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National trade and trade-related news
South Africa’s trade surplus grows to $3.67 billion in March (Reuters)
South Africa recorded its largest trade surplus on record in March, data showed on Friday, with sales of commodities and minerals rising sharply as global demand driven by the economic recovery from the coronavirus continued. South Africa’s trade surplus widened to R52.77 billion ($3.67 billion) in March from a revised surplus of R31.22 billion in February, the South African Revenue Service said. Exports increased by 28.9% on a month-on-month basis to R168.29 billion, while imports rose 16.3% to R115.52 billion, the revenue Service said.
Is South Africa ready for the Amazon effect? (IOL)
The announcement that Amazon will set up South African headquarters in an R4 billion Cape Town development was met with excitement and concern. It was exciting to those who care more about the economy and jobs but concern by environmentalists and those who care about heritage. There’s one concern that has not been raised yet and it relates to what is known as the Amazon Effect. It is known as the powerful disruption that e-commerce has made on the retail market. The term came about as a result of Amazon’s dominant role in the e-commerce marketplace and leading the disruptive impact of the industry. Based on recent developments it seems the Amazon Effect is coming for South Africa.
South Africa boosts Africa’s COVID-19 vaccine supply with local manufacturing (TheWorld)
This week, South Africa resumed its rollout of Johnson & Johnson’s COVID-19 vaccine to health workers across the country. The country had suspended the vaccine earlier this month over concerns of rare blood clots in the US. South Africa, unlike the US, could not afford to indefinitely suspend its only current vaccine available, especially in light of an overall global shortage of shots, and a third wave of the coronavirus on the horizon. Fortunately, South Africa’s resumption of COVID-19 vaccinations has coincided with an extra 1.1 million vaccine doses that were produced locally by South African company Aspen Pharmacare.
How Chinese exported Kenya PPEs before first Covid-19 case (Business Daily)
Chinese nationals living in Kenya last year used seven planes to repatriate Covid-19 personal protective equipment (PPE) to their home country ahead of Nairobi reporting its first coronavirus case, regulatory filings in the US indicate. The onset of the coronavirus pandemic was marked by an acute shortage of surgical masks and protective equipment export bans and disruption of flights that severed supply chains.
Treasury backtracks on a tax proposal to protect furniture makers (The Standard)
The National Treasury has made a U-turn on its plan to increase taxes on imported furniture, measures aimed at growing local industries. Treasury had last year said it supported a Bill to amend the Excise Duty Act and impose a 30 per cent excise tax on imported furniture. The Bill by Kiambu MP Jude Njomo is expected to promote the local furniture industry. “As Treasury, we use import duty to protect local manufacturers. Already, the imported furniture attracts a duty of 35 per cent,” said Gaichuhie when he appeared before Parliament’s Committee on Finance and National Planning. He said the industry was heavily taxed, noting that imposing domestic taxes such as excise duty was “inappropriate in protecting the local industries”.
AfCFTA: Business Editors Call for the Identification of Pockets of Competitiveness in Nigeria (Proshare Nigeria Limited)
The Amplification of Nigeria’s pockets of competitiveness will enable it to derive value from the Africa Continental Free Trade Agreement (AfCFTA). Business and Financial editors in Nigeria made this point in an interactive webinar forum organized by the Centre for Social Protection and Policy Studies (CSPPS), University of Lagos research team in line with promoting thought-led conversations on the AFCFTA. The editors agreed that the Federal Government needs to identify specific islands of competitive advantage and embark on an industry-needs assessment/study to identify immediate, medium-term, and long-term policy actions required to support sectors such as creative arts (music, movies, and culture), fintech, and financial services.
Ghana awaits AfCFTA investment protocols (GhanaWeb)
Finally, Ghana can start looking towards having a new investment code the design and introduction of which have been put on hold for the past two years because of the African Continental Free Trade Area. Simply put, the Government of Ghana has decided that it will wait for AfCFTA to finalize its investment protocol before completing a revision of its own investment laws to ensure that the national investment laws are in consonance with that of the African common market whose secretariat is hosted by Ghana. However, since then, the standoff between the Ghana Union of Traders Associations (GUTA) and Nigerian retail traders in Ghanaian markets – with government uncomfortably caught in the middle – has persuaded officialdom to change its strategy.
AfCFTA: Togo adopts strategic plan to boost its exports in Africa (Togo First)
Togo now has a national strategy to boost exports to other African countries. This is as African governments are doubling down on efforts to effectively implement the African Continental Free Trade Area (AfCFTA). Specifically, the document identifies industrialization and trade opportunities Togo has, in the framework of the (AfCFTA), as well related challenges and measures it should adopt to fully leverage the local, regional, and global markets.
African titans Vodacom, MTN battle for lucrative Ethiopia deal (The East African)
The battle for the lucrative Ethiopian telecommunications market has narrowed down to consortia led by two of Africa’s telecom giants, Vodacom and MTN Group, setting another stage for their sustained competition for the continental market. The bids of the two consortia led by Safaricom on the one hand, and MTN Group on the other, were opened by the Ethiopian Communication Authority (ECA) evaluation committee last week.
IMF Staff Completes 2021 Article IV Mission to Guinea
“The Guinean economy weathered the Covid-19 shock with strong growth of 7 percent in 2020, driven by a booming mining sector. However, despite the implementation of a swift and well-structured response plan, the pandemic took a significant toll on the non-mining economy, which accounts for over ¾ of total GDP and employs the vast majority of the population. While the mining sector is expected to continue to bolster overall growth in 2021, Guinea is facing a twin health shock, with rising Covid-19 cases coupled with a recent new outbreak of Ebola, which fortunately appears localized and under control. As such, non-mining sector growth is expected to recover only gradually.
African regional and continental news
Baker McKenzie’s new report outlines shifting patterns in infrastructure funding in Africa (African Mining Market)
Baker McKenzie’s latest report – New Dynamics: Shifting Patterns in Africa’s Infrastructure Funding – analyzes new data from IJ Global that shows the state of the African infrastructure market, and how the major global players’ approach infrastructure lending on the continent is changing. While the data shows a decline in the value of infrastructure lending, the region is known for its resilience and it is expected that as economies recover, new types of financing will be unlocked.
Effective Communication is critical to the AfCFTA implementation (Nairametrics)
Business owners and prospective investors intending to do business within the AfCFTA require access to periodic information on the phased negotiations of the various concessions and agreements reached by the member States towards the implementation of the trade deal. Just the same way, access to reliable and timely information is regarded as a hallmark of a democratic society. Amongst the priorities for implementing the AfCFTA, effective communication remains crucial, and each member State owes its citizens that duty to put in place a monitoring and evaluation system that will measure the phased implementations and provide constant progress and status report.
WCO and AfCFTA Secretariats meet to discuss the outlook for cooperation (World Customs Organization)
Following the launch of the African Continental Free Trade Area (AfCFTA) in January 2021, the WCO and the AfCFTA Secretariats held an exploratory meeting to discuss prospects of future cooperation to ensure a smooth implementation of the AfCFTA Agreement. The meeting was convened on 26 April 2021, in an online format, bringing together Customs and trade experts from the AfCFTA Secretariat and representatives of relevant technical directorates and cooperation programmes of the WCO Secretariat.
In conclusion, the meeting participants agreed that the next steps in the dialogue between the two organizations would include establishing a legal framework for a long-term partnership, as well as determining high priority areas of cooperation where swift action would be required. Technical directorates and cooperation programmes of the WCO will then plan and deliver activities in their respective areas of expertise on that basis.
Digital payments can accelerate value for African trade (Business Day)
The payments landscape in Sub-Saharan Africa should be examined to understand the role and potential of digital payments in enabling trade on the continent. Two areas can accelerate value for trade in the region: interoperability and cross-border transactions. The following areas should be prioritised to realise the true benefits of interoperability: Regulation that offers a clear approach in areas such as risk management, safety and security standards, fair and open access to interoperable solutions, and consumer protection; The development of resilient infrastructure that is in line with international best practice; Initiatives that accelerate digitisation of payments and drive access to market relevant solutions for all.
Port of Durban to be repositioned as a hub for the continent (Moneyweb)
The recent blockage of the Suez Canal by a major vessel presented a significant moment for South African trade. The blockage, which saw some of the world’s largest shipping container companies redirect their vessels to the route around South Africa, disrupted trade activity and global supply chains for nearly a week, costing more than an estimated $9 billion (R128 billion) per day according to the World Trade Organisation.
The blockage also exposed the vulnerabilities of global trade flows, bringing to the fore the critical role of efficient ports that are able to respond to the needs of the current global trade ecosystem. For South Africa, this has reignited the urgent need to expand capacity and improve efficiencies at our ports in order to boost the competitiveness of our economy and the broader South Africa Development Community (SADC) region.
‘Progress, peace & the young’ key to Africa’s future, says Mo Ibrahim (Africanews)
Progress, development and peace are the fundamentals for a bright future for the African continent, Dr. Mo Ibrahim told Africanews. ”We need to develop skills, we need more technical schools because that is education for employment,” Ibrahim said. “People can find work with it. It’s important to listen to young people because the future belongs to them, not to us old men.” He also said: “We need peace in Africa because conflict destroys the government and our chances of moving forward.”
East African Community suffers massive tourism and job loss (eTurboNews)
The East African Business Council (EABC) sent a shocking report that showed a loss of 2.1 million jobs in tourism among the 6 member states of the East African Community (EAC) when the world is celebrating International Labour Day. EAC member states are Tanzania, Kenya, Uganda, Rwanda, Burundi, and South Sudan. The EABC study reported a loss of US$4.8 billion in the tourism and hospitality industry caused by the impacts of the COVID-19 outbreak, mostly in key tourist source markets of Europe, North America, and Southeast Asia.
The United Nations Food and Agricultural Organization (FAO) and the Arab Bank for Economic Development in Africa (BADEA) signed a memorandum of understanding for future collaboration to promote agricultural infrastructure development and skills training for women and youth. The agreement would also advance climate-smart agriculture in Africa. “Africa is a top priority for FAO,” said Qu Dongyu. With this agreement, “we want to modernise Africa’s agriculture, and make it more efficient, more inclusive and more sustainable,” he added.
A coalition of multilateral development banks and development partners has pledged over $17 billion in financing to address rising hunger on the African continent, and to improve food security. These funds were pledged on the final day of a two-day high-level dialogue called Feeding Africa: leadership to scale up successful innovations. Of the overall amount pledged, more than $10 billion came from The African Development Bank, which said it would invest $1.57 billion on scaling up 10 selected priority commodities over the next five years. This will help countries achieve self-sufficiency. Another $8.83 billion will go towards building strong value chains for these commodities over the next five years. This will include programs to create opportunities for young people – particularly women.
SADC convenes virtual meeting of Ministers of Employment and Labour and Social Partners
The Ministers responsible for Employment and Labour and Social Partners of the Southern African Development Community (SADC) on 30th April, 2021 held a virtual meeting to discuss labour issues and interventions to stabilise the labour market and the regional economy in light of the COVID-19 pandemic. Hon Ms Margarida Adamugy Talapa said despite the challenges posed by the COVID-19 pandemic, the recently approved Regional Indicative Strategic Development Plan (2020-2030) presented an opportunity to realign strategies in order to contribute to increased decent work opportunities and productive entrepreneurship in the Region.
Global economy
Members express concerns on lack of transparency at WTO subsidies committee meeting (WTO)
The chair noted that despite reminders to members to submit their notifications in time, 80 members have still not submitted their 2019 notifications. In addition, 67 members still have not submitted their 2017 subsidy notifications, and 57 have still failed to submit their 2015 notifications. The chair strongly urged all WTO members to submit their notifications as soon as possible and use the technical assistance available through the WTO Secretariat if help was needed in filing the notifications. He also referred to the revised Handbook on Notification Requirements, which is available in all three official languages of the WTO.
New WTO database details impact of regulatory barriers, other factors on costs to trade (WTO)
Trade policy barriers such as tariffs and regulations account for at least 14 per cent of trade costs according to estimates from the WTO Trade Cost Index launched on 30 April. The index measures the cost of trading internationally relative to trading domestically, finding that the costs to export are higher for women, smaller businesses and unskilled workers.
India, South Africa to make fresh push for waiver of vaccine patents at WTO (Hindustan Times)
India and South Africa are preparing for a fresh push at the World Trade Organization (WTO) for a waiver of patent protections on Covid-19 vaccines though the success of the move will largely depend on the position adopted by the US and other developed countries, people familiar with developments said on condition of anonymity on Saturday. The fresh proposal is expected to be presented to the WTO sometime in the next two weeks, the people said.
COVID Pandemic Has Disrupted Global Value Chains, India Must Reorient Its Trade Policy (News18)
The COVID-19 pandemic has exposed existing vulnerabilities associated with international trade, especially for developing countries that are heavily linked into existing global value chains (GVCs). Disruption in the existing manufacturing GVCs due to the pandemic, on the back of disruptions caused by the Fourth Industrial Revolution, has led to a drastic fall in the exports of many developing countries and a decline in the import content of their exports. This has necessitated a rethinking of trade policies in developing countries. With growing digitalisation and amid the ongoing pandemic, India needs to reorient its trade policy with emphasis on developing its own GVCs and upgrading existing ones to accelerate its export diversification.
Exploring space technologies for sustainable development (UNCTAD)
In recent years, there has been increasing interest among countries in the use of space applications for sustainable development, especially to achieve the Sustainable Development Goals. In this context, in May 2019, the United Nations Commission on Science and Technology for Development selected as one of its priority themes for its twenty-third session the topic of exploring space technologies for sustainable development and the benefits of international research collaboration in this context. This report highlights the potential opportunities of space-enabled technologies for delivering on the Sustainable Development Goals and proposes science, technology and innovation policy options for harnessing space technology for sustainable development.
Qatar Airways Eyes African Expansion With New Abidjan Route (Simple Flying)
In a statement released last week, Doha-based Qatar Airways announced it would operate three flights per week to the Côte d’Ivoire capital Abidjan via Accra in Ghana starting from June 16, 2021. Qatar Airways Group Chief Executive, His Excellency Mr. Akbar Al Baker, said: “We are delighted to be launching flights to Abidjan, our fourth new destination in Africa since the start of the pandemic. At Qatar Airways, we remain committed to the African market, expanding our network across the continent and offering seamless connectivity to the largest network of destinations across Asia-Pacific, Europe, the Middle East, and North America. We are thankful to the Côte d’Ivoire Government for their support to launch these flights, providing an opportunity to reunite family and friends with their loved ones across the globe. We look forward to working closely with our partners in Côte d’Ivoire to steadily grow this route and support the recovery of tourism and trade in the region.”
China set to increase military engagements in Africa through Belt and Road Initiative (Zee News)
China’s military base in Djibouti isn’t the only sign of Chinese security engagement in Africa but the investments through the Belt and Road Initiative (BRI) in Africa can also motivate both Beijing and host countries to increase China’s military engagement on the continent. The safety and stability of the government and population of partnering African countries can play a role in the types of projects China looks to fund through this initiative, reported The Washington Post.
Considering the Chinese moves in Africa, the US State Department earlier this year implemented “Prosper Africa” to provide other investment opportunities for African business and development. European Union too launched an initiative last year aimed to increase European trade and investment with Africa. It seeks to boost security cooperation and reduce the numbers of African migrants heading to Europe. As countries adjust their foreign policy accordingly, China’s military and security partnerships with countries in Africa seem likely to expand, posing new challenges and questions for African nations’ long-time security partners like the United States.
Global e-commerce jumps to $26.7 trillion, COVID-19 boosts online sales (UNCTAD)
The COVID-19 pandemic has also resulted in mixed fortunes for leading B2C e-commerce companies, according to the UNCTAD report. Data for the top 13 e-commerce firms, 11 of which are from China and the United States, shows a notable reversal of fortunes for platform companies offering services such as ride-hailing and travel. The report estimates the value of global B2B e-commerce in 2019 at $21.8 trillion, representing 82% of all e-commerce, including both sales over online market platforms and electronic data interchange (EDI) transactions. Despite e-commerce firms’ sizeable fortunes, an index released by the World Benchmarking Alliance in December last year rated them poorly on digital inclusion. According to the UNCTAD report, a main factor for the poor performance is that e-commerce companies are relatively young, typically founded only in the last two decades.
