The results of both the first and second quarter of 2021 agriculture export performance reflects the resilience of the sector despite the ongoing Covid-19 related challenges across the globe.
The agriculture sector was able to operate during the various lockdown periods due to it being considered an essential service. Weather also came to the party and allowed for an excellent agriculture season which saw record crops across most commodities with the grain and oilseed crop topping 17.07m tonnes which is almost 2% higher year-on-year. Despite logistical challenges, the sector managed to move hefty quantity of produce to the rest of the world with the second quarter of 2021 recording a trade surplus of US$1.5m which is 40% ahead of the same period in 2020. The follows a 36% year-on-year spike in total agriculture exports in quarter two of 2021 at US$3.2bn, bringing the total 1H2021 export value to US$6.1bn which is 30% higher year-on-year.
Moving goods around Africa is notoriously difficult. Potholed roads, shakedowns at paramilitary checkpoints and weeks spent at border posts are only some of the challenges freight companies face. For those willing to brave the conditions, however, returns can be lucrative. The continent imported around $560 billion in goods in 2019, according to the United Nations Conference on Trade and Development, the global trade and development body. African countries also bought $69bn worth of goods from each other in the same year. The planned acquisition of South African freight company Imperial Logistics by the UAE’s DP World, announced in July, is a logical tie-up between two specialist operators. DP World specialises in global port operations, trade parks and maritime services. Imperial, on the other hand, has moved from global logistics operations to near-exclusive focus on moving goods around Africa. “The combination is complimentary,” Imperial chief executive Mohammed Akoojee says of the $890 million deal. “It will certainly bring down the cost of logistics in Africa, which is very much needed.”
Road transport costs in Africa are almost twice that of South-East Asia, according to the London-based International Growth Centre. For the 16 landlocked African countries it is even worse, as freight costs are three to four times higher than in developed countries.
THE fast-growing cannabis industry in South Africa needs better regulatory clarity with the respective government departments able to talk to each other for it to dominate the potential R56 billion a year potential by 2025. Managing director Mark Corbett said the co-ordination between the Departments of Trade and Industry (DTI), Agriculture and Fisheries and the South African Health Products Regulatory Authority (Sahpra) was not where it needed to be. “It makes much more sense to extract the product, but growth will be hampered by the regulatory environment.
Turmoil in global trade ‘could spur’ SA recovery (TimesLIVE)
There is still uncertainty about when SA’s growth will return to pre-Covid-19 levels, but the pandemic’s disruption of global supply chains is expected to continue, which will boost local manufacturing and potentially help speed up the country’s economic recovery. This is the view of Gary Chaplin, CEO of KAP Industrial, the diversified chemical and logistics business
Zambia’s new president a boon for mining sector reform - Sub-Sahara Mining & Industrial Journal (Sub-Sahara Mining & Industrial Journal)
Zambian opposition leader Hakainde Hichilema’s surprise win in the Aug. 16 presidential election may lead to a fresh start in the country’s relationship with the mining sector. While it was still early days, the appointment of Hichilema was “a welcome surprise for investors and miners”, UK broker Liberum analyst Ben Davis said.
Africa’s second-largest copper-producer — the metal accounts for more than 70% of the country’s export earnings — had witnessed a noticeable deterioration in its mining investment climate during Lungu’s second term in office, “damaging relations between miners and the government beyond repair”, the CEO of Africa-focused strategic advisory firm Africa Practice, Marcus Courage, told S&P Global Platts.
“This also resulted in lower levels of investment, lower copper production and reduced receipts for the government, in spite of a rebound in global copper prices,” Courage said.
Horticulture exporters sue to block new levy (Business Daily)
Fresh produce exporters have moved to court to stop the implementation of a 0.25 percent levy that the Horticulture Directorate is banking on for development projects including putting up a fumigation plant. The exporters, under the umbrella of Fresh Produce Consortium of Kenya, Fresh Exporters Association of Kenya and the Avocado Association of Kenya, have sued the Ministry of Agriculture, the Attorney- General and the Horticultural Directorate over what they term a rushed implementation of the levy. The exporters, however argue that there is no defined method under the Regulations for the Ministry of Agriculture and Attorney-General’s office to determine the customs value and thereby raise the amount collected in levies. “The taxable value is amorphous, ambiguous and arbitrarily imposed on the petitioners’ members for compliance, thus presenting an administrative difficulty and leaving the application of the levy open to manipulation and abuse,” said the exporters in a court filing.
Trade lobbies want immediate reopening of economy (Business Daily)
Trade associations have asked for immediate reopening of the economy and ending the Covid-19 containment measures issued by the Government to reduce the loss of livelihoods from the effects of the pandemic. The eight trade associations from across the retail, hospitality, transport creative, and entertainment sectors also backed the motion in Parliament urging the Government to concentrate on measures to revive the economy and vaccinate more people. The associations said there is confusion among business people on the orders from the President on the one hand and the Judiciary on the other on Wednesday evening.
Bill proposes tougher sugar import rules to curb glut (Business Daily)
Sugar dealers shall be required to present proof of shortage in the domestic market before importation if MPs approve changes to the law. Factories and importers will also be compelled to obtain pre-import approval from the State in new measures aimed at curbing flooding of the local market with cheap sugar. The National Assembly’s Agriculture committee has proposed further amendments to the Sugar Bill, 2019 sponsored by Kanduyi MP Wafula Wamunyinyi.
Kenya imports sugar mainly from the Common Market for Eastern and Southern Africa(Comesa) to cover for production deficits locally. According to the Sugar Directorate, imports of the commodity between January and June this year stood at 237,581 tonnes compared to 200,442 tonnes in the same period last year. The higher imports came even as local production recorded a 22 percent increase, with growth in local yields attributed to improvement in sugarcane supply to private millers The Sugar Bill, 2019 also seeks to reinstate the Sugar Act which was repealed through the enactment of the Crops Act, 2013.
Debt repayment relief saves Kenya Sh100bn (Business Daily)
Kenya saved Sh99.73 billion in deferred repayments for its external debt for the year ended June following a deal with several rich nations, lifting pressure on its thin domestic revenue collection. Fresh Treasury data shows expenditure on servicing external loans amounted to Sh234.59 billion, a drop of 29.83 percent compared to Sh334.32 billion that had initially been budgeted for.This is attributed to deferred repayments for loan principals and a more stable shilling against the US dollar than earlier forecast.
Kenya was initially reluctant to apply for the debt suspension offered by the rich countries but made an about-turn in January after domestic revenue collection missed the target by 12.4 percent, or Sh115.9 billion, in the half year to December 2020 — hurt by the economic fallout from Covid-19.
Kenya is among 46 countries that had by April applied to defer payment of an estimated $12.5 billion (Sh1.35 trillion) in bilateral debt owed to G-20 countries under the Debt Service Suspension Initiative (DSSI) programme. Seventy-three countries are eligible for the DSSI programme.
Treasury data shows expenditure on servicing bilateral debt for the year through June 2021 amounted to Sh55.99 billion, a drop of 24.83 percent compared with Sh74.49 billion a year earlier.
Kenya’s food imports bill surges to record Sh103bn (Business Daily)
Kenya’s food import bill hit a record high in the six months to June, piling pressure on household budgets that have already been ravaged by the Covid-19 pandemic, the latest official data shows. Import data tracked by the Kenya Revenue Authority (KRA) shows traders ordered food — including live farm animals for slaughter and breeding— and beverages valued at Sh103.34 billion between January and June this year. This is Sh12.35 billion, or 13.57 percent, more than the Sh91 billion that was spent on food imports in a similar period last year, according to the data collated by the Kenya National Bureau of Statistics (KNBS).
The expenditure on food imports in the half-year period is even higher than the Sh96.41 billion that was spent in the first half of 2017 when a biting drought hurt crop and fodder production hit —triggering a national crisis that forced the Treasury to allow subsidies and waiver of import duties to smooth purchase of key food items such as maize, rice and milk powder from abroad.
Analysts attributed the latest rally in the food import bill to enhanced shipments of items such as grain and cereals to cover for production shortfalls locally on the back of late planting in the March-April-May main crop season and a weakened local currency against the US dollar, which meant importers paid more.
Dar port braces for more large vessels (Dailnews)
AFTER successful construction of berth number zero and dredging the depth of Dar es Salaam Port, the government has embarked on expansion of the port entrance by increasing four more meters. The port entrance which has 11.5 metres is undergoing expansion to have 15.5metres which will enable the port to host large ships up to 400 meters from the current 200metres. This was revealed yesterday during Dar es Salaam Regional Commissioner Amos Makalla’s tour at the port, where he was briefed that the dredging is going on alongside construction of the port access entry roads.
According to the Director General of the Port of Dar es Salaam Elihuruma Lema, the construction work is expected to be concluded on November 25 this year. “The project worth 10bn/- is now at 51 per cent of its accomplishment,” he said, noting that the work continues day and night since they are behind by 13 per cent. “Right now it was supposed to be at 64 per cent towards accomplishment, but we are behind the time, in this case, we have decided that the work should be done in day and night hours,” he added.
Record gold imports tip Uganda-Tanzania balance of trade (Independent)
Uganda imported gold from Tanzania worth $591 million, which is more than half of all imports from the country and five times more than all that Uganda exports there
Uganda and Kenya have lost their balance of trade surpluses to Tanzania over the last one year, as the country opens up to regional integration. This comes as the East African Community (EAC) is planning to roll out a 24-hour operating system across all the borders of the region to improve trade, according to the Secretary General Peter Mathuki. The growth of Tanzania’s trade with other states is largely attributed to the removal of the non-trade barriers that had characterized cross-border operations, for some time, especially regarding trade with Kenya. On the other hand, Tanzania’s huge export volumes to Uganda are being boosted by the growing amount of gold shipped into Uganda, while Uganda’s exports to Tanzania are yet to grow significantly since the ban on grain and sugar more than two years back.
FG Launches Digital Hub for Agribusiness (THISDAYLIVE)
The Minister of Industry, Trade and Investment, Mr. Niyi Adebayo, has launched a digital agribusiness hub, known as I-Produce, to link young farmers with international investors and markets. The digital hub was created by Inara Foundation and funded by the Islamic Development Bank. The minister at the launch in Abuja recently said the federal government fully understood the importance of digital platforms like I-Produce adding that this was why it established the Micro, Small and Medium Enterprise (MSME) Innovation Portal to ensure that MSMEs have access to a wider market and can be matched with customers and clients.
He said, “Navigating international trade can be a daunting experience for small businesses and I am pleased that the I-Produce platform will provide opportunities for businesses to learn more about capitalizing on opportunities under AfCFTA and understanding cross-border trading. “We expect to conclude the development of a world-class investment policy that reflects Sustainable Development Goals (SGDS), climate concerns, the advent of AfCFTA and position Nigeria as Africa’s premier investment destination.”
Chief of Staff at the African Continental Free Trade Area (AfCFTA) Secretariat, Commissioner Silver Ojakol, has called on governments and businesses from party-states to prioritize what he describes as “low-hanging” fruits, particularly agricultural trade as the first, but most important step towards the prosperity of the arrangement. According to him, the sector provides the ideal launching pad for the initiative, and its proper execution is required for the wide-scale industrialization which the continent sorely requires.
Offering caution, he stated that failure to tow this path could see AfCFTA end up with similar ‘unfulfilled development promises’ in agriculture as witnessed under the General Agreement on Tariffs and Trade (GATT) as well as the World Trade Organisation (WTO). “Agricultural trade is the prime example of low-hanging fruit, and we urge the members of the business community to urge your governments to free the areas that you know are low-hanging. If you treat agriculture in the AfCFTA in the same manner in which it has been treated at the WTO, we will not move forward.” Taking the argument further on the sidelines with the B&FT, he stated that an agric-first approach aid in developing inclusive regional value chains around priority commodities, led by a dynamic and diverse private sector of smallholders, commercial farmers, processors and service providers. This, he noted would be a boost for intra-African Trade and Africa’s trade with the rest of the world.
The European Union (EU)has pledged 74 million euro to the African Continental Free Trade Area (AfCFTA) to support small medium enterprises (SMEs), said the Secretary General of the All Africa Association for Small and Medium Enterprises (AAASME), Ebiekure Eradiri. He made the disclosure today at the end of a three-day micro Small and Medium Enterprises (MSMEs) consultation on the AfCFTA in Dakar, organized by the Economic Commission for Africa (ECA) and AUNIQUEI Communication Company, with financial support from the EU. “I hope this information can help ignite your commitment towards ensuring that the AfCFTA does not fail,” said Mr. Eradiri who sought the continent’s patronage for the SMEs’ goods and services. “Let us build Africa, grow Africa, and buy Africa,” he said.
The bloc has immense opportunities for increasing intra-regional trade, enhancing production, promoting economies of scale, creating jobs, raising incomes and improving the standard of living of the African people.
SADC to take advantage of African trade opportunities (Namibia Economist)
The Southern African Development Community is ready to use the opportunities presented by the African Continental Free Trade Area to drive industrialization and boost the region’s agricultural production. President Lazarus McCarthy Chakwera of Malawi said in his acceptance speech after taking over as SADC chair at the 41st Summit of SADC Heads of State and Government, that the region already has the right tools in place to achieve its goals. He said that Malawi, as chair for the period August 2021 to August 2022, was fully committed to drive the implementation of the region’s integration agenda, particularly industrialization, riding on the success of programmes launched in the past year when Mozambique chaired the regional organization. Mozambique hosted the launch of the SADC Vision 2050 and the SADC Regional Indicative Strategic Development Plan 2020 – 2030 as well as the SADC Emergency and Humanitarian Centre.
EAC integration is on course despite hurdles — sec gen (The Star, Kenya)
Trade within the East African Community has increased significantly over the past three months despite the ravages caused by Covid-19.EAC secretary general Peter Mathuki said at the Namanga border post in particular, trade between Kenya and Tanzania has risen six-fold. There is still room for improvement. Intra-EAC trade stands at less than 15 per cent compared to 70 per cent in the EU, he said, adding that the community would try to raise it over the next five years.
Political federation is a key objective of the EAC regional integration. Is there hope this will happen any time soon? It is the fourth pillar and already, we are discussing with partner states because we must sensitise the citizens of the respective member states: We must move along with the citizens of East Africa.
By when will DRC’s admission to the EAC be finalised, and what opportunities and challenges do you think its membership will bring to the EAC? The population of DRC as we speak is close to 180 million people. DRC brings to the community more than 80 million. So, with its admission, the economic bloc will have a total population of close to 300 million. That is a huge market for us and will make EAC competitive in the world. We are going to see people moving from DRC to the region and vice versa. So the entry of DRC will be a game-changer in as far as intra-regional trade in East Africa is concerned.
Mobile telecommunications giant MTN Group, is spearheading digital solutions for Africa’s progress, as part of its strategic vision 2025. Mr Selorm Adadevoh, the Chief Executive Officer of MTN Ghana, said MTN recently announced its Ambition 2025 Strategic Vision with a focus on the African continent; the reason the group is exiting some of the other markets. “But what is important is not so much the focus on the continent but what that focus means? It means sustained investment,” Mr Adadevoh stated in his presentation at the MTN Media Forum in Accra.
The Chief Executive Officer said the infrastructure investment was the company’s highest investment in any single year in the last 10 to 15 years. “And that just tells you that our appetite is to continue to take the risk, our belief in the Ghana market and our desire to continue to push the boundaries of technology is even higher today than it was in 10 to 15 years ago. And for me, that is fantastic,” he stated.
Since 2015, the African Development Bank has made significant progress in reorganizing its operations and strengthening its internal processes to improve its overall delivery effectiveness. On 18 May 2016, the Bank Group Strategy for the New Deal on Energy for Africa (NDEA) 2016–2025 was approved by the Board of Directors of the African Development Bank Group. The aspirational goal of the NDEA is for Africa to achieve universal access to cost-effective, affordable and reliable electricity by the year 2025 (100 percent access in urban areas and 95 percent access in rural areas). The strategy also places an emphasis on encouraging clean and renewable energy solutions. The NDEA also supports the implementation of the new strategic goals of the Bank (the High 5s), namely: Feed Africa, Industrialize Africa, Integrate Africa, Improve the Quality of Life of Africans, and in particular, to Light up and Power Africa on a fasttrack, accelerated basis.
East African Community Headquarters, Arusha, Tanzania, 20th August, 2021: The 2nd Regional Bioeconomy Conference will be held virtually on 10th and 11th November, 2021 with a small group of in-person participants in Nairobi, Kenya. The theme of the conference is “Building a Sustainable and Resilient African Bioeconomy.” The theme is cognisant of the global need to reduce carbon emissions, as well as build resilience against emerging and re-emerging diseases such as COVID-19, thus opening up new possibilities for biologically based research and innovation.
Africa, with its rich biological diversity, and a relatively large proportion of arable land, is well positioned to tap these opportunities, and build a competitive but sustainable bioeconomy. The latter is seen as one of the ways of diversifying sources of growth through value addition to biological resources, and linking production to new markets.
IATF 2021 targets more than 40billion dollars in trade deals (BUsinessGhana)
More than 40billion dollars worth of trade deals are expected to be sealed at the Intra-African Trade Fair(IATF) 2021 scheduled for Durban, KwaZulu-Natal South Africa in November this year. The IATF 2021 will provide a unique and valuable platform for businesses to access an integrated African Market of over 1.2billion people with a Gross Domestic Product of over 2.5trillion dollars created under the African Continental Free Trade Area (AfCFTA).
Mr Denys Denya, Executive Vice President, Finance, Administration and Banking Services at Afreximbank, said the trade fair would make AfCFTA a possibility. Mr Denya was speaking at the first Country Roadshow held in Accra as a prelude to IATF 2021. IATF 2021 will be on the theme:” Building Bridges for a Successful AfCFTA.” Mr Denya said the trade fair would play a significant role in making Intra-African trade a reality by providing a sustainable platform for buyers and sellers, investors and governments to connect and exchange trade investment information.
Sugumaran Devaraja, Regional Director, Middle East & North Africa, Enterprise Singapore, pointed out that Singapore companies can be found in various sectors ranging from agribusiness, marine and offshore, urban solutions and digital solutions in Africa. “In recent years, we have seen more Singapore companies offer technology-based solutions to the continent in line with the technology leapfrogging that we have seen, further accelerated by the pandemic.”
Enterprise Singapore has been holding ASFB for the past five years, bringing together business and industry leaders from 30 countries, with the sixth edition this year will be held virtually on August 23 -24. The event will see Ashraf Sabry, CEO of Fawry, speaking on Panel 3 – Digital Africa besides General Authority for Investment & Free Zones (GAFI) presenting on investment opportunities in Egypt.
Devaraja revealed that Singapore’s biggest trading partners in Africa are South Africa and Nigeria. “Our interests in North Africa are varied ranging from agri-business, manufacturing, digitalisation and technology-based including fintech and are covered by our office in Dubai, UAE.”
“We already see growing interest from African companies to look towards Singapore and Southeast Asia/Greater China as an alternative market for diversification. We also have strong free trade networks through Free Trade Agreements (FTAs) with major economies and countries,” said the regional director of Enterprise Singapore.
He pointed out that Singapore’s position as the leading global trading hub for sectors like agriculture, metals & minerals and energy & chemicals is something, coupled with its pro-business environment, diverse pool of experienced trade professionals, and strong connectivity to the region, would
Export credit: Key interest subsidy scheme to be extended (The Financial Express)
Under the scheme, large manufacturing and merchant exporters get an interest subsidy of 3% on pre- and post-shipment rupee credit for the outbound shipment of 416 products (tariff lines). However, manufacturing MSMEs get a 5% subsidy on such credit to ship out any product.
The scheme, introduced in 2015, was initially valid up to March 2020. Its validity was then extended periodically, along with that of the foreign trade policy, up to September 2021.The scheme has been an effective instrument for exporters, especially the small ones, struggling to cope with a cash crunch in the aftermath of the Covid-19 outbreak. Having witnessed a 7% year-on-year drop in FY21, the country’s goods exports have staged a rebound this fiscal. Exports in the first four months of this fiscal rose to $130.8 billion, recording a jump of 75% year on year and 22% from the pre-pandemic level (same period in 2019), as orders from key western markets poured in and global commodity prices remained elevated. Of course, export growth was subdued even before the pandemic – outbound shipments rose about 9% in 2018-19 but again shrank by 5% in 2019-20. So only a sustained uptick over the next 2-3 years would help recapture the lost heights. Sustained credit push will help exporters benefit from a rise in external demand.
However, inadequate credit flow to exporters has been a nagging issue for the past three years before the recent pick-up. Export credit under the priority sector grew 18.3% as of June 19 from a year before, driven by a favourable base and growing demand in light of the latest surge in exports.
Trade is recognized as a vital factor for the 2030 Agenda. It’s singled out as a key policy instrument to contribute to sustainable development. Trade is now predominantly conducted through global value chains (GVCs). Today, about $8 trillion worth of world trade goes through GVCs, accounting for
How natural disasters reshape supply chains (VOX, CEPR Policy Portal)
COVID-19 has disrupted global value chains (GVCs). Some observers expect firms to respond by abandoning their pursuit of lower production costs in favour of building stronger resilience in production – by reshoring, nearshoring, and/or diversifying sources of production (e.g. Javorcik 2020, Kilic and Marin 2020, Lund et al. 2020, UNCTAD 2020). In contrast, others have argued that the same technological and institutional factors that have underpinned the international fragmentation of production in the past decades would make a retrenchment of GVCs post-COVID-19 unlikely, unless there is a radical change in the policy environment
The long-term impact of natural disasters on global value chains and their organisation is ultimately an empirical question. To understand how firms behave when faced with new risks, we examine in a recent paper how trade patterns adjusted in the longer term after the 2011 earthquake in Japan (Freund et al. 2021). Our results suggest reshoring, nearshoring, and diversification are unlikely, but production is likely to shift away from risky countries to which importers are highly exposed and towards low-cost producers and large countries.
LOW-INCOME countries continue to endure negative impacts of climate change that include, humanitarian, socio-economic and environmental. The possible threats of climate change are compounding an already dire situation of some developing countries where poverty is no longer regarded as a condition or state of affairs, but an established institution while climate-induced disasters have become a way of life. Despite being the least equipped, climate-induced disasters always hit developing countries with devastating impacts. These disasters always strike ahead of time, contributing to commotion and leaving no time for planning and coping.
Many developing countries are confronted by a host of climate risks. Instead of being up-to-date, the impacts of climate change are always far ahead of them. Despite contributing far much less carbon emissions, the least developed countries have been vulnerable to climate change ranging from lack of material needs, energy consumption, lack of technologies and resources to fight pollution, including low coal prices which lead to more demand and wide usage of coal. For the least developed countries, it is no longer a question of maybe or otherwise it is the real impact unfolding complemented by weak climate actions, lack of capacity, commitment, political will and funding.