tralac Daily News
Exports are key to the success of South Africa’s poultry companies. Key markets are the South African Development Community and its neighboring states. In 2019, total poultry exports amounted to more than 53,600 metric tons (mt), comprising 94% chicken meat, according to Business Insider. Within South Africa are avian flu-free compartments, and the nation will be working hard to reassure potential trade destinations that poultry products from these areas are safe and disease-free. However, as soon as the outbreak in Gauteng was confirmed, Reuters reported that agriculture ministry in Botswana had banned all poultry trade with South Africa. Within days, other countries had made similar moves. Namibia introduced a retrospective ban on South African poultry products from March 19, reports New Era Live, although imports and transit of products from HPAI-free compartments can continue.
South Africa’s logistics will be put to the test again as the country gears up for another bumper agricultural harvest with large export volumes forecast, especially in the horticulture and field crop sub-sectors, according to the Agricultural Business Chamber (Agbiz). The chamber’s chief economist, Wandile Sihlobo, said yesterday: “Apart from the near-term demands, the long-term export-oriented growth in South Africa’s agriculture also requires efficient logistics, which could be achieved through co-operation among all stakeholders so that challenges can be efficiently communicated and attended to. In engagements, Transnet is among some of the most important stakeholders.”
The fresh fruit and vegetables industry accounts for almost a quarter of total farming revenue in South Africa. The coronavirus pandemic has intensified the demand for fresh fruit and vegetables, and the agricultural sector, as a provider of essential goods, was exempt from lockdown restrictions. Growth in the fresh produce sector was underpinned by demand for fresh and healthy products, and by the higher export prices provided by the weak exchange rate. Horticultural exports remain the main contributor to South Africa’s positive agricultural trade balance and fruit has become one of the country’s most lucrative export products. Europe remains the top importing region, accounting for 40% of fruit exports in 2019. In January 2021, the United States government announced the opening of several new ports for the import of citrus products from South Africa.
South Africa is making progress on developing legal and regulatory frameworks for geographical indications (GI), which are designations for products that are linked to a region of origin and that have associated qualities. GI has been proven to enable producers to secure better prices for products and helps to ensure fair value is attained by producers and workers, a European Union (EU) and South Africa workshop on GI held by industry organisation the Agricultural Business Council (Agbiz) on April 20 heard. GI helps to improve the investment potential of regions and helps to ensure fair distribution of value along the supply chain, especially for primary producers, said European Commission agriculture and rural development directorate-general international affairs and trade negotiations director John Clarke.
Namibia recorded its first annual current account surplus since 2007, recording a surplus of N$207 million (N$3.4 billion) in 2020, from a deficit of N$217 million (N$3.1 billion) in 2019, according to the latest data from the Bank of Namibia. This is a result of the slump in goods imports during the year. The goods balance returned a deficit of N$878 million in 2020, compared with a deficit of N$1.3 billion during the previous year. This was mainly thanks to a much lower merchandise import bill of N$4 billion (-11%) as the value of imports in most subcategories fell. Meanwhile, on the other side of the goods trade ledger, the value of exports fell to N$3.1 billion last year compared with N$3.8 billion in 2019. “The expected loss in revenues from SACU transfers, diamond exports, and services would also give rise to further debt financing by the government, which could reduce the country’s creditworthiness and lead to capital outflows,” Louw said.
Kenya’s Poor Need Different Lockdown Restrictions to Survive, Scientists Urge (Inter Press Service)
Blanket containment measures imposed by Kenya’s government to control the coronavirus pandemic have denied poor slum dwellers access to sufficient nutritious food and livelihoods, according to early findings from an ongoing evidence-based study to assess the impact of COVID-19 on dietary patterns among households in Nairobi’s informal settlements. The study noted that urban slum and non-slum households are impacted differently by the COVID-19 pandemic, and therefore differentiated policies and solutions are needed to address food security, nutrition and the livelihoods of these two consumer groups.
The Kenya National Highway Authority (KeNHA) and China Communications Construction Company (CCCC) have signed a $166m deal to construct a 453km road in the Lamu Port South Sudan-Ethiopia Transport Corridor (LAPSSET). Peter Mundinia, director general of KeNHA, said in a statement that the work would involve a 257km stretch between the shortly-to-be-operational Lamu Port and the town of Garissa (see map), as well as a 113km section between Hindi and Kiunga and an 83km link between Ijara and Hulugho, which are both close to Lamu.
Kenya: Sugar belt road construction to start next month (Business Daily)
The Kenya National Highway Authority (KeNHA) has pushed back the starting date of the 63-kilometre sugar belt road construction, citing approvals delay. KeNHA Director–General Peter Mundinia was optimistic that the permits would be secured within the next week paving the way for works to start on the project that traverses Kisumu, Nandi and Kericho counties. Initially, the project was set to start last October. “We are in the process of getting all the required approvals which is the reason why works on the project is yet to start,” said Mr Mundinia.
US links loss of Kenya State tenders to graft (Business Daily)
The US has decried graft in government tenders in Kenya, saying it locked out qualified American firms from undertaking projects in the country. The US Trade Representative’s office (USTR) claimed that some rogue public officials in Kenya manipulated tender bids to suit their interests and those of their cronies. “US firms have had limited success bidding on government tenders in Kenya. There are widespread reports that corruption often influences the outcome of public tenders, and many of these tenders are challenged in the courts,” it said.
After years of supporting peace, Kenya seeks more market pie in DRC (The East African)
Kenya’s President Uhuru Kenyatta on Tuesday made his first ever State visit to the Democratic Republic of Congo, seeking to strengthen business ties with Sub-Saharan Africa’s largest country by land size. The President’s visit comes as Kenya faces competition for the DRC market, which relies heavily on the ports of Mombasa and Dar es Salaam for imports. Ahead of the trip, Kenyan officials said they were mulling granting various trading privileges to DRC, to entice more of its traders to use the port of Mombasa for importation of goods.
Uganda nets 43pc of Kenya’s sugar imports in deal (Business Daily)
Ugandan sugar will now account for 43 per cent of the total imports by Kenya from the Common Market for Eastern and Southern Africa (Comesa) after Nairobi and Kampala ironed out their trade dispute. Kenya’s Trade Cabinet Secretary Betty Maina and her Ugandan counterpart agreed that the neighbouring State will be allowed to export 90,000 tonnes of the sweetener to Kenya as soon as the verification mission on country of origin is completed. “Regarding Kenya’s restriction of Uganda’s sugar exports, Uganda shall export 90,000 tonnes of wholly originating sugar per annum. The findings of the ongoing sugar sector verification mission shall inform implementation of this decision,” the two governments said in a joint communiqué.
Chairperson of the Southern African Development Community (SADC) and Mozambican President Filipe Nyusi has to make consistent efforts toward addressing the systemic governance deficit, deepening political discontent, and widening socio-economic disparity as the surest possible way to maintain long-term peaceful environment in Mozambique. According to latest report on the Regional Economic Outlook: Sub-Saharan Africa, released April 15 by the International Monetary Fund (IMF) in Washington, Mozambique needs to address, as swiftly as possible, all kinds of internal conflicts, warning further that the conflicts have serious negative influences on the evolution of the country’s economy.
Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), says Nigerian companies will get access to markets worth $666 billion once the African Continental Free Trade Area (AfCFTA) agreement is implemented. Speaking at the 2021 export seminar organised by Zenith Bank on Tuesday, Emefiele said the AfCFTA aligns with the apex bank’s commitment towards enabling economic growth and creating employment opportunities for Nigeria’s population. “Full implementation of the AfCFTA, is expected to give Nigerian firms preferential access to markets in Africa worth $504.17 billion in goods and $162 billion in services. I believe that we should seize this opportunity to ensure that Nigeria serve as a significant hub for international and domestic manufacturing companies seeking to serve the West, Central and East African Markets.
Nigeria needs to improve its business environment to harness gains from AfCFTA – CBN Gov (Global Financial Digest)
The Central Bank of Nigeria (CBN) on Tuesday said improving the business environment in Nigeria is vital if “we are to harness the gains from the African Continental Free Trade Agreement (AfCFTA).”According to the Governor of the CBN, Godwin Emefiele, the CBN through its Trade Monitoring System portal (TRMS) is also helping to reduce the time it takes to complete export documentation process. “Supporting greater trade within Africa would also require the presence of a viable payment settlement system. In this regard, the CBN is working with key stakeholders in the African continent, particularly the Afrexim Bank to improve the underlying payment infrastructure to support greater intra-regional trade, through the Pan African Payments and Settlement System (PAPSS).”
Speaking at a news conference at Banjul on Monday, Minister Seedy Keita said: “My Ministry is aware that increases in food prices can have a major impact on the living standards of lower-income households, which generally spend most of their income on food.” “The Gambia is a net importer of food like many other developing countries are now feeling the impact of the pandemic in the domestic market in a form of price hikes,” he said. The Trade Minister said his ministry has put mechanisms in place to lessen the pressure on consumers justifying that it has worked with Gambia Port Authority (GPA) officials facilitating quick offloading of vessels carrying essential goods.
Trade Minister urges closer ties between Ghana, Swiss investor (Ghanaian Times)
The Minister of Trade and Industry, Alan Kyerematen has called for improved partnership between Ghana and Swiss investors in developing Ghana’s pharmaceutical and machinery manufacturing industries. “With the expertise of Switzerland in this sector, Ghana stands a chance to learn a lot from Switzerland and the manufacturing of industrial machinery and equipment will reinforce our capacity to pursue industrialisation,” he added. He was speaking in Accra on Friday when the Switzerland Ambassador to Ghana, Philipp Stalder, paid him a courtesy call.
Ghana’s Minister of Trade and Industry, Alan Kyerematen, has proposed to Canada’s Ambassador to Ghana for the establishment of a Ghana-Canada Business Council. According to the minister, the council when actualized will act as a platform to facilitate trade and investments and commercial relation challenges between the two countries. Making the proposal during a courtesy call on the minister by the Canadian Ambassador, Ms. Kati Csaba, Alan Kyerematen proffered that the council would offer prospects of a vital engagement in the business space and private sector development.
African regional and continental trade
Report: Africa Recorded $5bn Capital Flight in Q1 2020 (THISDAY Newspapers)
The African Trade Finance Report (ATFR) has revealed that Africa suffered more than $5 billion capital flight in the first quarter of 2020, due to the impact of COVID-19 pandemic disease. A statement from Afreximbank on Monday, stated that the ATFR, was commissioned by the African Export-Import Bank (Afreximbank), in collaboration with the United Nations Economic Commission for Africa (ECA), the African Development Bank and the Making Finance Work for Africa Partnership, to provide a better understanding of the trade finance landscape across Africa and how it has evolved during the COVID-19 pandemic.
Oramah said: “The tightening of global financial conditions triggered massive capital outflows from Africa, exceeding $5 billion in the first quarter of 2020. “These massive capital outflows strained African banks, many of which recorded sharp drops in their net foreign assets. This further exacerbated liquidity constraints and undermined the capacity of banks to finance African trade.” It noted that the tightening of financing conditions heightened balance of payment pressures and liquidity constraints, which affected the supply of trade finance between January and April 2020, the period covered by the survey.
SACU preps for AfCFTA rollout (The Southern Times)
The Southern African Customs Union (SACU) is laying the foundation for implementation of the African Continental Free Trade Area (AfCFTA) with consultations on conformity measures underway. SACU Executive Secretary Ms Paulina Elago said the AfCFTA was a game-changer for the continent’s development as envisioned by the African Union’s Agenda 2063 roadmap. In a webinar organised in partnership with the Trade Law Centre, Ms Elago said: “For SACU, the importance attached to the AfCFTA cannot be over emphasised. The AfCFTA will enable the SACU region and the Continent at large to deepen integration, a move that is in line with SACU’s own objectives. For this reason, SACU has placed the implementation of the AfCFTA among its top priorities.” Ms Elago said SACU had tabled an initial tariff offer comprising around 5,988 tariff lines, representing 77 percent of the bloc’s tariff book.
Data shows the region has borne the brunt of cross-border illicit trade – including counterfeits, smuggling and bootlegging, with Tanzania, Kenya and Uganda reportedly losing a combined $3.2 billion in annual revenues to illicit trade. Regional countries have in recent years intensified war on the malpractices by adopting new technological systems including digital stamps. The recent adoption of digital tax stamps (DTS) on cement and sugar earlier this month by Uganda Revenue Authority (URA) was a big step towards winning the battle. It became the fourth country among the East African Community (EAC) member states to adopt digital stamps in deliberate efforts to fill revenue leakage loopholes. Digital stamps enable the government to use modern technology to obtain production data on a timely basis from manufacturers.
In the face of growing global concerns regarding resource use and economic sustainability, the concept of a circular economy has emerged as an alternative production and consumption model. The circular economy promotes the conservation of finite resources while preserving the environment. It also presents opportunities for economic development, job creation and building new enterprises. For African countries, circular solutions can be leveraged to attain various climate action obligations and sustainable development goals. This is an opportunity to tackle issues such as poverty, poor infrastructure and unemployment, among others that have hindered economic development.
Women in East Africa can look back over recent history with a sense of struggle and accomplishment, of regression and progression. Women’s activism was ingrained in many of the independence movements that took hold across the region throughout the 20th century. In many respects, East Africa has achieved greater gender parity than many other parts of the world. But increased representation has not always translated to real changes for ordinary women, especially in the world of business, a historic central pillar of the global drive for equality.
South African venture capitalist Vusi Thembekwayo highlights the opportunities on offer to investors across Africa – and tackles the tough questions the continent needs to answer before it can fulfil its true potential.
Do you think Africa could become more competitive and fulfil some of the roles for the rest of the world that China has been fulfilling because of these changes? I think we’ll increasingly see more African countries move away from primary industries as a major source of GDP towards secondary and tertiary industries and beneficiating some of those goods and services.
Global economy news
The COVID-19 pandemic has brought social and economic disruption worldwide, but is also providing governments with the opportunity to put economies on a more sustainable and inclusive growth path while addressing the underlying challenges, according to the OECD’s Going for Growth policy report. Going for Growth 2021: Shaping a Vibrant Recovery analyses pre-existing weaknesses as well as those brought on by the pandemic, and offers policy makers country-specific advice to seize the opportunity for a fundamental reset.
Coronavirus vaccine scams pose a growing threat to global health, economy (South China Morning Post)
The World Health Organization and Interpol recently raised concerns about a spike in fake coronavirus vaccines. The news came at a time when vaccine shortages are slowing the progress of immunisation campaigns in many countries. The alarm call highlights the growing threat of illegal trade and counterfeit goods. If left unchecked, it risks allowing the illegal industry to grow at a time when we face an unprecedented health and economic crisis.
Kenyan officials accused the United Kingdom of “vaccine apartheid” this month after London added the East African country to its “red list” – the 39 countries where the U.K. bars entry to anyone who’s been within their borders in the previous 10 days. British officials say the ban is necessary to prevent the introduction of COVID-19 variants. But the broader restriction on who is allowed to travel regionally and internationally, specifically, may ultimately “compound the economic harm of the COVID-19 pandemic in low- and middle-income countries and keep students, scientists, and many others from participating in the globalized world, potentially for years to come,” Kavanagh said.
When the Covid-19 pandemic forced families across the world to stay home, half of them didn’t even have internet access. According to UNESCO, just 55 per cent of global households had access to the internet before the pandemic. Around 3.7 billion people remain unconnected. According to an analysis published by the United Nations Conference on Trade and Development (UNCTAD): “The least developed countries are the most vulnerable to the human and economic consequences of the pandemic, and they also lag farthest behind in digital readiness. Only one in five people in LDCs use the internet, and in most developing countries, well below 5 per cent of the population currently buy goods or services online.”
Many countries are experiencing a combination of high public debt and low interest rates. This was already the case in advanced economies even prior to the pandemic but has become even starker in its aftermath. A growing number of emerging market and developing economies are likewise enjoying a period of negative real rates – the interest rate minus inflation – on government debt. The IMF has called on countries to spend as much as they can to protect the vulnerable and limit long-lasting damage to economies, stressing the need for spending to be well targeted. This is especially critical in emerging market and developing economies, which face tighter constraints and associated fiscal risks, where greater prioritization of spending is of the essence.
Commodity prices continued their recovery in the first quarter of 2021 and are expected to remain close to current levels throughout the year, lifted by the global economic rebound and improved growth prospects, according to the World Bank’s semi-annual Commodity Markets Outlook. However, the outlook is heavily dependent on progress in containing the COVID-19 pandemic as well as policy support measures in advanced economies and production decisions in major commodity producers.
Services has become an increasingly important part of global trade, amounting to about half of world trade in value-added terms. Services trade policies are key determinants of overall economic productivity and trade performance. The addition of services is a complement to the existing information on measures related to trade in goods contained in the Trade Monitoring Database, which was revamped in 2019 to facilitate access to information on trade measures taken by WTO members and observers. Measures relating to intellectual property were also added to the Monitoring Database in 2021.
The United Nations Development Programme (UNDP) and the UN Secretary-General’s Global Investors for Sustainable Development (GISD) Alliance today launched the ‘SDG Investor Platform,’ an innovative tool to facilitate private sector investments that contribute to furthering the Sustainable Development Goals (SDG). Building on the SDG Investor Maps – created by UNDP’s SDG Finance initiative SDG Impact – and leveraging on UNDP’s presence in more than 170 countries and territories, the SDG Investor Platform – established in partnership with the GISD Alliance – provides private sector investors with access to country level market intelligence, including on-the-ground insights on the local investment landscape and investor connections.
WJP Rule of Law Index 2020 (World Justice Project)
More countries declined than improved in overall rule of law performance for a third year in a row, continuing a negative slide toward weakening and stagnating rule of law around the world. The majority of countries showing deteriorating rule of law in the 2020 Index also declined in the previous year, demonstrating a persistent downward trend. Countries with the strongest improvement in rule of law were Ethiopia (5.6% increase in score, driven primarily by gains in Constraints on Government Powers and Fundamental Rights). The most downward movement in the rule of law was seen in Cameroon (-4.4%, driven primarily by falling scores in Order and Security and Fundamental Rights).