tralac Daily News
Sars releases preliminary trade statistics for August 2021 (African Reporter)
These statistics include trade data with Botswana, Eswatini, Lesotho and Namibia (BELN). The year-to-date (January 1 to August 31) preliminary trade balance surplus of R332.13b is an improvement from the R134.95b trade balance surplus for the comparable period in 2020. Exports increased by 21.1% year-on-year whilst imports increased by 27.9% over the same period. The R42.40b preliminary trade balance surplus for August 2021 is attributable to exports of R158.92b and imports of R116.52b. Exports increased by R14.06b (9.7%) between July and August 2021 and imports increased by R8.68b(8.0%) over the same period.
South Africa will need a mix of grants and concessional loans to help effect a transition from coal to cleaner energy, Jonathan Pershing, the U.S.’s deputy special envoy for climate, said.While South Africa, as a middle-income nation, is not usually eligible for concessional finance, Pershing said at a press
SA opens super logistics centre (The Southern Times)
Global logistics company DSV has officially opened its new South African headquarters near Johannesburg’s OR Tambo International Airport. The logistics complex is built on a piece of land totalling 390,286 square-metres in size, equivalent to 54 soccer fields Its perimeter fence stretches 6.3km and its 79,000 square-metre warehouse can fit more than 300 Olympic-size swimming pools. DSV says DSV Park Gauteng is Africa’s largest integrated logistics centre. It’s taken roughly two years for DSV to build its newest and largest facility on the continent, combining several smaller hubs in Gauteng into a single, centralised head office. Work on the logistics complex – featuring a warehouse, cross-dock facility, and offices – started with a site visit in 2019. The new facility became fully operational in September and was inaugurated at a virtual ceremony last week.
Airlines’ entry into Entebbe bound to spur growth of hub (The East African)
Entebbe is stirring from slumber as two new carriers, SA Airlink and Air Arabia, launch routes here at a time national flag carrier, Uganda Airlines, is scheduled to commence flights to Dubai October 4. Aviation officials are upbeat on this development and say, rather than feel that they are being crowded out by foreign careers, they see this as a revival of the aviation sector, which had a 71.5 percent tumble in 2020. Vianney Luggya, the manager for public affairs at the Uganda Civil Aviation Authority says the experience had shown that new airlines tend to grow their own traffic. “That is what we saw when Air Uganda entered the market in 2007. Within five years, they had grown into the biggest operator out of Entebbe by frequency and had added half a million passengers a year to our tallies and yet everyone else was growing at the same time,” Mr Luggya said.
Horticulture lifts Kenya’s crops export earnings (Business Daily)
Earnings from horticulture recorded the biggest growth among Kenya’s main agricultural exports in the eight months to August, fresh data shows, cancelling out poor performance by tea. An update by the Central Bank of Kenya (CBK) shows that horticulture earnings jumped by a quarter to Sh87.8 billion ($795 million) from Sh70.3 billion ($636 million) in the first eight months of last year. Demand for the products which include flowers, fruits, and cut vegetables has gone up in key destination markets, which have been reopening fully following 2020’s Covid-19 lockdowns. The higher agriculture earnings helped grow Kenya’s exports by 11.5 percent in the period, with higher earnings from manufactured goods—up 39 percent in the period—also serving as a major boost.
CBK sees economy expanding by 6.1pc (Business Daily)
The Central Bank of Kenya (CBK) has projected the economy to grow by 6.1 percent this year and 5.6 per cent in 2022, backed by recovery in manufacturing, trade and hospitality sectors, and despite expected decline in agriculture production. CBK governor Patrick Njoroge said Wednesday that economic indicators around the manufacturing, trade, accommodation and power consumption are pointing to improved economic performance, while there is also high optimism among banks and private sector players over the prospects for growth. He however said the impact of drought will dampen growth in the key agriculture sector, which grew at 5.4 per cent last year and is the biggest contributor to Kenya’s GDP at 23 per cent.
A Joint Implementation Taskforce composed of representatives of the Ghana Union of Traders’ Associations (GUTA) and the Nigeria Union of Traders Association, Ghana (NUTAG), has been established. The taskforce is to implement the provisions of a new framework of engagement for the participation of Nigerian nationals in retail in Ghana. This was contained in a press release by the Ministry of Trade and Industry following a high-level bilateral meeting between Ghana and Nigeria in respect of the participation of Nigerian nationals in retail trade in the country.
On Tuesday, October 5, 2021, the taskforce will hold its next meeting, hoping to come to a resolution on this growing impasse. The ministry has therefore asked for both parties to refrain from taking any further actions that might mar the ongoing process. “Against this background, the Ministry requests the leadership of GUTA and NUTAG to refrain from further press releases, the closure of shops, and any other actions in respect of this matter until the convening of the next meeting of the Taskforce,” it stated.
The Minister for Trade and Industry, Alan John Kwadwo Kyerematen, has sworn in and inaugurated the governing board of the Ghana Standards Authority (GSA), saying the authority’s success is extremely crucial to the government’s industrial transformation agenda. Addressing the five-member governing board being chaired by Professor Felix Charles Mills Robertson, at a short inauguration ceremony this week, at the GSA head office in Accra, the trade and industry minister expressed conviction that the members of the board would not take lightly their appointment, particularly when the industrial transformation had since 2017 become the main driver of President Nana Addo Dankwa Akufo-Addo’s vision of a Ghana Beyond Aid. “As you are aware…the Ministry of Trade and Industry, over the past four years, has been implementing an aggressive Industrial Transformation programme, anchored on a Ten-Point Plan which seeks to make Ghana the new Manufacturing Hub for Africa,” Mr Kyeremanten said.
“In this context, the Ghana Standards Authority (GSA) which is Ghana’s national standards body, national metrology institute, the national certification body for products and management systems and is also involved in trade facilitation at the ports of entry by carrying out an inspection of goods being imported or exported plays a very critical role,” he added.
These developments scupper the African Union’s (AU) plans of seeing a regional economic community (REC) established in North Africa after Morocco rejoined the organisation in 2017. At the time, Morocco’s King Mohammed VI committed to playing a constructive role in the AU and argued for the revival of North Africa’s ailing Arab Maghreb Union. The AU has been silent on the renewed tensions. Lamamra, a former AU commissioner for peace and security, could use numerous mediation structures to bring his counterparts to the negotiating table. However, the longstanding divisions between the two countries – linked to territorial, political and economic rivalry – would be difficult for the AU to untangle. Still, emphasizing the African Continental Free Trade Area’s (AfCFTA) regional trade benefits could convince the respective leaders to cooperate. The AU could draw on influential voices in Morocco and Algeria who maintain that the countries’ substantial development challenges cannot be resolved without greater regional cooperation.
The AU hoped a North Africa REC would be established after Morocco rejoined the organisation in 2017. The current breakdown of diplomatic and trade ties followed a letter sent by Morocco’s ambassador to the United Nations (UN) showing the country’s support for independence movements in Algeria’s Kabylia region. The Mouvement pour l’autodétermination de la Kabylie is accused of perpetrating the devastating fires in Kabylia from 9 August that killed at least 69 people.
Economies defy COVID-19, recovery starts (The Southern Times)
Africa’s economy is starting to recover, despite being in the midst of a pandemic, the recently published Africa Risk-Reward Index 2021 shows. Control Risks and Oxford Economics Africa analysts, who jointly produced the index, project that the continent’s economy will grow by 4.45 percent in 2021, citing reduced COVID-19 caseloads despite slow vaccine rollout. Not even the third wave of COVID-19 including an outbreak of the more deadly Delta variant has stopped African economies from growing, the index results show. “Economies are starting to recover and the virus is no longer an all-consuming issue infringing on every area of the investment landscape,” says the index.
Digital technologies offer a chance to disrupt this trajectory – unlocking new pathways for rapid economic growth, innovation, job creation and access to services which would have been unimaginable only a decade ago. Yet there is also a growing ‘digital divide’ (for example, between urban and rural, between genders), and increased cyber risks, which need urgent and coordinated action to mitigate.
The shift to renewables creates a multiple-win, people-focused scenario for developing countries as well. Other technologies, such as small, off-grid solar installations, offer transformative potential to electrify rural areas and support local small business development. And the sector is responsible for notably gender-inclusive job creation: In 2020, renewables created 11.5 million new jobs, 32 percent of which went to women — better gender balance than comparable sectors. It’s clear that there is a tremendous opportunity here.
The Economic Commission for Africa (ECA) has outlined a raft of ambitious solutions and innovative measures to support Africa in integrating climate-smart actions to build forward better as the continent embarks on a robust pandemic recovery agenda. Jean Paul Adam, the Director of ECA’s Technology, Climate Change and Natural Resources Division, enumerated on the inventive and tested models during the on-going Africa Climate Week 2021 which is aimed at building momentum for action and consolidating enhanced ambitions ahead of COP26 in Glasgow in November. According to Adam, green and blue investments opportunities are Africa’s best bet for economic recovery creating an enabling environment for the realization of sustainable development goals (SDGs) and the achievement of the Paris Agreements targets. Adam noted that Africa has the advantage of vast nature based ecosystems that can be leveraged to attract more green and blue bonds financing in addition to the $100bn climate financing promised for developing nations under the Paris Agreement.
“Africa is playing catch-up in relation to green bond financing, with the continent having less than one per cent of the current global green bond issuances. The total green bond market stands at $539bn based on 2020 estimates. At present Africa has less than $8bn of that share.” Adam says.
“The COVID-19 pandemic caused an unprecedented recession in Africa in 2020. Poverty increased and health systems came under severe pressure. African countries implemented strong measures to contain the pandemic and mitigate its economic impact on the populations. A slow recovery is projected for 2021, with vaccine supply constraints and limited financial resources weighing on the macroeconomic outlook.
“The IMF has recently boosted its capacity to provide financial support to Africa. It has increased the capacity for concessional financing under the Poverty Reduction and Growth Trust ( PRGT ). Moreover, in August 2021, the Board of Governors of the IMF approved the largest SDR allocation in the history of the IMF equivalent to US$650 billion (about SDR 456 billion), including about US$33 billion to Africa. Transparent and accountable use of these resources in the context of medium-term policy frameworks is essential to ensure an effective and sustainable response to the pandemic needs.
‘Why Nigeria, others should leverage Africa-UAE forum for linkages’ (The Guardian Nigeria)
Preparatory to the Africa-UAE Trade and Investment Forum, organisers of the forum have urged Nigeria and other countries to use the platform for trade linkages. According to the Foreign Investment Network (FIN), a global consulting and publishing firm, under the patronage of Sheikh Tahnoon Al Nahyan with the support of the Dubai government, the forum is aimed at stimulating wider inclusiveness between countries to speed up actualisation of prosperous Africa. The FIN Africa-UAE Trade and Investment Forum scheduled to hold from, November 21st – 23rd, 2021 at the Burj AL Arab, Dubai, United Arab Emirates, with the theme; “The road to a prosperous Africa”, equally acts as advocacy machinery for the development of job creation incubation system for African youths at the grassroots and impact on the participants improved know-how on available opportunities for trade, investment and tourism.
New regulations for European Union exports (The Herald)
The European Union (EU) has announced new registration procedures for exporters intending to sell their commodities to the bloc under the EU- East and Southern Africa interim Economic Partnership Agreement. The EU-ESA iEPA came into force in 2009 between the EU and Madagascar, Mauritius, Seychelles and Zimbabwe and provides preferential tariffs for goods emanating from ESA States into the EU.
“Following a notification made by Zimbabwe to the Customs Cooperation Committee of the EU-ESA iEPA activating Article 18(3) of Protocol 1 to the EU-ESA iEPA, from 1 July 2021 products originating in Zimbabwe shall, on importation into the EU, benefit from the preferential tariff treatment of the iEPA upon submission of an invoice declaration made out, as provided for in Article 23 of Protocol, by: (i) a Zimbabwean exporter registered in the EU’s Registered Exporter system (the REX system), or (ii) any Zimbabwean exporter where the total value of the originating products consigned does not exceed EUR 6 000. From that date, paragraphs 1(a) and (b) of Article 18 ceased to apply for imports into the EU from Zimbabwe.
“This notice is issued for the information of customs authorities, importers and economic operators, which are involved in imports into the EU of products originating in Zimbabwe under the EU-ESA interim Economic Partnership Agreement (the IEPA’),” reads part of the notice.
US trade policy toward Africa is facing a conundrum. Much has changed in the two decades since the African Growth and Opportunity Act (AGOA) set the framework for trade between the world's largest economy and its poorest continent. Many observers advocate new policies to increase U.S.-Africa trade and investment, especially with Agoa expiring in 2025. Yet the policy path is less clear than when Agoa became law, and the prospects for a substantial African trade initiative gaining political support are more challenging.
The Biden administration has been slow to take up an Africa trade agenda, electing to first hear "an expanded cross-section of voices, values, and potential solutions," U.S. Trade Representative Katharine Tai recently told the Corporate Council on Africa. With the White House looking ambivalent, there is growing unease in Kenya, especially after Ambassador Tai met with her Kenyan counterpart in August and alluded to new U.S. negotiating priorities.
Advancing African trade will be further challenged by the expiration of the administration's Trade Promotion Authority this past July, making Congress more difficult to navigate. Meanwhile, China's determined economic engagement all over Africa has exploded since Agoa's passage.
The Biden administration has sought to make its policy toward Africa clear: Trade and investment with the continent will not be framed as competition with China. That was the message its top Africa officials delivered in their recent roll out of a revamped “Prosper Africa” policy, designed to increase US–Africa trade and investment. This is welcome news to many Africans, who largely disapproved of the Trump administration’s focus on countering China on the continent.
Africans welcome Chinese economic engagement because they have a massive infrastructure deficit — one estimate puts it at $150 billion a year — and need Beijing’s investment to achieve their development aspirations. Africa’s ambitious, newly inaugurated free trade agreement, an initiative in impressive contrast to the world’s protectionist trends, won’t succeed without new roads, ports, power plants, and telecommunications networks. Africa suffers from being a woefully small part of the global economy, with a meager 3% of world trade. Underdeveloped and marginalized, Africans countries resent being told by the US that they shouldn’t engage with China, the world’s second-largest economy.
Of course, there are problems with China’s economic engagement. Some Chinese-financed infrastructure projects won’t pay for themselves, leaving Africans saddled with unproductive investments and heavy debt. Chinese operators can be environmentally destructive and abusive of African labor. Corruption is also common, where bribery isn’t unknown to Chinese (or other) companies. The former director of China’s Export Import bank went so far as to defend such practices as a pragmatic necessity on the continent, saying in 2007:
“We spend most of the time discussing issues such as transparency and good governance. And that would not help because they are part of a development process. I do not think that Britain was as transparent as it is today some 200 years ago, let alone the United States a hundred years ago.”
Get Ready For The Africa-Caribbean Trade and Investment Facility (Caribbean and Latin America Daily News)
A US $250 million Africa-Caribbean Trade and Investment Financing Facility could soon become a reality. That’s according to President of the African Export-Import Bank (Afreximbank), Professor Benedict Oramah. Speaking at a press conference this week during a visit to Barbados, Professor Oramah said they have agreed in principle that the African Export-Import Bank will put in place an initial amount of [US] $250 million in a facility called the “Africa-Caribbean Trade and Investment Financing Facility.”
“We know that if they (banks and companies) want to do business among themselves, there is financing to support it,” he added. “We believe that is the first hurdle we must cross. And so, we’re going to go back and get our board to…look at it and consider it as quickly as possible.”
Okonjo-Iweala frustrated, mulls quitting WTO (Daily Trust)
Barely seven months into her four-year tenure as the Director General at the World Trade Organisation (WTO), reports indicates a mounting frustration by Dr Ngozi Okonjo-Iweala with the workings of the organization and has contemplated resigning if no headway can be found on critical issues. According to Bloomberg, five trade officials, who declined to be identified, reported that Okonjo-Iweala has fully grasped the frustrating reality of the WTO’s historical inertia, and has considered quitting. Ngozi Okonjo-Iweala, the leader of the World Trade Organization, began the year with a plan to score quick negotiating victories that she said would help reboot the dysfunctional Geneva-based trade body. The report noted that this year, Okonjo-Iweala has repeatedly told ambassadors and staff that she could easily walk away from the job, and reminds them she hasn’t bought any furniture for her temporary home in Geneva, the officials said.
An early departure of the WTO’s top trade official would add yet another layer of chaos to an organization suffering from an existential crisis that may lead governments to conclude the WTO is not a credible forum for addressing their shared challenges.
Ms Coke-Hamilton stressed that MSMEs were the hardest hit by the pandemic. The ITC's 2020 SME Competitiveness Outlook showed that 60% of micro businesses and 57% of small businesses were very negatively affected by COVID-19 compared to only 43% of large firms. She said: "We cannot afford to leave small businesses behind. How do we empower smaller firms, the very foundation of our global economy, to become more resilient in a global recovery? The vulnerabilities faced by MSMEs are multi-dimensional and so we should approach resilience building in the same manner." In her view, a long-lasting resilience for MSMEs is built when small businesses have a voice in the international trade space and when they are helped to implement greener business practices through innovative financing mechanisms, affordable green technology and training. She noted that enhancing a firm's resilience is closely linked to digital connectivity as firms need this to take advantage of the international e-commerce marketplace.
President Cyril Ramaphosa: Keynote Address at the World Trade Organisation Public Forum (South African Government)
New index suggests productive capacities should be priority at LDC5 (Trade for Development News)
A United Nations Conference on Trade and Development (UNCTAD) report on findings from its Productive Capacities Index (PCI) has concluded that inadequate productive capacity in many least developed countries (LDCs) limits their economic output, leaves them more vulnerable to external shocks and makes them more reliant on a handful of exports. Providing clear guidance on how to foster economy wide productive capacity in LDCs should therefore be an urgent priority at the fifth United Nations Conference on the Least Developed Countries (LDC5) in January 2022, it argues.
Launched earlier this year, the index measures and benchmarks countries’ productive capacities, drawing on 46 indicators under eight categories: energy, human capital, ICTs, institutions, natural capital, the private sector, structural change and transport. UNCTAD describes it as a diagnostic tool designed to track socioeconomic progress and guide evidence-based policy choices.
Finance ministers from the Group of Seven said they made some progress on Wednesday at reaching a joint position on a landmark global corporate tax deal, days before it needs to win over a wider international audience. "A common understanding was reached on some of the important open issues to support reaching final political agreement within the OECD Inclusive Framework in October," the U.S. Treasury Department said in a statement. Britain - which chairs the G7 this year - brokered an outline agreement in June on a global minimum corporate tax rate of 15% and measures to squeeze more money out of tech giants such as Amazon, Google and Facebook.
Next week the Organisation for Economic Co-operation and Development, which has been trying to shepherd through tax reform for years, wants to get full agreement on detailed proposals from 139 negotiating countries.
The global economy is growing far more strongly than anticipated a year ago but the recovery remains uneven, exposing both advanced and emerging markets to a range of risks, according to the OECD’s latest Interim Economic Outlook. The OECD says extraordinary support from governments and central banks helped avoid the worst once the COVID-19 pandemic hit. With the vaccine roll-out continuing and a gradual resumption of economic activity underway, the OECD projects strong global growth of 5.7% this year and 4.5% in 2022, little changed from its May 2021 Outlook of 5.8% and 4.4% respectively.
A rapid increase in demand as economies reopen has pushed up prices in key commodities such as oil and metals as well as food, which has a stronger effect on inflation in emerging markets. The disruption to supply chains caused by the pandemic has added to cost pressures. At the same time, shipping costs have increased sharply. Presenting the Interim Economic Outlook alongside Chief Economist Laurence Boone, OECD Secretary-General Mathias Cormann said: “The world is experiencing a strong recovery thanks to decisive action taken by governments and central banks at the height of the crisis…