tralac Daily News
NAB promotes sale of local produce (The Namibian)
THE Namibian Agronomic Board (NAB) has embarked on an initiative to promote the sale of locally produced fruits and vegetables.Conducted in collaboration with the Namibia Association of Traders in Fresh Produce (NATFP), it involves putting up eye-catching displays of Namibian fresh produce in stores across the country.According to a statement posted on the NAB’s website, this initiative aims to promote the sales of locally produced products in the country.”The eye-catching display initiative is part of the Namibian Horticulture Market Share Promotion (MSP) scheme being implemented by the NAB,” reads the statement.
Let’s expand trade: Malawi envoy (The Herald)
OUTGOING Malawian Ambassador to Zimbabwe, Ms Annie Kumwenda says there is room for the two countries to strengthen and expand trade. Ambassador Kumwenda said this after meeting President Mnangagwa at State House yesterday to confirm the end of her diplomatic tenure in Zimbabwe. She has been Malawi’s representative in Zimbabwe for the past six years and has witnessed an increase in trade between the two sister republics. Zimbabwe and Malawi have ties that pre-date their respective independence with ties going beyond trade and diplomacy, but also familial links as there is a large Malawian diaspora in the country. “We have seen a lot of countries going to Malawi to invest in different sectors in agriculture. We wish to take that further. There is more room for trade,” she said. Ambassador Kumwenda highlighted that a significant number of Memoranda of Understanding (MOUs) have been signed between the two countries with the latest seeking to enhance cooperation in the agriculture sector.
KRA nets Sh5bn on fall in machinery tax benefits (Business Daily)
The taxman netted an estimated Sh5.24 billion from corporate earnings after the Treasury successfully rallied lawmakers to reduce pretax capital expense deductions.The Treasury estimates the Kenya Revenue Authority (KRA) cut the amount it used to forego on corporate income tax as a result of deductible expenditures on investments in machinery and buildings to Sh56.74 billion last year from Sh61.98 billion the year before.This means the KRA received an additional Sh5.24 billion from earnings by corporate bodies, cash which was not previously collected as companies, co-operatives and trusts deducted higher capital allowances to recoup the investment in buildings and machinery.
Tanzania Peace Foundation’s Chairman, Sadiki Godigodi said in Dar es Salaam this week that during a Pan African conference held last week, delegates agreed that African Union member countries should ensure that peace and calm prevail within their borders for the Africa Continental Free Trade Area to work.
“Following the circulation of a fake document on social media web sites last week which rubbished aside the convening of the Pan African conference with a theme, ‘The imperative of post-Covid recovery: how can the resolution of the Sahara issue spur African stability and integration,’ held on Saturday, 16 October 2021, is fake,” Godigodi said.
Economic model must transition to production for recovery – John Kumah (The Business & Financial Times)
For the country to see a speedy recovery from impacts of the pandemic, it is important for the economy to transition into a new model that focuses on production rather than the traditional approach which has dwelt on importation and export of raw materials, Deputy Minister of Finance John Kumah has said.
For him, the market created by the African Continental Free Trade Area (AfCFTA) agreement should be a wake-up call for economic actors to channel their energies and resources into production; especially when the pandemic and its associated lockdowns and restrictions on movement have pushed advanced economies to shut their borders – thereby leaving the African continent to find its own way to survival.
Adesina slams Nigeria’s ‘import substitution’ economic model (Premium Times Nigeria)
The president of the African Development Bank, Akinwunmi Adesina, has criticised Nigeria’s failure to diversify its export base to high-value market products, saying the country has focused more on replacing imports and saving the naira rather than deliberately pursuing wealth creation and value-added manufacturing.
Mr Adesina, Nigeria’s former agriculture minister, said Nigeria must have a greater ambition for its manufacturing sector by integrating and rapidly moving up global and regional value chains in areas of comparative advantage; by and by driving greater specialization and competitiveness.
“Import substitution, while important, is a very restrictive vision. It looks towards survival, instead of looking to create wealth through greater export market and value diversification. The end result is a manufacturing sector that cannot develop nor compete globally, but limits itself to “survival mode, not a “global manufacturing growth mode”.
The President of the African Development Bank Group, Dr. Akinwumi Adesina, says the lack of stable electricity in Nigeria is killing industries in the country, adding that based on an International Monetary Fund report, about $29bn is lost annually due to poor power supply in Nigeria. He said this in his lecture titled, ‘Overcoming Binding Constraints to Competitive Manufacturing for Intra-Regional Trade’, which he presented at the Manufacturers Association of Nigeria Annual Meeting on Tuesday in Abuja. Adesina lamented the low export revenue generated from the manufacturing sector, representing only three per cent of total revenues from export. “The manufacturing sector of Nigeria represents only three per cent of total revenues from exports, but accounts for 50 per cent of imports in the country. “Instead of being forward looking in expanding the share of the manufactured goods in its total export revenue, Nigeria focuses on the model of import substitution. Import substitution, while important, is a very restrictive vision,” he lamented.
The Director General, National Automotive Design and Development Council (NADDC), Mr. Jelani Aliyu, has disclosed that the country has started to earn foreign exchange through exportation of locally manufactured vehicles. Specifically, he said indigenous automobile company, Innoson Motors, had already commended export Made -in Nigeria vehicles to Mali. Aliyu, at the recently concluded annual conference of Commerce and Industry Correspondents Association of Nigeria (CICAN) added that the council had gone a step further in leveraging on electric-powered vehicles. He pointed out that some local automobile companies had also commenced production of gas-powered vehicles as part of measures to support the federal government’s National Gas Expansion Programme.
Weak export capacity undermines proceeds from naira devaluation (The Guardian Nigeria)
Nigeria’s capacity to take advantage of a weakened currency to boost its revenue profile and bridge gaps in balance of trade remains undermined by lingering domestic challenges, especially that of logistics, in transiting its non-oil exports. Notwithstanding efforts by the private sector to overcome the challenges, retaliatory tariffs by neighbouring countries due to border closure by Nigeria in 2019, are also limiting the country’s capacity to improve its foreign exchange earnings. Operators in the non-oil export sector decried reduced international demand for Nigerian goods coupled with domestic economic challenges, while adding that ECOWAS member-countries continue to exploit Nigerians for revenue from liberalised items, therefore killing trade and competition. Though the Federal Government embraces import substitution as a policy to conserve scarce, foreign exchange, President of the African Development Bank (AfDB), Akinwunmi Adesina, yesterday, described the stance as a restrictive vision that looks towards survival, instead of looking to create wealth through greater export market and value diversification.
It’s here at last – The much-anticipated Central Bank Digital Currency (CBDC), also known as eNaira was launched on Monday by President Muhammadu Buhari, who proudly stated that Nigeria had “become the first country in Africa, and one of the first in the world to introduce a digital currency to her citizens.” The president quickly pointed out that the use of physical cash in conducting business and making payments had been on the decline in recent times, strengthened by the onset of the COVID-19 pandemic and the resurgence of a new digital economy. As a result, Buhari further observed that businesses, households, and other economic agents had sought for new means of making payments in the new circumstances. Specifically, he said the absence of a swift and effective solution to these requirements, as well as fears that central banks’ actions sometimes lead to hyperinflation, further created the space for non-government entities to establish new forms of private currencies that seemed to have gained popularity and acceptance across the world, including here in Nigeria.
After an unparalleled contraction in 2020, sub-Saharan Africa is set to grow by 3.7 percent in 2021 and 3.8 percent in 2022. The recovery is supported by rising commodity prices, improving global trade and financial conditions. But this welcomed rebound is relatively modest by global standards, leading to a widening income disparity with developed economies. Seven charts taken from our latest Regional Economic Outlook tell the story of the forecast for sub-Saharan Africa:
The EAC Secretariat in collaboration with International Organization for Migration (IOM) held a meeting of Chiefs of Immigration held from 18th - 21st October 2021. The Meeting was chaired by, Mr. Alexander Imbenzi Muteshi, the Director General Immigration Services, Ministry of Interior and Coordination of National Government, Republic of Kenya. Mr. Muteshi called upon Partner States to harmonise immigration processes to among others, promote domestic tourism and provide equal treatment to nationals of the EAC Partner States.
Hon. Christophe Bazivamo, the EAC Deputy Secretary General in charge of the Productive and Social Sectors, commended the Chiefs of Immigration for their continued efforts in the implementation of the EAC Customs Union and Common Market Protocols at the regional level and the African Continental Free Trade Area (AfCFTA) in as far as facilitating free movement of goods, persons, workers and services are concerned. He urged them to provide technical guidance towards the finalization of the draft e- Immigration Policy since its implementation was very crucial in the provision of e-immigration services especially in the era of Covid-19 and other highly infectious diseases.
The African Export-Import Bank’s new digital Customer Due Diligence (CDD) platform, called Mansa, is set to promote cross-border trade in Africa, says the product head Maureen Mba. Mba, who spoke during the launch of the platform in the East African Community in partnership with the East African Business Council in Kampala on Oct.20, said 965 businesses have already been uploaded onto the platform consisting of financial institutions, corporates and the Small and Medium Enterprises across Africa. Some of Uganda’s institutions on the platform include; Absa Bank, dfcu Bank, Cairo Bank, Opportunity Bank, Ecobank, Finance Trust Bank, NCBA Bank and Tropical Bank. Mansa is single source of primary data required for customer due diligence and Know Your Customer (KYC) checks on African entities, including financial institutions, corporates and SMEs, in accordance with best practices. The platform is also expected to address key trade related challenges facing the continent, including, the lack of market information, the high cost of doing business in Africa and discovering African counterparties.
Psaki added that the “unique arrangement will help facilitate” a separate deal between the African Union’s vaccine acquisition vehicle and Moderna “for a supply agreement for 50 million doses,” with an option for a further 60 million doses. A White House spokesperson told POLITICO the 33 million Moderna doses set to be deferred by the United States would be included in the forthcoming 50 million doses from the American pharmaceutical company to the African Union. The United States has thus far delivered 55 million doses of Covid-19 vaccine to Africa, Psaki said. In addition, 17 million doses of Johnson & Johnson’s vaccine “will be sent to Africa in the coming weeks,” and “tens of millions” of doses of Pfizer’s vaccine also are set to be shipped to the continent.
For decades, this informal commercial network has provided steady work for people, mostly women, in the area’s borderlands. The United Nations has estimated that the industry makes up 40 percent of the $17 billion trade market among the 16 countries in the Southern African Development Community. But the pandemic has kicked down this essential economic pillar for communities where job opportunities are slim and there is limited access to COVID-19 vaccines, sparking a financial downturn with no end in sight.Nearly 70 percent of traders in Zimbabwe are women, according to the UN, and they’ve had to find other sources of income. Some have tried buying and selling goods domestically, for less profit. Some have partnered with smugglers who sneak across the border to move products, taking a cut of the revenue. Some, like Michele, have begun selling sex, boarding, and companionship to the truck drivers stuck in town for weeks due to shipping delays, COVID screening bottlenecks, and confusion over shifting government policies.
“The virus and the resultant lockdown happened so fast that the women did not have enough time to prepare for any economic repercussions,” said Ernest Chirume, a researcher and member of the Catholic University of Zimbabwe’s Faculty of Humanities and Social Sciences, who wrote a paper on the effects of COVID-19 on informal traders.
‘Nigeria, others only increased U.S. non-oil imports by one-tenth of one percent’ (The Guardian Nigeria)
Despite the opportunities offered by the African Growth and Opportunity Act (AGOA), the United States Government has expressed worry that non-oil exports remain very low, with many African countries yet to exploit opportunities the programme offers.
United States Trade Representative Katherine Tai, while speaking during the opening session of the Virtual African Growth and Opportunity Act (AGOA) Ministerial, noted that outside of the oil sector, imports under AGOA have grown modestly over the life of the programme. According to her, while Sub-Saharan Africa’s non-oil exports to the United States have grown over the last 20 years, the region’s market share of U.S. non-oil imports has only increased by one-tenth of one percent. She said: “As we consider AGOA’s future, we must ask ourselves what improvements we can make to attract more investment and help small and women-owned businesses find new markets for their products and compete in the global economy.
Key strategies to accelerate Africa’s post-COVID recovery (Brookings Institution)
The COVID-19 pandemic brought unprecedented disruptions to Africa—reducing earnings and increasing poverty and food insecurity as well as leading the region into its first recession in 25 years. While the global economic effects of the pandemic have started to recede as Western and Asian countries recover, 2021 is still turning out to be a difficult year for Africa. Moreover, the region will face even riskier external and internal environments in the future.
Thus, African leaders must now adopt strategies for a resilient recovery post-COVID-19 as we discuss in our recent report. Resiliency—a country’s capability to recover from shocks and adapt flexibly to stressors—not only protects economic and social gains, but also facilitates economic transformation and sustainable employment. In a “resilient” country, fewer assets are lost when a shock occurs, so more sustained improvements in economic welfare occur for the same amount of investment. Post-COVID-19 African economic development policy needs, therefore, to be centered around both improving resiliency and accelerating transformation to realize sustained economic welfare gains. Strategies for resiliency should build on the COVID-19 experience, helping households, communities, and countries to strengthen coping measures that reduce losses thus allowing for a faster recovery, and investing to adapt to and mitigate the effects of future shocks. Adapting to a “new normal” can help resilient countries to grow and transform at a faster rate.
AFRICAN states should work on closing the science and technology gap in order to take full advantage of the African Continental Free Trade Agreement (AfCFTA). During the recent 5th AfreximBank’s annual lecture, it was revealed that Africa was lagging behind the rest of the world in science, technology and innovation (STI progress). “Only 0,1 percent of all patent applications are registered in Africa compared to 65 percent in Asia and 25 percent in North America, said AfreximBank, quoting Mauritius former President Professor Ameenah Gurib-Fakim. “Africa is also responsible for only two percent of the world’s research output and one percent of research spending.
Verdict on EAC admission of DRC set for November (The East African)
The Democratic Republic of Congo’s bid to join the East African Community (EAC) has passed the technical committee stage with the regional Council of Ministers expected to deliver the final verdict this November.The EAC technical experts have been reviewing a report of the mission tasked with verifying the readiness of DR Congo. The report touches on the social-economic and political compliance of the country with the Treaty establishing the EAC.
“From the next extraordinary meeting of the Council of Ministers to act on it before the end of November, it will be handed to the Summit of the Heads of State. We are looking at early 2022 for the Summit,” Mr Desai said.
Global leaders, hosted by President Uhuru Kenyatta, spoke at the launch of the Global Center on Adaptation (GCA) “State and Trends in Adaptation in Africa Report 2021 – How Adaptation Can Make Africa Safer, Greener and More Prosperous in a Warming World” (STA21) to call for COP26 and development partners to increase resources to the Africa Adaptation Acceleration Program (AAAP). STA21 presents a blueprint for climate adaptation and showcases the opportunities climate adaptation offers to solve previously intractable problems and put Africa on a more resilient pathway towards “green growth”.
The report outlines the financial and macro-economic risk climate change poses to Africa and the imperative for the continent to scale up adaptation to reduce the economic costs of climate change. Without adaptation action, projections estimate that climate change will lead to an equivalent of 2 percent to 4 percent annual loss in GDP in the continent by 2040, with the poor, women, and excluded populations bearing the brunt of the impact. Yet the GCA report shows that the benefits of adaptation measures are frequently more than twice or as much as five times or greater than their costs. In addition, moving quickly to adapt is especially beneficial, with a benefit-cost ratio for early action of at least 12 to 1.
“Africa will suffer higher GDP losses than most other regions of the world. These impacts can only be reduced with adaptation. Thousands of lives and millions of livelihoods have already been sacrificed in Africa because we are far from delivering what is needed in adaptation today. For COP26 to succeed, Glasgow must deliver for Africa. To do so, it must bring more ambition and more finance to help Africa adapt to the pace of a climate emergency devastating the continent with increasingly serious consequences for the world’s poorest and most vulnerable.” Patrick Verkooijen, in his inaugural annual lecture as GCA CEO, commented
Dr. Akinwumi Adesina, President of the African Development Bank Group: “AAAP provides a unique opportunity for wealthier nations to meet their commitments and help Africa tackle the consequences of climate change. I am optimistic that our partners will deliver the first round of financing of $6 billion to $8 billion that we need for the Africa Adaptation Acceleration
Although 70% of the world’s cocoa comes from Africa, chocolate bars are largely produced in Europe and beyond. McCollum wanted to change that equation. “Agricultural products don’t fetch much generally. It’s the value add that creates economic opportunity.”
Whereas the coffee industry has focused on high quality Arabica beans, seen the third wave movement take off in the US and Europe, and created metrics to encourage flavor and quality over quantity, the cocoa industry, McCollum says, is still behind. “If we were to compare chocolate to coffee, we’re still in the 1980s. We have a long way to go to help people taste the different notes in chocolate. Right now, a lot of it is still milk and sugar.” That lends itself to the burgeoning bean-to-bar movement.
Malta's foreign minister Evarist Bartolo placed a spotlight on illicit financial flows and how they are damaging citizens of African nations during a conference held in Rwanda.
Bartolo met several ministers from African countries while attending the second Ministerial meeting between the African Union and the European Union, in Rwanda. He also had a meeting with the Commissioner for Social Affairs of the African Union, Amira Elfadil. He told his audience that Malta
Malaysia External Trade Development Corporation (Matrade) is encouraging more exporters to venture into Africa due to its rising market opportunities. Among the potential areas that Matrade has identified are automotive components and parts, building materials, infrastructure concessions including highways, ports, public housing and government buildings, information communications and technology (ICT), agriculture and halal industry. It said growth is expected to be strong in East Africa, supported by foreign direct investment (FDI) flows into natural gas resources in Tanzania and oil production in Uganda and Kenya.
More than 300 young participants from over 70 countries bound by a shared vision to deliver prosperity for all adopted a declaration that calls for inclusivity and resilience in global efforts to recover from the COVID-19 crisis. The Youth Declaration presented at UNCTAD’s 15th quadrennial conference was a culmination of monthlong consultations among young leaders from across the world. It sets out the priorities and recommendations of youth who participated in the UNCTAD15 Youth Forum held in the lead-up to the conference. The youth selected five topics they deemed to be the most crucial to young people to address now: inclusive social and economic development, new economies, climate action, inclusive and equitable learning and youth civic participation. The declaration notes that although the COVID-19 pandemic has created a sea of challenges, a forward-looking picture points towards advancing a “trinity of sustainomics”, encompassing policies consolidating “skill development, strengthening the business environment (including capital markets) and reintegrating equitable solutions for cross-cutting aspects within a green transition.”
Participants concluded negotiations on the new disciplines on services domestic regulation at a meeting of the initiative on 27 September. Contained in the “Reference Paper on Services Domestic Regulation”, the new disciplines developed by the initiative aim to facilitate services trade by mitigating the unintended trade-restrictive effects of measures relating to licensing requirements and procedures, qualification requirements and procedures, and technical standards. Their focus lies on the transparency, predictability and effectiveness of procedures that businesses have to comply with for obtaining authorization to supply their services. The Reference Paper is available here.
The Agreement on Agriculture has 12 notification requirements but members’ compliance rate remains low - close to 2,000 notifications are currently outstanding. The Committee on Agriculture has called on members to improve transparency and bring their notifications up to date. The aim of the workshop is to provide much-needed help for those who have requested technical assistance on notifications. The first phase of the workshop focused on how to make notifications on agricultural subsidies by WTO members, an essential transparency commitment under the Agreement on Agriculture. It also highlighted the specific transparency requirements stipulated by the Nairobi Decision on Export Competition. Following the expiry of the five year-grace period for developing country members, these requirements are now applicable to all WTO members.
The diverse interests among the 197 signatories to the U.N. Framework Convention on Climate Change (UNFCCC) make for a tough challenge reaching consensus on the next steps to stem global warming. Here are some of the main stakeholders in the U.N. climate conference (COP26) starting in Glasgow on Oct. 31.
LEAST DEVELOPED COUNTRIES (LDCs)This group represents the world’s 46 poorest nations, whose 1 billion citizens across Africa, Asia-Pacific and the Caribbean are particularly vulnerable to climate change, but least responsible for causing it.Along with blocs such as the African Group of Negotiators and the Climate Vulnerable Forum, LDCs are expected to push wealthy countries to honour a pledge to provide $100 billion per year in climate finance to the developing world for the 2020-2024 period - a target they are on track to miss. read more
Brazil, South Africa, India and China make up this bloc of populous, fast-developing countries with high-polluting economies. Each has called on rich countries to provide more climate financing, and have demanded equity through the UNFCCC concept of “common but differentiated responsibilities” – meaning wealthy countries that contributed the most emissions to the atmosphere have a greater responsibility to address it.New Delhi has said the current $100 billion a year pledge is not enough, and that India is unlikely to commit to a net-zero target by 2050. Brazil also wants financial compensation to halt rampant Amazon deforestation. South Africa wants stronger evidence developed countries will come up with the annual $100 billion they have promised, but also says the figure should be more like $750 billion.
Lower income countries spend five times more on debt than coping with the impact of climate change and reducing carbon emissions, according to a leading anti poverty charity.Figures from Jubilee Debt Campaign show that 34 of the world’s poorest countries are spending $29.4bn (£21.4bn) on debt payments a year compared with $5.4bn (£3.9bn) on measures to reduce the impact of the climate emergency.Uganda said it would spend $537m between 2016 and 2020, including funds from international agencies and donors, on climate related projects to adapt the country’s infrastructure and deal with climate emergencies.However, the $107.4m annual budget is dwarfed by external debt payments which will total $739m in 2021, rising to $1.35bn in 2025.And Uganda is not the only low income country that will need to find extra cash to pay debt interest over the next four year, the charity said. By 2025, Jubilee Debt Campaign estimates the 34 countries covered in the research will be spending seven times more on debt payments than limiting the impacts of climate change.