tralac Daily News
Lockdown restrictions likely to slow South Africa’s Q2 GDP growth (Daily Maverick)
Softer mining production anticipated, while declines in manufacturing output and negative sentiment towards construction point towards a slowdown in GDP growth for the second quarter. Gross domestic product (GDP) figures due for release on Tuesday, 7 September, will likely show that the rate of economic growth in South Africa in the second quarter slowed, with manufacturing and retail sectors offsetting expansions in mining and agriculture driven by a global boom in demand for commodities.
Economist at Momentum Investments Sanisha Packirisamy sees growth at closer to the 1% mark. “We expect mining and manufacturing data to lag, but a mild recovery in the services-related sectors (accommodation, transport and restaurants) is anticipated given that the end of the second wave brought about some activity in these sectors,” said Packirisamy.
The country’s dire unemployment statistics have brought to the fore the urgency for the public and private sector to expedite the implementation of the Economic Reconstruction and Recovery Plan (ERRP) to address the devastating effects of COVID-19, says Cabinet.
South African companies could use the Port of Constanta as a logistics hub within the trade operations with Romania and the European area, the president of the Chamber of Commerce and Industry of Romania (CCIR), Mihai Daraban, told Thursday the Deputy Minister of International Relations and Cooperation of South Africa, Alvin Botes, during the visit made by the latter to the institution’s headquarters.
With Tourism Month having kicked off, Cabinet has encouraged South Africans to travel their country supporting the local tourism sector.
Focus on South Africa’s critical PGMs supply role increasing – Implats (Engineering News)
The critical role South Africa plays in the supply of platinum group metals (PGMs) is gaining increasing focus, Implats said on Thursday. Following a period where South Africa’s relevance and the country’s importance tended to be discounted on the assumption that sourcing could be done from mainly recycling, provision for the new hydrogen vision has highlighted South Africa as a critical PGMs provider to ensure future growth.
Uganda protests move to reduce its sugar exports to Kenya (The East African)
Uganda has protested a 79 percent cut on its scheduled sugar exports to Kenya, reigniting trade disputes between the two East African Community states. Uganda’s Agriculture Minister Frank Tumwebaze said Thursday his country was “not happy” with restrictions on its sugar exports to Kenya.
Mr Tumwebaze was reacting to a notice by the Sugar Directorate in Nairobi that traders will only be allowed to import 18,923 tonnes of sugar from Uganda, down from 90,000 tonnes 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 this year agreed that Uganda would export 90,000 tonnes of sugar to Kenya as soon as the verification mission on the country of origin was completed. A deal between the two countries allowed Uganda to export surplus sugar into the country three years ago. But Nairobi delayed the implementation until late last year when the neighbouring state was allowed to ship in 20,000 tonnes of the 90,000 tonnes surplus that it had requested.
Nigeria may not benefit from the African Continental Free Trade Area (AfCFTA), which favours countries that export high volume of products and services, as records indicate that the country exports only about 13 per cent of its cargo imports, which amounts to 115 million tons annual import deficit.
According to 2019 records of the Federal Airports Authority of Nigeria (FAAN), Nigeria’s annual air cargo import stands at about 131 million tons, while it exports only 16 million tons by air.
Aviation expert and specialist in cargo freighting Mr. Amos Akpan, warned that Nigeria is losing income it could have earned from export by air cargo because it did not build capacity for export. He regretted that most cargo flights that bring goods to Nigeria fly back empty because there are not products to take out of the country.
“The World Trade Systems capture air cargo as integral part of the entire logistics chain. As at 2020, air cargo accounted for 35 per cent of the movement of goods worldwide. Air cargo is critical to world economy; International Air Transport Association (IATA) records six trillion dollars as airlines contribution out of which air cargo generated $111 billion. The resolution from the 73rd AGM of IATA is to equip air cargo to benefit from the anticipated $1 trillion increase in trade growth in the next five years. All sectors of our socio-economic life depend a lot on air cargo. In medicine, air cargo is relied upon to deliver vaccines and body organs on-time to save lives,” Akpan said.
AfCFTA cannot fail under Ghana’s watch so get involved -Gov’t to private sector (The Business & Financial Times)
Addressing a stakeholder engagement forum on leveraging opportunities under AfCFTA to boost economic growth in Ghana, organized by the Good Governance Africa (GGA), a Deputy Minister of Trade and Industries in charge of Micro, Small and Medium Enterprises, Nana Ama Dokua Asiamah Adjei emphasized that beyond working hard to have the AfCFTA Secretariat in Ghana, the government has also created the enabling environment for the private sector to own the AfCFTA and use it to their benefit and the benefit of Ghana and Africa as a whole.
The Ministry of Trade and Industry says it will not allow Ghana to become a dumping ground for goods from the UK following the Ghana-UK: Tariff liberalization interim trade agreement which began on Wednesday, September 1, 2021. The tariff liberalization exercise will see Ghana reduce some tariffs on goods coming from the UK. The interim trade pact was ratified by the Parliament of Ghana in May 2021 after the UK completed processes to exit the European Union. This provided an opportunity for renegotiation of new tariff regimes in line with the partnership. Already, Ghana is benefiting from the treaty, as vegetable and fruit exporters enjoy duty and quota-free access to the UK market for goods originating from Ghana.
Director-General of the Ghana Standards Authority, Professor Alex Dodoo, has said that e-commerce, under the African Continental Free Trade Area (AfCFTA), must be governed by standards. As such, he said, there was the need for the development and implementation of the technical regulations of such standards. Speaking at the Africa Digital Forum, which was organised by AIDEC, he said there must be a conscious effort to standardise e-commerce trading in the continent. He was speaking on the topic: “e-commerce, Border Trade Protocols and Standardisation under AfCFTA” This, he said, would help make locally produced materials and goods more competitive, as compared with products from other continents.
The Executive Secretary, Nigerian Shippers’ Council (NSC), Mr Emmanuel Jime, on Thursday listed key issues to be addressed to make Nigeria a maritime hub for the African Continental Free Trade Area (AfCFTA). Jime made the recommendations at a sensitisation seminar with the theme, ‘African Continental Free Trade Area: Implementation Strategy for the Maritime Sector,’ organised by the council. Jime, represented by Mr Cajethan Agu, Director Consumer Affair of the council, noted that there was need to look at some indicators critically so that Nigeria could benefit adequately from AfCFTA. “The first indicator has to do with the Logistics Performance Index. On the table, the first is South Africa, followed by Egypt and Kenya; Nigeria is number 14, globally we are 110.
Kenya hosted a Country Roadshow to raise awareness about the substantial benefits of attending the second Intra-African Trade Fair (IATF2021). Organised by the African Export-Import Bank (Afreximbank) in collaboration with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat, IATF2021 will take place in Durban, KwaZulu-Natal, South Africa from 15 to 21 November 2021. Hon. Betty Maina, Cabinet Secretary, Ministry of Industrialisation, Trade and Enterprise, Kenya said: “The South-South Co-operation created opportunities for our people, the African Continental Free Trade Area (AfCFTA) will lead to great things going forward. Inward-looking policies hindered trade, the East African Community and COMESA harnessed opportunities.”
Hon. Ravi Pillay, MEC for Economic Development, Tourism & Environmental Affairs said: “Economic transformation is about local production, trade on equal terms. The vision of the African Union must remain alive and the AfCTA is a critical step forward. The success of this event will be achieved through partnerships and working together, marking a significant milestone towards the Africa we want, a collective effort, hard work and dedication. KZN is open for business, and we are ready to host the most successful IATF 2021 event on behalf of the country, region and continent.”
African informal trade worth $93bn annually — Osinbajo (Daily Trust)
Vice President Yemi Osinbajo said that authorities across the continent must take the right policy actions to actualise limitless opportunities for the industrialisation of Africa as contained in the African Continental Free Trade Area (AfCFTA). He said this in a message he delivered Thursday at a ‘Roundtable on Industrialisation in Africa’ themed “Positioning African Industries for Economic Transformation and Continental Free Trade”, organised by the Manufacturers Association of Nigeria (MAN) to celebrate its golden jubilee. He said such actions include the protection of local industries and improving value chains. “We must take policy actions to create an environment in which businesses can thrive. To start with, we must adopt the right type of macroeconomic and industrial policies.
“This will go a long way in creating the desired continental payments system and also in facilitating cross-border informal trade which is estimated to be about $93 billion per annum.”
The world economy was disrupted in 2020, due to the outbreak of the covid-19 pandemic, which brought economic activities to a halt in most countries, with Africa not exempted from the downturn. In 2020, a number of African countries fell into economic recession including Nigeria, however, the list of top economies per capita, remains fairly unchanged compared to the previous year. According to data obtained from the World Bank, the Sub-Saharan African economy declined by 2.45% in 2020 from $1.85 trillion recorded in 2019 to $1.81 trillion. Also, the middle East and North Africa region recorded a 3.66% contraction in its economy to an aggregate of $3.37 trillion.
A new report commissioned by Messe Frankfurt Middle East, organiser of Automechanicka Dubai (www.AutomechanikaDubai.com) – the largest international trade show for the Middle East and Africa’s (MEA) automotive aftermarket and service industry – signposts huge aftermarket potential in the African continent.
Produced by German consultants Africon GmbH, which supports international companies looking to expand their automotive businesses in Africa, the report identifies Nigeria and Kenya as key to unlocking the continent’s automotive aftermarket potential and the individual characteristics needed to succeed in each national marketplace. The report points to a resurgence of international interest in the African market, which boasts one of the world’s fastest-growing populations, with the United Nation’s 2021 population estimates putting Africa at 1.374 billion.
As the Covid-19 pandemic continues to afflict Africa, with the number of deaths increasing while the rate of vaccination remains slow, the African Airlines Association (AFRAA) has warned that the lack of support from governments and development finance institutions for the continent’s aviation and tourism industries was a major threat to the African commercial aviation sector. AFRAA warned that, should governments fail to respond to the appeals of itself, the African Civil Aviation Commission and the African Union, to supply financial support and relief to those carriers which had been most affected by the pandemic, there was a danger that the African aviation industry could collapse.
The association reported that it was forecasting that African airlines would suffer a full-year revenue loss of $8.2-billion for this year. This would be roughly equivalent to 47.2% of their full-year revenues during 2019, the last pre-Covid-19 year. Last year, African airlines suffered total losses of $10.21-billion, or 58.8% of their 2019 revenues.
Why Nairobi summit is a big deal for Africa’s agriculture (Business Daily)
The four-day AGRF 2021 Summit starts in Nairobi next week, with participants expected to chart a recovery path for Africa’s food system out of the Covid pandemic and build its resilience to future shocks. The AGRF 2021 Summit is critical for Africa’s agriculture. It is a defining moment to highlight achievements and unlock many of the political, policy, and financial commitments and innovations the continent needs to advance the pledges made at the Malabo Heads of State Summit and towards the achievement of the UN Sustainable Development Goals. Through the Agribusiness DealRoom, a matchmaking platform at the AGRF aimed at catalysing new business deals, partnerships and commitments, we were able to mobilise investments amounting to $4.7 billion in 2020. Over the last three years, the deal room has facilitated public and private actors who jointly sought an aggregate capital of $11 billion
On 9 September, the African Development Bank Group, Green Growth Knowledge Platform (GGKP), and other partners will launch a new initiative on integrating natural capital into development finance in Africa. This initiative, called the Natural Capital for African Development Finance Programme NC4-ADF, is supported by the World Wide Fund for Nature (WWF), the German Federal Ministry for Economic Cooperation and Development (BMZ) through its dedicated agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the United Nations Environment Programme (UNEP), the MAVA Foundation, the International Institute for Sustainable Development (IISD) and the Economics for Nature (E4N) partnership, with the goal of giving a central economic role to natural capital. “The inclusion of natural capital in development finance is essential for post-Covid-19 recovery,” said Vanessa Ushie, Director of the Policy Analysis Division at the African Development Bank’s African Natural Resources Centre. “The Bank recognises that nature-based approaches are key to addressing biodiversity and climate emergencies. It is working to integrate natural capital into infrastructure financing, investments, and economic policies in Africa.”
South Africa’s Cabinet has welcomed the outcomes of the G20 Compact with Africa meeting held in Berlin, Germany, last month. Currently, 12 African countries have joined the Compact with Africa initiative as well as the Democratic Republic of Congo in its capacity as the chair of the African Union. The meeting was held to discuss Africa’s vaccine production and to find ways to improve the business environment and to increase investment.
“We expressed our disappointment and we expressed our unhappiness and said that it’s not fair that Africa has only vaccinated 2% of the 1.3 billion people and yet the more developed countries in the North have vaccinated up to 60%. We expressed a lot of unhappiness with this inequality that currently exists. “It is to this end that South Africa and India made a proposal to the World Trade Organisation that there should immediately be a temporary suspension of the intellectual property rights so that vaccine production should be spread to other countries as well,” President Ramaphosa said.
Kenya to host the African – Caribbean Community summit Tuesday (Kenya Broadcasting Corporation)
Kenya will next week Tuesday 7th September 2021, virtually host the first-ever African – Caribbean Community (CARICOM) Summit. The theme of the Summit will be Unity Across Continents and Oceans: Opportunities for Deepening Integration. It is aimed at promoting closer collaboration between Africa Diaspora, People of African descent and the Caribbean and Pacific region and its institutions. Debt sustainability and development financing; trade investment and economic integration; blue economy and transport connectivity; fintech-related solutions; political integration between Africa and Caribbean countries; people to people contacts and cultural exchanges; COVID-19 pandemic management and AU-CARRICOM collaboration, will be among the thematic focus areas to be discussed at the Summit.
China’s Telecommunications Footprint in Africa (CGTN Africa)
China has continued to play a major role in financing and supplying telecom and ICT equipment to Africa. CGTN’s Daniel Arap Moi submits that Chinese companies like Huawei have helped to bring down charges and contributed to the success of mobile phones on the continent. Besides Huawei, Transsion Holdings group reportedly controls 40 percent of the smartphone market in Africa.
India will chair a virtual meeting today of BRICS (Brazil, Russia, China, India and South Africa) trade ministers. Assuming the BRICS chairmanship from Russia earlier this year, India will seek to leverage today’s gathering to set priorities for the 13th BRICS summit—to be held in New Delhi— in September. Expect trade and counter-terrorism to feature prominently in discussions. The ministers will likely review measures aimed at advancing a BRICS multilateral trading system. Making progress on a non-tariff measures resolution mechanism—recommended successfully by India at the bloc’s July meeting — will be key to gauging the feasibility of developments geared towards forging the multilateral trading system.
Kenya lobbies for Commonwealth top job (The East African)
Kenya’s Interior Cabinet Secretary (CS) Fred Matiang’i Thursday lobbied for support from Zambia for Kenya’s bid for the Commonwealth top job when he met new President Hakainde Hichilema. Kenya’s President Uhuru Kenyatta last week proposed Defence CS Monica Juma for Commonwealth secretary general.
Zambia, like Kenya, belongs to the Commonwealth, colloquially referred to as the Club, and includes the UK, its former colonies, and Rwanda and Mozambique. Kenya and Zambia, both former British colonies, also belong to regional blocs such as the African Union and the Common Market for Easter
“My central message is that we detect an increasing interest from our members to discuss the environmental implications of plastic trade and plastic waste,” DDG Paugam said at the event organized by the United Nations Conference on Trade and Development; the UN Environment Programme; the Forum on Trade, Environment and the SDGs, and the Government of Ecuador titled “How can cooperation on trade contribute to the United Nations Environment Assembly (UNEA) process on plastic pollution?”
UN Food Systems Summit: Africa’s Farmers Deserve Choices (Inter Press Service)
In a few weeks, the United Nations will host the first international Food Systems Summit. The goal is to create a global movement committed to solving the many dietary, economic and environmental problems linked to the way food is produced, sold and consumed today. Africa, a continent with high rates of poverty and malnutrition that are strongly connected to poorly performing farms—and home to vast tracts of uncultivated but farmable land—will be a stress test for the summit’s aspirations.
Most Africans—including up to 90% of people living in rural communities—still rely on small-scale or “smallholder” crop and livestock production to generate the income they need to support their families. Their farms—if productive and with good access to markets—can be the blessing that pays for school fees, health care and also food to round out their family’s nutritional needs. Farming is especially important for providing economic opportunities for African women. But farming is often a burden for many Africans because they lack what they need to succeed—so their farms don’t provide sufficient incomes or even enough food. This burden grows heavier every day as the stresses of climate change and, more recently, the impact of the COVID-19 pandemic add new obstacles.
Global food commodity prices rebounded rapidly in August after two consecutive months of decline, led by strong gains in the international price quotations for sugar, wheat and vegetable oils, the Food and Agriculture Organization of the United Nations (FAO) reported today. The FAO Food Price Index averaged 127.4 points in August, up 3.1 percent from July and 32.9 percent from the same month in 2020. The index tracks monthly changes in the international prices of commonly-traded food commodities.
Presentation by Economic Counsellor Gita Gopinath at the Bruegel Annual Meetings 2021