tralac Daily News
Infrastructure remains biggest source of concern for many citizens – Hlahla (Engineering News)
While South Africa has made significant progress in improving the living standards of its citizens, Bafokeng Holding chairperson Monhla Hlahla laments that infrastructure still remains the biggest challenge for many in the country. “Infrastructure is the main source where our people see no service delivery, where our people have seen monies lost and have nothing to show for delivery. It is the main source for growing poverty and strife,” she bemoaned during her keynote address at the virtual Women in Infrastructure Summit on August 24.
Zimbabwe: Good harvest knocks imports (The herald)
Zimbabwe has started reaping the benefits of a stellar agricultural season after cereal imports, including maize, dropped to 1,9 percent in the five months to May 2021 from 9,1 percent in January, official statistics show. Statistics from May’s trade report released by the Zimbabwe National Statistical Agency (Zimstat) show that maize output for this season is projected at a record 2,7 million tonnes, about 193,1 percent up from 0,9 million tonnes produced in last season. Central bank chief Dr John Mangudya is on record saying, due to the good harvest this year the country will save hundreds of millions of US dollars that were being spent on importing cereals, particularly maize and wheat, which would now be channelled towards productive sectors.
Kenya, Tanzania set December deadline to remove trade barriers (The East African)
Kenya and Tanzania have set December as the target time when the two neighbouring countries will have resolved most of the non-tariff barriers affecting cross-border trade. The decision came out of a meeting of the Joint Commission on Cooperation (JCC).“On trade, the JCC took note of the progress made by the Joint Trade Committee in addressing 30 out of 64 challenges facing bilateral relations and urged the resolution of the remaining 34 issues before the end of December 2021,” a joint dispatch from the JCC said on Tuesday.
In June, a month after the State visit by Tanzanian President Samia Suluhu to Kenya, the committee identified 60 tariff and non-tariff barriers between the two countries. Last week, officials said there would also be preferential treatment on cement made in their territories and that Tanzania would install the Single Window System as Kenya did to enable faster clearance of goods. Further, the countries would harmonise standardisation with veterinary products becoming valid for export for up to 30 days. A permanent committee has also been established to monitor the implementation of decisions made.
Tanzania, Kenya lead the world in peer to peer crypto trade (The Citizen)
Tanzania and Kenya have emerged as leaders in peer to peer (P2P) trading of cryptocurrencies more than any other market in the world, a new report shows. Residents of other African countries are jumping at the opportunity to cushion remittances and cross-border businesses from costly transfer fees and the risks of weakening currencies. According to Quartz Africa, internet-savvy Kenyans are leading the world when it comes to using digital currency platforms where individuals trade amongst themselves, a new report shows. Chainalysis, Global Crypto adoption Index 2021 has ranked Kenya the top country in the world in terms of peer to peer exchange trade, ahead of the other 154 countries surveyed.
Traders face losses as truckers suspend South Sudan business (Business Daily)
Traders in South Sudan expect to incur huge losses as hundreds of consignment remain uncollected at the Mombasa port while others have been dumped at the customs yard at the Elegu borderpoint after transporters suspended transport to Juba citing insecurity. More than 5,000 truckers have promised to stop hauling South Sudan destined cargo from Mombasa and other port facilities until they are assured of their security. This will not only result in cargo shortage in the country but will add to cost of transportation as the delay will attract demurrage to importers. According to the Kenya Transporters Association (KTA) chief executive Dennis Ombok, disruptions to cross-border trade is likely to last through the month of September as they need assurance from both Kenyan and South Sudan governments before resuming operations.
China port chaos pressures Kenya’s import prices (Business Daily)
Congestion at Chinese ports due to a two-week partial closure of the world’s third-largest container port has triggered anxiety over fresh increases in the cost of goods imported into Kenya. Meishan terminal at Ningbo port resumed operations Wednesday after shutting down due to a Covid-19 infection case.
“The [Kenya Association of Manufacturers (KAM)] is constantly monitoring global trends on logistics matters, including possible delays and disruptions that may occur due to the sudden surge of Covid-19 cases and consequent measures to mitigate its spread,” the lobby said in e-mailed responses to Business Daily.
The situation has already forced many traders in the global supply chain to source goods from alternative costlier markets. “The pandemic has revealed the risks of overreliance on imports, including raw materials. To this end, local industries are also trying to create sustainable backward linkages in the country and regional levels, to supplement the shortage that may arise out of global logistics network,” KAM also said.
Kenya cuts Uganda sugar imports quota by 79pc (Business Daily)
Kenya has cut sugar imports from Uganda by 79 percent in a move that is likely to escalate the ongoing trade dispute between Nairobi and Kampala. The Sugar Directorate said this week that traders will only be allowed to import 18,923 tonnes of sugar from Uganda down from 90,000 that Kenya had earlier said would be shipped in from its landlocked neighbour. Kenya’s Trade Cabinet Secretary Betty Maina and her Ugandan counterpart had in April agreed that Uganda will be allowed to export 90,000 tonnes of sugar to Kenya as soon as the verification mission on the country of origin is completed. In the revised quota published this week, countries from the Southern Africa will account for the largest share of imports under the Common Market for Eastern and Southern Africa (Comesa) window.
TZ, Burundi eye trade ties (Dailynews)
Trade ties between Tanzania and Burundi are set to flourish with technical teams from the two neighbouring countries currently meeting in Dar es Salaam, laying a groundwork for enhancing business flow. The meeting is the part of the implementation of recent directives by President Samia Suluhu Hassan and her Burundian counterpart Evariste Ndayishimiye to strengthen trade relations between the East African neighbours.
The technocrats from Works and Transport Ministries from both countries began their strategic meeting yesterday, with focus on transport infrastructures, mainly to set up partnership in the use of Dar es Salaam Port and the Standard Gauge Railway (SGR). The meeting will also draft a Memorandum of Understanding (MoU) for partnership in handling Burundi-bound cargoes in Tanzania’s dry ports.
No clear timelines for US-Kenya trade deal after key meeting (The East African)
The United States remained mum on the fate of a free trade pact after US trade Chief Katherine Tai met her Kenyan counterpart Betty Maina on Monday, amid growing unease in Nairobi about the delay by Joe Biden’s administration to conclude the deal. Separate statements issued by both Kenya’s trade Cabinet Secretary Betty Maina and her US counterpart US trade Chief, Katherine Tai, after a virtual meeting did not provide any timelines for resuming the stalled talks on the deal signalling a persisting deadlock. Both Nairobi and Washington however emphasised deepening trade engagement between the two countries.
A separate statement issued by Kenya’s trade ministry however struck an optimistic tone on the future of the deal saying Nairobi remains committed to conclusion of the talks. The statement said Ms Maina had expressed “Kenya’s desire to negotiate and conclude a predictable trade
Time to Revitalize Pursuit of U.S.-Kenya Free Trade Agreement (The Heritage Foundation)
In a letter to U.S. Trade Representative Katherine Tai, seven Republican senators have underscored the importance of resuming the negotiation of a bilateral U.S.-Kenya trade agreement. The Aug. 20 letter highlighted that a free trade pact with Kenya would be “the appropriate next step in recognizing and strengthening relations, economic opportunities, and a security partnership between the United States and Kenya.”
Currently, the cornerstone of America’s economic engagement with Africa is the 21-year-old African Growth and Opportunity Act. A preferential trade program, it offers eligible sub-Saharan African countries duty-free access to the U.S. market for more than 1,800 goods until 2025.
More can and should be done to build on the African Growth and Opportunity Act and upgrade it to strengthen and broaden commercial ties with Africa. A renewed U.S. effort to promote economic freedom across Africa should also be a central part of America’s long-term mission to assist African countries. Greater economic freedom, reinforced by trade freedom, is the long-term solution to the continent’s weak health security capacities and many more of its economic and social challenges.
Nigeria’s Buhari signs long-awaited Petroleum Industry Bill (Global Trade Review)
Nigerian President Muhammadu Buhari has officially signed the country’s much-anticipated Petroleum Industry Bill (PIB) into law, following nearly two decades of attempts, revisions and false dawns. Just weeks after the country’s Senate and House of Representatives passed a harmonised version of the PIB, on July 16, President Buhari’s office has announced that it formally approved the legislation. The move comes after years of legislative effort, with Buhari himself having rejected a previous iteration of the bill in 2018 over concerns around the potential loss of ministerial power and a lack of “fiscal content”.
Invest in Africa signs MOU with Ghana Enterprises Agency to support 1000 SMEs (Myjoyonline)
Invest in Africa (IIA), a not-for-profit organisation focused on growing local Small and Medium Enterprises (SMEs) in Ghana and across Sub-Saharan Africa to deliver positive economic impact and create jobs, have signed a Memorandum of Understanding (MoU) with the Ghana Enterprises Agency (GEA). Based on synergies identified through their respective Recovery and Resilience Programmes funded by the Mastercard Foundation, both organisations are collaborating to strengthen the resilience of local businesses and young entrepreneurs.
The GEA is an agency under the Ministry of Trade and Industry (MoTI) mandated to promote and develop the MSME Sector in Ghana. Since the COVID 19 pandemic, the GEA has focused on supporting local businesses as they navigate challenges resulting from the Pandemic and begin preparing for opportunities created by the African Continental Free Trade Agreement (AfCFTA).
How trade restrictions meant to curb Covid-19 have hit Africa’s urban poor (The Citizen)
Trade routes have been significantly disrupted this year in efforts to contain Covid-19. The effects of this are already showing: global growth is set to contract by 4.9 percent and growth in sub-Saharan Africa will contract by 3.2 percent. This will get worse if continued restrictions further impede trade. The World Trade Organisation has warned that at worst, global trade could collapse by a third this year, and at best, it will contract by 13 percent, similar to the recorded drop after the 2009 financial crisis. In the current economic climate, trade is not a luxury that can be temporarily avoided. In Africa, there’s a growing body of evidence showing that firms – from large to very small – have been severely affected by restrictions in the movement of goods and people. For many this means not only losing a livelihood, but a direct impact on their ability to meet basic needs.
EAC member states in pilot project for cross-border Comesa digital payments (The East African)
Comesa is recommending adoption of a digital payment system that supersedes similar systems adopted in the bloc to avoid disputes arising from overlapping systems. Plans are ongoing to introduce the payments platform for informal cross-border trade in the Comesa bloc, with EAC members Tanzania, Kenya, Uganda and Rwanda on board. A public-private partnership dialogue is underway to discuss a draft model policy for the Comesa platform and specifically designed to benefit micro, small and medium-sized enterprises (MSMEs) under the bloc’s Digital Financial Inclusion Project. The aim of the platform will be to further integrate informal traders into formal markets through better access to digital finance systems which are fast becoming the global norm.
Govt’s bid to host East African Monetary Institute progressing (New Vision)
Uganda is currently in the process of bidding to host the East African Monetary Institute (EAMI), as a precursor to hosting the East African Central Bank. Dr Chris Baryomunsi the minister of ICT and National Guidance on Tuesday revealed that Government had made progress saying the loci of EAMI would become a central hub of crucial economic activities with significant multiplier effects. “This will boost economic activities by offering business opportunities to local entrepreneurs in hotels and restaurants, transport, trade, ICT, financial services and tourism in addition to providing lucrative business for the national carrier-Uganda Airlines,” Baryomunsi said.
The East African Monetary Institute (EAMI) is one of the four institutions expected to carry out much of the preparatory work for the creation of the East African Monetary Union. The other three institutions are the: East African Community (EAC) Financial Services Commission; EAC Surveillance, Compliance and Enforcement Commission, and; EAC Statistics Commission. It is anticipated that the Monetary Union, the third pillar in the EAC Integration, will be in place in 2024 with the introduction of a common currency and the establishment of a regional central bank.
Private Sector called to drive the single currency discourse (UNECA)
The two-day roundtable on Single Currency and Fintech to boost Intra-African trade concluded today with calls for greater engagement and commitment of the private sector for achieving continental monetary union. Participants argued that although Governments and the business community should be equal stakeholders in trade matters, the sheer gap in communication between the two often becomes a formidable barrier to mutual understanding and effectiveness. The establishment of a credible mechanism for effective State-business relations is therefore needed to unlock private sector potential, and enhance prospects for a Single Currency. In this regard, the private sector on its part was called to explore an innovative approach to economic development that is specific to Africa, notably in terms of investing in strategic areas that will have a real impact on job creation and poverty reduction.
Africa Eyes Monetary Union in a Bid to Boost AfCFTA Implementation (UNECA)
Adoption of a single currency within the framework of the African Continental Free Trade Area (AfCFTA) dominated presentations at a two-day roundtable to deliberate on the Single Currency and build awareness of the potential role of FinTech in boosting intra-African trade.
Mr. David Luke, Professor in Practice and Strategic Director of Firoz Lalji Institute for Africa at the London School of Economics and former Coordinator of the African Trade Policy Centre of ECA opined that the AfreximBank initiative, which is known as the Pan-African Payment and Settlement System (or PAPSS) is an optimal policy response. “The PAPSS aims to establish a clearinghouse payment platform that utilizes national currencies. In view of the systemic risks of a single currency, an effective clearinghouse system with room for innovation by utilizing FinTech solutions is a viable alternative.”
Mr. Jean-Denis Gabikini, Acting Director of Economic Affairs of the African Union Commission said: “The AU is developing a payment and settlement platform to facilitate payments between African countries without having to recourse to a third currency, such as the euro or the dollar.”
Regional institution to enhance capacity in energy sector (The Star, Kenya)
An institution that will help enhance sustainable capacity in the energy sector in the East African region will be built in Arusha, Tanzania. The Energy Regulators Association of East Africa (EREA) Executive Secretary is spearheading the project that will cost between $12 million (Sh1.3billion) and $15 million (Sh1.6billion). EREA Chief Executive Officer Geoffrey Aori said the member states are in support of the project and implementation will start within the next one year. “The project will help us enhance skills and knowledge and competencies critical for regional policy harmonization and integration processes,” Mabea said. The establishment of this institution, the first of its kind in Africa has received overwhelming support from the governments from various quarters in Africa. “For increased operational efficiency to achieve the EAC’s policy harmonization agenda there is a need to develop highly skilled staff to provide services in the highly specialized field,” Mabea said.
International trade with Africa
Ramaphosa arrives in Germany for Africa investment talks (The South African)
South African President Cyril Ramaphosa has arrived in Germany to attend a G20 Compact with Africa (CwA) investment summit meeting in Berlin on 26 and 27 August. Ramaphosa arrived in Berlin on Thursday to attend the two day summit, the presidency said in a statement. The G20 Compact with Africa (CwA) was initiated under the G20 German Presidency in 2017 to promote private investment into the African continent.
South Africa, which is a member of the G20, co-chairs the initiative alongside Germany. “The Berlin meetings will include a G20 Investment Summit, as well as a separate meeting of Heads of State and Heads of Government, where discussions will take place on ways in which to improve the business environment and increase investment in Africa,” the presidency said. The conference will also discuss vaccine production in Africa, which is key to enabling African countries to build back stronger, faster and more inclusively, and ensuring that the post-pandemic African economies become more resilient and equitable.
Charting Africa’s digital future (NewsDay)
According to McKinsey and Company, the COVID-19 crisis “contains the seeds of a large-scale reimagination of Africa’s economic structure, service delivery systems and social contract. The crisis is accelerating trends such as digitalisation, market consolidation and regional co-operation, and is creating new opportunities – for example, the promotion of local industry, the formalisation of small businesses and the upgrading of urban infrastructure.”
Africa faces a myriad of challenges from healthcare, food security, education and energy. There is also a digital divide across the continent. The only way to address these challenges and to recover from the COVID-19 pandemic is for policy-makers to embrace and harness innovation and the potential brought by digital technologies.
China in Africa: The Role of Trade, Investments, and Loans Amidst Shifting Geopolitical Ambitions (Observer Research Foundation)
Chinese influence in Africa is high on the global agenda, as China within just a few decades has become a key political and economic power in the continent. Indeed, its emergence as a dominant economic and political actor might be the most important development in Africa since the end of the Cold War. This paper analyses China's economic and political relations with Africa beginning in the 1990s when China first pondered a “grander strategy” for Africa. It argues that the concern is not that China has expanded its economic and political presence in the African continent; rather, that the other stakeholders have ignored it for long.
China seeks to expand influence in Africa with more digital projects (South China Morning Post)
China said it would step up digital cooperation and investments in Africa, as Beijing seeks to deepen its influence on the continent alongside its pledges for trade, infrastructure and Covid-19 vaccines. At a time when the US is also seeking to reinvigorate its trade and investment with Africa, assistant foreign minister Deng Li told a virtual forum on Tuesday that China would boost its partnership with African nations in areas such as the digital economy, smart cities and 5G networks. “China will share the achievements of digital technology with Africa to promote interconnectivity of digital infrastructure,” he said. “China’s initiatives will never just remain a vision on paper, and [we] will work with Africa to formulate and implement the China-Africa digital innovation partnership plan to achieve results as soon as possible.”
Brexit is good news for Africa (The Spectator)
Few who voted for Brexit were actually racists, much as those opposed to the project would like to have you believe. There were probably as many reasons as the 17.4 million people who voted to leave the EU.
Even the EU’s supporters accept that the Common Agricultural Policy is a disaster for its southern neighbour. The programme sees unwanted European produce dumped on Africa – forcing down profits for the continent’s farmers – while blocking imports, again weakening the economic viability of African agriculture. No wonder Tanzania and several other African countries have repeatedly refused to sign a new Economic Partnership Agreement with the European Union. It was heartening therefore to see the new Prime Minister Boris Johnson organise the first UK-Africa investment summit in London last year, just a few weeks after the election.
Global Business Forum Africa 2021 to highlight trade potential (Khaleej Times)
Dubai’s growing appeal as a strategic hub for African companies that are keen to expand their global reach and tap into new trade opportunities will be a main focus of discussions at the 6th Global Business Forum Africa, which descends on Dubai October 13 and 14, 2021. Dubai Chamber of Commerce and Industry (Dubai Chamber) has announced the agenda for the Global Business Forum (GBF) Africa 2021 – the first of its programme of activities that it is running as the Official Business Integration Partner of Expo 2020 Dubai. Bearing the theme Transformation Through Trade, GBF Africa 2021 will turn its attention to explore an array of challenges and opportunities across the continent that have emerged in the wake of Covid 19 and the African Continental Free Trade Area (AfCFTA), while putting the spotlight on Dubai as a preferred gateway connecting African countries to promising markets in various regions of the world.
Okonjo-Iweala urges developed economies to support African countries with IMF’s SDR allocations (Premium Times Nigeria)
The Director-General of the World Trade Organisation (WTO), Ngozi Okonjo-Iweala, on Tuesday asked developed countries to channel their shares of the International Monetary Fund (IMF) Special Drawing Rights (SDRs) to poor African countries. The IMF announced on Monday that its new allocation of Special Drawing Rights SDRs was equivalent to $650 billion. The largest SDR in the IMF’s history comes into effect in an effort to help countries recover from the COVID-19 pandemic, the IMF noted. “The SDR allocation will provide additional liquidity to the global economic system supplementing countries’ foreign exchange reserves.”
SDR is an international reserve asset created by the United Nations specialised agency to supplement its member countries’ official reserves. Africa is entitled to about $33 billion, but French President Emmanuel Macron pledged during a summit of African leaders in May to urge richer nations to support an allocation of $100 billion to Africa.
IFC Invests Record $10.4 Billion for Private Sector Development in Africa and the Middle East (IFC)
IFC provided record financing in fiscal year 2021 in the Middle East and Africa to help thousands of small businesses access finance, connect people and businesses to reliable digital infrastructure, trade and services, and help to meet critical health needs amid the COVID-19 pandemic. The financing reached $10.4 billion. IFC’s financing included short-term finance ($2.9 billion) and mobilization ($4.2 billion), with 70 percent of IFC’s own account financing going to low-income and fragile and conflict affected states. In sub-Saharan Africa, where country leaders have called for greater support for vaccine manufacturing in the region, IFC committed $8.7 billion in investments Under the Global Trade Finance Program (GTFP), the largest ever annual commitment in the region, with the financing going to attract private investment in regional vaccine manufacturers, greater access for small businesses to life-saving medical equipment, and to climate-smart development projects and digital connectivity.
Embracing a new conceptual framework for the statistical measurement of illicit financial flows (UNCTAD)
Economic Development in Africa Report 2020: Tackling Illicit Financial Flows for Sustainable Development in Africa argues that tackling illicit financial flows is essential in order for countries in Africa to strengthen domestic resource mobilization, boost hard and soft infrastructure investment and achieve the Sustainable Development Goals. Illicit financial flows from Africa are large and growing: in 2010–2018, Africa lost at least $220 billion linked to the export of extractive resources, compared with $40 billion in 2000–2009. The lack of internationally comparable data and conceptual clarity as to what constitutes illicit financial flows and how to measure them have been major challenges in designing policies to curb such flows. This policy brief examines illicit financial flows linked to the export of extractive resources from Africa. It highlights opportunities to curb illicit financial flows using improved methodologies for customs fraud detection and to enhance resource governance with regard to metals that will be in high demand for the battery-storage technology needed in the transition to a low-carbon future.
Science, Technology and Innovation: Mapping the Donor and Investment Landscape in Africa (GOV.UK)
The United Nations Sustainable Development Goals (SDGs) were launched in 2015 with the aim to end global poverty and ensure long term sustainability of the planet. As a part of the Agenda 2030, advancing Science, Technology and Innovation (ST&I) has been recognised as one of the key strategies to achieve the global goals by 2030. Yet, prior to the global pandemic, the world was not on track to achieve the UN SDGs and the advent of COVID-19 has only exacerbated this problem by increasing inequalities, decreasing food security and causing large-scale loss of employment and livelihoods. Much like the rest of the world, Sub-Saharan African (SSA) countries are struggling to meet their SDG targets, with an annual requirement of USD 500 billion to USD 1.2 trillion in SDG financing. Consisting of 33 of the Least Developed Countries, SSA continues to rely heavily on funding from Development Finance Institutions (DFIs), multilaterals and philanthropic organizations for economic growth.
Given the urgent need for innovation and technology to address critical gaps in sustainable development, especially to help rebuild economies in the pandemic era, this report provides a timely benchmark to understand the effectiveness of capital financing flows in the Science, Technology and Innovation (ST&I) sector within South Africa, Kenya, Nigeria, Uganda, Ethiopia and Rwanda, with the aim to identify critical gaps across the spectrum of financing, and recommendations on different avenues for partnership and private sector participation.