Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News


JOHN STUART: Why the policy environment matters for SA (Business Day)

More than 18 months into a global pandemic, African countries have been harder hit economically than other regions. Trade volumes are down, tax bases are under pressure and investment flows have taken a knock. While there are clearly green shoots evident with the recovery of global demand for commodities, much needs to be done to rebuild economies and rebuild investor confidence. African governments themselves are unable to have much influence on the demand for commodities; this depends on the recovery in confidence in the world trading system, which has been badly affected by the myriad consequences of the pandemic. However, what governments in Africa can do is ensure their policy environments are favourable for investment.

Capitalising on Commodities Prices as a South African Exporter (The South African)

Commodities prices have boomed this year, as rapid economic recoveries in Europe, China and the US, paired with pandemic-related supply chain disruption, have sent raw materials prices skyward. This has been somewhat of a boon to export-oriented economies during a very difficult time, with South Africa’s trade surplus hitting record highs in recent months. For South African exporters, movements in the commodity markets can present both opportunities and challenges. So how can you capitalise on the raw materials boom while limiting the downside risks?

EU lends support to SA's infrastructure development plans (SAnews)

European Union (EU) Deputy Head of the Delegation to South Africa, Raul de Luzenberger, says the union is lobbying for R170 million to be dedicated to infrastructure development in South Africa. He was speaking during a webinar on the impact of the EU funded Infrastructure Investment Programme of South Africa (IIPSA). IIPSA is aimed at fast tracking infrastructure delivery in municipalities by using a blended project financing approach involving EU grants, government and the private sector.

Poultry industry on new growth and transformation path (Fin24)

Transformation, the resolution of inefficiencies and the stimulation of growth and expansion now form the broad narrative and focus of agricultural policy. It has already found traction in the new master plans of several agricultural industries, among others the poultry industry, which has for years been trying to free itself from the stranglehold of trade disruptions and international dumping. Before the minister of trade, industry and competition, Ebrahim Patel, signed off on the poultry industry’s recovery plan in November 2019, South Africa was struggling to meet the growing demand for poultry owing to the above-mentioned problems. The expansion of the poultry industry led to the whole grain value chain being further stimulated, according to Izaak Breitenbach, general manager of the SA Poultry Association’s (Sapa’s) Broiler Producers Organisation.

Opportunities for SA in Botswana dairy industry (Farmer's Weekly)

The Botswana dairy industry produces about seven million litres of milk annually, while more than 53 million litres will be imported in 2020/21. This created numerous investment opportunities for the South African dairy industry. This was according to Letsomo Mariri, chief scientific officer at the Department of Animal Production in Botswana, who said the national milk demand in that country was about 65 million litres, with local production meeting about 11% of this. This indicated that 89% of liquid milk was imported, and the bulk of it came from South Africa. These figures emerged during a webinar on the opportunities in Botswana’s dairy industry, hosted by Farmer’s Weekly, in partnership with the Botswana Investment and Trade Centre and the Botswana Ministry of Agriculture Development and Food Security.

Kenya's economy projected to grow by 6.1% in 2021 (The New Times)

Kenya's economy is projected to grow by 6.1 percent in 2021 after a 0.3 percent contraction in 2020, the central bank said on Wednesday. Patrick Njoroge, Governor of the Central Bank of Kenya (CBK) said that some dynamism is beginning to come back especially in the service sectors such as hospitality that were negatively affected by the impact of the COVID-19 pandemic in 2020.  "One sector to flag is the agriculture sector which remains most uncertain largely because of the rains. Some parts of the country are getting adequate rains but there is drought in other parts," Njoroge told journalists in Nairobi. The performance of agricultural sector will be a big driver of economic growth in 2021 and is projected to grow by 2.6 percent.

DCI probes container smuggling at Mombasa port (Business Daily)

Police have opened investigations into a suspected container smuggling racket at the port of Mombasa believed to be depriving Kenya of tax revenues. The Directorate of Criminal Investigations (DCI) is targeting three top executives of Kenya Ports Authority (KPA) labelled key suspects in the racket involving release of containers through a manual system, which allows for cargo to exit the port without taxes paid. The DCI has written to the KPA acting managing director, John Mwangemi, asking him to allow detectives to record statements from the managers in operations and container divisions. “This office is investigating a case of suspected smuggling of containers from the port of Mombasa,” John Gachomo, head of Investigations Bureau at DCI, to KPA acting managing director, said in the letter.

Officials of the port and other government agencies there have faced frequent and widespread accusations of colluding with rogue importers and exporters. Containers are expected to be cleared through an online system dubbed Kilindini Waterfront Automation System (Kwatos), which was installed in 2008 to curb tax evasion.

KRA ready for full rollout of iCSM to replace Simba system at port (The East African)

Importers and exporters using the port of Mombasa are ready for the full rollout of the Integrated Customs Management System (iCMS) in October. The Kenya Revenue Authority has been piloting the iCMS system in phases at the port since 2019, starting with clearing of motor vehicles, bulk cargo and export cargo. “KRA has planned to fully roll out clearance of containerised cargo from October 22, 2021. Thereafter all imports and exports shall be cleared through the iCMS system. “This is to request you to notify all KSAA members of the intended switch over from the MMS/Simba to the iCMS system,” Kenya Revenue Authority (KRA) assistant commissioner James Karugu wrote in the September 15 letter to the Kenya Ships Agent Association (KSAA).

Ghana-UK trade partnership agreement set to begin on Oct 1 - Alan Kyerematen (Myjoyonline)

The new interim trade partnership agreement between Ghana and the United Kingdom is expected to commence Friday, October 1. The Agreement seeks to reaffirm the deep interest of both Ghana and the UK to strengthen the longstanding trade and economic relationship by ensuring tariff-free trade transactions in both markets. It also establishes a new framework for Ghana-UK collaboration which will contribute to sustained economic growth in Ghana.  Minister of Trade and Industries, Alan Kyerematen announced the commencement date during the swearing-in and inauguration of the new Governing Board of the Ghana Standards Authority, Wednesday.

The Ghana-UK Trade Partnership Agreement will support businesses to increase their processes, encourage innovation in the market and create jobs as the country recovers from the ravaging effects of the coronavirus pandemic. The Trade Minister, while announcing the commencement of the agreement, added that other market integration frameworks such as the African Continental Free Trade Area (AfCFTA), and the EU-Ghana Economic Partnership Agreement are already being implemented. Here, therefore, urged the newly-inaugurated Board of the Ghana Standards Authority to support government’s flagship programmes.

'Ghana to assemble and manufacture vehicles locally' - Alan Kyerematen reaffirms as he inaugurates Ghana Standards Authority Board (Myjoyonline)

The Minister for Trade and Industry, Alan John Kwadwo Kyerematen has affirmed that the government through the Ghana Standards Authority (GSA) would continue to pursue measures which would make it possible for Ghana to assemble and later manufacture vehicles locally. The Sector Minister directly recalled the significant role the Authority played in the development of national automobile standards under the Ghana Automobile Development Programme which is being implemented by his Ministry. Additionally, Mr Kyerematen disclosed that the GSA has developed over 30 standards for vehicles.

EU court annuls Morocco trade agreement over Western Sahara (DW)

The Court of Justice of the European Union on Wednesday said it has canceled two agricultural trade agreements with Morocco concerning the disputed Western Sahara region, saying the North African country did not have the consent of local inhabitants affected. The EU-Morocco agreements concern the waters and territory of the disputed Western Sahara region. The deals allowed Morocco to export goods from the contested Western Sahara, and had previously been ratified by the European Parliament. In Wednesday's ruling, the tribunal said the Council had made a mistake and decided to revoke the agreements saying they imposed obligations on the people of Western Sahara without their consent.

Ports and Maritime Transport Authority and Elmreisa Free Zone agree to activate free zone through temporary dry port (Libya Herald)

Libya’s Ports and Maritime Transport Authority and the Board of Directors of the Elmreisa Free Zone (EFZ) decided at a meeting yesterday to activate the EFZ by establishing a dry port. The dry port will be established at Benghazi’s Jiliana port until the construction of the EFZ starts. EFZ is located 17 km west of central Benghazi. Background It will be recalled that at the end of August this year the Ministries of Economy and Trade, Transport and Finance approved the proposal to finance the EFZ’s dry port at Jiliana port until the completion of the main port at the EFZ. A related proposal was also adopted at the meeting to support a free zone in Kufra, linking it with EFZ through the approved transit trade route Benghazi-Kufra-Africa.


Africa trade recovery: many hurdles to overcome (Global Trade Review)

As Africa’s leaders look to secure the continent’s recovery from the Covid-19 pandemic in the face of numerous headwinds, Eleanor Wragg outlines the outlook for trade and explores some of the key challenges the region must tackle. The most recent economic outlook from the International Monetary Fund (IMF) paints a gloomy picture for Africa. Previously the world’s second fastest-growing region, trailing only developing Asia, the events of 2020 plunged the continent into a recession for the first time in a quarter of a century. Although global growth is set to reach 6% in 2021, Africa’s recovery will be far more muted, at just 3.4%, putting it at the bottom of the world’s regions in terms of economic expansion this year. However, Africa’s trade recovery is now underway (see figure 1), with the IMF’s Direction of Trade Statistics (DOTS) showing that, after a sharp dip during the worst of the pandemic, exports reached US$113.2bn in the first quarter of 2021, topping pre-Covid levels.

Roundtable: Africa's journey to post-pandemic trade (Global Trade Review)

In a roundtable held virtually in July 2021, GTR and Crown Agents Bank gathered some of Africa’s most influential figures from across the trade and trade finance sector to discuss the continent’s journey towards an inclusive, cohesive and sustainable post-pandemic reality.

GTR: What role does trade and trade finance play in Africa’s economic recovery?

Toyoda: We know that every 1-percentage point increase in trade will produce a 2-percentage point increase in income per capita. Trade drives everything in economic recovery, and from IFC’s point of view, we think the private sector is key to promote this. Without trade, no production starts, no operations start. In many cases, trade will not happen without trade finance. This is the beginning of the recovery stage, and we all have to come together to support this trade activity.

Vaccine access is critical to start economic recovery, and we either have to import vaccines onto the continent or we need to import vaccine inputs in order to produce locally. In terms of that sequence of the economic recovery, trade will therefore start everything. IFC just launched the Africa Trade Recovery Support Initiative to support trade and supply chain especially for SMEs.

Mashoko: Trade finance has a big role to play on the continent. In particular keeping the trade of goods and services flowing presents not only an economic but also a social imperative to preserve livelihoods of millions on the continent. Pre-Covid, the trade finance gap in Africa was estimated to be about US$81bn, and the industry has a role in reducing that gap. Trade finance will also play a role in providing instruments for short-term working capital requirements, in sectors like health and medical supplies that have expanded dramatically following the onset of Covid.

PAPSS to Help Africa Save $5bn Yearly in Payment Transaction Costs (Business Post Nigeria)

African Export-Import Bank (Afreximbank) and the African Continental Free Trade Area (AfCFTA) Secretariat have announced the commencement of the Pan-African Payment and Settlement System (PAPSS) to facilitate trade across the continent.

According to the Cairo-based Afrieximbank in a statement, 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 AfCFTA. PAPSS will serve as a continent-wide platform for the processing, clearing and settling of intra-African trade and commerce. It is expected to leverage a multilateral net settlement system.

New report: Few small firms in French-speaking Africa know about continental trade area (ITC)

Only a quarter of companies recently interviewed in francophone Africa have heard about the African Continental Free Trade Area (AfCFTA), according to a new report by the International Trade Centre (ITC). But of those who do, about 75% believe it will benefit their businesses.

Promoting SME Competitiveness in Francophone Africa: From crisis to recovery through regional integration makes the case for investing in awareness, in addition to implementation, of the AfCFTA. The report is based on data from 2557 businesses in French speaking Africa surveyed by ITC and the Permanent Conference of African and Francophone Consular Chambers (known in French as CPCCAF) between May and July 2021.

Only 6% of surveyed firms export to other African countries, and just 12% import from other countries on the continent. The voices of these firms suggests that high logistics and transport costs, along with delays and uncertainty, are the most common export barriers within Africa. The implementation of the AfCFTA, powered by investments in trade facilitation and infrastructure, has the potential to tackle some of these issues and expand intraregional trade.

Intra-EAC trade drop by 5.5% in 2020 due to Covid-19 (RegionWeek)

The intra-EAC trade drop by 5.5% to USD. 5.9 billion in 2020 due to COVID-19 while exports from the bloc to the world hit 16.2 billion in 2020 a 3% boost in comparison to  2019. This was highlighted during the Webinar on EAC Trade & Investment Recovery amidst COVID-19 organized by the East African Business Council. As reported by the EABC team, in his opening remarks, Mr. John Bosco Kalisa, EABC CEO  said, “the private sector and buy East African, build East Africa campaign is central in driving the economic recovery agenda for the EAC bloc amid COVID-19.” He elaborated that EABC in partnership with African Economic Research Consortium (AERC) and Bill & Melinda Gates Foundation (BMGF) conducted COVID-19 impact studies to inform policies in order to ignite the rebound and recovery of Manufacturing, Tourism& Hospitality, Agriculture & Food Security, and Transport & Logistics sectors in the EAC bloc.

In his remarks, the Director of Trade at the EAC Secretariat, Alhajj Rashid Kibowa said the EAC Post COVID-19 economic recovery plan is under country consultation. He further said the pandemic impacted trade performance noting that EAC import declined to 3.56 billion in 2020 from 3.95 billion in 2019.

Director Kibowa stated that Foreign Direct Investments (FDI) in the EAC dropped by 43% to USD. 4.9 billion in 2020 and jobs declined by 2%, wiping out the gains made in the previous year. In 2019 EAC bloc recorded USD. 8.66 billion FDI a 375% rise from 2018.

EAC meets to transpose the 2022 edition of its Common External Tariff into French (WCO)

In order to cater for the needs of its French-speaking Partner States and users, the East African Community held a meeting of tariff experts to transpose the HS 2022 edition of its Common External Tariff (CET) into the French language. The meeting took place from 13 to 18 September 2021 in Moshi, Tanzania. It was conducted with the support of the WCO, within the framework of the EU-WCO Programme for the Harmonized System in Africa (HS-Africa Programme), funded by the European Union. The meeting was preceded by an EAC regional consultation organized in March 2021 to prepare the English linguistic version of the HS 2022 EAC CET, with the participation of all the Community Partner States.

Experts examined the 2022 edition of the EAC CET and developed the French language version of it, while also ensuring that it incorporated all the changes made to the EAC CET from July 2017 to June 2021. The 2022 edition of the EAC CET was proofread, and some errors were rectified, in particular, in Chapters 16, 63 and 70. Moreover, the progress of the preparatory work to migrate national classification systems to the HS 2022 EAC CET was discussed.

South Africa, Nigeria trail Kenya cashless payments (Business Daily)

Kenyan businesses prefer cashless payments compared to those in South Africa and Nigeria, a new survey of women enterprises shows, highlighting the impact of digital platforms such as M-Pesa. A report by global digital payments solution provider, Visa, shows that an estimated 71 percent of businesses in Kenya use cash payments, while the preference for this mode by their customers stood at 22 percent. The survey shows higher use of cash by businesses in South Africa (91 percent) and Nigeria (94 percent). The less use of cash among Kenyan businesses is reflected in the high preference for mobile wallets (56 percent) compared to Nigeria (14 percent) and South Africa (7 percent).The use of mobile money payments has been rising following the Central Bank of Kenya push for the service last year, which now competes ahead of card payments. The report shows high usage of digital payments including mobile money transfer, card payment, contactless cards, and bank transfer was concentrated in food, beverage, and entertainment places, tours and accommodation, agriculture, transport and delivery, and professional services.

Investing In Africa? Invest In Women (Forbes)

The focus on gender balance as a strategic economic opportunity has risen around the world over the past two decades – now it is accompanying Africa’s rise. As research of the benefits of gender balance has steadily grown, companies and countries have pushed to balance boards and leadership teams. More recently, investors have added pressure on the issue. Large funds have declared they won’t invest in companies that don’t balance. Women-led venture funds have started to emerge, and just this week a women-led bank announced its opening in the US. Yet in the developing world, where the financing gap is most stark, women-led investments are rare, and women on listed company boards still a tiny minority. But efforts pushing for progress are emerging and deserve visibility.

Which private players are investing in West Africa's textiles industry? (Oxford Business Group)

As governments across West Africa prioritise their textile industries to drive post-pandemic recovery, a number of private sector initiatives are supporting the segment’s growth. In a region where just 2% of cotton produced is processed locally, much of the investment has focused on developing cotton processing capacity to capitalise on the added value that comes from selling finished goods. While West Africa is the sixth-largest cotton-growing region in the world – and Benin, Côte d’Ivoire and Burkina Faso the sixth-, seventh- and eighth-largest cotton-exporting countries, respectively – a lack of processing capacity has resulted in dependence on imported goods.

Projects worth $22.9b signed at 2nd China-Africa Economic and Trade Expo (China Daily)

A total of 135 projects worth $22.9 billion were inked at the second China-Africa Economic and Trade Expo which concluded in Central China's Hunan province on Wednesday. The four-day event, themed "New Start, New Opportunities, and New Accomplishments," was held both online and offline to mitigate the impact of the COVID-19 epidemic. A total of 320 companies displayed their products online and over 250 million yuan (about $38.7 million) worth of products were traded at an online shopping event during the expo, the information office of the Hunan provincial government told a press briefing on Wednesday.

Africa-Asia route investments boost international cargo volumes by 33.9% in Africa (Nairametrics)

African airlines’ international cargo volumes increased by 33.9% in August, 2021 compared to August 2019. This is the largest increase of all regions across the globe. This was disclosed in data gathered by the International Air Transport Association (IATA) for global air cargo, which was shared with Nairametrics on Wednesday. IATA confirmed that the Investment flows along the Africa-Asia route has been driving the regional outcomes with volumes on the route up 26.4% over two years ago. According to IATA, in August 2021, the data for global air cargo markets showed that demand continued its strong growth trend but pressure on capacity is rising.

African airlines’ saw international cargo volumes increase by 33.9% in August, the largest increase of all regions. Investment flows along the Africa-Asia route continue to drive the regional outcomes with volumes on the route up 26.4% over two years ago. International capacity decreased 2.1%.

Chinese market breeds new fashion for African consumption (The Herald)

As China’s imports from Africa increase rapidly, entrepreneurs are fostering new fashions of consumption in the country by matching African products of high-quality and added value with diversified demand of consumers.

Wu Kunyang, a woman in her 30s and mother of two children, laid out cosmetic products containing natural ingredients from African plants at the exhibition centre for African cocoa. It is one of the main exhibition centres for African products at the Gaoqiao Grand Market, a sub-venue of the second China-Africa Economic and Trade Expo, which ran from Sunday to Wednesday in Changsha, capital of central China’s Hunan Province.

Targeting Chinese consumers’ demand for safe and natural skincare products, the company spent around 70 percent of its revenue on research and development, cooperating with multiple universities.

She was not alone in promoting the imports of high-quality produce from Africa. In the exhibition hall of the African cocoa marketing center where her booth was, various cocoa products ranging from chocolate gift sets to cocoa ice cream, from flower-shaped aerated chocolate to blind boxes, were displayed.


Multilateralism is alive and well: Assembly President wraps up annual debate promising ‘active and inclusive’ 76th session (UN News)

Noting that the UN has “taken its biggest, boldest step yet to emerge from the pandemic”, Abdulla Shahid said: “We must build upon this success and continue momentum”. “Yet, our true measure of success remains our willingness and ability to engage in dialogue and to put our faith in the multilateral system”, he said. While a great deal was discussed over the last week, a clear set of issues arose time and again, namely COVID-19, climate change, peace, security and the risks of instability.

Climate, pandemic, e-commerce, inclusivity — Public Forum addresses priorities for reform (WTO)

The issue of WTO reform has been raised by the organization's members in various WTO bodies in recent years, with many recognizing the need to update rules written more than a quarter of a century ago. In outlining their priorities for reform, participants in the high-level session put forward a menu of issues requiring attention. These not only included tackling new issues like climate change, pandemic response and the digital economy, but also ensuring the WTO can better address matters that have been on its negotiating agenda for years, such as agriculture, disciplines on fisheries subsidies, and special and differential treatment for developing and least-developed countries.

“For the WTO to be useful for us, it has to function, it has to be fit for purpose,” John WH Denton, Secretary General of the International Chamber of Commerce, said. “The issues it deals with have to be those of the 21st century. It needs to grapple with issues it's been told to deal with because they're relevant issues.”

Transform food systems to avert $400 billion annually in loss and waste (UN News)

Not only is preventing food loss and waste crucial for the world’s people, it is also essential for the future of the planet, they stressed in remarks to an online commemorative event. “We cannot continue to lose 14 per cent of food produced globally and to waste 17 per cent of total food in households, retailers, restaurants and other food services.  This amounts to a loss of $400 billion a year in food value,” said Qu Dongyu, Director-General of the Food and Agriculture Organization (FAO). Our food systems and consumption practices, which use up precious water and land resources, are major contributors to the triple crises afflicting the planet: climate change, biodiversity loss and pollution, said Inger Andersen, Executive Director of the UN Environment Programme (UNEP).

Beware of BRICS project funding scam (SAnews)

Employment and Labour Minister Thulas Nxesi has warned the public to beware of yet another scam which purports to be communication from the Ministry about supposed projects and funding. In a statement on Wednesday, the department said that in the latest scheme, the scammers are impersonating the Minister as inviting people on social media to take up new opportunities. The scammers are inviting citizens and corporates of the Brazil, Russia, India, China and South Africa (BRICS) member states who are interested and dedicated to development in their respective communities and organisations to apply for funding. “Neither the Ministry nor the Department of Employment and Labour has issued an invitation to assist individuals or businesses with the funding,” the department said. The scammers claim that: “The SADC and BRICS has utilized funding in the form of budgetary support provided to Brazil, Russia, India, China, South Africa, amongst others, totalling €58 billion in the period of 2018-2022. Individuals are liable to get up to the amount of R20 million and cooperate organizations and NGO's could get up to the sum of R45 million”.

Small States Fighting the Pandemic Focusing on Solutions (World Bank)

The Bank’s COVID-19 crisis response—the largest crisis response in its history—is tailored to save lives, strengthen health systems, protect the poor and vulnerable, support businesses, create jobs and jump start a green, resilient, and inclusive recovery. The Bank is providing funds for the COVID-19 vaccine deployment and for strengthening national systems for public health preparedness in many countries including Cabo Verde, Comoros, São Tomé and Príncipe and Guinea Bissau. We are helping The Gambia expand access to vaccines through direct purchases from manufacturers as well as through the African Vaccine Acquisition Trust. In Saint Lucia the World Bank’s financing aims to provide short-term relief to the poor, small businesses, and the most affected workers. It also aims to supports reforms related to financial resilience to disaster and education sector policies. In Fiji, the Social Protection COVID-19 Response and System Development project seeks to mitigate the impact of the COVID-19 crisis on the unemployed and to improve gender outcomes.


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