tralac Daily News
A joint meeting of the portfolio committees on Trade and Industry and of International Relations heard that Africa consumes what it does not produce and produces what it does not consume.
One of the challenges experience in the AfCFTA includes what is defined as “locally produced in Africa”, which could then potentially qualify for tariff concessions. For example, if a machine is 95% produced in China, but the assembly or packaging takes place in an African country adding only 5% value, this is clearly not made locally. The committee further heard that trade between African countries is small and covers only 16%-18% of traded goods. Compared this with intra-Asian trade (52%), intra-North America trade (50%) and intra-European Union trade (70%). Low levels of intra-African trade can be attributed to the unresolved legacy of colonialism in which Africa exports mainly to the rest of the world, including oil, minerals and cocoa. Africa mainly imports finished goods, but intra-African trade is largely in value-added manufactured products.
Okonjo-Iweala: Trade And Development In Discourse (Leadership Newspapers)
Nigeria’s share in world trade is 0.33 per cent”. “Nigeria’s share in Africa’s trade is 19 per cent, below its share of Africa’s Gross Domestic Product (GDP)”. And that is official! At every engagement in Abuja during the week with the Ministry of Trade and Investment, Presidency and Central Bank of Nigeria (CBN), Dr. Ngozi Okonjo-Iweala, first female African Director-general of the World Trade Organisation (WTO), opened her remarks with the unpleasant miserable statistics about Nigeria’s status in Manufacturing Value Added (MVA).
Nigeria, we were told, currently “ranks 103 out of 167 counties in terms of logistics”. It was her first working visit since she came into office as the 7th Director-general, on the 1st of March this year.
Remarkably she commendably turned despair into hope when she pointed to the opportunities in the abysmal national disability of low global trade and poor value addition. “I like to look at the optimistic side, when I saw this (the numbers) I knew that there was potential for us to do much. And that is the message I want to convey to the country. This means we can turn it around,” she said.
The Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele says Nigeria needs to be given a chance to reset and diversify its economy, just as he reiterated the determination of the CBN to address identified deficiencies in the Nigerian economy. He stated this in Abuja on Tuesday, March 16, 2021, while playing host to the Director-General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala at the Bank’s headquarters.
The National Economic Council (NEC) launched the sub-national Ease of Doing Business report at a virtual meeting chaired by Vice President Yemi Osinbajo on Thursday in Abuja. Mrs Jumoke Oduwole, Special Adviser to the President on Ease of Doing Business, briefed State House correspondents after the virtual NEC anchored from the Presidential Villa. Mrs Oduwole said the report would serve as an information resource to businesses and investors alike, citing that businesses would have access to data showing available business climate across Nigeria.
President of the Senate, Ahmad Lawan has called for more trade between African countries to further enhance their economic Independence as a continent. Lawan made the call when the Namibian High Commissioner to Nigeria, Mr Humphry Desmond Geiseb paid him a courtesy visit on Wednesday in Abuja. The Senate President said, “we need to increase our level of trade because this is what will make us more independent. “Once we are able to achieve a reasonable level of economic independence we can take major decisions as a continent when it comes to bilateral and even multilateral issues. “Africa is challenged in so many ways. Our development levels vary of course but what is required of us is to ensure that we trade more between our countries. “The establishment of the African Continental Free Trade Agreement (AfCFTA) is a welcome idea to us in Africa. “It expands the frontiers of trade and infact investment in Africa and it is for African countries to now take the opportunity that will be made available by this Agreement.
Faced with the daunting task of ushering Namibia out of a prevailing recession coupled with significantly reduced revenue as a result of subdued economic activity brought about by a global pandemic, finance minister Iipumbu Shiimi yesterday tabled the 2021/22 national budget with a total proposed expenditure outlay of N$67.9 billion. However, out of this aggregate expenditure, N$8.5 billion, or 16.3% of revenue, is reserved for debt servicing interest payments, meaning the national budget actually amounts to N$59.4 billion of which N$53.9 billion is operational and N$5.6 billion is developmental.
SMEs advised to tap external markets to drive expansion (Business Daily)
Small and medium-sized enterprises (SMEs) have been advised to take advantage of external markets to grow their businesses amid the Covid-19 pandemic. Industrialisation Cabinet secretary Betty Maina said Kenya has negotiated several bilateral and multilateral trade agreements that SMEs should tap into. The latest deal is the newly signed economic partnership agreement between Kenya and UK that will eventually see duty on 82.6 percent of products originating from the UK abolished after 25 years. “Take advantage of the external markets that Kenya has negotiated for you by scaling production, increasing efficiency and diversifying products,” she told a forum for SMEs convened by the Nation Media Group (NMG).
CARICOM, Kenya move to strengthen ties | World News (Jamaica Gleaner)
The Caribbean Community (CARICOM) on Thursday accredited the first ambassador of Kenya to the regional body, marking a further step in their rapidly growing relationship. CARICOM Secretary General Ambassador Irwin LaRocque, in receiving the credentials of Ambassador Anthony Mwaniki Muchiri, said the occasion added a new chapter to the 2019 milestone year when Kenya’s President Uhuru Kenyatta paid visits to Jamaica and Barbados, and Prime Minister of Barbados Mia Mottley paid a reciprocal visit to Kenya.
CARICOM and Kenya are also actively considering a draft memorandum of understanding for the establishment of a Consultation and Cooperation Mechanism between the two sides.
Traders and civil society organisations in Uganda are urging the government of Kenya to allow entry of all goods made in Uganda into their market for as long as they meet all the required standards. In separate interviews with The Independent, traders and sections of civil society organisations, said that just like the ban on maize was fast lifted, restrictions on dairy, poultry products should be eased/lifted to allow free movement of goods in line with the provisions of the East African Common Market Protocol.
The United Kingdom (UK) market remains open for Zimbabwean exports and sourcing of key raw materials under a post-Brexit market access offer, which came into effect early this year. Zimbabwe is a member to various bilateral and multilateral agreements, including SADC, Comesa, the latest African Continental Free Trade Area (AfCFTA) and the UK Economic Partnership Agreement, among others.
Before Brexit, Zimbabwe and UK trade relations were governed by the EU-ESA iEPA, which was signed in August 2009. The iEPA allowed Zimbabwe’s exports to enter the European market, including the UK then, duty free quota free for all goods exported by ESA countries, except sugar and rice, which had limited duration transitional arrangements. “Discussions on a new agreement were then entered into with a view to avoid trade disruption between UK and ESA member states. Parties agreed to trade under similar terms as those prevailing under the iEPA but, however, broadening and widening the agreement,” said the tariffs authority in a public notice yesterday.
The Republic of Zimbabwe becomes the nineteenth (19th) African Union (AU) Member State to sign the Treaty for the establishment of the African Medicines Agency (AMA) on 16 March 2021, at the AU Commission in Addis Ababa, Ethiopia. The AMA treaty was adopted by Heads of States and Government during their 32nd Ordinary Session of the Assembly on 11 February 2019 in Addis Ababa, Ethiopia. Speaking during the official signing of the Treaty, H.E. Amira Elfadil Mohammed, Commissioner for Health, Humanitarian Affairs and Social Development, at the African Union Commission, who received the delegation from Zimbabwe underscored the importance of establishing AMA in order to improve the production and harmonization of pharmaceutical products on the continent.
News from Africa and Africa’s international trade relations
The United Nations Economic Commission for Africa (UNECA) disclosed that 11 African countries have validated the African Continental Free Trade Area (AfCFTA) agreement implementation strategies, according to the United Nations Economic Commission for Africa (UNECA). This was disclosed by Mrs Vera Songwe, UN Under-Secretary-General and Executive Secretary, UNECA, at the 39th session of the Committee of Experts on Wednesday.
African countries continue to trade more with the outside world than among themselves, according to findings of an Economic Commission for Africa (ECA) assessment report on progress made on regional integration in the context of the COVID-19 pandemic.
Stephen Karingi, Director of Regional Integration and Trade Division at the ECA, while presenting the report findings said COVID-19 had severely disrupted the implementation of regional integration initiatives, including the African Continental Free Trade Area (AfCFTA), particularly trade through national border closures. “Implementation of regional integration continues to be hampered by governance, peace and security challenges,” said Mr. Karingi. “Digitalization is key in maintaining trade competitiveness and enabling effective participation in cross border e-commerce.” The report shows that in 2018, Africa accounted for only 2.6% of global trade which is a slight increase from 0.2% from 2017. Intra-African trade increased to 16.1% in 2018 ($159.1bn), up from 15.5% in 2017. Globally, output slightly decreased to 3.6% in 2018 from 3.8% in 2017.
The Economic Commission for Africa (ECA) is making significant progress in supporting African countries to leverage the African Continental Free Trade Area (AfCTA) to drive digital trade on the continent. This was said Thursday by Daya Bragante, Head of the Sub-Regional Initiatives Cluster in the ECA’s East Africa Sub-Regional Office (SRO-EA), at the ongoing 39th ECA Committee of Experts of the Conference of African Ministers of Finance, Planning and Economic Development.
She said with the AfCFTA now operational, there was scope to pursue regional strategies to develop Africa’s digital economy. “ECA has been supporting the African Union Commission in the development of a digital strategy for Africa. The continental digital transformation strategy is designed to harness the benefits of digitalization and support the implementation of digital trade, digital identity and digital economy programmes in support of the AfCFTA.”
The Norwegian Ambassador to Ghana, H.E Gunnar Holm has highlighted the potential of the Africa Continental Free Trade Area (AfCFTA) to boost peace and stability on the African continent.
At the maiden edition of the Kofi Annan International Peacekeeping Training Centre’s stakeholder dialogue series, the ambassador said, “AfCFTA has the potential to drive Africa’s integration in a direction that fits in with the continent’s unique composition of countries, of people, resources and economic development.” “There will be challenges, but I am convinced that this is the way to go for regional peace and stability, for economic and social development and for fully harnessing the potential of the continent.” The theme of the dialogue was “The African Continental Free Trade Area (AfCFTA) and the Private Sector: Towards Effective Development and Sustainable peace,” and was organized to bring together stakeholders in the private sector to discuss how they can work together towards helping maintain peace and security in Africa.
At the Harare Forum on the 16 March, the International Trade Centre (ITC) urged women entrepreneurs in Southern Africa to expand their business opportunities through the African Continental Free Trade Area (AfCFTA). Organized in collaboration with the Organisation of Women in International Trade (OWIT) in Zimbabwe, the high-level trade forum is part of ITC’s One Trade Africa programme – AfCFTA Dialogue Forums. Looking at ‘Trade Beyond COVID-19: Demystifying the AfCFTA for Zimbabwe/Southern Africa Women-led MSMEs’, the event’s discussions promoted ownership of the Agreement among the region’s participants as well as engaged women and youth-owned small firms in seeking out the potential business gains the AfCFTA can offer. Given the current COVID-19 situation, ITC highlighted the rise of existing gender inequalities, affecting women’s access to resources and equitable economic opportunities.
The Economic Commission for Africa will continue to support its Member States in their efforts to improve women’s access to capital, technology and digital financing, says Edlam Abera Yemeru, Chief of the Urbanization Section, of the Gender, Poverty and Social Policy Division at the ECA. In a presentation on the Committee on Social Policy, Poverty Reduction and Gender to the ongoing 39th ECA Committee of Experts of the Conference of African Ministers of Finance, Planning and Economic Development, Ms. Yemeru said women entrepreneurs continued to face greater barriers to accessing financing for their small and medium-sized businesses than their male counterparts. This resulted in them failing to grow, she said, adding her division will continue to work towards the economic empowerment of women on the continent.
Africa is a priority for the WTO. The continent accounts for a substantial number of countries seeking to integrate their economies into the global economy through trade, who now for the first time have the prospect of benefitting from a major all-Africa economic integration project, the African Continental Free Trade Agreement (AfCFTA). The WTO Secretariat stands ready to assist in advancing the accession of Sudan through technical support and policy advice, as well as offering these kinds of support to helping make the AfCFTA a great success. Africa’s voice is now increasingly prominent in the WTO. This is the third day of our new Director General Ngozi Okonjo-Iweala’s visit to her home country, Nigeria. As a person, she was, is and will be a formidable leader. She will, I believe, bring forward momentum to the multilateral trading system. Sudan can play its part in creating this new era for international cooperation through its accession process improving the coverage and implementation of global trade rules.
Vaccines change outlook for African economies (Anadolu Agency)
This year looks positive for African economies, compared to the devastating impact of the COVID-19 pandemic in 2020, an expert said Thursday at the ongoing virtual conference of African Ministers of Finance discussing recovery. “The positive outlook is attributable mainly to the availability of vaccines and improved economic activity in the 4th quarter of 2020, holiday and travel expenditure,” said Hopestone Kayiska Chavula, in charge of the macroeconomic analysis at the United Nations Economic Commission for Africa (ECA).
Chavula said intra-Africa trade is expected to increase with the implementation of the African Continental Free Trade Area. He, however, underlined that the second wave of infections, expansionary fiscal measures, and rising debt levels could pose risks to growth in many African countries. Chavula cited climate change risks, particularly the high risk of extreme weather conditions, among other factors which could also undermine economic growth. He, meanwhile, said accommodative monetary policies have been maintained to cushion the negative effects of the pandemic on economic activity despite inflationary pressure in some countries.
As African countries scramble to acquire and roll out vaccines, the urgent need for reliable energy supply is once again in the spotlight. Health officials say at least two thirds of Africa’s 1.3-billion people will need to be vaccinated against Covid-19 if the continent is to achieve herd immunity. Meeting this target will be difficult, not least because of the lack of reliable power supply. Without urgent measures to address the huge power gap across sub-Saharan Africa the continent will struggle to not only contain Covid-19 and future pandemics, but also maintain sustainable economic growth. Even SA, Africa’s most industrialised economy with an electrification rate close to 90%, is being hammered by increasingly frequent and severe bouts of load-shedding, disrupting the country’s post-Covid economic recovery prospects. Accelerating investment in cost-competitive and employment-creating renewables will be key here.
Figures of the week: Africa’s spatial distribution of road infrastructure (Brookings Institution)
One of the pressing obstacles on Africa’s economic growth is its limited infrastructure. In a recent National Bureau of Economic Research working paper, “Spatial Inefficiencies In Africa’s Trade Network,” Harvard doctoral student Tilman Graff studies the spatial inefficiencies of Africa’s transportation industry and its impact on trade. However, the paper does not focus on Africa’s dearth of infrastructure (Africa has approximately 31 kilometers of paved road per 100 square kilometers of land in comparison to 134 kilometers of paved road in other low-income countries). Instead, the author delves into the extent to which the region’s existing infrastructure is in the right place.
Around the world, people commonly associate certain foods and products with particular geographical areas. These products are known for characteristics like aroma, flavor, and the traditional knowledge systems used to make them. Legal and agricultural scholars speak of these characteristics as terroir.
These kinds of products, which have characteristics unique to their source, can be identified and protected by a type of intellectual property right called Geographical Indications (“GIs”). This right gives economic and financial advantages to the place of origin. The products can be registered with a global treaty registry like the World Intellectual Property Organization. This helps to counter fake products in the international market.
According to a 2020 European Commission study, Europe’s economy gained about 75 billion euros in the 2017 sales value of GI products. This means GI products accounted for 7 percent of the total sales value of Europe’s food and drink sector. The study also shows that the sales value of GI products doubled on average, when compared with similar products without GI certification. People attach value to buying authentic products from their sources. As a predominantly agrarian region, Africa could adopt this strategy to boost the economies of rural communities. The second phase of the African Continental Free Trade Agreement (“AfCTA”) focuses on intellectual property rights and trade. It is an opportunity to take steps towards recognizing the economic value of GIs.
Mideast firms see 50% sales surge from Africa (Khaleej Times)
Businesses in the Middle East expect a 50 per cent surge in sales revenue from Africa while they witness a drop in international sales from North America, a global study on trade flows has revealed. The study, commissioned by DP World and conducted by the EIU at the outbreak of Covid-19 in first quarter of 2020, found that optimism about future growth is widespread and assuming the pandemic does not worsen, and protectionist policies remain restrained, 77 per cent of companies in the region expect international sales to expand despite the disruption to supply chains.
While African countries faced many challenges in 2020, the year 2021 is creating many opportunities for them to significantly improve their governance systems. For one thing, COVID-19 has forced many policymakers and civil society leaders to recognize the importance of technology to political and economic participation.
Such a process augurs very well for inclusiveness and the entrenchment of democracy. So, in 2021, African governments should invest in the necessary infrastructure to significantly improve access to these participation-enhancing technologies.
EAC: It’s diplomatic strategy that can normalise relations (Daily Monitor)
The stresses of the East African economic community have on the whole been more of a warning against fast-tracking political federation. Although Burundi, DR Congo, Kenya, Rwanda, South Sudan, Tanzania and Uganda have been united or affiliated to a common services organisation and the common market for sometime, the formation of a “Federation of East Africa” has throughout the history of the region been made more or less likely by the disguised mini-trade wars fuelled by economic nationalism.
Yet a background of economic cooperation would conceivably have made political federation easier. While working abroad, diplomats hailing from East Africa tended to be more conscious of being East Africans than of being Kenyans, Tanzanians, Ugandans or Rwandans because of the commonalities existing between them. We formed a bloc and shared information and supported each other whenever it became necessary.
Central African States Say COVID-19, Conflicts Halt Integration (Voice of America)
The Central African Economic and Monetary Community (CEMAC) says armed conflict and the coronavirus pandemic have seriously damaged the economies of the six member-countries and put a halt to regional integration. The economic block, one of the least developed on the African continent, marked its 27th anniversary this week in Cameroon.
Although nearly three decades old, the CEMAC trade block is comprised of some of Africa’s least developed countries, which have struggled during the pandemic.
African Development Bank economist Georges Meka Abessolo says it will be difficult for Central African states to reach their goal of becoming emerging economies by 2035.
End of the CFA franc: A possible turning point in Francafrique? (Global Risks Insight)
The CFA franc has long been cited as the representation of France’s economic “grip” on Africa and forms a central pillar of Françafrique – France’s relationship with its former African colonies. However, in an effort to move away from the controversial aspects of the region’s common currency, France and the CFA countries have initiated a number of reforms – with the former also pushing for the adoption of the “Eco” by the West African Economic and Monetary Union (UEMOA). This move would help remove the most visible elements of French influence; however, it is unlikely to assuage the allegations of French neo-colonialism that hamper Paris’ foreign policy objectives.
The global economy is set to grow by 4.7% this year, faster than predicted in September (4.3%), thanks in part to a stronger recovery in the United States, where progress in distributing vaccines and a fresh fiscal stimulus of $1.9 trillion are expected to boost consumer spending, says a new UNCTAD report. But this will still leave the global economy over $10 trillion short of where it could have been by the end of 2021 if it had stayed on the pre-pandemic trend (Figure 1) and with persistent worries about the reality behind the rhetoric of a more resilient future. “A misguided return to austerity after a deep and destructive recession is the main risk to our global outlook,” says the report, Out of the frying pan …Into the fire?, published on 18 March as an update to UNCTAD’s Trade and Development Report 2020.
Biden called upon to support India, South Africa at WTO on Covid vaccines (Business Standard)
A group of lawmakers in the US have urged President Joe Biden to support the move by India and South Africa before the World Trade Organization for emergency temporary waiver of some Trade-Related Aspects of Intellectual Property Rights (TRIPS) rules to enable greater production and supply of COVID-19 vaccines, treatments, and diagnostic tests.
The move comes after India and South Africa, along with several other countries, have urgently gone to the WTO seeking a time-limited waiver of the TRIPS agreement. The previous Trump administration had opposed such a move.
The lawmakers said more than 60 US representatives would collectively write to Biden to announce support for the TRIPS waiver proposed by India and South Africa at the WTO. The temporary TRIPS waiver would allow countries and manufacturers to directly access and share technologies to produce vaccines and therapeutics without causing trade sanctions or international disputes, they said.
eTradeHubs: New deal for women traders, entrepreneurs (The Nation Newspaper)
To expand market access and economic opportunities for Micro, Small and Medium Enterprises (MSMEs) in Africa, especially women-owned businesses, the International Chamber of Commerce (ICC), in partnership with West Blue Consulting, United Parcel Services (UPS) and Trade Law Center (TRALAC), has unveiled a digital trade solutions platform, tagged ‘eTradeHubs portal’.
The eTradeHubs portal, a digital trade solutions platform, among other deliverables, provides a 24/7 interface for women traders and entrepreneurs in Africa (along with their male peers) to connect and access timely and up to date information, skills and operational tools, offered by the various service providers within the supply chain. eTradeHubs portal, which was developed by two indigenous African technology providers – Global Trade Solution (GTS) and West Blue Consulting – was also designed to leverage the benefits arising from the operationalisation of the African Continental Free Trade (AfCFTA) Agreement. So, it was aimed at reducing the time and cost of doing business by supporting enterprises at all levels – from micro to multinational.
The supply chain industry was already confronted with profound disruption before meeting its worst nightmare yet — the global coronavirus pandemic. One area some may have been overlooking in the quest to adjust to the ‘new normal’ is the environment.
Because supply chains consume resources on a large scale, they are responsible for a disproportionately large share of the world’s carbon emissions. Statistics show that CPG companies are responsible for emitting roughly 33 billion tonnes of CO2 into the atmosphere — which is equivalent to 66% of the whole world’s emissions combined. Meanwhile, more than 80% of greenhouse gas emissions and more than 90% of the impact on air, land, water, biodiversity, and geological resources are accounted for by the CPG companies’ supply chains, according to McKinsey.
Collaborative Innovation Required to Grow Back Maritime Industry (The Maritime Executive)
Ensuring future competitiveness of the maritime industry in post-pandemic times will require making it more efficient, predictable, sustainable, and resilient. This implies a change in the recipe for capital creation of involved actors and a change in mindset to overcome industry existing legacy systems and silo-thinking. Enhanced collaboration and innovation are crucial to achieve this.
For WTO reform, most roads lead to China. But do the solutions lead away? (Atlantic Council)
As US President Joe Biden moves quickly in his first one hundred days to address key priorities, one issue is crying out for urgent action: the precarious state of the World Trade Organization (WTO), which is confronting a variety of immediate and long-term crises. While the Biden administration has expressed its strong support for reform of the body and working with other WTO members, so far its specific positions and goals regarding the institution remain vague. The Biden administration has already won kudos for joining a consensus in the WTO’s General Council to select Ngozi Okonjo-Iweala as the WTO’s new director-general. But these kudos were easily earned after the Trump administration vetoed Okonjo-Iweala’s appointment despite her strong credentials and support from other WTO members, spurring an avoidable crisis. And the Biden administration must now address a remaining crisis from the Trump era: putting the WTO’s Appellate Body back in operation by unblocking the appointment of new members, even if this effort will take more time given the justifiable push for some fundamental reforms in the WTO’s dispute-settlement system.
UK recognises Africa’s dynamism and restates commitments to global issues (Engineering News)
In its 2021 integrated review, published on Tuesday, the UK reaffirmed its commitments to multilateralism, international cooperation, free and fair trade, development, countering the effects of climate change, global health, and development. Entitled Global Britain: The Integrated Review of Security, Defence, Development and Foreign Policy, the publication also identified Africa as one of the most dynamic regions of the world. “The creation of the Foreign, Commonwealth and Development Office is the springboard for all our international efforts, integrating diplomacy and development to achieve greater impact and address the links between climate change and extreme poverty,” wrote Prime Minister Boris Johnson in his foreword to the review. “The UK will remain a world leader in international development and we will return to our commitment to spend 0.7% of gross national income on development when the fiscal situation allows.”