tralac Daily News
Business seeks to nudge localisation debate beyond import substitution (Engineering News)
Business is aiming to progress ongoing negotiations on the use of local-content regulations to revive manufacturing in South Africa beyond calls for blanket import substitution by identifying specific products or sectors where the country has the competitive advantages in place to increase domestic production. Trade, Industry and Competition Minister Ebrahim Patel has requested business to consider an import-substitution target of 20% for non-petroleum imports, which he says could drive progressive localisation worth up to R200-billion over the coming five years.
The Freight Forwarding Industry in South Africa 2021 (Research and Markets)
The freight forwarding and customs clearance sector makes a major contribution to facilitating trade in South Africa and co-ordinates over 80% of South Africa’s international trade. Ongoing waves of the pandemic continue to hamper the trade in goods by supressing consumer spending and causing congestion and disruptions at ports. These factors are driving up container freight costs and hampering the industry’s recovery. Most recently the sector has also been affected by rioting in Gauteng and KwaZulu-Natal, which disrupted trucks and port operations.
Uganda trade deficit widens, as imports from Tanzania hit 19pc (The East African)
According to the Ministry of Finance, Bank of Uganda and Uganda Bureau of Statistics (UBOS) latest data, imports from Tanzania have capped a seven-month surge, replacing Kenya as Uganda’s biggest source of imports in the region. Imports from Tanzania accounted for 19.2 percent of Uganda’s total imports bill in May, followed by China, India, Kenya and the United Arab Emirates, at 15 percent, 9.6 percent, 9.2 percent and 7.9 percent, respectively.
The deficit stands at $105.31 million with the EAC, with Tanzania accounting for the largest share of the deficit at $138.2 million. It more than offset the surpluses recorded with South Sudan, Burundi and Rwanda of $50.5 million, $6 million and $0.02 million, respectively. Uganda’s imports from Tanzania were $149 million, followed by Kenya with $71.6 million; on the other side, South Sudan and Kenya accounted for the largest export destinations for Uganda, accounting for $51.5 million and $48 million, respectively.
Exports receipts from the EAC have grown by 73 percent from $67.31 million in May last year to $116.56 million, while imports have grown by 44 percent from $153.95 million to $221.87 million over the same period.
Kenya will soon ban fish imports from China, the National Assembly’s Committee on Agriculture has confirmed. Kenya has enough fish stocks in its lakes, rivers and the ocean, the lawmakers said. The legislation, said chairperson Silas Tiren (Moiben), will improve the fisheries sector. “I don’t see why we should import from China when we have enough fish in the country. There is a lot of potential in our waters, we must capture it,” he said. “It’s clear that foreign countries are fishing from our waters and later selling to us, which shows we have enough fish and potential.”
Zimbabwe Bans Raw Chrome Exports (NewZimbabwe)
Cabinet has approved an immediate ban on all exports of unprocessed chrome ore in order to protect the ferrochrome industry, which it says is integral in the country’s attainment of an envisioned US$12 billion industry by 2023. Announcing the latest strategy to boost the mining sector during Tuesday’s post Cabinet media briefing, Information, Publicity and Broadcasting Services minister, Monica Mutsvangwa said the moratorium on raw chrome ore exports would promote the local value-addition chain. “In light of the need to safeguard the ferrochrome industry in the above regard, Cabinet approved a total ban on exports of raw chrome ore with immediate effect. The ban will capacitate current smelters and maximise the value chain to be realised from the country’s abundant resources as spelt out in the National Development Strategy (NDS) 1,” she said. As a measure to further hedge the industry, the external trade in chrome concentrates will be stopped effective July next year. Said Mutsvangwa: “This gives producers of chrome concentrates a year within which to make suitable arrangements for the value addition of the concentrates, the investment of which is low capital cost and relatively easy.”
Tanzania’s FDI inflows hit $1bn mark in 2020 (The Citizen)
Regardless of the adverse impact of the Covid-19 pandemic on the economy, Tanzania’s Foreign Direct Investments (FDIs) reached the $1 billion mark in 2020, the highest in five years. The country recorded a total of $1.01 billion in FDIs 2020, higher than the $991 million that it recorded in 2019, according to data from the World Investment Report 2021 by the United Nations Conference on Trade and Development (Unctad). The last time the country reported over a billion-dollar FDI inflows was in 2015: $1.56 billion. Then the inflows dropped to $864 million in 2016.
Key lessons for Tanzania from neighbouring Rwanda (The Citizen)
The Minister for Foreign Affairs and East African Cooperation, Ms Liberata Mulamula, said in Dar es Salaam yesterday that some of the lessons learnt during the visit include developing infrastructure and putting in place a conducive environment for investment and economic growth. According to Ms Mulamula, it was also useful to note how bolstering Export Processing Zones (EPZs) can boost the country’s chances of attracting investors. “We developed our own EPZs some years back; but it looks like there were some issues that needed to be worked on,” said Ms Mulamula, briefing journalists on major takeaways from President Hassan’s just-ended two-day visit to Rwanda. In efforts to improve Rwanda’s balance of payments, factories operating under the Special Economic Zones system in that country are required to export at least 40 percent of their products.
Côte d’Ivoire’s sugar industry hopes to become self-sufficient in five years (The Africa Report)
Just like other West African heads of state, Côte d’Ivoire’s President Alassane Ouattara has been implementing several measures to counter the rise in food prices and limit its impact on purchasing power. These include setting price ceilings for certain products, including rice, oil and flour; creating regional committees dedicated to fighting against the high cost of living and increasing the number of controls on regulated tariffs.
The All Progressives Congress (APC) Legacy Awareness and Campaign, a voluntary think-tank group of the ruling party, has declared that President Muhammadu Buhari’s administration is determined to set new standards in upgrading national infrastructure. The group noted that projects Nigerians have looked forward to in decades would be completed and commissioned between now and May 29, 2023, when Buhari’s second and final term in office would come to an end. The group noted that the high rate of abandoned or slow-moving road projects across the country prompted the present administration to increase the amount of funding available for road projects
Deputy Minister of Transport Hassan Tampuli has said out of the fifty-four (54) countries in Africa, thirty-eight (38) are coastal countries. He said it is therefore imperative that the countries leverage on this attribute for a collective development of the Continent. At the moment, he stated, over 90% of imports and exports are by maritime transport. “The 2050 Africa’s Integrated Maritime Strategy adopted in 2014 describes the maritime industry as the new frontier of the African Renaissance. “The opportunities in the maritime industry abound, representing trillions of United States Dollars’ worth of goods and services and millions of jobs. This ranges from sectors such as shipping, logistics, insurance, port management, tourism, fishing and aquaculture just to mention a few. “The sub-region can tap into the opportunities offered by this new frontier to propel its developments.”
Tomato traders at Agbogbloshie market in the Greater Accra region are lamenting the influx of imported tomatoes mainly from Morocco, on the local markets. According to the traders, this development is negatively affecting their businesses since the imported items are gradually taking over the domestic market. They are also demanding that government place an embargo on importation of tomatoes and other food items into the country and help intensify the campaign of consuming local foods. The traders have indicated that they are compelled to import the tomatoes from the neighboring countries due to its scarcity in the country. The traders have attributed the shortage of the tomatoes and other local food stuffs to pest infestation and inadequate rainfall as well as bad farm practices adopted by Ghanaian farmers.
The Information and Decision Support Center (IDSC) organized Wednesday a panel discussion displaying the opportunities and challenges impacting Egyptian exports to fellow African countries. There was congruence among the three panelists that the high cost of transportation because of the lack of the necessary infrastructure is the main hindrance. Chairman of the Egyptian African Business Association Yosry al-Sharqawy proposed that if the size of Egyptian exports rises, the prices of shipping and transportation will by default become lower. For instance, the costs of exporting just five containers are not like exporting 50. For that to materialize, the businessman reiterated supporting Egypt’s SMEs, and not just Egyptian large enterprises. He also suggests better integration with the international maritime transport system to ensure reliable access to African states.
Uganda misses agricultural opportunity to Malawi (Independent)
Africa’s newest state, South Sudan, has by-passed Uganda and signed a trade agreement with Malawi for the supply of grain and other agricultural commodities. This follows signing of a memorandum of understanding between the Minister of Trade and Industry of South Sudan, Kuol Athian Mawien and his Malawian counterpart, Sosten Gwengwe, in Juba recently, with the support of the African Export Import Bank. The five-year agreement will allow see South Sudan to import grain and other agricultural products from Malawi which is currently estimated to be having in excess of 1.2million metric tonnes of grain. Malawi will, meanwhile, be supplied with commodities such as petroleum products and bitumen, supporting development and wealth creation in the South Sudanese economy. Prof. Benedict Oramah, the President of Afreximbank said: “By taking their first ever steps into trade collaboration, both countries will unlock new channels for inclusive wealth creation and secure high-quality jobs for their people.”
Twenty Cameroonian civil servants drawn from a wide range of ministries have affirmed their commitment to fully appropriate the Integrated Planning and Reporting Toolkit (IPRT), a web-based application developed in response to the needs for African countries to simultaneously adopt and domesticate both the UN’s 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063 into their national development plans and enable them to report their progress in a harmonized way. “This tool comes at a time when the Monitoring and Evaluation Committee of Cameroon’s 2030 National Development Strategy (SND2030) is being constituted,” affirmed Mr. Eone Laurent of the Directorate General of Planning in the Ministry of the Economy, Planning and Regional Development (MINEPAT).
Africa open for business – AfCFTA General Secretary (Graphic Online)
The Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, Mr Wamkele Mene, has emphasised that Africa is open for business. He said the continent had tremendous business potential in various sectors, including agriculture, energy, infrastructure, natural resources and information and communications technology (ICT), which offered opportunities for African entrepreneurs. Speaking at the AfCFTA-Angola Business Investment Forum last Tuesday, the first-ever investment forum between the AfCFTA Secretariat and a party state, Mr Mene asserted that with its vast uncultivated arable land, Africa had the potential to ensure its own food sufficiency and be a major supplier on global food markets.
“While we are about to start working on the Protocol on Investments, the Protocol on Trade in Services already negotiated has provisions regarding investment: one of the general objectives is to ‘foster domestic and foreign investment’,” the Secretary General emphasised. He said additional protocols had strengthened value propositions of entrepreneurs and reduced their risks. “The introduction of a continental simplified trade regime should provide small and informal businesses with greater protection and support their participation in the new export opportunities created by the AfCFTA. “There is also the Protocol on AfCFTA dispute resolution which further enhances the value proposition for entrepreneurs by making investment in Africa less risky for investors,” Mr Mene added.
2021 is an important year for regional integration in Africa, as it marks the beginning of trade under the African Continental Free Trade Area (AfCFTA). As shown in joint research by ITC and UNCTAD, fostering intra-continental trade can contribute to sustainable and inclusive growth in Africa, as intra-African trade tends to favour structural transformation, the trade integration of small firms, and the economic participation of women.
So far, intra-African trade represents a relatively small share of African exports. However, as shown in joint research by ITC and UNCTAD, regional trade integration is already relatively high in view of the continent’s small share in international trade and the lack of overlap between African countries’ export profile and import basket. Moreover, there are substantial opportunities for export growth in Africa, and these are expected to increase through tariff reductions under the AfCFTA. With the right policy choices, African countries can leverage untapped export potential, create further opportunities, and foster sustainable and inclusive growth.
These findings are based on a joint technical paper by ITC and UNCTAD (forthcoming)
Sub-Saharan Africa growth opportunity at risk without right policy – S&P (Engineering News)
Sub-Saharan Africa’s labour force is set to more than double by 2050, boosting economic growth, but a lack of jobs, sound economic policy and investment in education might jeopardise its chance to catch up with developed countries, S&P Global Ratings said on Wednesday. The region is going to be the world’s main driver for working-age population growth in the next the 30 years, making up 68% of total global growth, S&P said in a report.
“SADC Summit opportunity for Malawi to shine” – Chilima (Nyasa Times)
The Southern African Development Community (SADC) Summit due next week to be hosted by the South-eastern nation of Malawi is an opportunity to shine to the world at large because as the country geared to give it its best shot, Malawi’s Vice President Saulos Chilima has said. “Malawi should regard the hosting of the Summit and the assuming of the SADC Chairmanship as a one time opportunity to show the world what it is capable of and display the beauty that the country has,” he said.
According to findings from the latest policy paper by EABC, Costs and Benefits of ‘Open Skies’ in the East African Community, air-transport liberalization is set to lower flight costs by 9% and see a 41 per cent increase in flight frequencies. EABC chief executive officer (CEO), John Bosco Kalisa said report shows that despite the commitments of the EAC partner states at the international level specifically on the Yamoussoukro Decision (YD) on liberalization of access to air transport markets in Africa and EAC integration efforts through the common market, the domestic air transport sector remains protected, reducing accessibility and increasing air transport cost at the expense of potential users. “Liberalisation of air services in the region is set to increase traffic volumes, improve connectivity and lower air transport fares. This will in turn increase trade and tourism, inward investment and productivity growth,” he mentioned.
Africa’s Common Position on Food Systems (AUDA-NEPAD)
The African Union Development Agency-NEPAD, is engaging with and providing support to National Convenors on the UN Food Systems Summit Process, in order to have a common position as Africa. The Agency has been collaborating with the 4SD and the UN Food Systems (UNFSS) Envoy to ensure coordinated support to Africa’s UN Member States in their efforts to organise and manage their national dialogues in the build-up to the just ended UNFSS Pre-Summit in Rome and the main summit to be held in September in New York.
“The African Union Development Agency-NEPAD has worked to create a common African position ahead of the Food Systems Summit in line with the African Union’s Agenda 2063 and the SDGS, for Africa to pursue solutions in its priority areas,” President Kagame stated. During the session on ‘Building Resilience to Vulnerabilities, Shocks and Stresses,’ Dr Mayaki highlighted the following as key: i) Regional approach: In Africa, strategies need to be regional if they are to provide optimal solutions at national level. ii) Governance: Africa needs to empower the frontline active players by providing them with tools to build the resilience needed. iii) Multisectorality: A fully adopted multisectoral approach for integrated solutions is also need. Investments need to be long-term: Short-term solutions do not work.
His Excellency President Cyril Ramaphosa, President of the Republic of South Africa and African Union (AU) COVID-19 Champion, is pleased to announce the start of monthly shipments of vaccines acquired by the AU / African Vaccine Acquisition Trust (AVAT) to the AU Member States today. An initiative by the AU Member States to pool their purchasing power, the AVAT, on 28 March 2021, had signed the historic agreement for the purchase of 220 million doses of the Johnson & Johnson single-shot COVID-19 vaccine, with the potential to order an additional 180 million doses.
The Johnson & Johnson vaccine was selected for this first pooled procurement for three reasons: first of all, as a single-shot vaccine, it is easier and cheaper to administer; second, the vaccine has a long shelf-life and favourable storage conditions. Last but not least, the vaccine is partly manufactured on the African continent, with fill-finish activities taking place in South Africa. President Ramaphosa said: “This is a momentous step forward in Africa’s efforts to safeguard the health and well-being of its people. By working together and by pooling resources, African countries have been able to secure millions of vaccine doses produced right here in Africa. This will provide impetus to the fight against COVID-19 across the continent and will lay the basis for Africa’s social and economic recovery.”
Africa is the big loser in the hugely reshaped global liner patterns over the course of the pandemic-strewn last year. Carriers have moved to deploy far greater tonnage on the more profitable three main east-west tradelanes – Asia-Europe, transpacific and transatlantic – at the expense of more regional coverage. New data from Alphaliner shows that capacity deployed on liner services to and from Africa is now 6.5% lower than one year ago. Mediterranean Shipping Co (MSC), for example, has shifted some 13,000 teu ships from African trading to the Pacific.
Commenting on Africa’s sudden drop in global maritime connectivity, Jan Hoffmann, head of the trade logistics branch at the United Nations Conference on Trade and Development (UNCTAD), told Splash: “Unlike the United States, African countries could not create significant economic stimulus packages, and their vaccinations rates are far lower than in North America. So the lower fleet deployment to African routes is a response of these two sides of the Covid pandemic. There is less demand, and the hinterland logistics system is even more strained than in the US.”
Empowering Female Entrepreneurs across Borders (THISDAYLIVE)
U.S. Deputy Assistant Secretary (DAS) of Commerce for Middle East and Africa Camille Richardson launched the Women Empowered Leave Legacies through Trade and Investment (WELTI) Initiative. She briefed attendees about the WELTI initiative, which aims to bring together leading businesswomen from the United States and the MENA region to discuss strategies. DAS Richardson shared insightful statistics stating that “more than 90 per cent of enterprises around the world are considered as SMEs, which account for nearly 80 per cent of jobs globally.” She also mentioned that “women own nearly 10 million of the world’s SMEs.” DAS Richardson concluded with the fact that “sustainable economic growth and achievement of the [United Nations] Development Goals are possible only through the active participation of women.”
Decision on TRIPS waiver absolutely crucial: India (Millennium Post)
A decision on the “critical” proposal in the WTO about temporary waiver of certain provisions of intellectual property rights’ agreement for tackling COVID-19, is “absolutely crucial” to relevance of this multilateral organisation in these trying times, India has said. In October 2020, India and South Africa had submitted the first proposal suggesting a waiver for all WTO (World Trade Organization) members on the implementation of certain provisions of the TRIPS Agreement in relation to the prevention, containment or treatment of COVID-19. In May this year, a revised proposal was submitted by 62 co-sponsors, including India, South Africa, and Indonesia.
According to a statement by India, delivered in a General Council Meeting held on July 27-28, few members refuse to engage in the text-based negotiation. And, those few WTO members have ensured that the organisation is unable to meet the deadline set by the TRIPS Council Chair for reaching the necessary landing zone on the proposal by end-July, it added. “The proposed waiver will enable the temporary suspension of the relevant TRIPS rules, providing the manufacturers around the world the freedom to operate and scale up production of vaccines. It is, thus, a necessary ingredient of a multi-pronged approach to combat the pandemic. “It is high time this organisation prioritises saving human lives and livelihoods over all other priorities. Needless to say that a decision on this critical proposal is absolutely crucial to the relevance of this organisation in these trying times,” India has said.