tralac Daily News
National trade and trade-related news
Avian flu: Poultry industry hustling to save exports (Food For Mzansi)
South Africa’s poultry industry is currently working hard to safeguard trade relations with five neighbouring countries following breakouts of avian influenza that caused trade partners to restrict their imports of chicken products from Mzansi. More countries have followed Botswana’s move to ban poultry products from Highly Pathogenic Avian Influenza (HPAI) affected areas, after commercial chicken farms in Ekurhuleni in Gauteng and Potchefstroom in the North West reported outbreaks.
Now Lesotho and Namibia have also joined the list of countries to ban poultry products from South Africa and Mozambique and Eswatini are said to be considering similar bans. Colin Steenhuisen, interim egg board general manager at the South Africa Poultry Association (SAPA). “We are doing all we can to keep our trading partners properly informed,” Steenhuisen says.
Government, auto sector look to accelerate new-energy vehicle production in SA (Moneyweb)
The government and automotive original equipment manufacturers (OEMs) are working towards accelerating the development of manufacturing capabilities for new energy vehicles in South Africa. Naamsa, now known as the Automotive Business Council, has confirmed that it is in discussions with the Department of Trade, Industry and Competition (dtic) on this issue and is keen on an early review of the South African Automotive Masterplan to incorporate the latest global developments with new energy vehicles.
The masterplan will be implemented from July 1 but global trends in the automotive industry have been accelerated by Covid-19, including several countries bringing forward the date from which internal combustion engine vehicles will be banned, resulting in global OEMs deciding to speed up the implementation of their electromobility strategies.
Importers face Sh13,000 cargo breach penalty (Business Daily)
Importers face a surcharge of up to Sh13,020 for every cargo container inspected and confirmed to be in breach of tax regulations by the Kenya Revenue Authority (KRA), the Mombasa port manager said. A schedule the Kenya Ports Authority (KPA) released on Monday showed that importers would pay Sh8,680 ($80) for a 20-foot container verified to be non-compliant with tax rules while 40-foot containers would each attract a fee of Sh13,020. “In addition to this, a penalty fee on misdeclaration as per the prevailing tariff shall be imposed” Kenya Ports Authority acting managing director, Rashid Salim said. Containers that are subjected to verification and found to be compliant and with no penalty imposed on them by the taxman shall however be exempted from the charges that took effect on Sunday.
CSOs to government: Focus on food security, healthcare to save people from COVID-19 crisis (The Independent Uganda)
Civil Society Organizations are urging the government to focus on issues related to food insecurity, and weak healthcare system as it takes steps to ensure immediate relief and long term recovery during and post-Covid-19 era. The CSOs include SEATINI Uganda, Oxfam, Federation for Small and Medium Enterprises and Uganda Small Scale Industry Association. They also said that the interventions should address the long standing structural challenges and interrelated crises of inequalities and vulnerabilities.
The other suggestion from CSOs is that the International Monetary Fund should not stop at disbursing loans to developing countries like Uganda but should be able to hold government to account to its commitments when requesting for the stimulus package. Proper handling of the stimulus package is key in furthering recovery of the economy that has been hit hard by COVID-19 pandemic restrictions, analysts say.
Zimbabwean Cabinet approves pharmaceutical strategy (The Herald)
A five-year strategy to capacitate the pharmaceutical industry to increase local production of essential and affordable medicines has been approved by Government. Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa yesterday said Cabinet was aware that the major challenge affecting the pharmaceutical sector was low production due to use of obsolete and antiquated equipment, cumbersome registration procedures and limited innovation.
“The objectives of the strategy include the following: to increase the market share of local pharmaceutical products from the current 12 percent to 35 percent by 2025; to increase local production of essential medicines from US$31,5 million to US$150 million by 2025; to increase local production of essential medicines from 30 percent to 60 percent by 2025 and to improve exports of pharmaceutical products from 10 percent to 25 percent by 2025.”
Accra-Nsawam rail line to be opened to traders and passengers – Peter Amewu (GhanaWeb)
The sector minister for Railways Development, John Peter Amewu has disclosed the Accra-Nsawam rail line will soon be reopened to traders and passengers. The development according to him comes following the completion of refurbishment works to improve traffic congestion on the road network along the route that was previously caused by deteriorating lines and land erosion. “The route was closed after the COVID-19 restrictions were announced last year but government intends to open it up soon and also link it to the Western rail line,” Peter Amewu disclosed.
Implementation of AfCFTA: Former deputy minister demands action from business associations (Graphic Online)
A Former Deputy Minister of Trade and Industry, Mr Robert Ahomka Lindsay, is demanding some action from business associations in the country to make the African Continental Free Trade Area (AfCFTA) agreement a success. He said if the agreement would benefit the country, then private sector associations such as the Private Sector Federation (PEF) and the Association of Ghana Industries (AGI) must be the ones pushing it and not the government.
“We need to move the discussion to details. How do I export products and what do I have to do? These are the kind of discussions we should be having. You need to advise your teams on what they need to export. “Ghana is very good at trading but we don’t do very well when it comes to formal trading and that is where the challenge is. The agreement has been signed and its effective now so it is important that we get to the details on products. “Every one of them should have a plan. The secretariat is right here in Ghana and we should be packed there. People are sending different delegations from other countries there, ours is just here and no association has been there so far. “We have to be strategic, otherwise, this thing will pass us by and we will wonder what happened,” he advised.
SCORE determined to build capacity of Ghanaian SMEs for AfCFTA (News Ghana)
Sustaining Competitive and Responsible Enterprises (SCORE) project, spearheaded by the International Labour Organization (ILO), has commenced the training of Small, Medium Enterprises (SME)to gain recognition and acceptance in African markets. Mr Samuel Onoma Asiedu, National Project Coordinator, SCORE Ghana, said the focus was to make Ghanaian enterprises gain recognition and remain relevant in the African Continent Free Trade Area (AfCFTA), said they were also interested in making the enterprises compete positively until they attained a space on the international market. “We need not help enterprises to compete outside. To compete the global world is not that easy, therefore they need to get their processes right, methods right and their employees should understand how to leverage on opportunities and others,” he said.
U.S. Secretary of State Blinken and Nigeria’s Buhari discuss bilateral relations in Virtual trip (CGTN Africa)
Nigeria’s President Muhammadu Buhari on Tuesday received in Virtual Audience United States Secretary of State, Antony J. Blinken at State House, Abuja. Blinken returned ‘virtually’ to Africa’s largest democracy to meet with President Buhari and witness the impact of U.S.-Nigeria health cooperation and programs. “While much has changed, promoting stability, health, security, and good governance remain shared priorities.” Blinken stated..
Ethiopia Economic Update: Ensuring Ethiopia’s Full Recovery from COVID-19 (World Bank)
The eighth Ethiopia Economic Update, Ensuring Resilient Recovery from COVID-19, finds that despite the 4.1% decline in merchandise exports, excluding gold, during the first half of the current fiscal year, most items (except garments) started to recover during October-December, 2020. Services exports started to recover as well, and remittances rebounded strongly during the first half of the fiscal year, the report says, while foreign direct investment inflows continue to decelerate due to uncertainty.
Response measures introduced by the government, including tax deferrals and waivers, liquidity provision to commercial banks, measures to ease access to credit and loan refinancing, logistics facilitation and food distribution measures, have contributed to cushioning some of the impacts from the crisis. However, the report notes that a 5% decrease in payment collection by commercial banks during the first half of the fiscal year suggests some firms and households continue to struggle to repay their loans and more needs to be done.
African regional and continental news
Bulawayo to host ZNCC AfCFTA conference (Chronicle)
Bulawayo is set to host a high-level trade conference on the African Continental Free Trade Agreement (AfCFTA) to help conscientise businesses about opportunities presented by the historic pact. The Zimbabwe National Chamber of Commerce (ZNCC) would host the event, which will see key speakers and delegates unpack the significance of the AfCFTA, which was operationalised in January this year.
“Where we are right now? l think not many people know this opportunity has presented itself. So, as a chamber we want to have a trade conference, which will discuss more details of the AfCFTA on the 7th of May, where they will be honourable guests.”
The African Continental Free Trade Area and exchange rate misalignments (Brookings)
African hopes are on the rise with the African Continental Free Trade Area (AfCFTA) that became effective on January 1, 2021. Foreign Policy celebrated the agreement as a game-changer for Africa, with the potential to create the world’s largest free trade area since the creation of the World Trade Organization. The excitement is understandable.
But the successful implementation of this trade agreement is going to be a long and uphill path. Political turmoil, infrastructure gaps, and security threats are among the impediments to free trade in much of Africa. Of particular importance here is the mix of exchange rate regimes from one sub-regional market to another, which entails heterogeneous reactions to price, fiscal, productivity, and debt shocks, resulting in significant misalignments and substantial growth disparities among countries. In this blog, we provide our thoughts on the relevance of monetary and exchange rate policy for countries with different governance structures and membership in trade agreements.
The Future Of African Start-Ups With Guinea’s Minister Of Investment, Gabriel Curtis (Forbes)
With the recent launch of the African Continental Free Trade Area (AfCFTA), the future of African start-ups and small enterprises has been at the heart of discussions concerning the growth potential of the continent. During the seventh annual conference of the Desautels African Business Initiative (DABI), Gabriel Curtis, the Minister of Investment in Guinea, alongside Segun Akintemi, Martin Webber, and Jim de Wilde, underlined key issues and opportunities to strengthen capital markets under the Free Trade agreement.
The main hurdle of AfCFTA, according to Minister Curtis, is connectivity. Physical and digital connectivity between countries that are not neighbours can be challenging due to lacking communication tools. Furthermore, the gap in digital literacy needs to be reduced, which is one of the top priorities of the African Union Agenda 2063.
“The agenda of every country, while entering the free trade, is different. Each country will continue to pursue their selfish interest, which will supersede the overall intention of the AfCFTA” Akintemi said. “We need to put selfish interest to the side and focus on where the growth is.”
Southern African nations meet to plan digital development (Capacity Media)
More than a dozen countries from southern Africa are expected to announced plans to harmonise their digital development strategies this week. The countries, all members of the Southern Africa Telecommunications Association (SATA), are meeting virtually this week to discuss how countries in the region are tackling the fourth industrial revolution. The aim, said SATA, is to “share their experiences on a wide range of topics including technology and infrastructure, policy and strategy for the future of the telecommunications industry”.
Southern Africa Taps $380 Million in World Bank Financing to Facilitate Regional Trade and Investment for more Inclusive Growth (World Bank)
The World Bank today approved $380 million in financing from the International Development Association (IDA) to support Malawi and Mozambique increase regional trade coordination, reduce trade costs and time, develop regional value chains, and improve access to infrastructure. The new Southern Africa Trade and Connectivity Project (SATCP) will benefit both countries and local communities through investments that will facilitate trade, strengthen regional coordination, and increase diversified economic opportunities along the Nacala and Beira corridors, connecting Mozambique to Malawi, and along the Maputo Corridor, connecting Mozambique to South Africa through Ponta Do Ouro.
“Regional integration can play an important role in helping Southern Africa recover sustainably from the current economic crisis. We are pleased to support Mozambique and Malawi in building upon recent regional infrastructure developments by working on reducing trade costs and improving their competitiveness. The project’s support for developing regional value chains could drive the creation of jobs and more incomes for communities”, said Ms. Deborah Wetzel, World Bank Director of Regional Integration for Sub-Saharan Africa, the Middle East, and Northern Africa.
Members’ sovereignty ‘will be maintained in East Africa confederation’ (The Citizen)
National sovereignty would be largely retained under the envisaged East African Political Confederation. This is according to Justice Benjamin Odoki, the chairperson of a committee of experts tasked with drafting a model of the constitution for the envisaged political union. He said the political confederation would ideally be vertical in that it would deal directly with the partner states rather than the EA citizens. “Political confederation is a transitional model to the political federation that is the fourth and ultimate stage in the EAC integration process,” he pointed out.
Consumer prices shoot through the roof as govts increase taxes (The East African)
The cost of living in the East African countries is on a worrying upward trend with governments shifting huge debt repayments burdens to households and businesses through increased taxation measures. The issue is further compounded by a surge in fuel prices and weaker local currencies, which have seen the prices of essential commodities like bread, milk, wheat flour, beef, tomatoes, greengrams and fruits in countries such as Kenya, Rwanda, Tanzania and Uganda sky rocket, according to data from national bureaus of statistics.
“In both Uganda and Kenya, foreign exchange rates have strengthened recently — and this should help to limit near-term inflation fallout. However, supply disruptions, and the risks stemming from that, will also need to monitored,” said Razia Khan, managing director and chief economist in-charge of Africa and Middle East Global Research at the Standard Chartered Bank Plc.
EAC and EU set to align development priorities for 2021 - 2027 (East African Community)
Tki, has today undertaken his first assignment as the 6th Secretary General of the EAC in a virtual meeting with the European Union Commission. The meeting provided the platform to review what is envisaged in the EU Multiannual Indicative Programme (MIP) for Sub-Saharan Africa 2021-27, taking into account lessons learnt from ongoing actions as well as the current priorities of the EU Commission and Regional Economic Communities in Sub-Saharan Africa. “The consolidation of the Customs Union and advancing the implementation of the Common Market Protocol call for urgent attention to further propel the EAC integration agenda,” said Dr. Mathuki.
Women’s economic empowerment critical for sustainable post-Covid recovery, African Development Bank country gender profiles show (AfDB)
African women are still disproportionately affected by poverty, and the coronavirus pandemic is exacerbating gender inequalities, according to new African country gender profiles developed by the African Development Bank. “The country gender profiles aim to spark dialogue and support evidence-based reform on gender equality at national level. The profiles are a guide to inform development policy makers and enrich development programs to better address gender disparities,” said Vanessa Moungar, Director of the Bank’s Gender, Women and Civil Society Department.
Why Chinese construction firms will remain the big builders in Africa (South China Morning Post)
Price-competitive Chinese companies are expected to continue to dominate construction of Africa’s power dams, highways, ports and railways, even as China’s official export credit agency takes a more cautious approach to lending, observers say. That outlook was reinforced earlier this week when state-owned China Communication Construction Company (CCCC) won a US$166 million contract to build a 453km (281-mile) road as part of a megaproject linking Kenya with Ethiopia and South Sudan.
Global economy news
WTO Chief Pursues a ‘Hectic’ Agenda to Fix World Trade’s Referee (Bloomberg)
The head of the World Trade Organization raised an alarm about the credibility of the multilateral trading system, urging leaders to act fast to bolster the global economy with steps like fairer vaccine distribution and cooperate to resolve longer-term problems like overfishing.
“The word I would use to describe it is absolutely hectic,” Okonjo-Iweala said in a phone interview on Tuesday when asked about her first few months in the job. “The challenges we thought were there are there and getting an agreement is not as easy because of longstanding ways of negotiating business positions.”
“We need to break out of the zero-sum deadlock,” Okonjo-Iweala said. “We need to remind the countries and members that the WTO is here to deliver for people. We can’t take 20 years to negotiate something.” Okonjo-Iweala said her top priority is to use trade to alleviate the pandemic and said her recent meeting with trade ministers and vaccine manufacturers provided a positive step in the right direction.
WTO members note further progress on Trade Facilitation Agreement implementation (WTO)
According to the update , the current rate of implementation of TFA commitments stood at 70.1 per cent for the entire WTO membership as of 22 April. This figure is expected to rise to 83 per cent by 2023 based on the notifications members had submitted on their respective implementation dates. Broken down by level of development, the current rate of implementation commitments equates to a 100 per cent rate of implementation by developed members and 61 per cent among developing members and least developed countries (LDCs).
Retain trade benefit for graduating LDCs (The Daily Star)
The developed and developing countries should retain the same trade privileges for the least developed countries (LDCs) even after they graduate as the coronavirus pandemic has hit poor nations hard, officials said yesterday. “The extension [of duty benefits] should be at least 12 years instead of three to five years,” said Zuena Aziz, chief coordinator for Sustainable Development Goals Affairs at the Prime Minister’s Office of Bangladesh, at a webinar.
How African companies can use the international trademark system to their advantage (Inventa International)
According to the UN Conference on Trade and Development (UNCTD), total trade from Africa to the rest of the world averaged roughly $760.5 billion between 2015 and 2017. The UNCTD also indicates that the share of exports from Africa to the rest of the world ranged from 80% to 90% during the same period, making the continent the second most export-dependent region in the world. While African jurisdictions are particularly dependent on the export of primary commodities such as ores, oil, gas and cotton, as well as food and drink products such as coffee, tea and various grains, there is a growing need to diversify the economy and add value to the chain of production. Trademarks are an essential tool for African enterprises looking to add value to their goods and services, as they provide exclusive rights to the registered owner and foster trust between the company and its customers.
Covid, lockdowns and vaccines: Why Africa shouldn’t copy the West (African Arguments)
Since COVID-19 began spreading across the globe last year, every government in the world has had to decide on the best way to handle the pandemic. Weighing up a variety of factors, some – such as East Asian countries and various island states – have pursued elimination strategies to pursue “zero Covid”. Others – such as Europe, the Americas and India – have imposed on-and-off lockdowns in response to repeated waves of surging cases and deaths.
One of the outliers of either of these trends has been Africa. Many countries on the continent were quick to lockdown early in the pandemic, but soon opened up when this became economically unbearable. Yet unlike elsewhere in the world, this hasn’t resulted in huge increases in cases or deaths. While restrictive lockdowns might save lives in the short term in higher-income countries with stronger safety nets and fewer people in poverty, they are much more likely to cost a large number of lives in lower-income ones.
Given this, a recent series of reports from the African Development Bank (AfDB) give serious cause for concern. They show that most African countries’ GDPs, which had typically been rising in recent years, collapsed in the last year. Several economies, such as Botswana’s, Cabo Verde’s, the Republic of Congo’s, South Africa’s, and Sudan’s, have declined by as much as about 10%. Furthermore, considering that much economic activity takes places in the informal economy, these figures may well be underestimates.
Top U.S. trade negotiator discussed vaccine ramp-up with Novavax exec (Reuters)
U.S. Trade Representative Katherine Tai discussed increasing COVID-19 vaccine production in a virtual meeting on Tuesday with an executive with drugmaker Novavax (NVAX.O), Tai’s office said in a statement. Tai and Novavax Executive Vice President John Trizzino also discussed a proposal before the World Trade Organization to waive certain intellectual property rights in response to the coronavirus pandemic, the USTR statement said.
Tax Inspectors Without Borders and partners pass USD 1 billion milestone in additional tax revenues for developing countries (UNDP)
TIWB is a joint OECD-UNDP initiative that deploys qualified experts in developing countries across Africa, Asia, Eastern Europe, Latin America and the Caribbean to help build tax capacity in the areas of audit, criminal tax investigations and the effective use of automatically exchanged information. TIWB assistance has led to increased domestic resource mobilisation in some of the least developed countries in the world.
During the fifth virtual TIWB Governing Board meeting on 27 April 2021, co-chaired by the OECD Secretary-General, Mr. Angel Gurría, and UNDP’s Administrator, Mr. Achim Steiner, participants celebrated the mobilisation of more than USD 1 billion in additional tax revenues for developing countries, with nearly three times that amount in total tax assessments.
Former Board member H.E. Ngozi Okonjo-Iweala, recently appointed WTO Director-General, commented that “Billions of dollars of tax due still remain outside the reach of most developing countries tax administrations. The TIWB initiative must continue to play its role as a catalyst to encourage businesses to uphold higher standards of responsible tax behaviour and avoid the reputational risks associated with aggressive tax planning.”