tralac Daily News
Although the Southern African citrus industry is celebrating another record breaking export season – the third year in a row – global and domestic challenges meant it did not translate into higher returns for local growers this year. In March this year, the Citrus Growers’ Association of Southern Africa (CGA) estimated that all previous export records will be broken with 158.7 million cartons exported this year. Even more – 161.6 million cartons of fruit – ended up being exported in the 2021 season – despite tough circumstances. In 2019, 130 million cartons were exported followed by 146 million cartons in 2020. However, the increased volumes of citrus exports in 2021 did not translate into higher returns and increased foreign revenue for local growers, according to Paul Hardman, acting CEO of the CGA. Last year, CGA – excluding Eswatini and Zimbabwean exports – generated R20 billion in foreign revenue. Figures for the 2021 season are not available yet.
“With the local industry expected to export 200 million cartons of fruit within the next five years, it is critical that challenges experienced during this season are resolved ahead of 2022,” Hardman said in a statement on Tuesday.
Following what President Cyril Ramaphosa has described as successful visits to Nigeria and the Ivory Coast, the South African government and business community will have an audience with its Ghanaian counterparts on Saturday. Ramaphosa and the sizeable delegation accompanying him on the four-country West Africa tour landed in Accra on Friday night. He will use the visit to enhance bilateral relations based on good governance and rules-based multilateralism.
South Africa has been the West African state’s number one foreign direct investor for years now while by 2019, Ghana had exported $1.7 billion worth of products to South Africa including gold, crude oil and cocoa paste.
The Competition Commission of South Africa will on Tuesday unveil and handover its first ever Economy Concentration Tracker report to the Minister of Trade, Industry and Competition Ebrahim Patel.
Themed: Measuring Concentration and Participation in the South African Economy: Levels and Trends, the report details the levels of concentration and participation in 178 markets and how these have been evolving over the past 5-10 years. The study makes use of data collected by over 80 industry organisations, regulators and government departments as well as data from SARS, Stats SA and the Commission itself. The economic sectors highlighted in the report include but are not limited to agriculture, retail, forestry, health care services, financial services sector, media, energy, property, gambling, construction, automotive and airline industry.
Industry and Commerce Minister Dr Sekai Nzenza has called on businesses to invest towards enhancing exports into the regional markets to take advantage of the opportunities presented by the African Continental Free Trade Area (AfCFTA). Founded in 2018, the AfCFTA was implemented effective 1 January 2021, becoming the largest free trade area in the world in terms of the number of participating countries since the formation of the World Trade Organization (WTO).
Dr Nzenza said local industry could transform the economy by working together towards exploiting opportunities presented by the US$3,4 trillion market presented by the AfCFTA. “We can make Zimbabwe great,” she said in a presentation made on her behalf by her ministry’s director of commerce and consumer affairs Constance Zhanje during the second edition of the business dinner and awards ceremony by Global Renaissance Investments (GRI). The awards dinner was held last week in the capital.
Manufacturing exports rise fastest on sector’s recovery (Business Daily)
Manufacturing goods recorded the fastest growth among Kenya’s major exports in the 10 months to October, signalling the return to health for the sector, which was badly affected by the curfew restrictions and low demand during the peak of the Covid pandemic.
Data from the Central Bank of Kenya (CBK) shows that these exports rose by 35 percent in the period to hit Sh46.97 billion, outpacing on relative terms the growth in raw materials and horticulture exports which went up by 24.6 percent and 23.8 percent to Sh41.1 billion and Sh108.8 billion respectively. The manufacturing sector has recorded an improvement in both sales turnover and demand for credit, indicating that firms are fielding more orders and producing at a higher capacity compared to last year. Their productivity was hurt last year on reduced demand for goods as consumers exercised caution in spending due to pandemic-fuelled uncertainty. The bulk of Kenya’s manufactured goods exports are made to neighbouring countries with Uganda the biggest destination of Kenya’s exports.
President Samia Suluhu Hassan has dissolved the Tanzania Ports Authority (TPA) board and the Shipping Corporation by removing its chairmen after dissatisfaction with their performance. President Samia announced the decision on Saturday, December 4 at the launch of pier number 0 to 7 at the port of Dar es Salaam. Prior to the announcement, President Samia described some of the shortcomings facing the authority, some of which were in the Auditor General’s (CAG) report questioning why no action has been taken to date. She also called on PCCB to investigate the boards for what was going on at the port and to take action against those responsible for the financial losses mentioned in the report.
Uganda and Tanzania currencies are the best performing media of exchange in East Africa against the dollar, whereas Kenyan and Rwandan currencies continue to lose value against the greenback. According to Bloomberg Refinitiv data, the Uganda shilling continues to hold steady against the dollar followed by the Tanzanian currency at 2.45 percent and 0.76 percent, respectively. They are among six African currencies with a positive outlook with the kwacha remaining best performing by end of November, appreciating at 19.64 percent followed by Mozambique’s metical and Angola’s kwanza at second and third respectively.
Currency policy in most of Africa is characterised as flexible without pegging the currency rate against the dollar.
Uganda is Africa’s biggest coffee exporter and shipments climbed to a record level in June on better yield from new trees, favourable weather and improved prices, according to the Uganda Coffee Development Authority. The pandemic has hurt economic output from the net importer but the country remains optimistic the dollar will continue to appreciate post-Covid.
Uganda’s economic recovery will be faster, stronger, and more sustainable if it brings more women into the center of profitable economic activity, according to the 18th edition of the Uganda Economic Update (UEU).Uganda Economic Update: Putting Women at the Center of Uganda’s Economic Revival, which projects the country’s economic growth to be between 3.5% and 4.0% in FY22 and about 5.5% in FY23, also delves into a special topic on women’s economic empowerment, with an emphasis on putting women at the center of Uganda’s economic revival.
The COVID-19 pandemic expanded gender gaps in paid work and business ownership, and the 2020 lockdown set off a wave of work stoppages and business closures that affected women more than men, while job losses and school closures have resulted in a greater share of unpaid care work for women, who already shoulder a disproportionate amount of household responsibilities.
Uganda said on Sunday it had launched a road-building project in neighbouring Democratic Republic of Congo aimed at boosting trade between the two countries. Sites for the roads were handed over to the contractor, Dott Services Limited, a Ugandan construction firm, the government said in a statement on Sunday. It added that the roads “will open the Eastern part of the country (DRC) to cross border trade with Uganda”. The statement did not give a cost for the 223 km (138 miles) of roads, which will connect Uganda to the eastern Congo cities of Beni, Goma and Butembo. Uganda had announced the plans to build roads in Congo in 2019.
The United States announced a plan to remove Ethiopia from the African Growth and Opportunity Act (AGOA) by the first day of January – and shock waves quickly rolled through the U.S. apparel and footwear industries – like a tsunami that no one expected. Manufacturers were alerted that perhaps their good-will African investments – were made in vain, and retailers started to think about pulling out of Ethiopia.
Under stark review, the concept of exiting the Ethiopian AGOA partnership is possibly a huge mistake – one that probably should (and could) be reversed, resolved, extended, or at least peppered with exemptions. America encouraged the apparel and footwear industries to make investments in Ethiopia, and now is potentially leaving “the ask.” Plus, all things considered, an abrupt exit (with only two months’ notice) has frightened other sub-Saharan African investors. They worry that the United States won’t renew AGOA in 2025, and won’t have their back the next time that trouble breaks out.
When looking at the results of AGOA, it is more important to focus on the non-energy sector – because that creates the most jobs and helps the most people on a humanitarian level – especially with apparel manufacturing in Kenya, Ghana, Lesotho, Madagascar, Mauritius, and (of course) Ethiopia.
The Ghana Investment Promotion Centre (GIPC) is initiating legal reforms to guarantee incentives for investors with interests in helping Ghana achieve the Sustainable Development Goals (SDGs). The incentives, tariff and non-tariff, will speed up the process of achieving the SDGs, which are linked to the country’s budget. “Ghana strongly endorses the SDGs and we are the first country in the world to benchmark our SDGs in the budget,” Mr Yofi Grant, the Chief Executive Officer (CEO) of GIPC, said at the Ghana – South Africa Business Forum in Accra on Sunday. He said the reform, when endorsed, would also strengthen partnership between GIPC and local investors where all Foreign Direct Investment (FDI) would have Ghanaian investors implanted in the supply and value chains. “I hope this would bring stronger partnerships, stronger trade interventions, and we would grow together,” he said.
The National Association of Small and Medium Enterprises (NASME) says efforts are in place to ensure a hitch-free 18th Micro Small and Medium Enterprises summit and exhibition scheduled for Thursday and Friday in Abuja. A statement issued on Sunday in Abuja by the Executive Secretary of NASME, Mr Eke Ubiji, said that the event would provide an avenue for industry experts to discuss a regulatory framework for full participation in the African Continental Free Trade Agreement (AfCFTA). The theme of the summit is “Positioning MSMEs for African Continental Free Trade Agreement Opportunities”.
President Muhammadu Buhari Saturday in Dubai declared that Nigeria remains the most viable and attractive investment destination in Africa, adding that the country is on the path of becoming the continent’s leading industrial and trading nation. Addressing a trade and investment forum at Dubai Expo 2020, organised by the Nigerian Arabian Gulf Chamber of Commerce, Nigeria’s Ministry of Industry, Trade and Investment, and the Nigerian Investment Promotion Commission (NIPC), the President said Nigeria is reaping from the efforts his administration has made to consciously improve the investment environment.
‘‘Nigeria’s pavilion at the Expo 2020 clearly shows why we remain the most viable and attractive investment destination in Africa. Our location, our natural resources, our population, and our regulations are there for all to see. Nigeria is on its way to become a leading industrial and trading nation in Africa,” special media aide, Femi Adesina quoted Buhari as saying.
Notable Rise in Non-oil Exports, Records 12% Growth MoM in July 2021 (Proshare Nigeria)
The latest monthly economic report from the CBN puts the provisional value of non-oil exports at USD0.46bn for July '21, indicating a growth of 12% m/m, and almost 43% y/y if we draw from data in the bank's quarterly statistical bulletin (QSB). The report does not provide a detailed breakdown of non-oil exports by product segment. However, it revealed that non-oil exports excluding electricity grew 13% m/m. While the surge in the y/y growth is clearly explained by the plunge in non-oil exports in 2020 due to the pandemic, the m/m growth was attributed to a marked rise in the export of agricultural products, particularly sesame seeds.
Despite Nigeria's vast export potential for agricultural commodities, non-oil exports still account for a small percentage of total export value. They accounted for just c.10% of overall exports in July. Based on the CBN's QSB which goes as far back as FY '08, we see that the share of non-exports to total peaked at c.16.1% (c.USD10.5bn) in FY '19.
Over the years, the federal government (FG) has implemented several initiatives targeted at increasing non-oil exports, including the export expansion grant, which reimburses exporters between 5% and 15% of their export value.
The African Continental Free Trade Agreement (AfCFTA) offers a major opportunity for African countries to cushion the economic impacts of the COVID-19 pandemic and is a vehicle for continued recovery to boost growth, reduce poverty, and broaden economic inclusion. This observation was made during a high-level panel discussion at the 2021 African Economic Conference, currently being held in a hybrid format, with key delegates gathering on the Cabo Verde island of Sal, as well as virtually. The panel discussion, moderated by Mr. Stephen Karingi, Director of the Regional Integration and Trade Division of ECA, focused on the implementation of AfCFTA to support countries in pushing back headwinds of a pandemic-induced recession. “The African Continental Free Trade Area (AfCFTA) is a stimulus for Africa’s socio-economic recovery from the COVID-19 crisis, and a driver of sustainable development particularly for women and youth in Africa,” said Ms. Joy Kategekwa, Strategic Advisor to the Assistant Administrator and Regional Director of the United Nations Development Programme (UNDP).
She underlined that the path to more robust and resilient African economies will be a challenging one, calling for boldness, imagination, and tenacious implementation of AfCFTA on the part of policymakers to address the lack of financing—including among informal businesses—and to support promising sectors in order to jumpstart and sustain an economic revival.
2021: Africa’s first year of free trading (BusinessAMLive)
NEXT JANUARY, in about a month’s time, the commencement of trading on the platform of African Continental Free Trade Area (AfCFTA) would have run its course for one year. By now, we should be expecting to read big headline news about what has been achieved during the one year of implementing a trade agreement that took off in the middle of a pandemic. Because Africa is not an isolated continent, the impact of the pandemic on the continent could be considered understandable.
Months before its commencement and for a significant part of 2020 – movement of people across national boundaries was severely limited and a lot of meetings had to be done remotely, online. Even with the commencement of trading on the AfCFTA platform, great news are yet to emerge. It is encouraging, however, that all African economies, except Eritrea, are now part of a comprehensive integration process based on trade and investment liberalisation, expected to lead to a customs union. Expectations remain high on the much publicised anticipated benefits on reduction of trade costs, fostering intra-African trade, driving efficiency and competitiveness, improving regional value chains and attracting foreign direct investment (FDI). Official responses to COVID-19 are not helping AfCFTA, at least for now as Africa is taking a hit from the disruptions to global value chains and supply chains. Border closures against many African countries in the past one week have taken a new turn with the identification of OMICRON variant of COVID-19, setting many Western nations on the edge for the time being.
Southern Africa is set for an economic rebound in 2021 and 2022, provided the Covid-19 pandemic tapers off, according to a report published by the African Development Bank. Like elsewhere on the continent, the pandemic will be a deciding factor in the region’s economic fortunes. If all goes well, and that includes a successful vaccination campaign and health measures such as social distancing and wearing masks, Southern Africa is projected to grow 3.2% in 2021 and 2.4% in 2022, according to the Bank’s Southern Africa Economic Outlook. These projections are a far cry from 2020, when the region suffered a 6.3% contraction – by far the worst in Africa. Central Africa experienced the second-worst regional economic contraction at 2.6%.
Going forward, lack of economic diversity could stifle the recovery. Commodities play an oversized role in many of the region’s economies, the Bank’s analysts point out, citing Angola, Mozambique and Zambia as examples. Dr. Emmanuel Pinto Moreira, Director of the Bank’s Country Economics Department, said the region’s economic performance fit in with the larger picture in Africa and the world as a whole. All but one region on the continent, East Africa, recorded growth in 2020. Overall, Africa experienced one of its worst recessions in decades.
President Cyril Ramaphosa was honoured with chieftaincy by the governor of the Autonomous District of Abidjan, Robert Beugré Mambé in Côte d’Ivoire on Friday. President Cyril Ramaphosa has said African politicians must “keep their hands” out of intra-Africa investment deals and the private sector must get on with the job. Speaking at a business forum of South African and Ghanaian businesses in Accra on Sunday, Ramaphosa added investment projects should be depoliticised, where governments only played a support role. “Africa must move away from too much political involvement by politicians – where politicians put their fingers in projects … it’s awarding and it’s execution. And I dare say dirty fingers. We need to depoliticise investment.”
Development experts at the 2021 African Economic Conference (AEC) say investment in infrastructure is crucial for the industrialisation of Africa. Delivering a paper on ‘Globalisation and Industrial Development in Nigeria’ on Saturday, Olufemi Samuel Omoyele, a development expert, said industrial development in the country was a necessary condition before globalisation could bring fortunes to Nigeria. He said economic globalisation was not good for the country because its economy was so dependent on crude oil revenue, and not very competitive. He added that before the current wave of economic globalisation could be a cure for Nigeria, the country’s government should first implement policies that would drive the largest proportion of foreign direct investment (FDI towards the manufacturing sub-sector.
OFID extends US$80m loan to boost trade in Africa (Emirates News Agency)
The OPEC Fund for International Development (OFID) has signed an US$80 million loan agreement with the African Export-Import Bank (Afreximbank) to finance international trade directly among corporates or through financial intermediaries. The OPEC Fund’s support will assist in boosting Afreximbank’s liquidity to grow its loan portfolio as it finances exports and imports in critical sectors such as agriculture, manufacturing and healthcare. The OPEC Fund’s loan will address trade challenges impacted by the COVID-19 pandemic.
Financial system pivotal to Africa’s huge potential — CBN deputy gov (Nigerian Tribune)
The financial system will be pivotal in the realisation of Africa’s huge potential just like it has in charting the economic recovery path from COVID 19. The Deputy Governor, Financial System Stability, Central Bank of Nigeria, Mrs. Aishah N. Ahmad made this observation in Lagos over the weekend, at the 40th anniversary summit of the Financial Institutions Training Centre (FITC).
Ahmad also said that there is significant room for the continent to leverage the bright spots, particularly the digital transformation and technological innovation being witnessed in the economy and financial ecosystem, to foster more prosperity and reduce income inequality. This innovation, according to her, has intensified growth in the size and significance of banks and other financial institutions, created new opportunities for new entrants and increased integration with global finance and capital markets.
A common crypto currency and an integrated capital market could boost trade in Africa and sustain growth after the Covid-19 crisis, experts said at the 2021 African Economic Conference on Friday. But the continent first needs to harmonise national rules and protocols governing the financial systems of individual countries to make the reforms workable, panellists said during a discussion on reforming Africa’s financial system. Anouar Hassoune, Professor of Finance and CEO of the West Africa Rating Agency, believes that a common crypto currency will ease the cost of doing business and give the continent an identity. “We need to come up with a crypto currency that is acceptable to each member state. It’s better to do it at the continental level, and we have the expertise to do it. It’s a matter of governance, not an issue of technology,” Hassoune stressed. He added that the proposed crypto currency could serve as an alternative to monetise some of the continent’s endowments, such as gold and other commodities.
Sovereign wealth funds are gaining ground in Africa, although urgent financial reforms are needed to boost foreign investment following the Covid-19 pandemic. This is according to economic experts speaking during the second day of the 2021 African Economic Conference in Cabo Verde. Studies presented during one of the sessions on Friday highlighted the progress made in some countries over the past few decades to improve policies. Experts argue that more work is needed to diversify and deepen financial markets so as to expand beyond commercial banks. Munashe Matambo, Associate Research Scientist at the Zimbabwe-based Scientific and Industrial Research and Development Centre, said there are at least 117 sovereign wealth funds currently operating or in the pipeline around the world, managing $9.1 trillion – 10% of global GDP.
Matambo said currently 24 African countries have established or are considering establishing sovereign wealth funds, but the process is not advanced.
How can the ocean contribute renewable energy to the African ‘Blue Economy’, bringing opportunities to millions of Africans and reducing or replacing carbon emissions, and which strategic actions can help it reach this potential? This background paper is an overview of offshore renewable energy sources across coastal Africa, including a review of six technology types: wave power, tidal stream power, ocean current power, ocean thermal energy conversion (OTEC), offshore wind power, and marine floating solar power (FPV). Analyses are based on a synthesis of available data and literature, including a review of their physical, technical, and socio-economic features.
The broad net zero emissions targets agreed at Cop26 are too amorphous. African negotiators need to push for more measurable targets based on ambitious African development scenarios. In particular, the issue is what this severe lack of progress means for African countries. Yes, there were other emissions-related agreements made in Glasgow – new net zero commitments in particular from India and a few others, a brand-new commitment to phase out coal, to list a few.
There are models. These include changes such as a complete shift out of diesel and petroleum in the global transport sector, to the use of green hydrogen by all steel and cement plants, to complete closure of all coal-fired power stations, and more. These are measurable, trackable, and possible to call out in global negotiations and domestic elections if not achieved. That is much harder for a broad emissions reductions target.
The problem is that – for Africans – trying isn’t good enough. It’s not just about impacts and adaptation costs at higher warming levels, nor about allowing African countries to continue to use oil and gas for a while
What stops Africa from exporting more crops to China? (South China Morning Post)
Half a world away in the Senegalese capital of Dakar, attendees at the Forum on China-Africa Cooperation were hearing Chinese President Xi Jinping’s plans to grow the value of imports from Africa to US$300 billion in the next three years. Xi said China would open “green lanes” for African agricultural exports just like those from Rwanda, to China. Further, China would offer US$10 billion in trade finance to support African exports and build a China-Africa industrial park for cooperation on the Belt and Road Initiative.
Observers said the announcement was timely since, in the past few years, African countries had been urging China to make it easier for African products to access the massive Chinese market. But realising the ambition would not be easy, with many trade and capacity challenges to be overcome.
World transporters reject travel bans over Omicron variant (The East African)
Global land, sea and air transport lobbies are laying into world leaders for imposing travel bans in the wake of a new Covid-19 variant in what could boost Africa’s argument against restrictions. The transporters who include shipping operators, air freighters and cross border hauliers say the “knee-jerk” reactions to the Omicron variant could risk killing an already ailing global supply chain. In a joint statement on Friday, the International Air Transport Association which represents commercial airliners, ICS which is the International Chamber of Shipping and the International Road Transport Union, and ITF, the International Transport Workers’ Federation, said they reject fresh travel restrictions including those that limit the flow of people and good because they “will do nothing to prevent this while inflicting serious harm to still recovering global supply chains and local economies.” Representing about $20 trillion of world trade share, these groups caution travel bans are putting the jobs of workers in the logistics sector at risk, while also damaging local economies.
Pressure is mounting on World Trade Organization (WTO) members to make a deal on an intellectual property waiver for the COVID-19 vaccines after it postponed its Ministerial Conference due to the emergence of the omicron variant.
India, South Africa and other countries have been pressing for the waiver, which wealthier countries have not embraced. The Biden administration publicly supports the waiver, which would allow more countries to manufacture vaccines without securing the intellectual property rights. Advocates say the administration has not put muscle behind its backing.
The delay of the conference, where members were slated to consider a proposed waiver suspension, has sparked concerns that the wait could further hinder the global vaccination effort and widen the vaccine gap between wealthy and poor countries.
The International Monetary Fund sees “downside risks” to the global economic rebound it forecast for this year and next, and is concerned that new coronavirus variants may hinder the recovery, its chief economist said. The International Monetary Fund sees “downside risks” to the global economic rebound it forecast for this year and next, and is concerned that new coronavirus variants may hinder the recovery, its chief economist said. ”Most of the overall risks are to the downside,” Gita Gopinath said in a virtual speech to an International Finance Forum conference in Guangzhou on Saturday. Gopinath, who is set to take over as the IMF’s No. 2 official in January, said the omicron strain may increase risks to the outlook and the world could also see more aggressive variants that further damage the recovery.
Digital technologies carry a promise to fast track sustainable development by supporting innovative, forwarding-looking policies and digital government solutions. There are, however, numerous risks and complexities of frontier technologies that come along with those opportunities, as well as policy and regulatory challenges such as those related to inclusion, competition, privacy and security. Innovation hubs, incubators, accelerators or testbeds have since emerged as springboards for new technologies and are now common in many developed and developing countries. In some scenarios, however, the perceived risks and costs of failure in public sector innovation mean that policymakers and regulators may still prefer to stick to the status quo.
The tech revolution that will change food production (United Nations)
Genetically modified crops and biotechnology have substantially benefitted farmers in recent decades, however, the next agricultural revolution will be driven by the accelerated application of smart, digital and precision agricultural technologies. The use of such technologies helps address the information asymmetries and deficiencies facing farmers, particularly smallholders. This can improve agricultural productivity and reduce costs, while mitigating the environmental impact of farming activities. The latest UN DESA Frontier Technology Issues paper studies a select set of technologies with potential for creating high economic value for smallholder farmers in developing countries.
The benefits offered by smart, digital and precision technologies are significant, but their uptake by smallholder farmers in rural areas of developing countries has generally been limited. To accelerate the adoption of these technologies, UN DESA calls for greater investment in promoting digital literacy in rural areas; a rethinking of the current model of agricultural extension services; a renewed effort to make digital platforms more user-friendly for smallholder farmers; and significant expansion of rural infrastructure to promote agricultural e-commerce.
Securing the funding needed for sustainable development by involving as many actors from different sectors as possible, is more urgent than ever, amid a widening “trust deficit” between the haves and the have-nots, the UN Deputy Secretary-General said on Monday.
How is tax driving the green agenda? (Business Daily)
The UN COP26 Summit 2021 was recently concluded in Glasgow, Scotland, as climate change becomes a key agenda worldwide. The conference was an opportunity for governments to track how they have responded to multiple challenges presented by the climate emergency efforts with two areas of focus, including reducing carbon emissions and changing the use of resources. Kenya and other East African Community states have over the years adopted tax policy initiatives to control the use of certain products with an effect on the environment. These taxes have ranged from excise duties or environmental taxes to income taxes on corporates. It is anticipated that prioritising tax-related environmental measures will be a great lever for change in the consumption or use of certain products. Some initiatives and policy measures the Kenyan government has put in place concerning green tax fall into several thematic areas.