tralac Daily News
The South African government plans to block certain imports to the country. The move to support the success of locally produced goods was officially confirmed by the Minister of Small Business Development Khumbudzo Ntshavheni. Ntshavheni pointed out that the international trade of specific goods needed to be regulated in order for South Africa’s small businesses to succeed.
According to Business Tech South Africa, Ntshavheni stated that they had reached out to the Department of Trade Industry (DTI) and had included working with the South African Revenue Services (SARS). South Africa’s open economy, according to the minister, has caused small business to compete with international companies for the sale and distribution of similar products. The DTI has subsequently been called to increase the privilege of local products to be between 80 and 100 percent. This would mean that goods from international companies cannot be from the same category as those produced by local businesses.
The strategy also includes SARS and customs ensuring that the stipulated regulations will be followed such that international products marked for 100% local production, do not make it inside the country. The Small, Medium and Micro Enterprise (SMMEs) industry has admittedly been battered by the COIVD-19 pandemic and the local market is desperate for a speedy recovery.
Cabinet welcomes R3 billion COVID-19 technology transfer (Cape Business News)
Cabinet has welcomed the R3 billion commitment, to transfer the latest technology for producing vaccines and biological therapies to South Africa, announced by Dr Patrick Soon-Shiong. Soon-Shiong, who is a South African born biotechnology entrepreneur, now based in the United States, announced this during a meeting organised by the World Health Organisation, on Wednesday. “Cabinet also appreciate the acknowledgement by Dr Soon-Shiong of South Africa’s advancement in the science, the human capital, the capacity and the desire to produce second generation vaccines to address variants of the Coronavirus that might make current vaccines less effective.”
South African mining production shot up 21.3% year on year in March, Statistics South Africa (Stats SA) said on Thursday. It’s the biggest bounce in six years. Mineral sales for the month reached a record R75-billion, with 41% of that generated by platinum group metals (PGMs). Among other things, this bodes well for the first quarter (Q1) GDP figure. “Despite mining and manufacturing contributing positively to Q1 GDP on quarterly terms, we still expect a soft Q1 GDP number as domestic demand remains muted, which will have a negative effect on the services sector (71.4% of GDP in 2020),” Pieter du Preez of NKC African Economics said in a note on the data.
Zimbabwe committed to clearing AfDB debt (The Herald)
The Government is committed to clear its arrears with the African Development Bank (AfDB), as part of the Second Republic’s reform agenda anchored on a return to the international community through mending broken relations and entrenching already existing ties. “Government is aware of Zimbabwe’s outstanding financial obligations of US$729 million to the AfDB,” said Minister Shava during his engagement with AfDB. “We are committed to clearing these arrears as part of Government’s re-engagement agenda with the international community and development partners.
ZITF return to restore confidence, tourism recovery (The Herald)
The return of the Zimbabwe International Trade Fair (ZITF) this year is expected to restore tourism recovery and business confidence in Zimbabwe as an investment destination, while impacting positively on the wider economy. Industry and commerce players are already seized with preparations for this year’s ZITF, scheduled for July 20 to 23 in Bulawayo, amid prospects for renewed business after the event was suspended last year at the height of Covid-19 lockdown measures. This year’s expo would be held for only four days instead of five guided by tight Covid-19 mitigation protocols under the theme: “Showcasing the New Normal for Business & Industry: Realities and Opportunities”.
When President Uhuru Kenyatta locked down Nairobi,Kiambu, Machakos, Kajiado and Nakuru in March just ahead of the Easter holiday, those with travel plans had to cancel them. With the reopening on May 1, hotels and transport providers including airlines and SGR are mostly offering rescheduling but no refunds. The Standard Gauge Railway (SGR) has suspended refunds until further notice. The only available option is rescheduling 48 hours prior to the preferred travel time before August 2021.
On the 10 March 2021, after a late night session in parliament, Kenyan MPs announced the ratification the Kenya-United Kingdom Economic Partnership Agreement. It is hoped that the agreement, concluded against the background of the UK taking its new post-Brexit place in the world, will serve to support and increase trade between the two nations. Ratification follows months of negotiations, and significant scrutiny in both countries. This article explores the advantages and disadvantages that may flow from this deal, and the impacts that this could have for business in Kenya, the UK and the wider world.
Uganda approves US $395m loan for Kampala-Malaba MGR refurbishment (Construction Review)
Uganda’s Parliament has approved a US $395.5m loan the refurbishment of the Kampala-Malaba Meter Gauge Railway (MGR). The approval in a plenary sitting Chaired by Speaker Rebecca Kadaga came after the approval of a report by the National Economy Committee presented by Nakaseke North MP Syda Bbumba. According to Hon Bbumba, the Kampala- Malaba project is part of the bigger proposed Meter Gauge Railway (MGR) project, which will entail the rehabilitation of the 8.3km Kampala-Port Bell section and the 12.3km Kampala-Nalukolongo-Kyengera section, purchase and rehabilitation of coaches, wagons and locomotives, creation of a railway training school to equip Uganda Railways Corporation (URC) Management and Staff with modern railway skills, and stock new spares for the workshop. “If the Meter Gauge Railway Project (MGR) is implemented, the cost of transport by rail will improve from the current average of between US Dollars 0.09 – US $0.13 (per NTK-net tone kilometre) to US $0.05, hence reducing the cost of doing business,” said the MP.
Insecurity, biggest threat to investment in Nigeria – NESG (Nairametrics)
The Nigerian Economic Summit Group, NESG, warned that insecurity is the biggest threat to investment in Nigeria and urges the FG to provide security agencies with the necessary support to deal with insecurity. The NESG disclosed this in its May 2021 report, titled ‘Sectoral reforms and Investments in Nigeria; A Focus on the Manufacturing Sector.” “The biggest threat to investment in Nigeria is insecurity,” the report said. “The President and National Assembly must provide security agencies with adequate resources – equipment, finance, training, etc. – to tackle the insurgency, banditry, and other forms of social vices. There must be clear key performance indicators and heads of security agencies must be sanctioned when they fail to meet relevant goals,” it added.
“Let us conclude and sign the proposed Agreement for Joint Declaration of Strategic Partnership between the two countries since it offers the framework required to increase cooperation between Ghana and Ethiopia”. Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey has raised concerns on the need for Ghana and Ethiopia to conclude and sign the proposed Agreement for Joint Declaration of Strategic Partnership between the two countries. This, she believes will offer the framework required to increase cooperation between Ghana and Ethiopia.
African regional and continental news
ICC, UPS, Trade Law Centre (tralac), and West Blue Consulting today announced a partnership to support women-led small and medium-sized enterprises (SMEs) in Africa. The partners will offer capacity building programmes and tools, including co-developed trade and information portals called “e-Trade Hubs,” advocate for enabling public policy, and create electronic guidelines to help women entrepreneurs scale-up and digitise their businesses.
“The AfCFTA provides a significant opportunity to empower women entrepreneurs and to promote Africa’s digital transformation,” said Trudi Hartzenberg, Executive Director, tralac. “The adoption of digital trade solutions for the AfCFTA will address many border management challenges that disproportionately impact women traders. tralac is very pleased to collaborate with ICC, UPS and West Blue Consulting to support digitisation of women’s businesses to enhance their competitiveness in the AfCFTA and global markets.”
AfCFTA promises to unlock the potential for African women to move from micro to macro businesses (African Union Monthly Bulletin)
For decades, African women have been trapped in poverty cycles due to several underlying factors including unequal access to education, factors of production, and trade facilities; inequitable labour saving technologies; underpaid or unpaid labour; harmful cultural practices; and limited legal protection from gender inequality practices entrenched in society. Through the AfCFTA, informal and micro and small enterprises will be integrated into the continental markets breaking the barriers these businesses constantly encounter as they try to penetrate more advanced regional and overseas markets. Women, estimated to account for 70 per cent of informal cross-border trade in Africa, will be well positioned to tap into regional export destinations and use regional markets as stepping stones for expanding into overseas markets. By reducing tariffs and with simplified trading regimes for small traders, AfCFTA makes it more affordable for informal traders to operate through formal channels, which offer more protection by addressing the vulnerabilities women in cross-border trade often encounter such as, harassment, violence, confiscation of goods and even imprisonment.
The EAC Secretary General, Hon (Dr.) Peter Mathuki has promised the business community in the region that he will do everything within his power to address the vice of Non-Tariff Barriers to trade and trade wars, and work towards raising the volume of intra-regional trade from the current level of below 20% to more than 50% over the next five years. Mr. Badagawa called upon the EAC Secretariat to initiate the amendment of some of the provisions of the EAC Common Market Protocol (CMP) to give effect to the Regulations on Free Movement of Services and Service Suppliers, the Mechanism for the Removal of Restrictions on Trade in Services and Revised Schedules of Commitments on Progressive Liberalization of Services.
On his part, Mr. Gideon Badagawa, Chairman, Private Sector Foundation Uganda (PSFU), urged the Secretary General to help coordinate finalization of the amendments of the EAC Elimination of Non-Tariff Barriers Act, 2017 as well as the launching of the Dispute Resolution Mechanism by the operationalizing the EAC Trade Remedies Committee.
NRM promotes trade in the region (Independent)
The Ministry of Trade implemented the manifesto commitment of continuing fast-tracking the East African Community (EAC) economic and political integration in line with the vision of having a single monetary union and achieving political federation of all the EAC member states. Economic integration was deepened through engagement in sectoral councils (resolving the outstanding NTBs and facilitate smooth trading under the COVID 19 pandemic). Also achieved was implementation of the Common Market Protocol where implementation of the Northern Corridor Initiative started, Signing of the Mutual Recognition Agreement to ease movement of persons in the professions of Engineers, lawyers, accountants; ease of movement of persons by having a common tourism visa.
Ports and exports: KwaZulu-Natal has an abundance of both (Global Africa Network)
A new era in trade and export has begun and the traders, logistics operators and ports of KwaZulu-Natal are in pole position to take up new opportunities. Not only is the province strategically located on the Indian Ocean but it already has excellent infrastructure which is being upgraded and improved. As part of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), South Africa is already part of the most active regional bodies which are promoting integration and intra-regional trade. These regional groupings are best placed to start thinking beyond tariffs: more efficient customs posts, lower air-freight costs, better-run ports, regulatory alignment and improved rail and road infrastructure.
Vice-President Dr Mahamudu Bawumia has tasked the Economic Community of West African States, ECOWAS, to take advantage of the strong linkages of their economies to build synergies in common areas of clear comparative advantage towards achieving strategic food security systems. "Our plan to build a strategic food storage system for the sub-region is a step in the right direction towards addressing the dire situation of emerging hunger facing our people. "In order to operationalize our objective, there is an urgent need for marching resources and financing mechanism," Dr Bawumia said. The Vice President said the meeting was a giant step in ECOWAS’ quest to provide food security especially for the vulnerable, and a good sign of being responsive to the needs of the people.
The Covid-19 pandemic had a devastating impact on many African economies, particularly those dependent on oil exports, tourism and resources. However, the continent’s GDP is expected to grow by 3.4% this year – after shrinking by 2.1% in 2020 as a result of the pandemic – supported by a rebound in commodity prices and the resumption of tourism as pandemic related restrictions are eased, according to the African Development Bank’s recently released ‘African Economic Outlook 2021’ report. Technology needs to play a key role in the continent’s recovery, both to support local and regional value chains, as well as to enable a more cost-effective delivery of services to consumers. Digital applications will be essential in ensuring Africa is more resilient in the future. The continent, however, remains the least connected continent, lacking sufficient digital infrastructure. Exacerbating the lack of connectivity is the issue of affordable connections with less than a quarter of African countries meeting the affordability standard for internet connections as per the recommendations of the United National Broadband Commission.
The Africa Medical Supplies Platform (AMSP) is a relatively straightforward e-commerce platform that has revolutionised Africa’s response to the pandemic — think Amazon or Alibaba for hospitals. The idea is to connect medical suppliers with medical providers and eliminate middlemen. Purchasing through the AMSP is restricted to governments, national health systems, NGOs and donor organisations.
The AMSP’s goal is to leverage Africa’s bulk-purchasing power to secure supplies and stabilise prices. It does this by pooling orders and ensuring transparency so that African countries can compete for goods with the world’s most dynamic economies. As Masiyiwa puts it, “The service we provide is the fact that we aggregate the purchases, so that suppliers are not dealing with so many countries.”
Africa, like the rest of the world, is working out ways of recovering from the devastating effects of the Coronavirus pandemic. Many experts are worried about the amount of debt that African countries are getting from China. Will African countries grow the financial muscle to repay? Or will China write off many as debt burdens? Or will there be a doomsday scenario where economic colonisation takes place?
The Bank of France has reportedly started transferring foreign currency reserves to a tune of 5 billion Euros to the Central Bank of West African States (BCEAO). This process is part of the reform of the CFA Franc which was announced in December 2019 by the French and Ivorian presidents. The transfer happens ahead of a summit French president Emmanuel Macron is holding with African countries to discuss the revival of economic fortunes following the Coronavirus pandemic.
Covid’s impact on Africa probably understated (IT-online)
As the world battles new Covid-19 variants and supply and rollout of vaccines remains critically low in Africa, new research from the Partnership for Evidence-Based Response to Covid-19 (PERC) indicates that burdens experienced by people in African Union member states remain grave. A massive 81% of survey respondents reported challenges in accessing food, 77% reported experiencing income loss and 42% reported missing medical visits since the start of the pandemic. The report calls for targeted public health measures for high-risk populations, increased surveillance in light of new variants, and scaled-up vaccine supply from the global community to control the pandemic in Africa. “The PERC report provides valuable insights to countries to strategically tailor their ongoing responses,” says Dr John Nkengasong, director of the Africa Centres for Disease Control and Prevention.
How trade deals explain the behaviour of West African elites (The Conversation Africa)
The political survival of ruling elites is one of the major determining factors behind their trade policy choices. But trade policy choices can determine whether a country’s economy diversifies to reduce dependence on the production of a few goods or services. This phenomenon is most pronounced in countries whose economies are heavily dependent on a few commodity exports.
My research shows that trade partnerships with the EU generally function as a system of extraversion for West African ruling elites. To ensure their political survival, they tend to fashion their trade relations with the EU as one of dependency. These amount to the continuation of a colonial economic system, a neo-colonial relationship. It comes at the expense of economic diversification. The key feature of the trade partnerships addressed here is their prevention of economic change in West Africa.
Developments in competition law in post-pandemic Africa (Africa Feeds)
With the growth of economies across Africa, competition law has remained one of the key drivers for effective market participation, consumer protection and fair business practices. However, the global pandemic introduced new challenges for competition authorities in Africa and abroad, with each enforcer pursuing the most beneficial enforcement method for its national or regional jurisdiction. According to Lerisha Naidu, Partner in Baker McKenzie’s Competition & Antitrust Practice in Johannesburg, “These efforts were aimed at curbing the persistence of unjustified price hikes, anticompetitive cooperation between competitors and other harmful business practices that sought to undermine competition.
In Africa, Legalizing Marijuana Can Deliver Higher Growth (Foreign Policy)
Legalizing cannabis could provide these countries with another lucrative income stream and help create jobs, as the plant can be used to produce goods ranging from cannabis oil to textiles. Despite the plant’s economic promise, many governments remain wary of legalization. Cannabis is one of Africa’s fastest-growing sectors, but Zimbabwe is only one of 10 countries that has decriminalized it or made efforts to do so. Zimbabwe’s decision was largely driven by economic reasons: Mthuli Ncube, the Zimbabwean finance minister, has said that cannabis production could generate $1.3 billion in 2021, making it one of the country’s most lucrative industries. As demand for medical marijuana products surges worldwide and states look to diversify their income streams, other African countries should follow Zimbabwe’s lead. Africa could reap enormous economic benefits from cannabis—but only if it goes further in legalization.
Southern Africa Development Community (SADC) Parliamentary Forum said its working on creation of the structures for technical and administrative support for the regional Parliament. The Secretaries General Committee of the national members parliament of SADC parliamentary forum are working on attaining this goal. The process for transformation of SADC Parliament Forum into a Regional Parliament has been in progress. This entails the creation of organs to support, in terms of technical, technological and administrative point of view, this Parliament, he clarified. According to him, the secretaries general of SADC Parliament Forum is tasked with creation of pre-conditions to assess an organisational structure able to respond to the future Regional Parliament. The process for transformation of SADC Parliament Forum into a Regional Parliament has been in progress. This entails the creation of organs to support, in terms of technical, technological and administrative point of view, this Parliament, he clarified.
The heavy price Africa pays for digital violation (Business Daily)
From internet shutdowns, social media crackdowns, cyber attacks, espionage and low digital inclusion, private data tracing apps, digital rights across Africa have never been as infringed as during the Covid-19 period. Though internet access and affordability has been improving over the last decade in Africa, online vulnerabilities and a huge digital divide have been witnessed more, according to the Mo Ibrahim Foundation 2020 report on African governance. The online vulnerabilities are behind rising violation of digital rights in Africa. This has pushed to the forefront the need to come up with solutions that protect digital rights in Africa. “Digital rights are just as fundamental as all other human rights,” said ‘Gbenga Sesan, director of Paradigm Initiative.
Britain is making positive inroads into the second largest continent in the world, defying gloomy forecasts from Project Fear doom-mongers the new sovereign nation would struggle outside the EU. Trade deals worth billions of pounds have already been signed with a number of African countries, including South Africa, Ghana and Kenya, while many more are expected to be rubber-stamped over the coming months.
Cheryl Buss, CEO of Absa International, formerly Barclays Africa, told City AM: “We’ve already seen a number of positive impacts post-Brexit for Africa. The UK has signed a free-trade agreement with South Africa which was extended to both the Southern African Customs Union and the Mozambique-UK Economic Partnership Agreement (SACU+M). While the trade agreement is largely similar to the trade deal the SACU+M had with the EU, the negotiations centred around a realignment of quotas for SACU+M countries in favour of African countries.
Slow vaccination could hinder emerging market recovery, warns S&P (Engineering News)
The economic recovery in emerging markets (EMs) will remain highly vulnerable to pandemic-related setbacks, given the slow vaccine rollout, financial services company S&P Global Ratings notes in its ‘Emerging Markets Monthly Highlights: Slow Vaccination Keeps Recovery At Risk’ report. It notes that while it seems as though the worst of the latest Covid-19 wave has passed in most EMs, the likelihood of intermittent lockdowns will remain high for some time. As such, vaccination progress will remain a key variable of future economic performance.
China’s commerce ministry spokesman Gao Feng said on Thursday that Beijing supports a proposal by the World Trade Organization (WTO) for an intellectual property protection waiver on COVID-19 vaccines to enter the consultation stage. British and European Union officials have been sceptical about the usefulness of a US proposal to waive patent protections for COVID-19 vaccines, while saying they are prepared to discuss it. “China will work with all parties to actively participate in consultations and jointly promote a balanced and effective solution,” he said.
The scarcity of COVID-19 vaccines across the developing world is largely the result of efforts by vaccine manufacturers to maintain their monopoly control and profits. Recent company pledges to give vaccine doses to the COVID-19 Vaccines Global Access (COVAX) facility, which will direct them to the most at-risk populations in poorer countries, are no substitute. These promises may assuage drug companies’ guilt, but won’t add meaningfully to the global supply.
In recent weeks, legions of pharmaceutical lobbyists have swarmed Washington to pressure political leaders to block the WTO waiver. If only the industry were as committed to producing more vaccine doses as it is to producing specious arguments, the supply problem might already have been solved. Instead, drug companies have been relying on a number of contradictory claims. They insist that a waiver is not needed, because the existing WTO framework is flexible enough to allow for access to technology. They also argue that a waiver would be ineffective, because manufacturers in developing countries lack the wherewithal to produce the vaccine.
The U.S. earlier this month said it supports temporarily waiving intellectual property protections on COVID-19 vaccines. In doing so, President Joe Biden’s administration threw serious weight behind a proposal brought to the World Trade Organization by India and South Africa. Other emerging countries such as Pakistan, Mongolia and a group of least-developed nations including Bangladesh have backed the idea as well. They argue patents and other restrictions hinder timely access to affordable inoculations and could prolong the pandemic. A spokesman for China’s Commerce Ministry on Thursday said Beijing also supports taking the proposal “on exemptions for anti-epidemic materials” into the consultation stage. On the other hand, pharmaceutical companies are resisting the waiver, not only in the U.S. but in other countries like Japan, which has lagged behind in COVID-19 vaccine development. Who would benefit if patents are waived? What are the possible downsides? Here are five things to know about the debate.
“While momentum builds behind a proposal to waive patents on COVID-19 vaccines, removing intellectual property protection would not accelerate the global immunization effort. The sooner the world recognizes that production capacity is not the problem, the better. “With that goal in mind, a global movement has emerged to demand a World Trade Organization waiver of patent protections for COVID-19 vaccines (as well as treatments and diagnostics). But patent protections are not the primary cause of the vaccine-supply bottleneck. If anything, a waiver might divert scarce materials from vaccine production facilities that are already up and running, not to mention discourage investments in pharmaceuticals to ward off future pandemics.
An Investment Perspective on Global Value Chains (World Bank)
This book examines the role of foreign direct investment (FDI) in global value chains (GVCs). To stimulate economic transformation through GVCs, policy makers in developing countries need to better understand the business strategies of multinational corporations (MNCs), internationalization pathways for domestic firms, and how policies can create a favorable environment for both types of firms.
What if development practitioners, city planners, community organizers, and other decision makers could build more resilient systems to help people thrive in a sustainable way? What if projects and policy decisions planned for the effects of climate change, from the start? What if by improving processes like these, local agencies were more connected and agile, enabling them to monitor for disruptive weather patterns, fluctuations in food prices, or changing water levels to help communities anticipate problems and make plans to avoid them?
The new Resilience Booster Tool helps them to do just that. This hands-on, intuitive tool, developed by the World Bank Group under the Africa Climate Resilient Investment Facility (AFRI-RES), is now available for teams who are designing and implementing development projects that consider climate change to better support communities and institutions navigate future climate shocks and stressors.
New data from the World Bank shows that private participation in infrastructure (PPI) in developing countries, while taking an historic plunge in the first half of 2020 due to COVID-19, saw a very modest uptick in the second half of the year. The 56 percent drop in PPI in H1 from the previous year moderated to 52 percent for the full year. Infrastructure investment commitments in 2020 stood at $45.7 billion across 252 projects in developing countries. “Hopefully, this data signals that the worst effects of COVID-19 on private sector infrastructure finance are now behind most developing countries,” said Imad Fakhoury, the World Bank’s Global Director for Infrastructure Finance, PPPs & Guarantees.