tralac Daily News
South Africa expo backs intra-continental trade (CAJ News Africa)
THE upcoming Intra-African Trade Fair (IATF2021) will offer South African companies a platform to broaden their client base domestically and internationally. The second edition of the expo is set for Durban on November 15-21. The government will support more than 80 South African companies to showcase their products and services at the trade fair.
The Department of Trade, Industry and Competition (DTIC) has granted support through its Export Marketing Investment Assistance (EMIA) Scheme whose objective is to develop export markets for South African products and services. It also aims to recruit new foreign direct investment into South Africa.
SA Investment Conference postponed to March 2022 (SABC News)
The fourth South Africa Investment Conference scheduled to take place this month has been postponed to March next year. President Cyril Ramaphosa announced this in his weekly letter to the nation on Monday. The delay is due to several other events under way at this time such as the COP26 climate conference, the Intra-Africa Trade conference kicking off in Ethekwini next week and the recently completed local government elections. Despite this, Ramaphosa says that the country’s ambitious investment drive continues, with companies making good on their earlier commitments and looking for other investment opportunities in the country.
The federal government has disclosed that it is set to update Nigeria’s trade policy in order to enhance the country’s access to regional markets in preparation for effective implementation of the African Continental Trade Agreement (AfCFTA). President Muhammadu Buhari disclosed this in Lagos while speaking at the opening ceremony of the 2021 Lagos International Trade Fair (LITF), which was orgainised by the Lagos Chamber of Commerce and Industry (LCCI). He also disclosed that Nigeria recorded $10.1 billion foreign investment announcements in the first half of 2021.
He said: “One of the major policy thrust we are deploying to drive the facilitation of trade and market access is the imminent revision of Nigeria’s trade policy. “Its revision will caption our current economic realities and our aspiration to further facilitate trade and access to markets both locally and regionally, especially in the advent of the implementation of the AfCFTA.”
Minister of industry, trade and investment, Otunba Adeniyi Adebayo, has restated the federal government’s commitment to driving trade facilitation and market access. Adebayo, who represented President Muhammadu Buhari at the opening ceremony of the on-going 35th edition of the Lagos International Trade Fair (LITF) organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos, added that, “we are deploying to drive the facilitation of trade and market access, which is the imminent revision of Nigeria’s trade policy. The revision would capture the country’s current economic realities.” “It would also consider the nation’s aspirations of further trade growth and access to markets both locally and regionally, especially in the advent of the implementation of the Africa Continental Free Trade Area (AfCFTA),” he stressed.
FG urges Nigerians to patronise local products (Daily Sun)
To boost trade and economic activities, the Federal Government has enjoined Nigerians to support locally manufactured goods. President Muhammadu Buhari, who made the remark at the opening ceremony of the 35th edition of the Lagos International Trade Fair at the weekend, organised by the Lagos Chamber of Commerce & Industry (LCCI ), noted it was in this regard that the government signed Executive Order 003 in 2017. He said several campaigns have been launched to create necessary awareness and momentum. Represented by the Minister of Industry Trade and Investment, Adeniyi Adebayo, the president also disclosed that the country’s investment announcements in the first half of the year at $10.1billion was a 100 percent increase compared to 2020.
Nigerian importers and exporters have decried the N9 million duty per truck imposed by Benin Republic Customs on transit goods passing through the country’s corridor. Daily Sun learnt that the situation forced some shippers to pay more to reroute the goods via Togo port to Nigeria following the government of the Republic of Benin decision to stop all Nigeria-bound trucks laden with transit goods coming from Cote D’ivoire, Ghana and Togo. However, shippers described the situation to be a revenge meausure over Nigeria’s closure of its borders in 2019, which lasted for more than one year. Presently, most local manufacturers in the food, beverage and tobacco sector are said to be short of raw materials.
AfCFTA poised to dramatically increase Nigeria’s exports (Afreximbank)
Nigeria has the most to gain from the growth in intra-African trade, heard the country’s business community on 18 October at a Lagos roadshow for the Intra-African Trade Fair (IATF2021). The event offered Nigerian audiences a taste of what is to come at the IATF2021, which will take place in Durban, KwaZulu-Natal, South Africa, from 15 to 21 November 2021.
The Lagos preview event showcased a range of topics and opportunities due to be addressed at IATF21, which Nigeria, sub-Saharan Africa’s largest economy and the continent’s most populous country, is poised to capitalise on. During a panel discussion on ‘Unlocking Regional Value Chains Through the Implementation of the African Continental Free Trade Area (AfCFTA)’, delegates familiarized themselves with the revolutionary Pan-African Payment and Settlement System (PAPSS); the advantages of harmonisation of standards in the automotive and pharmaceutical industries; and the potential for boosting the continent’s automobile manufacturing.
Pandemic stimulus not sufficient for Ugandan businesses (The East African)
Ugandan businesses are still low on funds even after the Ministry of Finance, Planning and Economic Development injected a stimulus package of Ush13,208 billion ($3.7 billion) into the economy to help them weather the economic impacts of Covid-19.As part of the stimulus package, private loans in commercial banks were restructured, development financer Uganda Development Bank (UDB) recapitalised to finance distressed companies, businesses directly benefited from tax rebates and deferrals and youth and women entrepreneurs got seed capital. However, businesses in Kampala The EastAfrican spoke to are still reporting a drop in cash flow and low foot traffic.
New export tax on gold costs Uganda $720m (The East African)
Uganda has lost an estimated $720 million in missed gold exports since July as exporters boycott a new tax. In July alone, the country did not export any gold for the first time in six years, and now the government is seeking to reverse the new tax that was announced this year. In April, the government imposed a levy of five percent on every kilogramme of refined gold and 10 percent on unprocessed gold for export. The new requirement became operational in July, forcing gold exporters to hold back stock to protest the tax. Gold has for three years now overtaken coffee to become Uganda’s leading export commodity earning an average of $180 million per month for the government in revenues.
According to sources at the Ministry of Energy and Minerals, the government has yielded to the demands of the gold exporters and a team of technocrats from the ministry, their finance counterparts and the sector players are now looking for a solution by before year end. At the same time, President Yoweri Museveni has issued a directive to the Finance ministry to stay the collection of the new levy pending the ongoing review of the new tax requirement. The president suggested that the exporters should be in the meantime allowed to sell their gold under the old tax law as the review goes on.
Tanzania, investors begin talks on gas production (The East African)
Negotiations between Tanzania and international oil companies on the stalled liquefied natural gas (LNG) project are set to start after teams from both sides met in Arusha last week. This follows President Samia Suluhu’s push for the project and finalised review of the Production Sharing Agreement (PSA) arrangements.
“The LNG investors have been notified of the meeting on November 8 by the government,” said Ola Morten Aanestad, spokesperson of International Upstream.
Tanzania Petroleum Development Corporation (TPDC) Project Manager Fedister Agrey confirmed the meeting saying the government had done the relevant preparations and planned to hold discussions with the investors this month. “Tanzania will invest in the project according to participation percentage that is described within the PSAs,” she said
Oil and gas companies say there is hope to hold and finalise talks over the $30 billion LNG project.
“We see a window of opportunity for the Tanzania LNG project, and the ability to move efficiently to complete the discussions will create value for all partners involved and Tanzania as a country,” said Aanestad.
Kenyan solar energy startup shines at AfCFTA awards (The East African)
Kenya’s Tekizo Africa Limited is among the companies that emerged top in the just concluded Africa Continental Free Trade Area (AfCFTA) Caravan Prize competition. The firm, which deals in the manufacture and distribution of solar freezers to small-scale fishermen, emerged as a runner up in the final competition results announced on Friday. Among the winners were Senegal’s Matontine offering digital financial services and Medics2You from Nigeria that incorporates technology in the provision of healthcare. Matontine bagged the grand prize, while Medics2You took home the commendation prize.
The AfCFTA Caravan Prize is aimed at boosting small and medium African enterprises through the provision of soft infrastructure that helps them expand beyond their home countries. The prize targets a select few of the Caravan Initiative-supported enterprises and offers them more intensive support and cash grants.
Coffee is central to Rwanda, being one of the country’s most important exports. The sector occupies 79.5% of the labour force, contributes one-third of GDP and generates more than 45% of the country’s export revenues. It is therefore key to overcoming the challenges of COVID-19 that has pushed many people back into poverty. The pandemic-induced lockdowns have demonstrated the importance of using digital channels to reach new markets and stay connected with existing customers. Moreover, as consumers increasingly lose trust in food value chains, buyers are under pressure to increase traceability and provide full transparency to consumers on where their goods are sourced. A new type of blockchain technology implemented by Farmer Connect facilitates the collection and validation of this information in the coffee supply chain, by capturing the coffee farmer’s transactions. The International Trade Centre recognizes the importance of blockchain technology for traceability as it offers greater transparency in the supply chain and increased visibility for women-owned small holder farmers to international buyers.
The AfCFTA – A Catalyst for Industrial Opportunities (Pumps Africa)
The African Continental Free Trade Area agreement (AfCFTA) will constitute the world’s largest free trade area, consolidating an integrated market of 1.3 billion consumers with a combined gross domestic product (GDP) of approximately $3.4 trillion. The objective is to realise a continent-wide single market for goods and services with free movement of business, persons and investments. The agreement will ultimately boost trade and industrialization across the continent, while addressing the negative impact of the COVID-19 pandemic. As such, the trade deal has been prioritised amongst continental policymakers and affiliates in support of the process.
The AfCFTA assures a virtuous cycle of opportunities for manufacturers and various other market players. With trade and investment stimulation, enhanced value addition and productivity growth, more and better jobs will be created through social inclusion, and consequently further enlarged markets. However, to realise the maximum possible benefits, African nations need to refine business legislation, invest in human capital, infrastructure, transport corridors and logistics and other necessary enablers, all while improving access to credit for export-oriented manufacturing entities. Furthermore, political leaders need to demonstrate commitment to ensuring that industrial policies are established and congruous at both national and regional levels.
Comprising a pivotal theme at this year’s Manufacturing Indaba conference is the AfCFTA’s immense potential to convert Africa into the next big manufacturing hub, eliminating global reliance on Chinese manufacturing and furthering global economic competition. The event provides a rare opportunity for African manufacturers and governments to observe and partake in thought-provoking debates to not only develop but maintain a sustainable and lucrative export sector in Africa.
Dr. Akinwumi Adesina, right, meeting with African Continental Free Trade Area Secretary General, Wamkele Mene African Development Bank Group President, Dr. Akinwumi A. Adesina, said on Friday that the Bank would mainstream the African Continental Free Trade Area into its country and regional integration strategies. Receiving African Continental Free Trade Area (AfCTA) Secretary-General Wamkele Mene, in Abidjan on 29 October, Adesina said “the implementation of the free trade area will become a key component of the Bank’s lending program. We want to have a critical mass of AfCFTA-aligned investments.”
The Committee of Ministers of Trade (CMT) of the Southern African Development Community (SADC) has approved the extension of the implementation of the Trade Facilitation Programme (TFP) for the period 2020-2030 in line with the revised Regional Indicative Strategic Development Plan (RISDP) and the implementation of category B and C of the World Trade Organisation Agreement on Trade Facilitation. The TFP was initially approved in March of 2016 to advance and consolidate the SADC Free Trade Area. The CMT, which met at the end of July 2021, urged SADC Member States to ensure that the activities contained in the TFP are mainstreamed into their national plans in order to support the implementation plans, industrialisation strategy, the regional integration agenda, and mobilistion of the resources.
The SADC TFP contains 28 activities under Transparency, Predictability, Simplification and Cooperation clusters. The programme is meant to support the consolidation of the SADC FTA in general and the implementation of the Industrialisation Strategy in particular.
Comesa trade supply chains remain constrained (Chronicle)
TRADE supply chains remain constrained within the Common Market for Eastern and Southern Africa (Comesa) region amid renewed calls for countries to ensure full implementation of the Covid-19 pandemic trade facilitation guidelines. Last year, on account of the adverse impact of the Covid-19 pandemic, a call was made within the Comesa region for the full implementation of guidelines that promote the movement of goods and services to facilitate regional trade. Speaking during the 42nd Comesa Inter-governmental Committee virtual meeting last week, Zambia Minister of Commerce, Trade and Industry Chipoka Mulenga said supply chains were still constrained and prices for inputs and consumables rising in member States.
“Our countries have now started to experience the negative impact of Covid-19 induced disruptions of supply chains and weakening demand levels in our trading partners as our trade volumes are showing marked declines,” he said.
SACU, EFTA continue negotiations on expanded Free Trade Agreement (Namibia Economist)
Senior officials and experts from the Southern African Customs Union (SACU) and the European Free Trade Association (EFTA) Member States met through videoconference on 3 and 4 November 2021 to continue their negotiations on an updated and expanded Free Trade Agreement. The delegations informed each other on domestic developments that happened since the last round, including the economic impact of the Covid-19 pandemic, and uneven recoveries. They exchanged views on the steps needed to move the review process forward and took stock of all issues outstanding under review in a constructive fashion showing their willingness to take the negotiations forward.
Sub-Saharan Africa is estimated to possess 30 percent of global mineral reserves, representing a major opportunity for the region. Despite the high level of private investment in this critical sector, new analysis finds that many multinational companies are avoiding paying their taxes. To get a sense of the scale of the investment that companies are making in the region’s mining sector consider the case of Guinea. One multinational company has invested five times more in a single bauxite mine (as a percent of GDP) than the government has spent in total public investment since 2018.
New IMF staff research shows that governments in sub-Saharan Africa—now under tremendous pressure to raise public spending in response to the pandemic—are losing between $450 and $730 million per year in corporate income tax revenues as the result of profit shifting by multinational companies in the mining sector. Targeted policy actions to reduce tax avoidance could help governments recover some of this badly needed tax revenue to aid with the recovery and meet Sustainable Development Goals.
ANALYSIS: How Africa can tap opportunities presented by COVID for economic growth (Premium Times Nigeria)
The coronavirus pandemic caught the world totally unprepared! From Asia to America, from Europe to Africa, the crowned virus ravaged lives and livelihoods. Its impact on world economies has been widespread and very deep. To combat the pandemic, governments all over the world deployed a cocktail of responses ranging from: lockdowns to creation of Isolation centres; mobilization of healthcare personnel and facilities; palliatives for the vulnerable in the society; stimulus packages for businesses; issuance of covid-19 protocols for all forms of social gathering; and guided vaccinations.
It is pertinent to note that the advent of covid-19 coincided with the period in which African political leaders choose to foster Africa’s economic integration through the African Continental Free Trade Area (AfCFTA). This would have laid a veritable foundation for a viable continental market that engenders long-term growth, develops commodity value chains and industries across borders. The potential for income and employment creation (and by extension poverty reduction) is equally largely acknowledged as one of the major benefits of AfCFTA. This initiative is laudable as it is poised to make Africa more competitive in global trade as trade is crucial to development. For a continent with weak growth statistics, AfCFTA is a welcome development and can be leveraged to deepen African countries’ integration into regional and global value chains. Although covid-19 interrupted the pace of the initiative, it still holds a lot of promise for the continent as it is a veritable tool for fastracking the process of economic recovery.
Group calls for realistic energy transition goals in Africa (Trade Arabia)
The Sahara Group has called for the adoption of an “Africa appropriate” transition agenda in the continent’s upstream sector Group Executive Director Moroti Adedoyin-Adeyinka has said the disparate development level in Africa needs to be considered when discussing how best the continent and its global partners should approach the desirable goal of energy transition. “We need to have realistic goals and milestones that will ultimately enhance energy transition in Africa in a manner that leaves no one behind. Sahara Group as a foremost promoter of access to energy and sustainable environments is delighted to join other African and global stakeholders to help shape a sustainable future for upstream business in Africa, she said.
According to her, a “responsible and cleaner” production and consumption of energy in Africa holds the key to unlocking economic prosperity on the continent.
The African Development Bank and partner institutions of the Africa NDC Hub have published a flagship report on the status of Nationally Determined Contributions (NDCs) in Africa and the imperative for climate finance innovation. The report provides key action points needed to bring African countries on course to meeting their commitments under the Paris climate agreement, including setting up system enablers to crowd-in private capital. The study presents a compelling narrative on the pathway to raising ambition through NDC implementation, mapping out climate finance flows for both mitigation and adaptation, and investment strategy options to accelerate NDC interventions.
SA ‘spearheading’ vaccine development in Africa – expert (The Citizen)
Dr Messeret Eshetu Shibeshi, an Immunisation Officer with the World Health Organisation (WHO), discussed South Africa’s response to the Covid-19 pandemic, specifically in terms of the vaccine rollout. She said Africa contributes to approximately 2.5% of the global cumulative cases, which as of 5 November 2021, stood at 249 million cases and 5 million deaths. Furthermore, 6.8 billion vaccine doses have been administered on a global scale, as of 31 October 2021. Out of the accumulated reported cases, South Africa reported “among the highest in Africa, close to 1.2%”, as reported to WHO, Dr Shibeshi said.
In response to human rights violations, the United States announced this week that it plans to suspend Ethiopia, Mali and Guinea from duty-free access to American markets as of January 1. U.S. President Joe Biden said in a statement to Congress, released Tuesday, that these nations were no longer in compliance with the eligibility requirements for the African Growth and Opportunity Act (AGOA). He cited various examples of their failure to defend internationally recognized human rights.
Given the benefits posed by the AGOA, suspension from the act may have important implications for each country’s economy.
That Africa will soon establish a body that will be responsible for regulating medicines and medical products across the continent is a positive development. In February, 2019, the African Union adopted a treaty to set up the African Medicines Agency but, for take-off, it required 15 African countries to sign it and notify the AU commission before it could be established. And just the other day, Cameroon formally notified the AU that it had ratified the treaty bringing the number to the needed 15. It will now require a 30-day waiting period before the setting up of the agency can commence. So, by November 5, it can formally start.
AMA will be the second cross-continental African health agency, after the establishment of the Africa Centers for Disease Control and Prevention. It’s still a surprise that countries have been slow to be part of AMA because in 2019 when the decision was taken to establish it by the AU Assembly it was unanimous.
AMA will not take over the job of a country’s drug regulatory agency but will strengthen their capacity and bring harmony to the regulation of medicines across the continent.
A total of 65 WTO members reached a deal on 27 September on new disciplines for services domestic regulation that aim to facilitate services trade. The objective is to mitigate the unintended trade-restrictive effects of measures relating to licensing requirements and procedures, qualification requirements and procedures, and technical standards. Improving the predictability and transparency of procedures that businesses have to follow for authorization to supply a service is the overarching aim of the new disciplines.
In the final stages of the negotiations, participating members are updating their schedules of commitments to reflect the new disciplines in their existing WTO services commitments. Several have added more service sectors to be covered by the new disciplines — such as environmental and business services — and all of them intend to apply the discipline on non-discrimination between men and women to their authorization procedures.
Under the draft decision, the TRIPS Council would be asked to continue its discussions on this issue and to make recommendations to the 13th WTO Ministerial Conference. In the meantime, members would refrain from bringing such cases to the dispute settlement system. This so-called “moratorium” has been extended several times, from one Ministerial Conference to the next.
“Science has spoken: reaching an agreement on fisheries subsidies at MC12 would help protect the oceans and, in turn, uphold the long-term food security and livelihoods of millions of people,” DG Okonjo-Iweala said after receiving the letter addressed to the full WTO membership. “This letter is a strong reminder to WTO members of why they are in these negotiations, and what the consequences will be if they do not reach an agreement. The message to our political leaders is clear: they have already committed to concluding these negotiations in Sustainable Development Goal 14.6. They must not delay any further.”
The declaration calls for discussions on establishing a work programme for LLDCs in the WTO to monitor their needs, challenges and vulnerabilities and to develop strategies to boost their participation in the multilateral trading system. In addition to the challenges of high trade costs and dependence on transit countries to trade internationally, LLDCs are facing new challenges, such as container shortages, high shipping costs, climate change vulnerability and limited access to COVID-19 vaccines, the declaration notes.
A study commissioned by Christian Aid highlights the devastating economic impact climate change will inflict on the world’s most vulnerable countries.
As delegates at COP26 in Glasgow mark ‘loss and damage day’, the new report lays out the grim economic future some of the poorest countries will face, underlining the need for a robust system for dealing with loss and damage and much greater action to reduce emissions.
The report, Lost and Damaged: A study of the economic impact of climate change on vulnerable countries, was coordinated by Marina Andrijevic, an economist at Humboldt University in Berlin. By 2050 and 2100 the economies of these countries are still expected to be higher than they are today. This study highlights the amount of damage caused to their GDP by climate change, compared to a scenario where climate change didn’t take place.
By accelerating digitalization, COVID-19 appears to have boosted trade in information and communication technology (ICT) goods, which had declined before the pandemic, according to an UNCTAD technical note on the pandemic’s impact on trade in the digital economy, published on 21 October. Against a backdrop of sharply declining merchandise trade, the share of ICT goods in merchandise imports surged from around 13% in 2019 to nearly 16% in 2020 – the greatest annual increase since records began in 2000. “The pandemic has made affordable ICT goods imports even more important for countries at early stages of the digital transformation – the same countries that saw the biggest falls in ICT goods imports in 2020,” said Shamika N. Sirimanne, UNCTAD director of technology and logistics. “In this context, adopting trade facilitation and customs automation measures to smooth import processes will be important to improve access to the equipment needed in the digital economy.”
Poor countries have “borrowed to our eyeballs” and must be granted more cash to cope with the climate change ruining lives and livelihoods around the world, a representative of 46 developing nations has told Sky News. Sonam P Wangdi, chair of the Least Developed Countries (LDC) group at UN climate talks, said around 70% of the money poor countries receive to tackle climate change is in the form of loans they “can’t afford”, sending many into “debt traps”. Speaking of the high proportion of loans, he said: “That is totally a no. It must be grants and then access must be ensured.” “It is ridiculous” that it can take three years to access money due to bureaucracy and delays - whereas they need it in less than a year, he added.
It comes as negotiators at the Glasgow climate talks COP26 prepare to discuss today two highly sensitive issues for developing nations: funding for adaptation and for loss and damage. The former helps poor countries cope with the impacts of climate change, for example an extreme weather warning system, and the latter covers damage from climate change, such as displacement or death.
The jury is still out on whether world leaders are ready to turn words into actions at COP26. At stake is life as we’ve known it for millennia. The recent IPCC report is unequivocal. Many of the climatic changes we are seeing around us are irreversible. We can still avert the worst-case scenarios with ambitious and dedicated decarbonization measures, but more extreme weather events and persistent environmental stress are now inevitable. The bad news is that no country is really prepared. The pandemic could have been met with a coordinated global response, to preserve lives and livelihoods, but instead revealed the frailty of global governance. As a consequence, health systems are again under stress in several countries and economic recovery is pushing parts of the world further behind, threatening to preserve and intensify the deep divisions in our world and undermining resilience to future shocks. Far from building back better, this type of response ushers in a new normal of recuring and reinforcing health, environmental and economic crises. The good news is that we still have time to change. The pandemic has been a brutal learning experience, but we can use it to build a different future. In the Trade and Development Report (TDR) 2021, UNCTAD calls for more effort on climate adaptation and a transformative approach based on scaling up public investment to adapt to existing and future threats and to leverage private investment towards sustainable development, green industrial policies to diversify economies and create good jobs, and a new vision of multilateral cooperation to empower that approach.
International Trade Centre (ITC) has partnered with Alibaba.com to launch the “Global Digital Trade Accelerator for MSMEs in Developing Countries” initiative on 6th Nov during the ongoing 2021 China International Import Expo (CIIE) in Shanghai, China.
Together, the parties will help Micro, Small and Medium Businesses (MSMEs) enhance their international export competitiveness and contribute to sustainable development by better utilizing eCommerce platform opportunities.