News
tralac Daily News
National
Commodities boom: SA’s current account and trade surpluses hit records in Q2 (Daily Maverick)
South Africa recorded its largest current account surplus ever in the second quarter of this year, widening to R343-billion from R262-billion in Q1. The trade surplus also hit a record high. The commodities boom is the main reason for this positive state of affairs against the backdrop of an otherwise frail economic recovery. Prices for a range of metals and minerals, from rhodium to iron ore, have been scaling historic highs this year as the global economy rebounds from 2020’s pandemic-induced contraction. That’s good news for resource-rich economies such as South Africa’s, where mining companies have been posting record results. Much of that money has been flowing to Treasury at a time when it needs every rand it can lay its hands on, while shareholders have reaped windfall dividends. For the South African economy more broadly, this can be seen in the current account, which forms part of a country’s balance of payments and is basically an accounting of its transactions with the rest of the global economy.
South Africa emerges as Namibia’s largest market for both exports, imports in July (China.org.cn)
Namibia’s trade composition by partner illustrated that South Africa emerged as Namibia’s largest market for both exports and imports in July 2021, according to trade statistics released Thursday by the Namibia Statistics Agency (NSA). South Africa emerged as the country’s largest export destination, with a share of 20.1 percent of all goods exported followed by Spain with a share of 15.1 percent, NSA statistician general Alex Shimuafeni said, adding that China, Zambia and the Netherlands formed part of Namibia’s top five export markets.
SA losing more and more farmers as agriculture faces tough challenges (News24)
The number of farmers in SA is declining, with a notable drop since the start of the Covid-19 pandemic. And those that remain - especially small-scale farmers - face ongoing challenges. Dairy farmers alone have dropped in number by more than two-thirds in the last 14 years, from 3 899 in January 2007 to 1 053 in January 2021. This is according to the latest in a series of Essential Food Pricing Monitoring reports issued by the Competition Commission. The latest report focused on the impact of the Covid-19 pandemic on food markets in the country.The report says small-scale and emerging farmers were particularly hard hit by poor yields and low productivity, and struggled to grow their operations. Barriers include access to finance, infrastructure and routes to market.
Economic Survey: Kenya’s GDP contracts by 0.3pc (The East African)
The Kenya National Bureau of Statistics has released the annual Economic Survey 2021 after a four-month delay. The report capturing the performance of the economy and the jobs market is usually released in late April or early May, ahead of the budget reading. However, this year, the statistics agency did not release the data, prompting Parliament to probe the delay. KNBS had earlier cited the late submission of data by some of the respondents in economic sectors.
Kenya GDP contracted by 0.3pc in 2020, hit by the economic fallout of Covid-19, compared to 5pc growth in 2019.GDP jumps to Ksh10.75 trillion ($97.8 billion) after rebasing of the economy to 2016 base year from 2009. The economy is projected to grow by 6pc this year helped by the manufacturing sector
Cross border traders appeal to govt for help (Graphic Online)
Ghanaian traders who travel to neighbouring countries to do business have appealed to the government to take steps to save them from the challenges they face at the borders and in the neighbouring countries. While some of them complained about human rights violations and the impact of the closure of land borders, others accused customs officers of extorting various sums of money from them at the borders before allowing them to bring their goods into the country. According to the traders, without immediate intervention and sustained efforts by the government, their businesses faced existential threat, which could inhibit the goal of having a robust trading system among African countries, as envisioned under the African Continental Free Trade Area (AfCFTA) agreement.
2021 US Ghana Business Forum: Government calls for strategic partnership to develop Covid-19 economic transformation (Myjoyonline)
Government is calling for a strategic partnership with the United States of America to develop a post Covid-19 economic transformation agenda which will mutually benefit the two countries. According to Trade and Industry Minister, Alan Kyerematen, this will enable the country to attract more investments from the USA to take advantage of the African Continental Free Trade Area. He explained that the country’s economy is being diversified from cocoa, gold and oil to pharmaceutical, energy and telecommunications, amongst others. Speaking at the virtual 2021 US Ghana Business Forum which opened yesterday, Mr. Kyerematen said “we [government] have launched a very aggressive programmes for industrial transformation which I believe offers strategic entry points for US investments into our country. Now these new strategic anchor industries that are part of this industrial transformation agenda includes the following; vehicle assembling and component manufacturing, garments, petro chemicals, agro industry, industrial chemicals including the process of industrial salt, Integrated bauxite and aluminium, iron and steel and the manufacture of machinery and equipment.”
Benin road project boosting transport (World Highways)
West Africa is to benefit from a road improvement project that will boost the country’s transport connections internally and also with its neighbours. The road links the cities of Banikoara, Djougou and Péhunco and will be resurfaced with asphalt. Financing has already been secured for the project, which is being provided by the West African Development Bank (BOAD), the African Development Bank (AfDB) and also the Benin Government. The work is expected to commence in October 2021, once the rainy season has passed. The project is costing US$236.7 million.
The city of Banikoura lies close to Benin’s borders with both Niger and Burkina Faso and this road provides an important transport link for both of these landlocked nations. Upgrading the road will lower transport costs while boosting safety, delivering significant economic gains for Benin as well as its neighbours, which also include Nigeria and Togo.
Africa
Tanzania ratifies Africa free trade area treaty (The East African)
Tanzania on Thursday ratified the agreement establishing the African Continental Free Trade Area (AfCFTA), effectively joining a pact connecting countries with a total gross domestic product of $3.4 trillion. Minister of Industry and Trade, Kitila Mkumbo, made the announcement via Twitter, noting the country has joined a market of 1.2 billion customers. Tanzania had not formally joined although former President John Magufuli signed on the agreement in 2019. After signing, parliamentary approval is required for ratification of the agreement. The ratification is an indicator of President Suluhu’s intention to return the country to regional integration.
Freight, logistics integration key to successful intracontinental trade (Engineering News)
Although the African Continental Free Trade Area (AfCFTA) agreement aims to achieve an economically integrated continent, with successful trading among African countries, the Trade Research Advisory tells Engineering News that this will prove challenging in the short to medium term. “Government officials and politicians are understandably optimistic about the AfCFTA agreement, but it is a big basket of promises. “The reality is that the practical and physical logistics of intracontinental trade facilitating infrastructure will, ultimately, be a core deciding factor in whether the aims as set out by the agreement will be achieved within planned time frames,” says Trade Research Advisory MD and international trade specialist Dr Martin Cameron. Access to finance is, first and foremost, required to achieve economic growth in African countries under the AfCFTA agreement, but the ‘nuts and bolts’ of logistics – such as existence of well-maintained and efficiently functioning bridges, roads, railway networks and ports – within and among African countries are bigger hampering factors than the much publicised tariff reduction negotiations and process. In addition, core utility infrastructure development related to power, water and education are also necessary.
Reform Africa’s Trade Agenda or continue to sink deeper in the claws of Neoliberalism (Citizen TV)
The global North is fiercely and actively coveting Africa for her resources, how prepared is Africa to counter this undeniable neo-liberalism of our times? Unless Africa, a continent of 1.3 billion people, redefines and re-strategizes how it is trading with the global North then the ensuing plunder and exploitation of her resources will continue unabated as has been the case in the pre- and post-colonial era. Re-defining her trade destiny means Africa must adopt three critical approaches: – Resist Western imposition, engage for continental integration and build alternatives that will sustain a solid economic base.
“The first thing we must do is resist with all consciousness the deliberate imposition of trade treaties and agreements by the West. Then we must engage as Africans the issue of our fragmentation which makes us economically not viable and easier to colonize in our current state of division. Third, we must build alternatives that can be articulated well enough to be implemented.
Lastly and more importantly, we must pause, rethink and focus on reforming our trade policy and systems from neoliberal embrace to a model grounded on the human element. This is how we can challenge the neo-liberalism adherents to their dogma and offer better benefits to the (African) people and the environment,” said panelist Brian Tamuka Kagoro, a Pan African Lawyer.
Experts Call For Development Of Transport Systems Among Others To Realize Benefits Of AfCFTA (News Ghana)
Maritime industry experts have called for the development of a robust maritime industry for effective trading within the single continental market. Africa has been opened up for free trading, since the beginning of 2021, with the introduction of the African Continental Free Trade Area, but experts believe much is left to be desired in terms of the readiness of countries to trade effectively within the single continental market.
Maritime law consultant and legal practitioner at Alliance Partners, Dr. Kofi Mbiah stated that since trade is inextricably tied to transport, failure to invest and develop hinterland transport systems will render developments in port infrastructure futile. “The transport connectivity in most sub-Saharan ports are poor. Go to Apapa port in Lagos, for example there is serious gridlock – about 5-10km of trucks lined up in a queue. You can’t build AfCFTA on that,” Dr. Mbiah cited.
AfCFTA, public-sector support vital for aerospace growth (Engineering News)
The African Continental Free Trade Area (AfCFTA), implemented at the beginning of this year, can potentially boost African aerospace manufacturing by improving export sophistication across Africa, states Commercial Aerospace Manufacturing Association of South Africa chairperson Themba September. “The importance of the AfCFTA is often overlooked – perhaps because it is so unconventional – but it is a potentially decisive element, as its scope exceeds that of traditional free trade areas, which generally focus on trade in goods. The AfCFTA includes trade in services, investment, intellectual property rights and competition policy, and possibly e-commerce.”
“For aerospace manufacturing, the prospect of improvement in export sophistication across Africa by enabling more countries to integrate regional and global value chains – and consequently increase the quality of exports – can result in an enhanced prominence of aerospace manufactured products being traded.”
He acknowledges that, while the African aerospace sector can benefit, it is unlikely that African manufacturers will be able to emulate the investments made by developed countries in their aerospace manufacturing capabilities.
Why paytech is the key to unlocking Africa’s new free trade zone (NewsDay)
EFFICIENT payment will be needed across the African Continental Free Trade Agreement (AfCFTA)’s 55 countries, with their varying financial systems. Africa’s emerging paytech sector has experience working across borders. Government-sanctioned paytech is a better trade facilitation option than unregulated cryptocurrencies. Optimistic, the world holds its breath for the AfCFTA as it seeks to redefine African markets. It will create uniform rules to guide trade, dispute settlement, investments, competition and intellectual property rights across the continent.
with the AfCFTA signed, implementation is the next critical hurdle. In the words of its secretary-general Wamkele Mene: “We have completed the easiest part — that is for 55 countries to negotiate a single set of rules. The most difficult part is implementation.”
Kenyatta urges African states to base food security policy on data (The East African)
Kenyan President Uhuru Kenyatta on Wednesday urged leaders in the continent to improve food security policies by basing decisions on data and science. The President spoke at the virtual African Green Revolution Forum (AGRF) summit at State House, Nairobi, on the same day he declared drought in some parts of Kenya as national disaster.
“Equally important to note is that our renewed drive anchors our food systems transformation agenda on data-driven decisions. “Armed with relevant and precise data, we are better able to make targeted interventions that address water-scarcity, climate change, land pressure, and the competition between subsistence food crops and export cash crops.”
Africa, President Kenyatta said, must make agriculture as attractive to children just as law or other careers are. “In order to overcome these negative perceptions and to show our children and youth the nobility and profitability of agriculture, we are elevating the place of agriculture in our schools by revitalising the 4-K-Clubs,” he said of Kenya’s efforts. “We are doing this because Kenya’s 31,218 primary schools and their enrolment of close to 10 million school-going children, offers a vast network through which knowledge about food and nutrition security can be boosted.”
Historic CARICOM-AFRICA Summit Plans to Strengthen Unity, Trade and Investment Between the Two Regions (PRNewswire)
History was made on September 7th 2021, when the inaugural CARICOM-Africa Summit was held virtually under the theme ‘Unity Across Continents and Oceans: Opportunities for Deepening Integration’. The meeting, which was delayed a year due to the pandemic, aimed at ‘Promoting closer collaboration between Africa Diaspora, People of African Descent and the Caribbean and Pacific region and institutions.’ Kenyan President Uhuru Kenyatta led the summit with leaders of 69 countries between Africa and the Caribbean. Among matters discussed were greater economic trade and investment opportunities between Africa and the Caribbean and solidarity in addressing global challenges, including climate change and the COVID-19 pandemic.
“Colleagues, we have it within our power to demand change in the international system and to fight for it and to make it happen. But only if we act harmoniously,” said President Kenyatta. “We are a population of approximately 1.4 billion people, with great natural and wealth-creating resources including oil, gas, agriculture, minerals, forestry, tourism, fisheries and much more.”
Absa leads the pack in support for SMEs through its Africa trade finance (CapeTalk)
Small and medium-sized enterprises (SMEs) are crucial to an economy such as SA’s no less so than the rest of Africa’s. The SME sector urgently requires optimal bank funding support to ensure its recovery from the pandemic and to adequately exploit the new growth opportunities presented by the African Continental Free Trade Area (AfCFTA), launched on 1 January 2021. “The AfCFTA is a new frontier and a potential game change for the continent, and one that stands to benefit entrepreneurs as much as the corporate sector,” says Doreen Fick, Head of Funded Wholesale Trade Finance products at Absa. “It is therefore vital that it in practice benefits SMEs and entrepreneurs across the continent and does not simply become the domain of big businesses. This is a massive opportunity for SMEs to grow their intra-Africa trade with the potential only limited by their access to trade finance.”
Africa grapples with surging food import bill (IPP Media)
Kalibata made the disclosure during the African Green Revolution Forum (AGRF) where she made the case for prioritising moving smallholder farmers from subsistence agriculture to profitable agribusiness. At the forum, a Deal Room—a matchmaking event seeking to mobilise $5 billion in agribusiness financing, was launched. Africa remains a net food importer with the food import bill outstripping export revenuers.
Africa’s exports of food and agriculture products are somewhere between $35 billion and $40 billion a year, and some $8 billion a year flows through intra-regional trade in these products, according to McKinsey & Company – a US-based management consulting firm. “We cannot develop this continent on the back of seven out of 10 people living as producers of food (farmers) who are facing high poverty,” Kalibata observed.
The African Development Bank Wednesday joined leaders of government and international organizations in calling for stronger partnerships to support Africa’s recovery from the Covid-19 pandemic at the first Egypt-International Cooperation Forum. Participants also urged greater cooperation with the private sector in the short term to secure more rapid vaccine access for Africans. Gender equality and climate action were also discussed.
Dr. Rania Al-Mashat, Egypt’s Minister of International Cooperation, highlighted the opportunities that have emerged from the Covid-19 pandemic to accelerate progress towards the 2030 Agenda, as well as how South-South cooperation can be exploited to foster enhanced flows and increased volumes of trade, as well as the exchange of solutions and experts, technology transfer, and dialogue on options for policy reforms.
“There is this common conviction of the importance of SDGs. We need to work more together to enhance complementarity between different multilateral institutions to achieve them,” she said.
AfDB pledges more support for EAC integration process (EAC)
The Executive Director of the African Development Bank (AfDB) for Kenya, Eritrea, Ethiopia, Rwanda Seychelles, South Sudan, Tanzania and Uganda, Mr. Cheptoo Amos Kipronoh, has pledged more support to Infrastructure, power connectivity and capacity building for the East African Community bloc.
Mr. Kipronoh said that investment in infrastructure, power connectivity and capacity building was the key to economic development and strengthening EAC integration. Mr. Kipronoh commended the EAC for being the most integrated bloc among the eight regional economic communities (RECs) recognized by the African Union. “The AfDB rates EAC very highly. You are truly on course to the Community’s intended objective of transforming the region into a single market for all factors of production for enhanced welfare and economic prosperity of the people of East Africa,” he said.
International
BRICS statement bats for multilateralism, reform of UN bodies (THE WEEK)
Asserting that effective and representative multilateralism is essential for building resilience against current and future global challenges, the BRICS grouping on Thursday recommitted itself to instil “new life” in the discussions on reform of the UN Security Council and keep working to revitalise the General Assembly.
In the Delhi Declaration, adopted after a summit between leaders of the member states of Brazil, Russia, India, China and South Africa, the influential grouping pledged its resolve towards strengthening and reforming the multilateral system to make global governance more responsive and agile, effective, transparent, democratic, representative and accountable to member states.
“The pandemic has reinforced our belief that effective and representative multilateralism is essential for building resilience against current and future global challenges, promoting well-being of our people and building a sustainable future for the planet,” said the declaration issued after deliberations between Prime Minister Narendra Modi, Russian President Vladimir Putin, Chinese President Xi Jinping, South African President Cyril Ramaphosa and Brazil’s Jair Bolsanaro.
They agreed that the task of strengthening and reforming the multilateral system encompasses making instruments of global governance more inclusive, representative and participatory to facilitate greater and more meaningful participation of developing and least-developed countries, especially in Africa, in global decision-making processes and structures, and make it better attuned to contemporary realities.
The leaders also asserted that the macroeconomic stability of the BRICS economies will play a major role in achieving global recovery and stability.
The least developed countries (LDCs) are vulnerable to exogenous economic, environmental and health-related shocks, such as the coronavirus 2019 (COVID-19) pandemic, due to the low level of development of their productive capacities. The fifteenth session of the United Nations Conference on Trade and Development (UNCTAD XV) will be held in October 2021 and the fifth United Nations Conference on the Least Developed Countries (LDC5) will be held in January 2022; both conferences will aim to seek ways and means of expanding productive capacities, critical to building socioeconomic resilience and enabling LDCs to achieve structural transformation and sustainable economic growth. In this policy brief, UNCTAD intends to shed light on the role of institutions in fostering productive capacities, and examines Institutions as one of the eight categories of the UNCTAD Productive Capacities Index.1 In the context of the formulation and implementation of policies and strategies in support of LDCs, recommendations are provided to support the building of stronger and more effective institutions, a prerequisite for fostering productive capacities.
Invest in technology today to power logistics solutions for tomorrow (Construction Week Online)
There’s no doubt about it – technology has not only changed the way we work and live, it’s also pushing boundaries in the way we do business. For instance, e-commerce has become the norm rather than an option today. We’re now used to the luxury of everything being just a click away or at our fingertips. With options like premier delivery services it is possible to receive an order within an hour of placing it. This was unheard of until about five years ago and in the years ahead, it is quite possible that there will be further disruption with the advent of technology and blurring of boundaries. According to Global Total Logistics Market Report the pandemic has had highly complex and nuanced effects on supply chains, despite which the sector is expected to grow by 4.7% through to 2024. All over the world, supply chains are being transformed by the development of a more digitalised environment, where value chains are connected, and distribution systems are increasingly intelligent, autonomous and automated. The pace of advancements here is rapid and has led to huge impacts in flexibility, efficiency and automation of distribution. The fundamental building blocks of Industry 4.0 are driving innovation in supply chain and as companies seek to make their supply chains more efficient, the adoption of these new technologies into operations is becoming more prevalent.
It’s tough to delink technology from all this. This has allowed companies in logistics and supply chain management – both legacy brands and emerging ones – to forecast their requirements, deploy effective solutions and put in place measures leading to better efficiencies. Here are some of the trends that will act as the torch-bearers for the future of this industry.
Innovative debt financing could close the digital access gap. Here’s how (World Economic Forum)
Digital connectivity is oxygen for opportunity. The opportunities made possible to those who are connected are rapidly expanding as services across every sector are increasingly provided and consumed online. These include healthcare, education and financial services. Yet, the global COVID-19 pandemic has laid bare the vast divide between those who are connected and the billions of people who are not. Increasingly, leaders in business, government and civil society have recognized the societal and economic imperative to invest in digital inclusion, and many have invested in projects designed to advance this objective.
