment (Vanguard)

President Muhammadu Buhari has urged ambassadors-designate, consuls-general and charge’ d’ Affaires to continually project the strengths of Nigeria, showcase priorities of the government and uphold standards that will bring honour to the country. He further charged them to strive to promote trade, human capacity development, foreign direct investment and other areas of cooperation with countries at national and multilateral levels to support national growth and development.

Africa Must Produce to Benefit from WTO, Say Soludo, Rewane (THISDAY)

A former Governor of the Central Bank of Nigeria (CBN), Prof. Charles Soludo, Managing Director, Financial Derivatives Company Limited, Mr Birsmack Rewane, and former Nigerian ambassador to the United States, Mr. Joe Keshi, yesterday opined that Africa must boost its production level to gain from the World Trade Organisation (WTO). They argued that the WTO as a global body will deal with every country and continent according to what they bring to the table during trade negotiations, noting that if Nigeria would benefit from Dr. Ngozi Okonjo-Iweala’s headship of the organisation, it must align with the principles of the WTO.

Mozambique LNG project on track, Total confirms (Pumps Africa)

Total Chief Executive Officer, Patrick Pouyanne has said that a security agreement with the government of Mozambique has been signed. Speaking to the press in Paris, Pouyanne confirmed that the offshore and engineering works are in progress despite the suspension of the onshore works. The Mozambican government will now offer security in the zone where the liquefied natural gas (LNG) plants will be built. The Mozambique LNG project will be Africa’s biggest foreign direct investment of over US $ 25 billion financed by a consortium of global energy developers and operators.

News from Africa and Africa’s international trade relations

Building African economies back, better and stronger than before (Brookings Institution)

Africa, like other regions, is reeling from the pandemic’s economic and social consequences. The global economic downturn is undercutting every sector of Africa’s economy. Growth is expected to turn negative for the first time in almost 50 years, threatening the hard-won development gains of past decades. The International Monetary Fund (IMF) estimates that Africa will need $1.2 trillion over the next three years to recover from the epidemic.

New head of African Union faces daunting challenges from day one (FinalCall.com)

He’s been described as a “master strategist,” but can the incoming chair of the African Union beat the daunting challenges ahead? That is the difficult question facing Felix-Antoine Tshisekedi Tshilombo, president of the Democratic Republic (DRC) as he assumes the post just relinquished by South African leader Cyril Ramaphosa.

AU ECHO 2021 (African Union)

In this edition of the AU Echo in line with the African Union Theme of the Year 2021 on “Arts, Culture and Heritage”, we focus on the cultural and creative industries. This vast sector has great potential and it is telling that African Governments will step up their efforts in the year 2021 to support the CCIs. From continental treaties such as the Charter for African Cultural Renaissance and The African Union (AU) Plan of Action on Cultural and Creative Industries, as well as national development plans on CCIs, 2021 will be a year for rallying support behind a sector which by virtue of its linkages to social, cultural, economic and political issues is at the bedrock of the development of African society and the future envisaged in Africa’s Agenda 2063.

EALA passes key report on EAC political integration (East African Legislative Assembly)

The East African Legislative Assembly is rooting for political integration of the EAC. In so doing, the Assembly has reiterated the need to adhere to a triad-approach encompassing; a common foreign policy, peace and security and good governance. A report of the regional Assembly on “the progress made by the community towards achieving the EAC Confederation and the EAC Elections Observer Missions”, adopted on February 10th, 2021, echoed a robust constitutional making exercise which ensures a comprehensive consultative process with clear benchmarks for a model Political Confederation.

On the four pillars of integration, the House was informed that considerable progress has been registered in the first three (3) pillars of integration (Customs Union, Common Market and the Monetary Union). The Chairperson informed the House that on the fourth pillar (Political Federation), there appeared to be a diversion with the region.

Heavy agenda on the table for EAC heads of state (The East African)

Covid-19 challenges, Somalia’s application to the join the East African Community, ratification of the African Continental Free Trade Area agreement and consultations towards attaining a Political Federation will be top on the agenda at the Heads of State Summit scheduled for February 27. “We are planning to have a Council meeting just before the Summit. There are issues like the challenges posed by Covid-19 in the EAC, the working of the institutions and others, though it is too early to come up with all the issues,” said Prof Manasseh Nshuti, Rwanda’s Minister of State in charge of the EAC and also the chairperson of the Council of Ministers.

EU focuses on a greener and more sustainable economy for Angola (Sprout Wired)

The European Union ambassador in Angola said in an interview with LUSA that funds are currently underway for the coming years. To date, more than EUR 130 million has been allowed under the European Development Fund and they are now “working with the plan for the next six to seven years,” Seppen said. The partnership with Angola derives from the so-called “joint path”, the broad framework on which institutional relations between the European bloc and the African country are based, and which includes political, economic and social aspects.

ECOWAS – UEMOA Partnership: A meeting to discuss economic competition issues regarding the Regional Market

At the initiative of the ECOWAS Department of Trade, Customs and Free Movement and the ECOWAS Regional Competition Authority (ERCA), a virtual meeting will be held on 17 February 2021 between the two institutions and the UEMOA Department of Regional Market and Cooperation. The Cooperation and Partnership Agreement calls on the two organisations to establish close cooperation and collaboration with a view to promoting the coordination and harmonisation of their respective development actions in order to accelerate convergence between ECOWAS and UEMOA, and strengthen regional integration in West Africa through the Joint Technical Secretariat. On the other hand, the Convergence Protocol sets out common mechanisms for the adoption of regional integration policies, programmes and regulations.

ECOWAS Holds Technical Working Group Meeting on Trade Information System

The first Technical Working Group meeting for the ECO-WAS Trade Information System (ECOTIS) held virtually on the 12th of February, 2021. The trade information system is meant among others, to readily make information on trade related issues available to the regional community citizens, investors and partners. It is also billed to close the existing gaps resulting from untimely, unreliable, inaccurate and cumbersome trade information processes, which have left business opportunities largely untapped and other markets unexplored.

Global economy

What the future holds for world trade, according to 8 global leaders (World Economic Forum)

Ngozi Okonjo-Iweala has made history – becoming the first woman and the first African ever to hold the post of director-general of the World Trade Organization. Her appointment comes after a year that has rocked international trade. In October, the WTO forecast a 9.2% decline in the volume of world merchandise trade for 2020, with a 7.2% rise in 2021. But it warned the estimates were “subject to an unusually high degree of uncertainty” as they depended on government measures to control the pandemic.

The international trade system was under the microscope at the World Economic Forum’s Davos Agenda week, with expert panellists giving their views on what it needs to do to adapt to future disruptions and how industry and government can work together to make it more sustainable and more resilient. These were some of the key quotes.

Least developed countries in 2021 – progress amidst the COVID-19 crisis? (United Nations)

2021 commemorates the 50th anniversary of the creation of the least developed country (LDC) category by the United Nations. Currently, there are 46 countries on the list established by the Committee for Development Policy (CDP). In February 2021, the CDP will undertake its triennial review of the list of LDCs to recommend countries for inclusion and graduation. Twenty-four international experts will review the latest available data for 15 indicators for all developing countries.

Making global value chains sustainable and enhancing the position of LDCs: A shared responsibility (Trade for Development News)

Company activities that incorporate products and services components spread throughout the world are called “value chains”. The social and climatic dimensions of value chains are important for making value chains sustainable, and joint responsibility and action by all stakeholders is required, acknowledging the interdependencies between all. Moreover, value chains require that developed countries and companies originating in them increase their share of responsibility instead of focusing only on their own goals, as is currently happening in the distribution of vaccines against COVID-19. It seems the developed world is not realizing that the unequal distribution of vaccines is not only unfair, but due to economic interdependencies, there will also be significant damage that puts decades of economic progress at risk for developed and least developed countries (LDCs) alike.

UN says lack of proper infrastructure planning is costly and hurts COVID-19 recovery, climate action, and SDGs (United Nations)

In a new publication, the UN is calling on countries to vastly overhaul the way governments build and maintain infrastructure – everything from water and sanitation systems to energy grids to transportation facilities – in order to reduce waste and costs, improve delivery of essential public services and ensure a sustainable future for all. The new publication, Managing Infrastructure Assets for Sustainable Development, issued by the UN Department of Economic and Social Affairs and the UN Capital Development Fund, with support from UNOPS, says sound infrastructure – and the systems that support it – are needed to achieve 92 percent of the Sustainable Development Goals.

Switzerland Climbs to Top of Global E-Commerce Index (UNCTAD)

Europe remains by far the most prepared region for e-commerce, according to UNCTAD’s Business-to-Consumer (B2C) E-commerce Index 2020, but wide gaps with countries with the lowest level of readiness need to be addressed by tackling weaknesses in those nations to spread the benefits of digital transformation to more people. For the first time, Switzerland leads the UNCTAD B2C E-commerce Index, just ahead of the Netherlands. The 10 developing countries with the highest scores are all from Asia and classified as high-income or upper-middle-income economies. At the other end of the spectrum, least developed countries occupy 18 of the bottom 20 positions.

Joint Statement Initiative on E-Commerce (JSI): Economic and Fiscal Implications for the South (UNCTAD)

Covid-19 pandemic has exposed the existing global digital divide and the urgent need to build digital infrastructure in the South. While many developing countries are in the process of designing national digital policies, a group of countries have initiated negotiations on digital rules under the Joint Statement Initiative (JSI) on E-Commerce. This paper identifies key digital rules being negotiated by the JSI members and examines their economic and fiscal implications for the developing countries which are members of the JSI.

Digital Economy Agreements: The New Phase in Economic Alliances (Modern Diplomacy)

This article explores systemic and market barriers preventing the wider use of BRICS national currencies in trade, including currency swaps mechanisms and reasons for BRICS exporters’ preference not to use national currencies. Design flaws are outlined in the New Development Banks’ Contingency Reserve Arrangement (CRA) in the context of de-dollarizing BRICS trade, namely its IMF linkage requirements and limited scope, symptomatic of a lack of trust between BRICS member states.

Accelerating Trade Digitalization Amid The Pandemic (Bangkok Post)

Paperless trade across borders has proven an effective way to mitigate trade disruptions since the onset of the crisis, enabling commerce to continue while limiting physical contact. Yet, despite the increasing acceptance of electronic documents across borders, implementation of cross-border paperless trade remains low, according to the United Nations Global Survey on Digital and Sustainable Trade Facilitation for Asia and the Pacific.

When it Comes to Services vs. Manufacturing, Words Matter (IMF Blog)

Efforts to revive national manufacturing sectors get a lot of airtime. After all, the sector propelled many East and South East Asian economies – the so-called “East Asia Miracle” – and was a gateway to the middle class for millions of workers. However, for all the obsession with manufacturing, economists for their part seem to be more preoccupied with services. To confirm this, we combed through thousands of IMF reports on countries’ economies from 1978 to 2019. Using 113 distinct terms related to growth theory and policy – ranging from “infrastructure” to “liberalization” – we computed the relative weights of each term across countries and years.

Addressing financial challenges of sustainable shipping (International Maritime Organization)

Work to address the financial challenges of shipping’s transition to a more sustainable future has continued this week with a meeting of the FIN-SMART Roundtable Workstream 1. The Roundtable provides a platform for regular dialogue among key maritime stakeholders to support accelerating financial flows, particularly in developing countries, for the decarbonization of the maritime sector. This is carried out in line with country priorities and the goals of the IMO Initial Strategy on the reduction of GHG emissions from ships.

India hopes that new WTO DG will be guided by Mahatma Gandhi’s consideration for the poor (Business Line)

India has expressed hope that WTO’s new Director General Ngozi Okonjo-Iweala would remember Mahatma Gandhi’s advice on considering the fate of the poorest while dealing with a tricky situation when she makes difficult choices at the multilateral trade forum. Views of the new DG on continuing with the special & differential treatment (S&DT) for developing countries may have a critical bearing on the on-going discussions, some trade experts say. The fact that Okonjo-Iweala, is also a development economist who served at the World Bank for several years, has also raised hopes of a positive intervention on development matters. The next few days are likely to be critical for the future of the India-South Africa proposal on temporary waiver of TRIPS provision as the Members may take a call on whether negotiations on the matter should continue some more or be given up as an agreement remains elusive.


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