Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News
Photo credit: Chris Kirchhoff | MediaClub South Africa

Country focus

Minister Patel calls for partnerships at BRICS South African Manufacturing Conference (the dtic)

South Africa must rebuild its manufacturing strength to be able to fully benefit from the opportunities in the BRICS markets. This needs to be done through deeper partnerships and careful use of both demand and supply-side measures.

This was said today at the BRICS Business Council meeting by Minister of Trade, Industry and Competition, Ebrahim Patel. “Over a number of years, manufacturing was seen as a sunset industry, a relic of an age that was passing, and policy-makers were urged to abandon efforts to support the industry and seek opportunity in other sectors of the economy. In the case of South Africa, the country rapidly opened its trade-exposed sectors to what was described as the bracing effects of global competition, but without supporting local firms to become stronger and more dynamic. The results were painful to see – we lost critical manufacturing capacity,” Minister Patel said.

South Africa must scale up infrastructure spending, emphasises BLSA’s Mavuso (Engineering News)

A report released by business organisation Business Leadership South Africa (BLSA) last week indicates that the country is failing to get infrastructure investment to play a critical role in driving the economy, CEO Busi Mavuso says in her weekly newsletter. “The facts on the ground are sobering: for the past five years infrastructure investment has been shrinking, driven primarily by a decline in investment by the public sector.

Kenya: Plans To Promote Trade In Africa (Kenya News Agency)

Trade Principal Secretary Amb. Johnson Weru has told international business partners to offer technical knowledge to local manufacturers in order to promote Kenyan export business. Speaking during the closing ceremony of Kenya Africa free Trade Area (AfCFTA) in Mombasa Friday, Weru noted that the recently signed partnership should make Kenyans reap big in terms of businesses and employment. “We want to see the benefits of this partnership in our local markets. Don’t give us money for workshops but money to acquire technology on how we can boost local manufacturing and exports,” he said.

Local airlines banned from take off again as Covid third wave hits (Business Daily)

The Kenya Civil Aviation Authority (KCAA) has directed the local airlines, with hubs in Nairobi, to ground flights from Monday noon after President Uhuru Kenyatta restricted movement in and out of the capital and four other counties, until further notice, to tame the spread of infections following a spike in cases.

One-stop border post to boost trade between Malawi and Zambia (Malawi Nyasa Times)

Malawi High Commissioner to Zambia Warren Gunda says the newly-constructed one-stop border-post at Mchinji/Mwami border will boost trade between the two countries.

“The project, although long overdue, will ease business transactions between the two neighbouring countries,” said Gunda. He cautioned the institutions manning the one-stop border-post to serve people crossing into either country professionally. Malawi Revenue Authority station manager Lucy Chikhawo said: “The one-stop border-post is unlike the current set-up where traders and travellers from Malawi and Zambia have to do repetitive paper work and engage with agencies such as Immigration from both countries separately.

Botswana: State of economic crunch to be revealed (Mmegi Online)

Statistics Botswana will release the fourth quarter GDP figures next week, which will in turn show the full year economic performance. Ahead of the official figures, forecasts by different authorities indicate the economy will be shown to have contracted by between 7.7 percent and 8.9 percent in 2020. Should the March 31 figures indicate an 8.9 percent fall, the economy will have recorded its worst contraction in history on an annual basis, higher than the -7.7 percent seen in 2009 during the global recession. The African Development Bank (AfDB) in a recent report, said the local economy’s performance in 2020 was expected to be severely impacted by COVID-19 lockdowns and movement restrictions.

“On the supply side, mining output declined significantly, mainly due to falling global demand for diamonds,” AfDB researchers said in the African Economic Outlook released recently. “The mining sector is now showing signs of recovery after the devastating 2020 COVID-19 pandemic affected both production and sales of minerals,” he told Parliament last week.

Ghana, Rwanda explore trade and investment opportunities to boost economies (Modern Ghana)

Ghana and Rwanda are considering trade and investment partnership opportunities to boost the economies of the two countries. This came to light at a virtual summit held to promote the exchange of goods and services between the two countries The targeted areas include Agriculture, Manufacturing and Industrial Services. The virtual summit was organized under the auspices of the Rwanda Development Board (RDB) and the Ghana Export Promotion Authority (GEPA).

The Deputy Chief Executive Officer of GEPA, Samuel Dentu said the business and investment summit would create the necessary interactions and deepen ties between the two countries. “Trade between Rwanda and Ghana is very low. It is imperative for our two countries to intensify our trade relations. Today is an engagement we hope will bring meaningful collaboration between Rwanda and Ghana,” he said.

Zambia’s e-commerce firms stay the course amid pandemic | UNCTAD

Zambia’s coronavirus lockdown shut down some more traditional businesses, but for e-commerce firms this was their chance to scale up operations. AfriDelivery, a food delivery service with big dreams of becoming a business-to-business (B2B) e-commerce platform, recorded 100% growth in annual terms in 2020. Afshon Wallace, the company’s founder and CEO, said it grew on two fronts – in business partners and customers – during the pandemic. “We managed to keep delivering, from shops, restaurants, supermarkets and pharmacies while also finding more businesses to partner with. It’s been a powerful period for us, even though the growth was related to the pandemic,” Mr. Wallace said.

Despite the opportunities, the pandemic also brought many challenges and unforeseen costs for e-commerce firms. Operational costs also increased due to measures taken to protect staff.

‘How Nigeria Can Key Into $3.4tn Projected Opportunities in AfCFTA’ (THISDAY)

The National Association of Nigeria Travel Agencies (NANTA) said it has unveiled plans to enable Nigeria benefit from the projected $3.4 trillion Gross Domestic Product (GDP)-rated Africa Continental Free Trade Area (AfCFTA) Initiative. NANTA said the country could benefit from the anticipated $3.4 trillion through the collaboration of the Nigerian aviation industry with four major African carriers: Kenya Airways, Egypt Air, Ethiopian Airlines and Rwanda Air. NANTA also said that an organised trade and tourism marketing among African nations facilitated by well-thought out aviation connectivity, African Union passport and synchronised visa regime, among nations under the AFCFTA deal, could change the economic narratives of the estimated 1.3 million population of African nations.

NANTA President, Mrs. Susan Akporiaye, told journalists in Lagos, that the trade pact had the potential of lifting out the vulnerable poor, particularly African women, who she said were about 70 per cent the informal sectors in Africa out of poverty.

Nigerian MSMEs Move to Improve Contribution to GDP (THISDAYLIVE)

Micro, Small and Medium Enterprises (MSMEs) in the country have moved for greater stake in the economy in a bid to improve their contribution to the country’s Gross Domestic Product (GDP). Speaking at the first strategic planning meeting of the Forum of Micro, Small and Medium Enterprises Business Membership Organisations (FOMSBON) in Abuja at the weekend, its Chairman, Board of Trustees (BoT), Dr. Albert Akinyemi observed that globally, MSMEs are regarded as the engine of economic growth. He, however, regretted that in Nigeria, the reverse was the case as the sub-sector is renowned only for its marginal contribution to the national economy, expressing the need to change the ugly trend.

“The organisation is aimed at institutionalising the MSMEs’ sub-sector in Nigeria as it has been done in in the developed economies of the world, where MSMEs as a discipline is being taught in the Universities, has a say in the parliament with a database for projection and planning with high priority for adequate research.”

Algeria: Plans to reopen land border crossings for entering foreign markets (APS)

The minister of Trade, Kamel Rezig, said Thursday in Algiers that his department is working in collaboration with other departments for the reopening of Algerian land border crossings for exporters, as part of the increase of non-hydrocarbon revenues. In 2020, revenues from barter trade with Mali and Niger were estimated at DZD70 billion, he said.

Ethiopia: Institute gearing up for rice import substitution scheme | Ethiopian Press Agency

The Ethiopian Institute of Agricultural Research (EIAR) accentuated that Ethiopia has to employ agricultural technology and mechanized farming to save 300 million USD spent each year for rice importation. Having a stay with the Ethiopian Press Agency (EPA), EIAR Researcher and National Rice Production Program Coordinator, Mulugeta Atnaf (PhD) said that the country has planned to substitute rice importation through increasing productivity and utilizing its abundant natural resources via employing various agricultural technologies and farming irrigation. He further said that the government is endeavoring to scale up productivity so as to substitute importing rice by beefing up the local product which is covering only 20 percent of the national demand at present.

Egypt attractive export market for SA sparkling wine under new free trade agreement | Citypress

The 3 000% import tariff on South African sparkling wine going to Egypt could disappear completely in five years under the new African Continental Free Trade Area (AfCFTA) agreement. Catherine Grant Makokera, director of the Tutwa Consulting Group and a trade policy expert, says this tariff reduction offers excellent opportunities for South African sparkling wine producers who want to export to the rest of Africa.

News from Africa and Africa’s international trade relations

AfCFTA: Free trade bloc can be a game changer for African people and business (AfDB)

Exploring strategies to deepen private sector participation in the implementation African Continental Free Trade Area (AfCFTA) was the highlight of a panel session during the 2021 WTO Aid-for-Trade Stocktaking meeting. The African Development Bank, the United Nations Industrial Development Organization (UNIDO) and International Trade Centre (ITC) organized the session held on Wednesday 24 March. “The success of the AfCFTA hinges on the ability of African firms to understand and capitalize on the trade related opportunities offered by the AfCFTA,” said Pamela Coke-Hamilton, International Trade Centre (ITC) Executive Director. The Aid-for-Trade initiative – which promotes the role of trade in development and supports building productive capacities– should focus on three priorities to boost the private sector’s role in AfCFTA: empowering businesses with skills and know-how; fostering multi-stakeholder partnerships to attract investment for greater value addition and enhancing market connections using e-commerce and digital platforms, Coke-Hamilton said.

African Continental Free Trade Area’s effect on oil & gas sector africa (ESI Africa)

Since the World Trade Organisation creation, the African Continental Free Trade Area is the largest free trade area globally, with 54 out of 55 nations of the African Union, many of which have already ratified the agreement. Estimations forecast that this free trade area will positively impact Africa’s Gross Domestic Product (GDP), resulting in welfare gains for citizens, facilitating trade growth and improving Africa’s trade deficit. While Africa has substantial natural resources, it has not received significant benefits from the extraction and export of such resources, particularly in oil and gas. Will AfCFTA have an impact on oil and gas industry exports? Oil and gas and mineral resources account for more than 75% of Africa’s exports and the continent’s potential for growth in oil and gas is significant. Estimations at the end of 2017 indicated that Africa has 487.7 tcf of proven gas reserves (7.1% of proven global reserves), while Africa’s proven oil reserves are in the region of 125 billion bbl.

African youth urged to tap into agriculture potential (The New Times)

Africa has the ability to produce enough food to feed its population and beyond, and develop agribusiness that would offer decent employment to youth. This observation was made by different pan-Africanists, calling for the development of the entire agriculture value chain. They were speaking on Saturday, March 27 during Pan-African Movement (PAM) Youth Commission’s Fourth Africa Expects Youth Series webinar that was held under the theme “Youth as Key Drivers to Sustainable Food Security.” They said that there is a need to make sound investment to develop agro-processing so as to add value to farm produce and effectively linking primary producers to industries.

Investing in social protection critical for Africa to build back better after COVID-19 (Africa Renewal)

African countries are experiencing an unprecedented economic downturn with a dramatic effect on the implementation of the Sustainable Development Goals. The continent has headed towards its first economic recession in 25 years, with a contraction of 1.6 per cent in the gross domestic product growth in 2020. In sub‑Saharan Africa, growth was projected to contract by 3.3 per cent in 2020, halting a decade of economic progress. 

Lockdown measures and the economic recession have increased unemployment, poverty, food insecurity and inequality.  Although some of the measures taken by African governments were temporary, they have shown the strength of resilience that social protection can help to support. Going forward, African countries should build on these temporary measures and strengthen social protection for the long-term. 

Report: How Biden can ‘go big’ on Power Africa (Devex)

Power Africa was launched during former U.S. President Barack Obama’s administration with the aim of increasing access to electricity across the African continent through projects creating new connections and increasing generation capacity. The interagency initiative has continued to operate since – though some experts and former officials say it’s time for a bit of a reboot.

A new paper released this week outlines steps President Joe Biden’s administration can take to improve the initiative based at the U.S. Agency for International Development. They range from the relatively straightforward – for example, boosting the budget to $300 million annually and reappointing a National Security Council lead to co-chair the Power Africa working group – to the more complex, such as setting new goals around power reliability and costs.

Global economy

US considering supporting India, South Africa at WTO on TRIPS waiver: Report (Mint)

The White House is considering supporting a move by India and South Africa before the World Trade Organization on emergency temporary waiver of some Trade-Related Aspects of Intellectual Property Rights (TRIPS) rules so that greater supplies of Covid-19 vaccines, treatment, and diagnostic tests can be produced globally, a media report has said. Such a positive consideration by the Joe Biden administration comes after more than 60 lawmakers, mostly progressives, and a large number of rights and non-profit pharma bodies have approached the White House to support the move of India and South Africa along with hundreds of other nations that have urgently gone to the WTO seeking a time-limited waiver of the TRIPS agreement.

Trade tiffs, Covid jab export bans leave Africa vulnerable (Daily Monitor)

From fresh export bans to a fight over how best to use the global intellectual property (IP) system to tackle the Covid-19 pandemic, poor nations especially in Africa sit vulnerable especially at time when a third deadly wave of infections sweeps across the world. As the EU tighten Covid-19 vaccine export rules on the account of rising third wave of infections, several developed nations including the US, UK, Switzerland, Canada and their allies continue to block a proposal by developing countries to temporarily suspend the World Trade Organisation (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement to enable greatly increased, affordable supplies of Covid-19 vaccines, drugs, tests and equipment. The proposal by Indian and South Africa had suggested a waiver for all WTO members on the implementation, application and enforcement of certain provisions of the TRIPS Agreement in relation to the “prevention, containment or treatment” of Covid-19.

Guterres urges ‘decisive action’ to stave off debt crisis in developing world (Mirage News)

More than a year into the pandemic, the fiscal impacts of the crisis are triggering debt distress in a growing number of countries and is severely limiting the ability of many countries to invest in recovery and the Sustainable Development Goals (SDGs), including urgently needed climate action, Secretary-General António Guterres said. According to the policy brief, 42 economies borrowing from capital markets have experienced sovereign downgrades since the start of the pandemic, including 6 developed countries, 27 emerging market economies, and 9 least developed countries.

“Unless we take decisive action on debt and liquidity challenges, we risk another ‘lost decade’ for many developing countries, putting the achievement of the SDGs by the 2030 deadline definitively out of reach”, Mr. Guterres urged. The policy brief, entitled Liquidity and Debt Solutions to Invest in the SDGs, takes stock of the global policy response since April last year, assess remaining gaps and challenges for their implementation, as well as propose updates to the recommendations, presented last year, in light of developments over the past 12 months. The policy brief highlighted the need for debt relief to create space for investments in recovery and for achieving the SDGs.

Suez Canal ship partially refloated after huge effort to unblock trade route (NBC News)

The giant container ship that has blocked traffic in the Suez Canal for the last week, bringing a key global trade route to a standstill and capturing the world’s attention, was partially refloated early Monday. It was unclear when the vessel would be fully set free but the progress raised hopes the crucial waterway could soon be reopened after days of intense global salvage efforts.

Explained: What has caused a ‘traffic jam’ in the Suez Canal, hitting global trade? (The Indian Express)

The Suez Canal, a critical shipping artery that connects the Mediterranean and Red Seas through Egypt, has been blocked after a large cargo ship ran aground while passing through it on Tuesday, bringing traffic on the busy trade route to a halt. Egypt, which heavily depends on revenues from the canal, is now diverting ships to an older channel to minimise disruption to global trade. The blockage has already led to a long queue of vessels waiting to cross the canal.

A human-made waterway, the Suez Canal is one of the world’s most heavily used shipping lanes, carrying over 12% of world trade by volume. Built in 1869, it provides a major shortcut for ships moving between Europe and Asia, who before its construction had to sail around Africa to complete the same journey.

OECD reports to G7 on need to strengthen economic resilience against crises - OECD

Creating an emergency Rapid Response Forum to ensure global supplies of essential goods continue to flow during major international crises is one of a broad range of recommendations contained in a new OECD report to the G7 on building economic resilience. Fostering Economic Resilience in a World of Open and Integrated Markets says the devastating impacts of the Global Financial Crisis and now the COVID-19 pandemic will continue to leave lasting scars on our economies and societies. With the risk of other systemic threats on the horizon – starting with climate change but also spanning security threats, including cyber attacks – it is critical to learn the lessons of these and previous crises in order to tackle the vulnerabilities of our economic system, absorb shocks and engineer a swift rebound.

Ensuring the resilience of global supply chains of essential goods is crucial, the report says. An emergency Rapid Response Forum would provide G7 and other governments with a means of upstream policy co-ordination and, particularly, consultation ahead of the imposition of any trade restrictions. Such an initiative could also prepare timely co-operation on logistics, transportation, procurement, planning and communication.

OECD’s updated guidance on tax treaties and the impact of Covid-19 (The New Times)

The Covid-19 pandemic has impacted every part of our lives – tax treaties have not been immune to this impact. Earlier this year, the OECD issued updated guidance on the impact of the Covid-19 pandemic on tax treaties. This guidance is intended to provide further certainty to taxpayers as it reiterates most of its original guidance issued in April 2020, a few months after the pandemic broke out. A number of countries have also issued their own guidance to provide certainty to taxpayers who could be impacted by their own tax treaties or domestic tax legislation – most countries have followed the OECD guidance.

5G to contribute $700bn to global economy by 2030 (ITWeb)

The rollout of 5G is forecast to contribute $700 billion to the global economy by 2030, with a compound annual growth rate of 20%. This is according to the 5G Technology, Market and Forecasts 2019-2029 report, compiled by research firm IDTechEx, which examines 5G infrastructure and its impact on end-user industries. “The global rollout of 5G is a revolutionary rise that represents one of the largest emerging markets in the coming 10 years. Over the next 10 years, global telecom operators will invest $1.2 trillion to $1.5 trillion in 5G network rollouts, most of which will be for sub-6GHz 5G,” notes the report.

Tapping the Full Value of Data Will Save Lives and Accelerate Development – but not without Trust and Equity (World Bank)

As the world battles COVID-19, data’s value and potential impact, the opportunities it presents, and the challenges it faces, have become all the more evident. Data collected through mobile phones, such as call detail records (CDR) and GPS location data, help measure the effectiveness of policies to contain the coronavirus, making it possible to better target interventions and policy responses. But at the same time, countries are struggling to balance the benefits against the risk of misuse, underscoring the importance of a regulatory environment that builds trust in data systems.

To achieve the full benefits of data while addressing the risks, the report calls for a social contract that puts people at the center – one that protects people from harm, ensures equal access and representation, and creates value. To this end, the report emphasizes the need to build trust with robust infrastructure, policy, rules, and regulations around data, while prioritizing improved representation in, and access to, data for marginalized people.


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