Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News


Manufacturing output up 35% y/y in May (Engineering News)

Manufacturing output increased by 35.3% year-on-year in May, Statistics South Africa (Stats SA) reports. The largest contributors to the increase in output were motor vehicles, parts and accessories, growing by 215% and contributing 8.9 percentage points; and basic iron and steel, nonferrous metal products, metal products and machinery, growing by 42% year-on-year and contributing eight percentage points. The Steel and Engineering Industries Federation of Southern Africa (Seifsa) chief economist Chfipa Mhango says that while the improvement in manufacturing production was encouraging, the recent move to tighter lockdown regulations threaten to undo some of that improvement. Stats SA reports that seasonally adjusted manufacturing production decreased by 2.6% in May, compared with April, which followed month-on-month changes of -1.2% in April and 3.7% in March. Nedbank says manufacturing production remains well below its pre-pandemic levels, with output 7.5% weaker than its 2019 levels and 8.4% lower than the 2017 to 2019 average.

Report on Inequality Trends and Diagnostics in Kenya 2020 released (University of Nairobi)

A report that presents a comprehensive analysis of multidimensional inequality in Kenya has been released. The report dubbed ‘Inequality Trends and Diagnostics in Kenya 2020,’ presents and interprets results from inequality analyses and measurements based on per capita household expenditure, assets, labour market earnings and access to labour market, to education and health and other basic services. “The multidimensional approach to profiling inequality adopted in the report can facilitate the design of policy levers for addressing horizontal & vertical inequities that have been entrenched in Kenya for a long time,” said the Director General, KNBS, Mr. Macdonald Obudho.

Kenya mulls promotion of horticultural produce in non-traditional markets (News Ghana)

Kenya has embarked on the promotion of its horticultural products in non-traditional markets to boost foreign exchange earnings and cushion the sector from pandemic shocks, an official said on Monday. Kello Harsama, acting director-general of the Agriculture and Food Authority (AFA) said that diversifying to new markets for horticultural produce will help boost the sector’s performance. “We are now exploring Russia, Asia, Uganda, South Sudan, Democratic Republic of the Congo, Tanzania, the Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA),” Harsama told journalists in Nairobi.

Horticulture earnings drop Sh6bn on quality concerns (Business Daily)

Horticulture earnings dropped by Sh6.3 billion in the first half of the year, attributed to lower quality produce that attracted reduced prices in the international market. The Directorate of Horticulture data shows Kenya earned Sh77 billion between January and June, down from Sh83.3 billion last year. This is the steepest decline in earnings for the horticulture industry in the last five years, raising concerns over quality standards, especially in the avocado sector where some farmers have been harvesting immature fruit.” Value dropped by Sh6.3 billion attributed to low prices offered in the international market for low quality produce. Interceptions also contributed to low value traded over the half-year period,” said Benjamin Tito, head of the directorate.

Current account deficit widens as tourism slump hits inflows (Business Daily)

Kenya’s current account position weakened in May due to a drop in inflows from travel and tourism amid a rise in import expenditure. The Central Bank of Kenya (CBK) said the current account deficit – which measures inflows and outflows of hard currency – widened to 5.5 percent of gross domestic product (GDP) in the 12 months to May compared to 5.2 percent of GDP in the corresponding period last year. The CBK said international travel and tourism inflows remained subdued since last year as arrivals are lower by more than 70 percent compared to the pre-pandemic period. On the other hand, import expenditure, especially on capital goods has continued to rebound after the reopening of firms and industries, but exports recorded a slower recovery.

Used vehicle importers sue to stop number plates rule (Business Daily)

Importers of used cars have gone to court seeking to stop a requirement that their vehicles be assigned registration number plates at the point of clearance and not when selling them. They say this has put them at a disadvantage if they take months or years to sell their vehicles in a market where buyers prefer the latest number plates. This, they say, force them to offer discounts – which can amount to losing their entire margins of Sh50,000 to Sh200,000 per unit – on vehicles that may not be older but were imported earlier and do not bear the latest number plates. The Car Importers Association of Kenya (CIAK) says used vehicle importers are being discriminated against since formal dealers and other importers of new cars are allowed to register their vehicles at the point-of-sale. Their rivals, who are allowed to keep their imports at the bonded warehouses, are also not required to pay customs and excise duty before the vehicles are sold.

Covid measures push businesses to the edge (The East African)

Small and medium enterprises and the stock market in Uganda are facing another round of stress following the July 18 announcement of more coronavirus containment measures. Although financial analysts are betting on business resilience in the second half of this year despite the poorer economic indicators, the reality is that there is a slump again in general economic activity with the suspension of mass public and private transport, suspension of weekly food and non-food markets and a longer curfew. These measures mean fewer buyers for retail businesses since last month and increased signs of financial distress by small and medium enterprises.

Malawi, Zimbabwe sign bilateral trade agreement (Malawi Nyasa Times)

Malawi and Zimbabwe on Monday signed bilateral trade agreement in order boost trade between the two countries. Speaking during the event held at Umodzi Park in the Capital City Lilongwe, Minister of Trade Sosten Gwengwe said the agreement follows up to another agreement which the two countries signed in 1995. She said with the agreements in place, Zimbabwean companies can export directly to Malawian companies using distributorship and agents. She encouraged companies to partner with local distributors in Zimbabwe for the benefit of market information trends and consumer buying patterns. The main trade between Zimbabwe and Malawi as of 2019 include corrugated paperboard; cement; iron and steel structures; packing containers of paper, paperboard, cellulose wadding or webs of cellulose fibres; rough wood; agrochemicals, seeds, maize and fish.

Nigeria’s lack of logistics capacity threat to AfCFTA, PIB gains – Expert (Tribune Online)

Nigeria’s lack of logistics capacity may prevent the country from reaping the full benefits of the Africa Continental Free Trade Area Agreement (AfCFTA) and the newly passed Petroleum Industry Bill (PIB). This is the view of a logistics expert, Mubarak Mahmoud, who observed that there is a massive human capacity gap in the logistics administration sector in the country. Mahmoud, a marine officer/Offshore oil and gas expert, told newsmen in Abuja Monday that Nigeria does not have skilled persons in logistics field to fill strategic logistics positions offered by AfCFTA and PIB.

Manufactured imports rise to N40.94tn, Nigeria exports N4tn goods (Punch Newspapers)

Between January 2017 and March 2021, Nigeria spent N40.94tn on the importation of manufactured goods. It earned only N4.22tn on the export of manufactured goods within the same period. These are according to data obtained from the Foreign Trade report of the National Bureau of Statistics. In the review period, total value of imports was N66.43tn and total value of exports was N67.30tn. Manufactured goods dominated the import bill but contributed little to the export bill of the nation. Nigeria’s exports were dominated by crude oil according to statistics obtained from the NBS. In the review period, the nation exported N49.31tn worth of crude oil compared to manufactured goods that only earned the nation N4.22tn.

Customs Facilitates N52.6bn Hibiscus, Cocoa, Others (LEADERSHIP)

The Nigeria Customs Service (NCS), Area ll Command, Onne Port, Rivers State, said that goods worth N52.6 billion were exported through the command in the first half of the year. These exports, according to a statement by the command’s public relations officer, Ifeoma Onuigbo Ojekwu, include; sesame seeds, ginger, cocoa beans, hibiscus, fluorite ore, lead ore, palm kernel shell, cotton, float glass, among others. The total tonnage of the said export stood at 331.356.39 tonnes with FOB value of $138 million. The statement reads: “The revenue generation, strict enforcement of fiscal policies, uncompromising implementation of government directives and diligent trade facilitation are among strategies put in place by Comptroller Auwal Mohammed, Customs Area Controller of the command.”

AfDB-financed road interchange opens in Ghana to help ease mobility (Devdiscourse)

Ghana’s President Nana Akufo-Addo commissioned the Pokuase Interchange – an array of swirling highways – at a ceremony held Friday 9 July, attended by government ministers, diplomats, transport operators, members of parliament and traditional chiefs draped in colourful regalia. The four-tier interchange – the first of its type in West Africa – and a 10-km road network linking it to adjoining arterial roads, form part of the Accra Urban Transport Project. The Bank Group provided $83.9 million for the project from the African Development Fund, its concessional financing window, and the Ghanaian government contributed $11 million.

Trapped Trucks At Benin Border, Threat To AfCFTA – Ex-LCCI DG (LEADERSHIP)

The former director-general of Lagos Chamber of Commerce and Industry (LCCI) Dr Muda Yusuf, has berated the action of officials of government of Benin Republic, who stopped 3,700Nigeria-bound trucks from passing through their border. Yusuf described the action as a threat to economic integration in Africa. LEADERSHIP reported on Monday that the government of Republic of Benin stopped Nigeria-bound trucks laden with transit goods from Cote d’ivoire, Ghana and Togo from passing through its border to Nigeria. This development has left over 3,700 Nigeria-bound trucks laden with transit goods worth several billions of naira trapped between Ilakoji, a border between Ghana, Togo and Benin.

ECA partners with OECD and Afreximbank to help Egypt in its product transformation policy review to benefit from the AfCFTA (UNECA)

Egypt today launched a Product Transformation Policy Review (PTPR) which aims to help position the country to fully benefit from the African Continental Free Trade Area (AfCFTA). With the theme: “Embracing Change, Achieving Prosperity,” the PTPR is to understand how to capture the benefits of the AfCFTA for transforming the economy of the country, the Director of the Regional Integration and Trade Division in the ECA Stephen Karingi, said at the launch, the first for an African country. “The real test will be securing these gains through quick and effective implementation of the Agreement, along with supporting policies needed to address other barriers to trade, investment and product transformation,” he said.


AfCFTA Secretariat signs MoU with African Shippers Council (GhanaWeb)

The African Continental Free Trade Area (AfCFTA) Secretariat has signed a Memorandum of Understanding (MoU) with the African Shippers Council to facilitate trading process in Ghana. According to AfCFTA Secretary-General, Wamkele Mene this agreement will solve the problems associated with the transportation and clearing of goods at the ports. These challenges, he said slow down inter African trade. “Transportation of goods, clearance of goods through customs and customs procedures are very important factors in the implementation of this agreement. As a secretariat, we are not in the position to address these challenges alone, we would have to work with the private sector and that is why the engagement and the collaboration with the Union of African Shippers Council is so very important.” Wamkele Mene said the new agreement between the Shipping Council will help the secretariat to achieve its objectives.

ITFC launches report on potential impacts of AfCFTA on OIC countries (Devdiscourse)

The International Islamic Trade Finance Corporation (ITFC) and its partner the Statistical, Economic and Social Research and Training Centre for Islamic Countries (SESRIC), today launched a technical report on the potential impacts of the African Continental Free Trade Area (AfCFTA) on selected OIC countries, namely Côte d’Ivoire, Egypt, Guinea, Mozambique, Tunisia and Uganda. The launching event unveiled the key findings of the report, covering important topics including the facilitation of investments in productive capacities to differentiate products and strengthen the competitiveness of domestic enterprises

Continental payment system piloted (Namibian)

The Africa Export-Import Bank (Afreximbank) is piloting a pan-African payments and settlements system to enhance continental economic integration. The system is currently tested in Gambia, Ghana, Guinea, Liberia, Nigeria, as well as Sierra Leone. This is a good move, according to Namibia Trade Forum (NTF) trade policy analyst Claudia Capelao, who says successful continental economic integration hinges, to a large extent, on payment system integration. The roll-out of payment systems is expected to commence by the end of 2021, however, digital preparedness among African countries could be a limiting factor. Capelao recently said liberalising trade does not involve the elimination of tariffs only, and there are other potential obstacles, such as how goods would be paid for.

AFRAA releases African airlines’ performance updates for June 2021 (AFRAA)

The month of June saw African airlines’ traffic decreasing by 59% compared to same month in 2019. Similarly, capacity declined by 49.6% as of June 2021. Domestic markets continue to record better performance with demand for passenger travel outperforming intra-Africa and intercontinental at 63.2% as opposed to 22.2% for intra-Africa and 13.9% for intercontinental. African airlines restart of operations on international routes continued the positive trend observed in the last couple of months. From a May 2021, recovery of some 62.5% of international routes compared to the pre-Covid period, June 2021 saw an additional 10.2% increase to 72.7%. Regarding intra-African connectivity, Mauritius continues to be the most impacted hub, with a reduction of 98% of possible connections to/from African airports compared to February 2020. Connectivity at Nairobi JKIA in June declined mainly due to schedule adjustments and frequency reduction by national carrier, KQ. Up North, intra-African connectivity for Algiers and Cairo decreased by 75% and 64% respectively.

Africa’s rail sector poised for growth (International Railway Journal)

AS the world’s second largest continent, the list of transport challenges facing Africa is long. Often it is easier to fly via a European capital than flying direct between African capitals. Transport costs are also among the highest in the world, which increases the cost of trade and makes products uncompetitive on international markets; transporting a car from Japan to Abidjan costs $US 1500, inclusive of insurance costs, while the same operation across Africa from Addis Ababa to Abidjan costs $US 5000. According to the Programme for Infrastructure Development in Africa (PIDA), connecting Africa through infrastructure is integral to improving economies across the continent. Only 16.6% of total exports from Africa are with neighbouring countries, with intra-African commerce beset by many challenges including logistical and trade barriers.

DRC’s admission to EAC sees regional bloc brace for potential problems (The Africa Report)

The Democratic Republic of Congo (DRC) is applying to join the East African Community (EAC) and could become the regional economic community’s seventh member. It would bring a huge market for the region’s exporters and also provide a venue for the DRC’s disputes with Rwanda and Uganda that go back decades. After a preliminary discussion about the DRC’s application at a summit on 27 February, the EAC is now assessing if the country could be a suitable candidate. A team from the EAC secretariat completed its verification mission to the eastern DRC city of Goma on 3 July. The report will be presented to presidents of the EAC member states in November or December, to help them make their decision.

Africa’s 4 $1b fintech unicorns could pave the way for startups (Quartz Africa)

There is a wave of optimism around the first four African start-ups to hit a $1 billion valuation. These $1 billion+ companies – typically referred to as unicorns – are Flutterwave, Interswitch, and Fawry in fintech, and Jumia in e-commerce. Emerging markets investment analysts are betting on these two sectors, staked on the continent’s tech-savvy population, to provide even more unicorn status companies for the region. Three of these unicorns are from Africa’s most populous country and also its largest economy – Nigeria – while the other one, Fawry, is from Egypt, where tech start-ups are attracting massive funding from venture capitalists in the recent past. The continent’s large unbanked population, most of whom are informally employed but increasingly mobile and tech savvy provides immense potential for tech start-ups to tap into the payments and e-commerce sectors, according to Rahul Shah, an analyst at emerging markets investment insights company, Tellimer.

COVID-19 and poverty’s impact on electricity access in sub-Saharan Africa (Brookings Institution)

On June 14, the United Nations released its 2021 Sustainable Development Goals (SDG) Report, which examines the world’s progress toward accomplishing the SDGs. The most recent edition placed special emphasis on the COVID-19 pandemic given its role in reversing many SDG gains. More specifically, the authors note that years or even decades of progress have been halted or reversed due to the pandemic. While the electricity sector has increased and renewable energy has improved, millions of people still find themselves without power and many major improvements are under threat. While 46 percent of sub-Saharan Africa’s population now has access to electricity – up from 33 percent in 2010 – the region is far behind the global average of 90 percent. Indeed, 97 million people in urban areas and 471 million in rural areas are still without access to electricity.


Ensuring open, competitive and fair digital markets (UNCTAD)

Authorities in developing countries face several challenges in enforcing competition law against digital platforms, participants heard during an UNCTAD experts meeting on competition law and policy held from 7 to 9 July. An UNCTAD survey found that the major challenges include definition of the relevant market and determination of dominance in digital markets. The survey report maps several areas of challenge. It says the dynamic structure of digital markets, zero-price services, network effects, market tipping, lock-in effects and multihoming are among the factors that require careful consideration when defining markets and determining market power.

Sustainable Economic Recovery & Resilience Building Post-COVID 19 (IPPMedia)

“We must prepare ourselves to create long-term resilience through investment in Africa’s infrastructure considering the new realities posed by the pandemic. Investments in infrastructure will enhance the continent’s resilience, sustainability, and preparedness to future crises while stimulating recovery. Exploring diverse mechanisms is vital to secure financing for infrastructure projects, cognizant of the fact that the pandemic has already strained national budgets to a great extent,” said H.E. Dr. AmaniAbou-Zeid, Commissioner for Infrastructure and Energy at the African Union Commission, at the STC-TTIIE.

US$345 billion loss in trade for Commonwealth countries due to pandemic (The Commonwealth)

Commonwealth countries are estimated to have lost up to US$345 billion worth of trade in 2020, including $60 billion in intra-Commonwealth trade, according to 2021 Commonwealth Trade Review on “Energising Commonwealth Trade in a Digital World: Paths to Recovery Post-COVID”. The COVID-19 pandemic has taken a heavy toll globally, substantially impacting all Commonwealth members economies and leading to US$1.15 trillion in foregone gross domestic product (GDP) in just one year. Compared to pre-pandemic growth trends in 2020, Commonwealth economies contracted by approximately 10%.

Future UK trade agreements need to be compatible with its obligations on climate change, according to new report (QMUL)

The policy briefing, “How Trade Can Support Climate Action: A 2021 Agenda for the UK”, co-authored by experts from Queen Mary and the Trade Justice Movement launched at an online event on 13 July sets out how the UK is in a unique position to influence the international trade regime to support climate action. The Trade Justice Movement (TJM) is a UK coalition of nearly sixty civil society organisations, with millions of individual members, calling for trade rules that work for people and planet. How Trade Can Support Climate Action: A 2021 Agenda for the UK, outlines how three important pillars of the UK’s approach to tackling climate change – decarbonising the economy, creating green jobs and industries and delivering more sustainable food and farming systems – could either be helped or hindered by trade rules. It also makes practical recommendations for the UK government.

Dancing in the dark: What Brexit means for UK-EU trade and UK industry (EUROPP)

Five years ago, the UK voted to leave the EU. After four years of complicated negotiations, and three Prime Ministers later, the UK and the EU concluded the Trade and Cooperation Agreement (or TCA, also known as the post-Brexit Treaty) in December 2020. The TCA was heralded as a free trade agreement with the best possible positive effects for British industry in general and exporting companies in particular. While economies everywhere face adjustment problems, Brexit has made life for UK businesses structurally harder and disproportionately more so than for companies in the EU.

Rich Country Hypocrisy Exposed by Vaccine Inequities (Inter Press Service)

‘No one is protected from the global pandemic until everyone is’ has become a popular mantra. But vaccine apartheid worldwide, due to rich countries’ policies, has made COVID-19 a developing country pandemic, delaying its end and global economic recovery. Most rich countries have been blocking the developing country proposal to temporarily suspend relevant provisions of the World Trade Organization (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) for the duration of the pandemic to more affordably and effectively contain it. Needed to quickly scale up production and affordable access to relevant diagnostic tests, medical treatments, personal protective equipment and prophylactic vaccines, the proposal – by South Africa and India in late 2020 – is now supported by more than two-thirds of WTO members.

Fair trade steps for small-scale growers in climate journey (Business Daily)

Ensuring a “fair and just” value chain is about ensuring consumers are willing to pay fair prices to ensure producers earn decent livelihoods. It is also about ensuring a fair and sustainable supply chain that protects nature and the environment. Sadly, addressing climate change isn’t fair. Often, it’s those with the lowest carbon footprint who are hit hardest. Small-holder farmers are grappling with the loss of arable land, yields, and livelihoods, due to extreme weather and rising temperatures. Droughts, floods, crop diseases, pests, and soil erosion threaten the livelihoods of small-scale farmers. There are low-cost, everyday “fair trade” practices which small producers can embrace to grow resilience to climate change, and reduce emission of greenhouse gases.

Narrowing the trade finance gap for LDCs (Trade for Development News)

LDCs have long been disproportionately impacted by a global trade finance gap that the Asian Development Bank estimated in 2019 exceeded $1.5 trillion. A recent report by the African Export-Import Bank (Afreximbank) confirmed that in the first four months of 2020 around 38% of local banks in Africa reported rising rejection rates for trade finance instruments like letters of credit while more correspondent banking relationships were cancelled. LDCs are particularly vulnerable to global shocks, such as financial crises or the current pandemic, which either weaken international banks’ risk appetite or trigger a surge in competing financing demand from other countries. This is in part because LDCs must effectively “import” such finance from foreign banks. LDCs also need support from organizations like the WTO to develop trade finance products that incentivize companies to finance trade through formal banking channels, Ahmady adds.

The World Investment Report 2021 And The Problem With FDI (The Organisation for World Peace)

The United Nations Conference on Trade and Development (UNCTAD) recently published its annual World Investment Report 2021. True to its title, Investing in Sustainable Recovery, the report highlights the effects that the pandemic has had on foreign direct investment (FDI). The pandemic shrunk FDI flows to Africa by a further 16%, due to the commodity-dependence of its economies. Africa faces an FDI paradox: investments should theoretically flow to the countries with the highest returns. Even though African nations had the highest rate of return on FDI from 2006 to 2011, the inflow hasn’t followed. There are several reasons for this given by academics. These include weak infrastructure development, low human capital, weak judicial systems, weak property rights, fragmented investment policies, and limited access to investment opportunities.

High global food prices remain cause for concern (Global Times)

While global food prices finally fell after experiencing 12 consecutive months of increases, vigilance is still needed to stave off uncertainties facing the international food supply. According to the United Nation Food and Agriculture Organization (FAO), its latest monthly food price index, which tracks the international prices of commonly traded food commodities, averaged 124.6 points in June, down from 127.8 in May but still up 33.9 percent year-on-year. The June figure also marked the first month-on-month decline after advancing for 12 straight months. Despite the minor correction, it is worth noting that the global food inflation is currently at a level unseen in almost a decade, which is why countries around the world still need to be cautious toward the potential adverse impacts brought by the high food prices and increased volatility in the future.


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