tralac Daily News
The importance of investing in SMEs (Vutivi Business New)
Banks and equity funders in South Africa plan to ramp up their support for SMEs over the next five years as they are critical to help rebuild the economy. According to panelists at a Standard Bank SME Summit in partnership with Business Day webinar on reigniting businesses in the new economy, investing in the SME sector market can be mutually beneficial for financial institutions, investors and smaller businesses. Although SMMEs are the lifeblood of South Africa’s economy and employ around 60% of the workforce, they are most at risk due to very little support and limited access to capital. But both Standard Bank and Jaltech Fund Management told the webinar that they were looking to change this situation. Jaltech Fund Management co-founder and partner Gaurav Nair said that already investors were moving away from the traditional markets of listed equities for their returns. “So what lies ahead is investing into the alternatives and the alternatives are equity funding into small and medium-sized businesses and what lies over there is that you have really good deals as an equity investor because a lot of the other funders are not looking there… it’s the really good deals that you are not competing for,” he said.
The South African companies that are based in China will participate in the 2nd China-Africa Economic and Trade Expo (Catexpo), that will take place in Changsha City, Hunan Province, China from 26-28 September 2021. The theme of the Expo will be “New Start, New Opportunities, New Accomplishment”. The Expo is a hybrid event comprising both physical and virtual activities. It is aimed at providing a platform to enterprises to discuss import and export business and purchasing through online systems. According to the Deputy Minister of Trade, Industry and Competition, Mr Fikile Majola, South Africa is privileged to participate in the Expo as a Guest Country of Honour this year. “China is strategic to South Africa and participating in the Expo will expand, elevate and deepen the mutually-beneficial economic and trade cooperation. South Africa is a member of the Forum on China–Africa Cooperation (Focac),” says Majola.
Strategic export pricing, payment terms (Sunday Mail)
ZIMBABWE’s exports have been on an upward trend over the past few months and are expected to continue growing throughout the year. This growth is a result of initiatives being implemented by the Second Republic, including developing and promoting relations that facilitate export growth.
In addition, ZimTrade — the national trade development and promotion agency — has been undertaking export promotion programmes in non-traditional markets over the past few months, in line with the National Export Strategy, which was launched by President Mnangagwa in 2019.
KPA eyes more efficiency as key projects near completion (Business Daily)
The Kenya Ports Authority (KPA) expects to improve its efficiency in the next three months as some of the key projects which were delayed as a result of Covid-19 are set to be completed. KPA acting managing director John Mwangemi said construction of phase 2 of the Second Container Terminal (CT2) whose completion is at 88 percent will be done before the end of 2021 and will bring on board an additional capacity of 450,000 twenty foot equivalent units (TEUs). Mr Mwangemi said the new facility will increase Mombasa port capacity to 2.1 million TEUs per annum.”Apart from the completed construction of Kipevu road which is a partnership between KPA and Trademark Africa which is only waiting to be linked with the Mombasa Nairobi Highway once the latter is complete, CT2 will play a key role as we shall never experience congestion at the port,” said Mr Mwangemi.
Carrier vessels shortage hits car importers (Business Daily)
Kenyan car importers are facing delays due to the unavailability of vessel spaces in Japan coming on the back of recovery of global trade that was affected by the Covid-19. Imports now take more than the maximum 40 days that it used to take for one to import a secondhand vehicle from an Asian country. The recovery of the global supply chain has created a huge demand for shipping vessels, meaning shippers cannot meet the high demand for exports. “At present, it is extremely difficult to secure space for vessels; one of the main reasons is the resumption of the economy due to the coronavirus,” Japanese biggest vehicle importer to Kenya SBT Company Limited said. The scarcity of vessels could cause the prices of vehicles as well as freight to go up as demand outweighs supply.
Ethiopia and Kenya have finally sealed a deal for a free trade area projected to make cross-border business dealings easier. The signing of an operational guiding document, the Moyale One Stop Border Post Procedure Manual, in Addis Ababa last week is expected to give the neighbouring countries a competitive edge with regard to goods traded. The deal seeks to encourage small-scale traders by developing a simplified framework to facilitate their business activities at the border. It will also help to harmonise Kenya and Ethiopia’s trade regimes, particularly on agricultural products, in order to allow citizens from both countries to conduct business beyond the borders.
Following the trade impasse between Ghanaian traders and foreign retail traders, the Greater Accra Chairman of the Ghana Union of Traders Association (GUTA), Nana Kwabena Peprah, has called on government to speed up the strategies put in place to end this problem. It would be recalled that shops belonging to some foreigners in the retail business in the Eastern regional capital, Koforidua and in Accra were closed by members of GUTA. This comes after negotiations by a joint implementation task force between GUTA and the Nigeria Union of Traders Association (NUTAG) to look out for a long-lasting solution to this trading impasse proved futile.
He said, “All these happenings are unfortunate, but what I will say is that the leadership is in control. We are talking to the sector associations and asking that the government should speed up and immediately convene the meeting for the retail trade committee to work and bring sanity.” Despite the implementation of the African Continental Free Trade Area (AfCFTA) which is to allow the free movement of goods among ECOWAS countries, there’s still a trade war between Ghanaian traders and their Nigerian counterparts. Per the Ghana trade law, a person who is not a citizen or an enterprise that is not wholly-owned by a citizen, shall not invest or participate in the sale of goods or provision of services in a market, petty trading or hawking or selling of goods in a stall at any place. Also, there’s a minimum capital requirement of $1 million for foreigners engaging in some retail business here in Ghana.
The business community is a key part of the African Continental Free Trade Area (AfCFTA) and could benefit immensely in terms of access to raw materials, technology and also increasing economies of scale for participation in regional and global value chains, said Ms Mama Keita, Director of UN Economic Commission for Africa, Office for Eastern Africa. Ms Keita was speaking during a webinar organized by ECA in collaboration with the East African Business Council (EABC) to discuss with the private sector of East Africa about the AfCFTA implementation in East Africa. The e-meeting participants exchanged views on how to harness the potential of the African markets and on how businesses can seize the moment to implement and benefit from the AfCFTA agreement. ECA simulations stress that AfCFTA is set to boost Eastern Africa manufactured exports, in particular, textiles & clothing exports will increase by 100 per cent, heavy manufacturing by 63 per cent, light manufacturing by 61percent, Processed food by 54 per cent while livestock & meat products by 39 per cent.
The Nigeria-South Africa Chamber of Commerce (NSACC) has called for visa-free entry into all African nations to ensure the success of the Africa Continental Free Trade Area (AfCFTA) agreement. Osayande Giwa-Osagie, NSACC president, said this on Thursday in Lagos during the chamber’s September breakfast forum themed, ‘Perspectives on the Africa Continental Free Trade Area in Relation to Nigeria’. According to him, a single African passport will ease the movement of people and goods within the continent. He said that AfCFTA would boost intra-African trade by 22 percent, adding that its implementation would impact positively on the Nigerian economy. He also said Nigeria must diversify its economy to harness the gains of the agreement.
Right infrastructures, policy framework’ll spur Africa’s (The Sun Nigeria)
For Africa’s transformative agenda to kick in properly with respect to creation of jobs, women and youths have to be empowered with the right infrastructure and policy framework to give room for sound innovation and entrepreneurship. This was the view of experts who spoke at the annual West Africa Business forum tagged; “Empowering women and youths to spur Africa’s transformation agenda” in Lagos recently. The forum which is organised by the United Nations – Economic Commission for Africa (ECA) sub-regional office in West Africa seeks to formulate discussions around policies that will provide support to the transformation of African economies.
The African Development Bank has published a white paper on Entrepreneurship and Free Trade that makes a case for entrepreneurs and innovation as vital drivers of resilience and emergency preparedness across Africa. The white paper, titled Towards a New Narrative of Building Resilience and released in September 2021, places the private sector—particularly technology and knowledge-based entrepreneurs—at the heart of the continent’s security, sustainable development and future growth.
Dr. Khaled Sherif, the Bank’s Vice President for Regional Development, Integration and Business Delivery said, “entrepreneurs are instrumental to addressing the continent’s economic, social and environmental concerns. We must provide them with the necessary encouragement and support—the future depends on it.” The white paper notes that African entrepreneurs have driven numerous advancements already, including widening access to information and services, bridging rural-urban divides, and expanding mobile phone-based payment and remittance systems that enable more inclusive finance.
Manufacturers have long been struggling to integrate into the global value chains that generate the goods and services that are demanded by consumers around the globe. Experts, however, say that the use of export-oriented Special Economic Zones (SEZs), which offer a concentration of high-quality infrastructure and mouth-watering fiscal incentives to producers in the zones, are drivers of improved competitiveness of local manufacturers and by extension, industrialisation.
International flight restrictions coupled with lockdowns decimated international tourism in the East Africa region. The region is normally a hotspot for global tourism because of its rich cultural diversity and varied landscapes attracting millions of visitors from across the world. “Business was terribly hit; from almost the end of last December most of our tour vehicles were parked,” said Gatera, owner of G- Step Tour, one of the companies offering customized tours in East Africa. “After the outbreak of coronavirus, business dwindled to about 10% of what we used to work. But it has been gradually picking up with hopes that by next year it may reach around 60%,” he said. - Tourism contribution Tourism played a critical role in the pre-pandemic economic growth of the East African Community (EAC) partner states, contributing to the gross domestic product by an average of 9.5% in 2019. It contributed an average of 17.2% to EAC total exports and 7.1% to employment.
Trans Kalahari Corridor Management Committee reports on progress amid COVID-19 (Namibia Economist)
Trans Kalahari Corridor Management Committee (TKCMC), one of the corridor management institutes has taken the lead to embrace change and ensure smooth transit of goods and persons along the route amid the COVID-19 pandemic.
Giving his remarks during the meeting, the Executive Director of Trans Kalahari Corridor Secretariat Leslie Mpofu stated that the TKC has achieved a lot in trade facilitation even though initially certain challenges were experienced such as meetings being unable to materialise due to technology glitches, new regulations or COVID 19 protocols by the different countries that were not in harmony, quarantining of drivers and high costs of COVID 19 tests among others. Despite these challenges, Mpofu mentioned that with combined efforts by stakeholders, a lot of accomplishments were achieved. One of the key successes being the piloting of the Corridor Trip Monitoring System (CTMS) on TKC.
Afreximbank President Decries Trade In Dollars (Leadership Newspapers)
The President of African Export-Import Bank, Professor Benedict Oramah has advised African countries to reduce the use of US dollars in their transactions in order to enhance their development. Professor Oramah said that entrepreneurs and countries should instead use the Pan African Payment Settlement System which the bank has already developed for intra-continental trade. Oramah who decried the excessive reliance on foreign currency, especially US dollars, argued that this dependence heightens inflationary pressures on commodities, which in turn subjects African trade to global volatility.
TradeMark East Africa (TMEA) has launched a system that aims to eliminate paperwork and introduce a digital process that increases visibility of the supply chains between the UK and Kenya. The system has deployed blockchain technology to link supply chains and enable fast logistic clearance
Businesses, policymakers, farmers, researchers, and several other food system actors will get a chance to view proven and cutting-edge innovations during the first-ever open door day organized by the iREACH agriculture technology park located in Bambey, 130 kilometers (70 miles) west of the Senegalese capital, Dakar. About 120 participants are expected at the October 6, 2021 event.
«A technology park is a space where agriculture technologies and innovations are exhibited to improve the knowledge of actors on a value chain with the overarching aim of improving production systems,» explains Dr. Niéyidouba Lamien, a program manager at CORAF and current interim Director of Re search and Innovation.
«There are many reasons for the low adoption of agriculture technologies and innovations. This can be because of the deficit or inadequate flow of knowledge between researchers and end-users or as a result of the lack of physical or financial access to the technology,» reasons Dr. Vara Prasad,
US fashion contaminates Africa’s water (The Mail & Guardian)
From rivers that turn blue with dye pollution to dangerous working conditions, Lesotho is paying a heavy price for its textile industry, whose garments its factories produce end up on the shelves of global fashion brands. The pollution they produce does not travel quite as far: people living downriver lament the contamination of their fresh water supplies, while workers at the factories are perhaps most affected. One man spoke of the “unbearable dusty conditions” and chemicals from denim dye that have left him with chronic breathing problems.
His health and the environmental contamination putting Lesotho’s people at risk are part of a wider crisis growing across the continent. In July, advocacy group Water Witness International released a report that looked at the water cost of Africa’s booming textile industry. Titled How Fair is Fashion’s Water Footprint?, the report found pollution at factories in five countries: Lesotho, Ethiopia, Kenya, Mauritius and Madagascar.
China’s WTO benefits ‘can be a reference’ for wary African nations (South China Morning Post)
More African nations should consider joining the World Trade Organization (WTO) or risk missing the opportunity to influence global trade rules, said China’s Zhang Xiangchen, a deputy director general at the organisation.
Zhang, who was appointed as a deputy to WTO director general Ngozi Okonjo-Iweala in May, said the share of African countries in global trade has declined over the years.
“It’s risky for developing countries to stay outside the stiff competition in reshaping international trade rules, therefore developing countries should actively engage in making new international trade rules to safeguard their interests,” said Zhang at the second China-Africa Economic Trade Expo in the central Chinese city of Changsha on Sunday.
The benefits that China has seen since joining the body in 2001 could serve as a “reference” for African countries, even though the multilateral trading system had “flaws”, he said via video link.
Newly launched Dubai Chamber initiative highlights untapped business potential in West Africa (Government of Dubai Media Office)
Dubai Chamber has announced the launch of “Why Africa”, a new initiative highlighting untapped business potential in West Africa, as well as the region’s key economic indicators and competitive advantages.
The initiative comprises in-depth analyses conducted by Dubai Chamber and based on recent data from UNCTAD, up-to-date insights for prospective investors and recent trade trends. The initiative was launched in the lead up to the Global Business Forum (GBF) Africa 2021, which takes place October 13-14 on the side-lines of Expo 2020 Dubai. “Africa is one of the world’s most promising regions for economic growth, which is featured prominently on many global indicators in recent years as one to watch out for. Market research is essential for UAE investors who are studying the possibility of expanding their businesses into Africa key African countries. Dubai Chamber’s ‘Why Africa?’ initiative seeks to provide such insights that can help them make a more informed business decision,” said His Excellency Hamad Buamim, President and CEO of Dubai Chamber.
Africa: China’s trade with the continent grows to record highs (GlobalComplianceNews)
Trade between China and Africa almost doubled between 2020 and 2021, and over the last 20 years trade between China and the region has increased twenty-fold. Challenges, such as Africa’s over-dependence on natural resources and vast lack of essential infrastructure, must still be addressed, but the African Continental Free Trade Area is gearing up to provide a further boost for all of the continent’s major trading partners.
A recent report by Economist Corporate Network, supported by Baker McKenzie and Silk Road Associates, BRI Beyond 2020 (Economist report), showed how these strengthening trade links are, in part, a result of favorable financial incentives offered to African jurisdictions by China. According to the Economist report, 33 of the poorest jurisdictions in Africa export 97% of their exports to China with no tariffs and no customs duties. This report noted that bilateral trade was still heavily centered on China’s import of Africa’s natural resources. However, in recent years China had increased its import of manufacturing products from more diversified economies such as South Africa.
A Baker McKenzie report with Oxford Economics – AfCFTA: A Three Trillion Dollar Opportunity (AfCFTA report) – revealed that over three quarters of African exports to the rest of the world were still heavily focused on natural resources, but that on the import side, manufactured goods accounted for more than half the total volume of imports into African jurisdictions. Africa’s most important suppliers of manufactured goods were listed as Europe (35%) China (16%) and the rest of Asia, including India (14%).
Speakers at a webinar, on Wednesday, emphasised the need for enhanced cooperation between Pakistan and African nations in all areas of mutual interest including trade, economy, and investment. The Centre for Afghanistan, Middle East and Africa (CAMEA) at the Institute of Strategic Studies Islamabad (ISSI) organised a webinar on “Pakistan-Tanzania Ties” with key speaker, Mohammad Saleem, High Commissioner of Pakistan to Tanzania. In his remarks, Saleem said that Tanzania is an important country of Africa and “it is the most populous country of Africa” with the largest consumer market.
While talking about imports and exports between Pakistan and Tanzania, he said that Pakistan’s exports to Tanzania mainly include cement, textiles, rice and sugar and besides these articles, spare parts of heavy machinery and tractors are also exported.
The Republic of Togo and the Republic of Mauritius became the twenty-third (23rd) and the twenty-fourth (24th) African Union (AU) member states to sign the Treaty for the establishment of the African Medicines Agency (AMA) on 20 and 21 September 2021, at the AU Commission in Addis Ababa, Ethiopia.
The signing demonstrates the fulfilment of the desire by Heads of States and Government (HoSG) to use continental institutional, scientific and regulatory resources to improve access to safe, efficacious and quality medicines. The African Medicines Agency (AMA) will among other functions provide technical assistance and resources, where possible, on regulatory matters to State Parties that seek assistance, and pool expertise and capacities to strengthen networking for optimal use of the limited resources available. The Agency will also coordinate access to and network the services available in quality control laboratory services within national and regional regulatory authorities. To date, seventeen (17) member states have ratified the AMA Treaty and twelve (12) of these have deposited the instruments of ratification to the Commission. Twenty four (24) member states have signed the Treaty.
Trade facilitation is a quick win for vaccine equity. Here’s why (World Economic Forum)
As vaccine inequity hinders economic recovery in less-developed countries and threatens to reverse progress towards the Sustainable Development Goals (SDGs), trade facilitation measures offer a fast, cost-effective solution. From digitizing trade documents to cutting red tape and making border processes more efficient, they ensure vaccines travel more easily to those who need them most. While boosting COVID-19 vaccine production – especially in the countries with low immunization rates – resolving licensing disputes and eradicating trade barriers such as export restrictions are also vital for equitable vaccine access, they require significant time and investment. In contrast, implementing trade facilitation measures – as laid out in the WTO Trade Facilitation Agreement – can reap results within months rather than years, and ensure that when vaccine supplies do ramp up, they flow quickly to where they are needed most. Facilitating trade in COVID-19 vaccines also brings long-term benefits for countries’ broader health systems and economies, reducing the future cost of importing anything from perishable foods to pharmaceutical inputs.
Among the many outreach activities, Dr. Okonjo-Iweala has undertaken since being elected as DG, has been a very detailed and substantive meeting with the LLDC group in Geneva. During that meeting the LLDCs appraised many problems they face in their trade, many of which have been exacerbated during the crisis. She has asked the Secretariat to do a study on the barriers that LLDCs face and are having a negative impact on their economic performance. We hope to complete this mapping exercise by the end of November, in time for the WTO’s Ministerial Conference.
The WTO’s role is especially significant in the area of international trade and trade facilitation as the continuous and full implementation of the WTO’s Trade Facilitation Agreement (TFA) is central to ensuring LLDCs can fully participate in the multilateral trading system. The WTO-led Aid-for-Trade initiative is also highlighted as a priority in the VPOA and our work in this area has resulted in increased aid flows targeted at the needs that have been expressed by the LLDCs, addressing, inter alia, issues of connectivity and capacity building for implementation of the TFA.
The United Nations’ Food Systems Summit, convened by UN Secretary-General António Guterres, is part of the Decade of Action to achieve the Sustainable Development Goals (SDGs) by 2030. The Summit will launch new actions to deliver progress on all 17 SDGs, each of which relies to some degree on healthier, more sustainable and equitable food systems.
“The world has the resources to end hunger,” African Development Bank president Dr. Akinwumi A. Adesina said in a message on the first day of the United Nations Food Systems Summit. Convened by UN Secretary General António Guterres, the event is billed by its organisers as “a historic opportunity to empower all people to leverage the power of food systems to drive our recovery from the COVID-19 pandemic and get us back on track to achieve all 17 Sustainable Development Goals (SDGs) by 2030.”
Decrying the 246 million people in Africa who go to bed daily without food and the continent’s 59 million stunted children as “morally and socially unacceptable,” Adesina said that delivering food security for Africa at greater scale called for prioritising technologies, climate and financing. “The $33 billion per year required to free the world of hunger, is just 0.12% of $27 trillion that the world has deployed as stimulus to address the Covid-19 pandemic. I am confident that zero hunger can be achieved in Africa by 2030,” Adesina said. The African Development Bank’s Feed Africa Strategy, through its Technologies for African Agricultural Transformation program - widely known as TAAT – has provided 11 million farmers across 29 African countries with proven agricultural technologies for food security. Food production has expanded by 12 million metric tons while saving $814 million worth of food imports.
BRICS Members Are Gaining Greater Global Standing Together (Foreign Policy)
The 13th BRICS Summit, featuring the five major emerging economies of Brazil, Russia, India, China, and South Africa, took place virtually earlier this month. Modi’s speech was avidly covered by the Indian press, and the summit itself drew significant coverage by newspapers in India and China, the two most populous BRICS members. This attention stood in contrast to U.S. media coverage, where there was noticeable silence. Past BRICS summits have invariably drawn at least a trickle of U.S. media coverage, albeit usually in the form of commentary on the irrelevance, dysfunction, or inevitable demise of BRICS as an institution.