Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News


SA must implement structural reforms to accelerate economic growth – CDE (Engineering News)

Centre for Development and Enterprise (CDE) CEO Ann Bernstein said South Africa needs to implement a range of structural reforms essential to accelerate economic growth, free up the labour market so that growth could become more labour intensive, and fix a training, skills and education system that is expensive and mainly ineffective. The CDE launched a new report,’ South Africa’s NEETs crisis: Why we are failing to connect young people to work’, which examines the role and performance of South Africa’s skills system, and finds that constructive cooperation between businesses and technical and vocational education and training colleges remains the exception rather than the rule.

Rich Nations Pitch Climate Aid to Fund South Africa Coal Exit (Bloomberg)

Envoys from some of the world’s richest nations met with South African cabinet ministers on Tuesday to discuss a climate deal that could see billions of dollars put toward ending the country’s dependence on coal.  The delegation is trying to hammer out an agreement that can be announced at the COP26 climate talks, which start in Glasgow, Scotland on Oct. 31, two people familiar with the talks said. The discussions with South Africa -- the world’s 12th-biggest emitter of greenhouse gases -- include representatives from the U.S., U.K., Germany, France and the European Union.

While South Africa is under pressure to cut its dependence on coal -- which accounts for more than 80% of its power generation -- it needs finance to facilitate the transition to cleaner energy. Developed nations may also need to find away to address the challenges faced by South Africa’s state-owned power utility, which is burdened by 400 billion rand ($27 billion) of debt.

Partnerships Key to Transformation of the Automotive Sector- Acting DDG Mangole (the dtic)

Continuous building of partnerships with key stakeholders is significant to enhance support towards transformation in the automotive sector. This was said by the Acting Deputy Director-General of Industrial Financing at the Department of Trade, Industry and Competition (the dtic), Ms Susan Mangole. Mangole made the remarks during a webinar on Access to Financing for the Local Automotive Component Manufacturers organised by the dtic in collaboration with the Automotive Industry Transformation Fund (AITF). The webinar was intended to share various funding programmes and incentives available to the sector. The R6 billion AITF is a good platform to further strengthen compliance adherence by local automotive component manufacturers, who are participating in the value chains of the seven multinational automotive manufacturers in the country, namely BMW, Ford, Isuzu, Nissan, Toyota, Mercedes-Benz and Volkswagen in South Africa.

KRA gives traders a week to switch to new customs monitoring system (Business Daily)

Traders handling containerised cargo have seven days to switch to the Kenya Revenue Authority’s new customs monitor as the agency moves to increase clearance efficiency at the country’s entry points. Deputy Commissioner Revenue and Regional Coordination, Mr Joseph Kaguru asked traders to expedite the shift from the MM/Simba system to avoid being inconvenienced when Kenya implements full use of the system starting October 22. The deputy Commissioner said the authority had set up dedicated desks at different custom points including at the port of Mombasa, at Malaba border and at Long House (KRA headquarters Mombasa) to assist traders having difficulties making the switch.

China, Europe container demand hits Kenyan exports (The Star)

High demand for empty containers in China has hit Kenyan exports as shippers rush back empties instead of carrying export cargo. This, coupled with increased freight charges due to a global vessel shortage threatens Kenya’s international trade. The high demand for empties in China is as a result of reopening of industries after a slow down during the peak of the Covid-19 pandemic last year, with the Asian country rushing to clear orders for its exports, mainly to Europe and the US. Containers of all sizes—20-foot and 40-foot are in short supply, according to industry players. China is said to be paying handsomely for the return of empty containers, a move that the Kenya Association of Manufacturers (KAM) says is making it attractive to vessel owners. “This has resulted in cargo ships scrambling for empty containers from the diverse ports in order to transport them back to China. It results in exports goods lacking space on cargo ships, as ships are allocating space to empty containers,” KAM chief executive Phyllis Wakiaga told the Star.

Transporters diversify to survive SGR competition, Covid (Business Daily)

When the government ordered all cargo destined for Nairobi and the hinterland from the Port of Mombasa be transported via the Standard Gauge Railway (SGR) trains, it plunged logistics companies into financial distress that saw a number of them shut down. For the few that were still operational, the going got harder when Covid-19 struck early last year. However, a few have managed to remain a float in the industry after diversifying their businesses. When the outlook in the cargo business started looking bleak, Sidoman Investment Limited quickly cast its eyes elsewhere and started offering logistics solutions to all sizes of businesses, from small traders to large corporations in the evolving global marketplace.

Rwanda, Zimbabwe sign five pacts to boost trade (The New Times)

Rwanda and Zimbabwe have signed five cooperation agreements in ICT and e-governance, environment and climate change, agriculture and livestock, tourism and business events The agreements were signed on September 28 at the ongoing trade and investment conference where Rwanda’s Private Sector Federation and the Confederation of Zimbabwe Industries signed a memorandum of understanding.

“Rwanda’s development strategy is centred on private sector development,” Niyonkuru said at the bilateral trade and investment conference. Rwanda has implemented a host of business reforms, making the country one of the most favoured investment destinations in Africa. “We strongly believe that our ambitious development targets can only be achieved through a thriving private sector that delivers sustained and inclusive growth.”

IMF Executive Board Concludes 2021 Article IV Consultation with the Republic of Congo (IMF)

The COVID-19 pandemic and oil price shocks have taken a deep toll on the Congolese economy but there are signs of recovery. Positive non-oil economic growth is expected this year, buoyed by the easing of lockdowns, gradual vaccine rollout, social spending, domestic arrears repayments, and some expansion of agricultural and mining activities. The contraction of oil production has slowed as oil field access and investment normalize; and the value of oil revenues and exports are rising on the back of higher oil prices. Overall growth is projected to be around zero percent in 2021 with subdued inflation (2 percent) and a current account surplus (12 percent of GDP).

Over the medium and long terms, the main challenges will be exiting fragility while adapting to climate change and reduced oil revenues in response to the global transition to low-carbon economies. Non-oil economic growth is expected to gradually recover driven by economic diversification and resilience-building—which will benefit from continued governance and business environment reforms, increased social and infrastructure spending, and prudent debt management. The outlook is subject to high uncertainty amid risks of new waves of the pandemic, volatile oil revenue prospects, climate change shocks, and successful reform implementation. On the upside, investment in mining and oil and gas could rise with new field discoveries and accelerated reform implementation could catalyze more concessional financing.


Afreximbank and AfCFTA announce the Operational Roll-out of the Pan-African Payment and Settlement System (PAPSS) (Afreximbank)

African Export-Import Bank (Afreximbank) and AfCFTA Secretariat announced today the operational roll-out of the Pan-African Payment and Settlement System (PAPSS), a revolutionary Financial Market Infrastructure to enable instant, cross-border payments in local currencies between African markets. By simplifying cross-border transactions and reducing the dependency on hard currencies for these transactions, PAPSS is set to boost intra-African trade significantly and underpin the implementation of the African Continental Free Trade Area (AfCFTA). PAPSS will serve as a continent-wide platform for the processing, clearing and settling of intra-African trade and commerce payments, leveraging a multilateral net settlement system. Its full implementation is expected to save the continent more than US$5 billion in payment transaction costs each year.

African states can grow global trade finance with AfCFTA – Coronation Merchant Bank (Nairametrics)

Financial experts in Coronation Merchant Bank have tasked member states of the Africa Continental Free Trade Area (AfCFTA) to leverage resources and synergies to grow the continent’s trade finance globally. They disclosed this during the bank’s interactive section tagged: “AfCFTA- The Road Ahead,” which was monitored by Nairametrics.

Managing Director, Coronation Merchant Bank, Mr Banjo Adegbohungbe, believes that member states in Africa Continental Free Trade Area (AfCFTA) should leverage resources and synergies to grow the continent’s trade finance globally. According to him, the nations should understand that they should leverage resources not just for the benefit of the African continent but for global trade. He said, “The emergence of the COVID-19 pandemic had led to rapid changes in the international trade landscape. The expansion of intra-African trade via the AfCFTA was a critical enabler for the Nigerian economy. “From supply chain disruptions to higher logistics cost to the adoption of digital platforms, the landscape has continued to evolve. More than ever before, oganisations have been faced with multiple challenges while trying to meet their strategic objectives. “As Africa continues on its journey to economic recovery, it must look inwards and strive to leverage the resources and synergies in growing trade finance not just for the benefit of Africa but for the whole world.”

AfCFTA To Open Export Opportunities For States (Leadership)

ECA and AUDA -NEPAD renew partnership to enhance sustainable growth in Africa (UNECA)

The Economic Commission for Africa (ECA) and the African Union Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD) have signed a Memorandum of Understanding (MoU) to enhance their partnership and collaboration to accelerate the achievement of Africa’s Agenda 2063 and the 2030 Sustainable Development Goals (SDGs). Signed at the Africa Union Office in New York City on September 27, the MoU aims to harness synergies arising from the organisations’ mandates and establish the non-binding and non-exclusive arrangements necessary to ensure effective cooperation in areas of mutual interest. Vera Songwe, UN Under-Secretary-General and ECA’s Executive Secretary, said the MoU is a show of how much the two organizations can pool together and raise their ambitions to achieve what needs to be done in regard to Africa’s transformation Agenda 2063 and the Sustainable Development agenda 2030. “Our collaboration will push Africa’s agenda forward, especially within the context of the African Continental Free Trade Area (AfCFTA), which we all believe in,” said Ms Songwe.

“We have done well on advocacy in the areas of sustainable energy, climate change, industrialization, digitalization, and health security. But we need to do better on financing. More advocacy is needed for more financing as we prepare for COP26.”

United Nations issues guidance on negotiating trade agreements for increasing trade resilience in times of crisis and pandemic  (UNECA)

The United Nations has released a first version of a Handbook on Provisions and Options for Trade in Times of Crisis and Pandemic’. Work on the handbook was initiated by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), in collaboration with the United Nations Economic Commissions for Africa (ECA), Latin America and the Caribbean (ECLAC), West Asia (ESCWA) and Europe (UNECE), the United Nations Conference on Trade and Development (UNCTAD), and the World Trade Organization (WTO) after realizing that the hundreds of regional trade agreements in place provided no guidance to countries on how to keep trade going during the COVID-19 pandemic. In many cases, especially during the first half of 2020, many countries took ad-hoc unilateral measures that seriously disrupted international supply chains, including supplies in essential goods, such as medical equipment as well as food.

Africa Resilience Forum 2021: Facing the ‘hydra-head challenges of Covid-19, conflict and climate’ (AfDB)

The fourth edition of the Africa Resilience Forum opened on Tuesday, as the continent’s most vulnerable communities confront the triple challenges posed by the Covid-19 pandemic, conflict and climate change. An estimated 39 million Africans could slip into extreme poverty this year, as a result of the pandemic. At the same time, countries are facing higher fiscal costs, reducing capacity for the critical investments required to deliver on ambitions such as the UN Sustainable Development Goals. The Africa Resilience Forum is a flagship African Development Bank event which brings together key stakeholders across government, civil society, the private sector, and international partners, to reflect on the continent’s conflict prevention, peace, and state-building initiatives.

“Across Africa, rising expenditures on defence and security, increasingly displace development financing on essential services such as education, health, water, sanitation, and affordable housing…This compromises long-term resilience needed to bounce back better,” Adesina said. “The hydra-headed challenges of this pandemic, insecurity, and climate change, continue to impact young men, women, and children the most.” Going forward, Adesina said the Bank would work closely with regional member countries on security-indexed bonds to address the root causes of insecurity by protecting investments and livelihoods.

Trade experts meet to speed-up negotiations on market access (COMESA)

Trade experts from Member States began a three-day virtual meeting, 28- 30 September 2021, to review progress on the liberalization of trade in services for enhanced market access under the COMESA Free Trade Area. The meeting is the 10th for the COMESA Trade in Services Committee. It will receive updates from Members States on the progress they have made in their bilateral negotiations and tariff offers. Further, it is expected to finalise the negotiations on the priority sectors: communication, financial, tourism and transport services, and proceed to the implementation of the commitments made. COMESA has prioritized and negotiated schedules of specific commitments in four priority sectors. The proposal that will emerge from the Committee’s meeting will be tabled before the upcoming Trade Policy Organ Meetings when the final and legally scrubbed schedules will be submitted for approval and adoption by Council of Ministers. The Committee is the prime forum in COMESA for trade in services negotiations as mandated by Council to spearhead the COMESA trade in services liberalisation programme

The Council adopted the COMESA Regulations on Trade in Services in 2009 and initiated negotiations on the progressive reciprocal removal of barriers to trade in services in seven priority sectors, focusing on only one major area of services negotiations; market access.

Africa must seize the global commodity exchange opportunity (The New Times)

Africa has 50% of the world’s unused arable land (food demand is expected to increase on our continent by over 200% by 2030 and globally by over 50% by 2050). In addition, with improved logistics, the harnessing of better agricultural practices, and strong government and multilateral support, the future for agriculture and agri-business on the continent is bright. Among the many factors that will turn the obvious potential of Africa’s agriculture into reality is the strength of the continent’s commodity markets.

Africa: Increasing Competition Policy Enforcement Across the Continent (Lexology)

Regulators view competition policy as a key driver of economic growth. Although over the past two years African competition regulators have actively engaged in efforts to address pandemic-related challenges, there has also been a general upward trend in competition policy enforcement across the continent. Matrices used to analyze economic transformation, such as the Bertelsmann Transformation Index, note the existence of comprehensive competition laws that are enforced (to some degree), in at least 46 African jurisdictions. This upward trend in enforcement is highlighted by a number of significant recent developments in competition law regulation around the continent. Competition policy continues to be viewed by regulators as a key driver of economic growth globally. Across Africa, competition policy enforcement is increasingly being employed as a tool to boost economic performance and promote the revitalization of trade and industry following the devastating impact of COVID-19. The effects of the pandemic have led to negative economic growth in a number of African jurisdictions, and have given rise to opportunistic, anticompetitive behaviors such as unreasonable price increases and price gouging, coordination amongst competitors, and other unsavory business practices that erode competition.

Innovative financing needed to help Africa tackle climate change (UNECA)

African countries are facing severe liquidity challenges that make the mobilization of domestic resources for climate action difficult. That is according to experts at a session on actualizing climate action and a green recovery for Africa at the Africa Climate Week (September 26- 29). “At both the national and global levels, the conversation is built around finance, because the COVID19 pandemic has further narrowed the fiscal space available to African countries to mobilise the desperately needed resources,” said Jean-Paul Adam, Director of Technology, Climate Change and Natural Resource Management at the Economic Commission for Africa (ECA). Mr Adam said it was crucial for developed countries to meet their USD100 billion climate finance pledge to help the most vulnerable in developing countries.


DG Okonjo-Iweala welcomes participants to 2021 Public Forum (WTO)

This year’s Forum, entitled “Trade Beyond COVID-19: Building Resilience”, is focusing on the effects of the pandemic on trade and how the multilateral trading system can help build resilience to COVID-19 and future crises.

In his keynote address, South African President Matamela Cyril Ramaphosa said the global pandemic has presented the world with one of its greatest health, social and economic challenges in more than a century. “To overcome the challenges confronting all of us, we need global solidarity, and we must reaffirm the role of open, inclusive multilateralism,” President Ramaphosa declared. A relatively positive short-term outlook for global trade “is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries,” he continued. “We are not, as yet, building back together.”

In addressing the theme of the Forum, Director-General Okonjo-Iweala noted that trade has been a source of resilience during the pandemic, helping households, businesses and governments cope with dramatic shocks. Trade has enabled access to food and medical supplies and contributed to economic recovery.

South Africa, Oxfam call for fairer trade rules in response to pandemic (Reuters)

South Africa’s president and the head of Oxfam heaped pressure on World Trade Organization members and manufacturers to allow fairer access to COVID-19 vaccines on Tuesday, including through a waiver on intellectual property rights. At a WTO public event on trade and COVID-19 also attended by German vaccine maker BioNTech, Cyril Ramaphosa said a waiver on patents was needed to save millions of lives during the pandemic. read more “This is not the time just to be uni-dimensionally focused on profit. This is the time to save lives,” Ramaphosa said.

Oxfam’s Executive Director Gabriela Bucher said monopolies, not science were the biggest challenge to defeating the virus. “The reality is the current trade rules enable rich country governments and pharmaceutical corporations to work hand in hand to artificially limit vaccine supplies to developing countries,” she said. “I must appeal to BioNTech - the vaccine has turned your CEO into a double digit billionaire,” she added.

Working group on small business finalises MC12 draft declaration (WTO)

Ambassador José Luís Cancela (Uruguay), the Coordinator of the Group, thanked members for their comments, flexibility and constructive spirit. He noted that the text has been under discussion for several months and has undergone several rounds of comments. He said that the Group should now try and build support for the initiative and invite WTO members that are not participating in the Group to endorse the Ministerial Declaration The draft declaration states the Group’s commitment to address challenges facing MSMEs seeking to trade internationally. It recognizes the negative impact of COVID-19 on small business and the need for a global coordinated response to help MSMEs recover from the pandemic.

Participants in domestic regulation talks conclude text negotiations, on track for MC12 deal (WTO)

The disciplines seek to ensure that domestic regulation procedures for trade in services are clear, predictable and transparent and do not unnecessarily restrain trade. Flexibilities are envisaged to help governments apply the measures and regulate based on their national policy objectives and levels of development. In the negotiated text, participants agreed to include a provision on non-discrimination between men and women in the context of authorization procedures for service suppliers. This will be the first provision of its kind in a WTO negotiated outcome. Participants further agreed to an optional section with a set of disciplines on financial services, and to a maximum transitional period of seven years for developing countries that need more time to implement individual disciplines for specific services sectors.

Boosting productive capacities only hope for least developed countries post COVID-19 (UNCTAD)

The development of productive capacities in least developed countries (LDCs) is necessary for boosting their ability to respond to and recover from crises such as COVID-19, and to advance towards sustainable development, says UNCTAD’s Least Developed Countries Report 2021 released on 27 September. UNCTAD defines productive capacities as “the productive resources, entrepreneurial capabilities and production linkages that together determine the capacity of a country to produce goods and services and enable it to grow and develop.” Developing productive capacities allows the world’s poorest countries to foster structural economic transformation, which will in turn help reduce poverty and accelerate progress towards the UN Sustainable Development Goals (SDGs), the report says. Reaching SDGs, however, requires massive investment and spending, which go well beyond LDCs’ financial means.

Inequalities threaten wider divide as digital economy data flows surge | UNCTAD (UNCTAD)

The data-driven digital economy is surging. Recent estimates show that global internet protocol (IP) traffic – a proxy for data flows – will more than triple between 2017 and 2022, according to UNCTAD’s Digital Economy Report 2021 released on 29 September. The COVID-19 pandemic has markedly increased internet traffic, as many activities have moved online. Global internet bandwidth rose by 35% in 2020, compared with 26% the previous year, the report says. A growing part of data flows is related to mobile networks. With the increasing number of mobile devices and internet-connected devices, data traffic by mobile broadband is expected to account for almost one third of the total data volume in 2026, the report states. “But the data-driven digital economy is characterized by large imbalances and divides,” said UNCTAD’s director of technology and logistics, Shamika N. Sirimanne. “As the digital economy grows, a data-related divide is compounding the digital divide.”

New approach needed to make digital data flow beneficial for all (UN News)

This should help maximize development gains and ensure that they are equitably distributed, said the agency, launching its Digital Economy Report 2021. A new approach should also enable worldwide data sharing, increase the development of global digital ”public goods”, increase trust and reduce uncertainty in the digital economy, UNCTAD added. The report stressed that the new global system must help avoid further fragmentation of the internet, address policy challenges emerging from the dominant positions of digital platforms, and narrow existing inequalities. “It is more important than ever to embark on a new path for digital and data governance,” UN Secretary-General António Guterres said in his preface to the report. “The current fragmented data landscape... may create more space for substantial harms related to privacy breaches, cyberattacks and other risks” he added. 

Economical internet services required to bridge digital divide, experts say (The National)

A quick and decisive mobilisation of resources and economical internet services are required to bridge the widening digital gap in the post-Covid era, industry experts have said. With an estimated 47 per cent of the global population offline and the cost of available broadband exceeding the affordability in 50 per cent of developed countries, it is necessary to accelerate efforts to achieve digital inclusion at all levels, Badr Jafar, chief executive of Sharjah-based conglomerate Crescent Enterprises, told a panel at the World Economic Forum’s Edison Alliance discussion on ‘boosting digital inclusion’.

“We, the connected people, are the true agents of change … and history will judge us on whether we really used these tools for the collective betterment of humanity and our planet,” he said.

Policymakers ‘fail to support small-scale fisheries’ (SciDev.net)

Small-scale fisheries provide livelihoods for millions of people globally, particularly in the developing world, but are overlooked by policymakers, making the need to understand their diversity, roles and resilience critical, researchers say. In a paper published this month in Nature Food, researchers call for better understanding of the small-scale fisheries sector, along with targeted action such as ensuring that policy goals support the sector actors to derive sufficient benefit from their activities and investments. “The small-scale sector provides more than 50 per cent of what human beings eat from aquatic [water] environments. We are at a watershed moment for blue foods [fish and other foods from water bodies], and simply cannot move in the right direction without putting small-scale fisheries and aquaculture front and centre,” says Rebecca Short, study co-author and researcher at the Stockholm Resilience Centre.

Why gender matters in trade facilitation reform (UNCTAD)

Women traders in African countries face a great deal of barriers to trade – some the realm of nightmares – as these intrepid traders do what they can amid, at times, insurmountable impediments to getting their goods to market. “If trading in Africa were a video game, and each character a women, the character’s encounters would go from bad to worse until the final stage, where you reach the big monster – in this case it could be a thief, or a corrupt official, or a law you didn’t know about, or being asked to do something online when you don’t even have a computer,” said Arántzazu Sánchez, UNCTAD economist. “You need to be a superhero to be a women cross-border trader to overcome each challenge and still generate an income and livelihood, support your family, or even just survive.”


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