Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News


SA’s trade surplus is continuing its upward swing (IOL)

South Africa’s bumper trade activity rose above expectations in May as the country recorded the largest monthly trade surplus ever on the rise in exports. The SA Revenue Service (Sars) yesterday said South Africa’s trade surplus rose to R54.60 billion in May from an upwardly revised R51.26bn in April. South Africa’s trade balance has recorded a surplus for 13 consecutive months, with exports benefiting from elevated commodity prices and rising demand in its major trading partners. Investec economist Lara Hodes said the modest monthly pick-up in exports was largely buoyed by vegetable products and vehicles and transport equipment as global auto demand continues to recover. Sars said the year-to-date preliminary trade balance surplus of R202.59bn was an improvement from the R10.63bn surplus for the comparable period in 2020.

Poor port performance costing South Africa money, jobs (Engineering News)

The time currently wasted at the Durban port owing to poor performance and inefficiency is having a direct impact on employment generation, poverty reduction and economic growth in South Africa, says global lead for transport connectivity and regional integration at the World Bank transport global knowledge unit, Martin Humphreys. “Quite honestly, [South African ports] are just not efficient enough.” Humphreys’ remarks follow the May release of the World Bank report ‘The Container Port Performance Index 2020, A Comparable Assessment of Container Port Performance’. This report placed the performance of South Africa’s Cape Town, Durban, Port Elizabeth and Ngqura ports, all managed by parastatal Transnet, in the bottom five out of a list of 351 global ports.

SA’s clothing industry trying to stitch itself together following worst decline to date (Fin24)

South Africa’s clothing industry has not escaped the impact of the Covid-19 pandemic on heavily burdened consumers, with retail sales in the SA clothing and textile industry reaching the worst decline ever recorded in 2020. But, say local manufacturers, they are pulling out all the stops to snatch back market share from imports, as they continue to face supply chain disruptions brought on by the pandemic. Graham Choice, managing director of merchandise supply chain at clothing retailer TFG (formerly The Foschini Group), says some of the country’s leading apparel retailers have tried to tackle the problem by localising and shortening lead times. But, he says, there has been little on offer from the local manufacturing sector, which he describes as “decimated”. “Overall, the local CTFL [clothing, textile, footwear and leather] value chain in SA has come under extreme pressure as the Covid-19 pandemic significantly constrained demand for retail goods,” says Choice.

South Africa needs to improve the inclusiveness of the economy (Engineering News)

Policy research and development think tank the Centre for Development and Enterprise (CDE) notes in a new report that there is limited empirical information on which to base policies to support the growth of small, medium-sized and microenterprises (SMMEs) and grow the inclusiveness of the economy. The report, titled ‘What role can small and micro businesses play in achieving inclusive growth?’, states that the informal sector in South Africa is relatively small, employing only one-sixth of South Africa’s workers and contributing 6% to gross domestic product. The formal sector is, thus, more important for growth and inclusion.

Kenya’s attempt to boost agro-processing (Devex)

Kenya loses almost half of its farm produce to poor roads, production gluts, and policies that fail to promote local agro-processing, according to Patrick Nyangweso, business development manager at the Kenya National Chamber of Commerce and Industry. Establishing agro-processing zones close to farmers – providing value addition – can reduce these post-harvest losses. Though the Kenyan government has begun the process of establishing six agro-processing zones and its 10-year agricultural sector development strategy identified value addition as key to transforming the sector, local entrepreneurs say that progress has been too slow and that additional investment in the industry is needed. “Local agro-processing is a game changer.”

Kenya-UK economic partnership agreement betrays the East African Community (Citizen)

The fact that Kenya maintains an unhealthy trade balance with the UK where the UK imports into Kenya far outmuscle Kenya’s exports to the UK is a major concern on elimination of customs on UK imports and implementation of the agreement. It is surprising, however, that the impact of the agreement on the East African Community remains largely undebated unlike the preceding Kenya-USA Free Trade Agreement that has been critically examined against the EAC’s Customs Union Protocol and the Common Market Protocol. It is time that the stakeholders in the EAC integration process highlighted the imminent dangers posed by the Kenya-UK EPA on the EAC integration.

Dar reaffirms AfCFTA vow (Dailynews)

President Samia Suluhu Hassan has reaffirmed Tanzania’s commitment to ratify the Africa Continental Free Trade Area (AfCFTA). She also pledged that Tanzania will fully support the continent economic emancipation drives. Once Tanzania ratifies the agreement, it is expected to have access to a market of over 1.3 billion people across the continent. A statement issued by the Directorate of Presidential Communications said President Samia made the pledge, when she met with the Secretary General of the AfCFTA Secretariat, Mr Wamkele Mene, at the State House in Dodoma, yesterday. “The government is finalising the process towards the ratification of the AfCFTA agreement. On the other hand, Tanzania will fully collaborate with you to achieve your mission of recovering the economy of the African continent,” said President Samia.

TRA waives 15 pc import duty on industrial sugar (Dailynews)

Tanzania Revenue Authority (TRA) has from today waived the 15 per cent import duty on industrial sugar for use in industries. The move follows the 2021/22 budget tabled by Minister for Finance and Planning, Dr Mwigulu Nchemba indicating the government strong commitment to further improve the business environment in the country. According to TRA Commissioner General, Alphayo Kidata the import duty was among the concerns raised by business people in the country. The additional 15 per cent duty on imported industrial sugar to Tanzania was imposed to curb misuse of the commodity by unscrupulous traders selling it on the local market for domestic use, and hence posing unfair competition for local producers of domestic sugar.

Six months after, Nigeria yet to domesticate, implement AfCFTA (Guardian)

Six months after trading officially commenced under the African Continental Free Trade Area (AfCFTA), Nigeria and some other countries continue to lag behind, having stalled the process to domesticate trade protocols in line with the implementation of the new trade regime. With the rules of origin yet to be defined, Nigerian exporters and manufacturers are left in the dark on the next line of action as other countries take national positions in safeguarding local industries and expanding regional agenda.

Though the Nigerian Office for Trade Negotiations (NOTN), in February, unveiled trading requirements for Nigerian traders under the AfCFTA, while also identifying 89 items that qualify for preferential trade under the deal, the delay in domesticating the treaty remains a challenge for its operationalization. With the details of tariff lines yet to be unveiled, manufacturers, traders and other exporters are awaiting a comprehensive list of the products that would be liberalised and restricted under the trade deal.

Rwanda economy hit hard as infections rise (The East African)

Rwanda is grappling with a rise in Covid-19 infections, which has forced the government to re-impose containment measures to stem its spread countrywide. Faced with a risk of a severe third wave, the government last week imposed restrictions that are expected to dampen recovery after the economy recovered to a modest 3.5 percent in the first quarter of this year after slowing to 3.6 percent year-on-year in the first quarter of 2020, from 6.1 percent in the same period in 2019. The pandemic has hit Rwanda’s key strategic services sector, particularly retail trade, leisure, hospitality and conference tourism, which collectively account for most jobs in the country.

White gold gamble: Togo turns to private sector for cotton revival (Eyewitness News)

In a bold but contested strategy, the West African state of Togo has bet heavily on the private sector to revive its struggling cotton industry. ‘White gold’, as cotton is sometimes called, accounts for only between one and 4.3% of the country’s GDP, bringing 500,000 jobs for a population of 8.8 million. Yet cotton also has huge potential in terms of job creation, especially for the poorest and smallest producers in the marginalised north. Eyeing the success of privatisation in neighbouring Benin, Togo last December sold a majority stake in its largest cotton producer, the New Cotton Company of Togo (NSCT), to a Singaporean giant. NSCT says it aims to produce 135,000 tonnes next year and 225,000 by 2025 – a target that many say is a big ask.


AfCFTA considers $40b fund for tariff-reducing countries (Graphic Online)

The African Continental Free Trade Area (AfCFTA) Secretariat, is working towards establishing an adjustment fund to serve as a cushion for countries that will reduce their tariffs to support the implementation of the agreement. The secretariat said it was concerned about the possible drop in revenue for countries in that circumstance and that the fund would help to lessen the economic impact of tariff reduction on such countries. The secretariat said it had already made available $1.5 billion for the fund and was mobilising resources to increase it to $40 billion. Mr Wamkele Mene stressed the need for governments to desist from considering tariffs as a revenue generation tool, but should rather be an industrial development tool to propel the growth of the continent.

He, however, mentioned currency convertibility as among the key issues affecting trading within the continent, revealing that the cost of currency convertibility alone added about $5 billion to the cost of doing business in the continent. To address this challenge, he said the secretariat was establishing a Pan-African payment platform which would offer businesses an opportunity to conveniently make payments without necessarily converting their currencies. “We are also establishing digital platforms that will enhance the ease of doing business. This will make it easier for SMEs to connect with larger markets on every part of the continent and accelerate interconnectivity,” he said.

AfCFTA strengthens the continent’s energy transition (ESI-Africa)

The AfCFTA Agreement aims to reduce all trade costs and enable Africa to integrate further into global supply chains – it will eliminate 90% of tariffs, focus on outstanding non-tariff barriers, and create a single market with free movement of goods and services. Cutting red tape and simplifying customs procedures will bring significant income gains. Beyond trade, the pact also addresses the movement of persons and labour, competition, investment, and intellectual property.

One of the industries that can benefit from AfCFTA is the energy sector, both the traditional oil and gas operators as well as the growing number of renewable enterprises. Oil and gas and mineral resources account for more than 75% of the continent’s exports and with the high growth potential in oil and gas, it will still have a role to play in the short and mid-term. Estimations vary but recent figures put Africa’s proven gas reserves at 487.7 tcf with proven oil reserves in the region of 125 billion bbl.

Countries Implementing the Simplified Trade Regime Set to Rise (COMESA)

Ethiopia is set to start implementing the COMESA Simplified Trade Regime (STR) and other related trade facilitation instruments, which are critical in strengthening cross-border and COMESA intra-regional trade especially during this time of the COVID-19 pandemic. Eight other regional States including Burundi, D R Congo, Kenya, Malawi, Rwanda, Uganda, Zambia, and Zimbabwe are already implementing the STR. COMESA launched the STR in 2010 to simplify and streamline the documentation and procedures for the clearance of small cross border traders’ consignments, while enabling them to benefit from the COMESA preferential tariffs trading environment. “Previously, preferential trade regime benefitted the big and established traders who are able to obtain the Certificates of Origin and to complete required customs documents with ease. This excluded small-scale traders,” said the Director of Trade and Custom in COMESA, Dr Christopher Onyango.

Can EAC partner states have centralized tax system? (Independent)

Uganda’s finance ministry and Uganda Revenue Authority executives have agreed that there is need to centralize collection of revenues within the East African Community. This, they say, will play an important role on mitigating tax competition which has significant implications on attracting investors. Leonard Kizito Ojara, the Commissioner of Economic Affairs at the Ministry of EAC Affairs revealed during the Post-EAC Budget Dialogue on June.22 that Uganda as a member of the trading bloc is ready to implement policies geared towards the harmonization of the policies because the government knows its implications. “Uganda has an elaborate regime that lists the qualifying sectors. In Kenyan and Tanzania, regimes are wider without being limited to specific sectors,” SEATINI Uganda Executive Director, Jane Nalunga said adding that Uganda tries to favor local industries and EAC citizens.

African mining needs responsible rethink for future success (Mining Weekly)

Amid a changing operating landscape being shaped by the Covid-19 pandemic, technology advancement and climate change, the African mining sector finds itself in unchartered and uncertain territory, necessitating a shift in how the sector will operate going forward. To this end, stakeholders such as policy think tank SAIIA senior fellow Deon Cloete says the African Mining Vision (AMV), which was drafted in 2009, already illustrated the need for futures literacy, foresight and anticipatory governance. Mastering the ability to view uncertainty as a resource, rather than the enemy of planning, is key to transforming the African mining sector. Therefore, adopting the discipline of anticipation in the aftermath of the global Covid-19 pandemic should include the use of foresight methods beyond the conventional limitations of mineral and mining forecasting, he points out.

Skills Development, Education and PPPs Key for Successful Job Creation in Africa (expert) (UNECA)

The Economic Commission for Africa and NKC African Economics (an Oxford Economics company) launched today a joint report on “Best Practices in Job Creation, lessons from Africa.” “Through this document, we are sharing successful job creation policies with the hope that they will provide insights and learning for other countries across the region”, said Amal Elbeshbishi, Economic Affairs Officer in charge of employment at the ECA Office for North Africa. This new report reveals that “a focus on skills development and education not only improves employability, but also provides the youth with the tools needed to be successful in entrepreneurship endeavours. Meanwhile, fiscal pressures have intensified following the COVID-19 pandemic, and it will become increasingly imperative [for governments] to partner with the private sector to implement employment creation initiatives,” according to Cobus de Hart, Head of Consulting at NKC African Economics.

EAC Sectoral Council on Transport, Communications and Meteorology directs United Republic of Tanzania to join EAC Roaming Framework by September 2021 (EAC)

The EAC Sectoral Council on Transport Communications and Meteorology (TCM) has directed the United Republic of Tanzania to adhere to the set date of 30th September, 2021 on the implementation of the EAC Roaming Framework. The TCM which met in Dar es Salaam, Tanzania further directed the Republic of Burundi to expedite the implementation of the EAC Roaming Framework. The EAC Roaming Framework or One Network Area was meant to harmonise mobile and data roaming charges across the region and make affordable calls starting from and ending within the region, in addition to enhancing intra-regional trade. The framework imposed price caps on roaming charges and called for the removal of surcharges on cross-border telecommunications traffic. So far, the Republics of Kenya, Rwanda, Uganda and South Sudan have implemented the framework.

African RECs move to formalize and consolidate closer cooperation on labour migration policies (African Union)

The IOM JLMP Programme Coordinator, Mr Edwin Righa said that ‘labour migration has become very important for development and integration of the African continent as highlighted in some of the flagship programmes and policy frameworks like the Migration Policy Framework for Africa (MPFA), the African Union Free Movement Protocol and the Global Compact for Migration’. He highlighted that political will to facilitate trade in the continent must be matched with facilitation of the Rights of Movement, Residence and Establishment as articulated in AU and RECs Protocols and frameworks. It was clearly noted that the AU Free Movement Protocol was the bedrock of facilitating labour migration in the continent, hence all hands should be on deck to facilitate ratifications among AU Member States.


Members and stakeholders provide new impetus to future WCO work on cross-border e-commerce (World Customs Organization)

On 28 and 29 June 2021 the World Customs Organization (WCO) held its Second Global Conference on Cross-Border E-Commerce that was organized with the financial support of the Customs Cooperation Fund of Japan and gathered more than 800 experts from Member Customs administrations, partner international organizations, regional organizations, industry associations, the private sector, development partners and academia. “New business models and the characteristics of e-commerce present a number of challenges that affect the basic principles of traditional Customs procedures,” said the WCO Secretary General, Dr. Kunio Mikuriya in his opening speech. “The WCO Framework of Standards on Cross Border E-Commerce offers 15 standards that broadly cover all issues of relevance to the management of the growing volumes of small and low-value consignments.”

The Secretary General of the International Chamber of Commerce (ICC), Mr. John Denton, joined the WCO Secretary General in the opening session of the conference and highlighted the paramount importance attributed by the ICC to the relationship with the WCO. “The future belongs to a fully digitally-enabled trading system”, said Mr. Denton. “Customs administrations have made remarkable steps to secure cross-border trade in the face of the unprecedented shock created by the spread of the coronavirus. From an economic perspective, you are the true heroes of the pandemic. But it is vital that we don’t lose the gains that we have made through your emergency actions”, the ICC Secretary General added.

World Bank Financing for COVID-19 Vaccine Rollout Exceeds $4 Billion for 50 Countries (World Bank)

The World Bank announced today that it is providing over $4 billion for the purchase and deployment of COVID-19 vaccines for 51 developing countries, half of which are in Africa. More than half of the financing comes from the International Development Association (IDA), the Bank’s fund for the world’s poorest countries, and is on grant or highly concessional terms. This financing is part of the Bank’s commitment to help low- and middle-income countries acquire and distribute vaccines and strengthen their health systems. Since the start of the COVID-19 pandemic, the World Bank Group has approved more than $150 billion to fight the health, economic, and social impacts of the pandemic.

WTO issues new update on trade in medical goods in the context of COVID-19 (WTO)

Following up on the revised note issued on 22 December, the Secretariat’s latest update includes 2020 trade statistics for medical goods from around 100 economies as well as comparisons with 2019 trade statistics. The report also includes a special case study on diagnostic reagents and test kits, two critical products for monitoring the prevalence of the virus and which constitute a crucial barometer for governments to determine policies to fight the COVID-19 pandemic. Trade in medical goods continued to register phenomenal growth of 16.3 per cent in 2020 compared to the 4.7 per cent growth of the same sector in 2019. Medicines remained the largest category by trade value, with more than 50 per cent of the total share of medical goods both in 2019 and in 2020.

World Bank, IMF, WHO, WTO heads call for urgent action to accelerate global vaccine access (WTO)

As many countries are struggling with new variants and a third wave of COVID-19 infections, accelerating access to vaccines becomes even more critical to ending the pandemic everywhere and achieving broad-based growth. We are deeply concerned about the limited vaccines, therapeutics, diagnostics, and support for deliveries available to developing countries. Urgent action is needed now to arrest the rising human toll due to the pandemic, and to halt further divergence in the economic recovery between advanced economies and the rest.

WTO Informal Dialogue Calls for Ministerial Declaration on Plastics (IISD)

World Trade Organization (WTO) members participating in the Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP) explored ways to strengthen policy coherence through collective approaches and improved technical assistance to developing countries such as to support global efforts to reduce plastic waste and achieve a circular plastics economy. To guide further action, participants called for a declaration at the WTO’s Twelfth Ministerial Conference (MC12). Among the key topics identified by the proponents for discussion in 2021 are: improving transparency; monitoring trade trends; promoting best practices; strengthening policy coherence; identifying the scope for collective approaches; assessing capacity and technical assistance needs; and cooperating with other international processes and efforts.

Strengthening corporate governance should be a priority to boost economic recovery, says OECD (OECD)

The COVID-19 pandemic has exacerbated existing structural weaknesses in the corporate sector and capital markets. Without an effective policy response, the number of undercapitalised and underperforming firms will likely rise and remain high, while an increasing amount of productive resources will be tied up in non-viable companies, dragging down investment and economic growth, according to a new OECD report. The Future of Corporate Governance in Capital Markets Following the COVID-19 Crisis says that substantial financial resources will be needed for investment both to support the recovery from the COVID-19 crisis and to further strengthen resilience to possible future shocks. Strengthening corporate governance policies and frameworks will help both existing and new companies access the capital they need.

World must strike right balance between ocean protection and production (UNCTAD)

This year’s World Oceans Day on 8 June looked at the role of oceans in the lives and livelihoods of all. This viewpoint is critical as the world seeks sustainable, regenerative ways for people to live and work with the ocean and develop a healthier relationship with our blue planet. To acknowledge the significance of the ocean to the 3 billion people that depend on it for their food and livelihoods, UNCTAD Special Adviser for the Blue Economy, Dona Bertarelli, spoke at a series of events during the month-long ocean celebrations. Throughout her engagements in June, Ms. Bertarelli emphasized that it’s critical to pull off the great balancing act between production and protection of our oceans.

Protecting nature could avert global economy losses of $2.7 trillion per year (World Bank)

A new World Bank report estimates that the collapse of select ecosystem services provided by nature – such as wild pollination, provision of food from marine fisheries and timber from native forests – could result in a decline in global GDP of $2.7 trillion annually by 2030. The Economic Case for Nature underscores the strong reliance of economies on nature, particularly in low-income countries. The report highlights that Sub-Saharan Africa and South Asia would suffer the most relative contraction of real GDP due to a collapse of ecosystem services by 2030: 9.7 percent annually and 6.5 percent, respectively. This is due to a reliance on pollinated crops and, in the case of Sub-Saharan Africa on forest products, as well as a limited ability to switch to other production and consumption options that would be less affected.


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