tralac Daily News
South Africa’s economy is likely to grow by 2.1 per cent in 2022, reverting to where it was before the COVID-19 pandemic began in 2020, the World Bank has forecast, but warned that constraints on long-term growth, large-scale unemployment and inequalities still persisted. “Growth in South Africa is forecast to revert to its pre-pandemic trend, with the economy projected to grow by 2.1 per cent in 2022 and 1.5 per cent in 2023,” the Global Economic Prospects report, which was released on Wednesday said, citing improved control over virus outbreaks along with more widespread vaccinations as the main reasons for the improved projection.
Agricultural organisations the Agricultural Business Chamber (Agbiz), CropLife South Africa and the South African National Seed Organisation (Sansor) say government is stifling the development of new breeding technologies (NBTs) by deciding to evaluate them under the risk assessment framework for genetically modified organisms (GMOs). The Department of Agriculture, Land Reform and Rural Development in October last year announced that a diverse and evolving group of products derived from NBTs would be evaluated according to the GMO Act. This decision, the organisations say, will have widespread implications in South Africa and on South African innovators, as well as for trade of commodities that may contain products derived from NBTs.
Mineral Resources and Energy Minister Gwede Mantashe says the country will continue to pursue an energy mix while balancing the country’s low carbon emissions commitments.
“We will continue to pursue an energy mix to ensure security of energy and supply, cognisant of our international commitments to respond to climate change. We will continue to invest in clean energy technologies toward net zero emissions. We will do this through our ambitious energy procurement programmes facilitated by the Independent Power Producer Office (IPPO), which recognised globally for its pioneering excellence. “Our country relies on about 75 percent of coal for electricity generation…we cannot, overnight, shut down coal generation,” he said.
Lemon juice dumping: South Africa could face tariffs after US accusation (Fresh Fruit Portal)
Makers of lemon juice in South Africa may be slapped with anti-dumping duties by the US, if a petition against them succeeds next month. On Dec. 30, a US citrus juice maker, Ventura Coastal, filed a petition with the United States International Trade Commission, requesting that the US government impose anti-dumping duties on lemon juice from South Africa and Brazil, Business Insider reports. It alleges that lemon juice from South Africa and Brazil is sold at less than fair value in the US. Should the petition succeed and anti-dumping tariffs be imposed, South Africa’s juice processors will be left with a lemon juice glut, Andre Swart, managing director of Venco Fruit, told the Business Insider South Africa on Monday.
Kenya’s passport eighth most powerful in Africa (Business Daily)
Kenya’s passport is now the eighth most powerful in Africa and 71 globally after its mobility score improved six places in the latest ranking. The Henley Passport Index Report released on Monday shows that the number of countries that Kenyans can visit without a visa, or obtain it on arrival has increased to 72 from 64 in January last year. The mobility score measures the number of countries that a person holding Kenya’s passport can visit without having a visa or the nations where they can get a visa on arrival.
Kenyan textile firm opens Sh5.7bn plant in Zanzibar (Business Daily)
Kenya’s firm Basra Textiles Ltd is setting up a Sh5.7 billion ($51.3 million) factory in Zanzibar as it targets to get a pie of the regions clothes market. It is hoped that the factory, which was launched by President Samia Suluhu Hassan this week, will give a new impetus to Tanzania’s textile industry, which has the potential to become a significant sourcing location for foreign buyers. With the factory at Chunguni area in Zanzibar, Basra Textiles is targeting export markets across East and Central Africa, its company chief executive officer, Ahmed Othman, said on Tuesday.
The global textile industry was estimated at around $920 billion in 2018, and it was projected to reach approximately $1,230 billion by 2024, available global data show.
Imports of goods, services shoot up – BoT (Dailynews)
Import of goods and services increased to 11,251.5 million US dollars in the year ending November 2021, from 9,268.6 million US dollars during a similar period in 2020. According to the Bank of Tanzania (BoT) monthly economic review for November, the increase was observed in all import categories, with a significant rise in oil, industrial raw materials and transport equipment. During the period, oil imports increased by 44.9 per cent to 1,938.8 million US dollars on account of both price and volume. Service payments increased to 1,573.2 million US dollars from 1,349.8 million US dollars in the year to November 2020, much of the increase stemming from freight payments consistent with a surge in import bills.
Rwanda’s medium-term outlook is positive, supported by the authorities’ large policy package to respond to the evolving COVID-19 pandemic and their continued commitment to the PCI in a challenging environment. Economic recovery is underway with easing of restrictions supported by faster vaccination rates since July. GDP growth is projected at 10.2 percent in 2021 and inflation remained subdued. But Rwanda’s remarkable economic and social progress over the last two decades faces a significant setback, with poverty, unemployment, and gender inequalities on the rise. These pandemic scars, if not addressed, risk reversing hard-won economic and social gains. With a large share of the population still unvaccinated and the emergence of new variants, risks to the outlook remain elevated.
Energy expert, Dr. Yusif Sulemana, has said Ghana should focus on taking advantage of internal resources stating that hydrocarbon investments will not be attractive to foreign market and investors in the future. According to him, Ghana’s oil sector investments will suffer losses if internal resources because oil firms will no longer be interested in hydrocarbon investments which will hike the cost of energy. “The narrative will not change, there will be some headwinds. The headwinds are that we will continuously have constrained investments into the world of hydrocarbons. As long as we have constrained investments into hydrocarbons, the cost of energy will continue to rise and that’s a fact.
Govt plans $500m investment in technology for youths (The Nation)
To encourage creativity among youths, the Federal Government, in partnership with some international organisations, is mobilising $500 million for investment in technology and creativity. This was made known yesterday by Vice President Yemi Osinbajo (SAN). It was at the 2021 National Gold Award Presentation, organised by the International Award for Young People (IAYP) at the State House in Abuja. Describing the youth as Nigeria’s most valued assets, Osinbajo said the Federal Government valued their contributions to national development, adding that the Muhammadu Buhari administration is doing everything to encourage their creativity.
A recent report states that the federal government has assured manufacturers of its relentless efforts at improving the state of conditions in the country’s manufacturing sector. According to the report, all hands are on deck to resolve the foreign exchange scarcity, the chief amongst issues faced by manufacturers, particularly for the importation of machinery.
Morocco settles trade dispute with Egypt (The North Africa Post)
Morocco has resolved a trade dispute with Egypt that was sparked in March last year after Cairo denied entry to vehicles made in the Tangier factory. Egyptian authorities have denied entry to some 300 cars made in the Renault factory in Tangier, claiming these were not included under the free trade deal because they were made in the free zone in Tangier instead of the Casablanca factory.
Morocco however is set to review a list of products that will not be included in the free trade agreements with Tunisia and Egypt including textile and reinforcing bars in a bid to curb its trade deficit.
The instruments of an effective industrial policy for Tunisia are based on the variables controlled by public authorities to allow essentially, to act on the costs of companies and on the sectoral structures, underlines the Tunisian Institute of Competitiveness and Quantitative Studies (ITCEQ) in its report: “For a renewal of the industrial policy in Tunisia: requirements of the competitive positioning”
“These forms of intervention can take several forms. They can be direct or indirect measures. Nevertheless, there are variables whose qualification is not easy”, according to this document which has just been published on the website of the institute.
The much anticipated Pan-African Payments and Settlement System (PAPSS) was officially launched in Accra, Ghana, on Thursday, January 13, in a virtual event titled “Connecting Payments, Accelerating Africa’s Trade.” The new approach allows a customer in one African country to pay in their own currency, while a seller in another country receives payment in their own currency. After a successful pilot in the West African Monetary Zone (WAMZ), the payment system was launched commercially. Gambia, Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone make up the WAMZ, a West African economic and integration organization.
With PAPSS, Africa has demonstrated to the developing world and emerging economies how these international transaction issues can be addressed with a commercially viable modern solution. Participants no longer need to convert local currencies into exchanged currencies thanks to the PAPSS platform’s quick payouts. Overnight settlements allow central banks to reduce their international currency holdings. The technology checks for compliance, legality, and punishments in real-time. PAPSS has the potential to reduce transaction time to seconds, removing a major impediment to intra-African e-commerce, services, and goods trade growth.
Pan-African payment system launched: How it works (The New Times)
The long awaited Pan-African Payments and Settlement System (PAPSS) was launched Thursday, January 13, in Accra, Ghana, in a virtual event under the theme: “Connecting Payments, Accelerating Africa’s trade.” The new system allows a buyer in one African country to make a payment in his or her national currency and the seller in another country receives payment in their local currency.
According to Prudence Sebahizi, the Chief Technical Advisor at the AfCFTA Secretariat, the new system will allow a customer or a buyer to make payment in a national currency and the seller will receive the payment their own currency. This, he noted, is way easier and less costly than changing the Kenyan shilling to the US dollar and then converting the US dollar to the Ghanaian cedi, as has been the case.
Key pillars mostly in place to speed up Africa’s free trade in 2022 (Africa Renewal)
A major hurdle is ongoing negotiations on the remaining crucial elements of the trade pact, particularly rules of origin.
Concluding negotiations on rules of origin, which is basically to determine the “nationalities” of thousands of products to prevent dumping, will be key to success. Already, negotiators have reached an impressive 87.8 per cent agreement on rules of origin. That includes more than 80 per cent of the about 8,000 products listed under the World Customs Organisation’s Harmonized System of rules of origin and tariffs. Such a high threshold of consensus guarantees that the vast majority of products can be traded. “What is outstanding are automobiles, textiles, clothing and sugar. These account for about 12-15 per cent of what we call the tariff book. We want to conclude negotiations on these so that we can reach a 100 per cent rules of origin convergence,” Mr. Mene said.
The Futures Report 2021 launched last December in New York provides traders with valuable business information, making it one more item in the AfCFTA’s toolbox to catalyze intra-African trade. Jointly produced by the AfCFTA Secretariat and the UN Development Programme (UNDP), the report, titled “Which Value Chains for Made in Africa Revolution”, highlights for market participants value chains with lucrative opportunities in goods and services for value addition. Noting rising inequalities, the report states that, “Africa is the only continent where the number of poor people increased, up from 392 million in 2000 to 438 million in 2017.”
Analysts forecast grim 2022 economic outlook for Africa (Deutsche Welle)
African economies were badly hit by the emergence of COVID-19 in 2020 and the subsequent slowing of the global economy. On top of this, the lockdowns and restrictions accompanying the pandemic led to drops in the manufacturing of goods, trade volumes, investments, tourism and other revenue generating activities across the continent. There were some rays of hope in 2021, though.
Some of Africa’s poorer nations bounced back slightly in 2021. According to World Bank figures, emerging and developing economies, most of which are in Africa, grew by 6.3% at the end of 2021. Looking at only Sub-Saharan Africa, however, these figures are somewhat less positive. The region had an economic output growth of 3.5% in 2021, mainly driven by a rebound in commodity prices and an easing of social restrictions.
“Commodity dependent economies — like Nigeria, for instance, which relies on oil, Angola, Zambia on copper, even Ghana on gold — are expected to help mitigate some of the current challenge and help with economic recovery,” said Martey, a senior economist at Databank Financial Service in Ghana’s capital Accra. Africa’s developing nations are particularly vulnerable to global threats to economic recovery.
Shipping costs soared over the past year as consumers unleashed pent-up savings to buy new merchandise while the pandemic continued to snarl the world’s supply chains. Container rates have more than quadrupled since the start of the pandemic, with some of the biggest gains concentrated in the first three quarters of last year.
Lockdowns, labor shortages, and strains on logistics networks led to shipping-cost increases and significantly lengthened delivery times , though those pressures are easing. Our Chart of the Week shows how global container rates began to pull back from their record in September and have since declined by 16 percent, mostly due to falling rates for trans-Pacific eastbound routes, the main sea link from China to the United States.
The 2022 World Economic Situation and Prospects (WESP) report, produced by the UN Department of Economic and Social Affairs (DESA), cites a cocktail of problems that are slowing down the economy, namely new waves of COVID-19 infections, persistent labour market and lingering supply-chain challenges, and rising inflationary pressures. The slowdown is expected to carry on into next year. After an encouraging expansion of 5.5 per cent in 2021 — driven by strong consumer spending and some uptake in investment, with trade in goods surpassing pre-pandemic levels — global output is projected to grow by only 4.0 per cent in 2022 and 3.5 per cent in 2023.
Africa takes vaccination into its own hands (EURACTIV)
Put simply; vaccine inequality is costing developing world lives. This is the view of former UK Prime Minister Gordon Brown, who says wealthy G20 nations have monopolised 89% of jabs at the expense of the world’s poorest. Emphasising the scale of the problem, he said: “For every vaccine delivered as first vaccines in the poorest countries, six times as many doses are being administered as third and booster vaccines in the richest parts of the world”. Two years on, we have our fourth globally spreading variant, yet our most vital preventative tool is still denied to billions. The African continent is at the forefront of this disparity, with vaccination rates of around 9% of the continent’s 1.2 billion population. In poorer African countries like Mali, that figure falls to 1.9%, in South Sudan to 1.4%, and desperately minute in DR Congo where just 0.1% of people have received jabs. Even in Nigeria, one of Africa’s richest economies, the vaccination rate only slightly exceeds 2%. This comes while Western Europe reaches close to administering an average of 200 doses per 100 people. In light of this, former UK Vaccine Taskforce Head Clive Dix recently said, “We must stop endlessly jabbing in wealthy countries while poorer countries go without”.
The Commodities Issue 2022 (Global Trade Review)
Despite the continued impact of the pandemic, the disruption to global supply chains and the transformative effect of technology on trade and trade finance, GTR’s most-read stories of 2021 focused on the commodity finance sector.
In this issue, our feature titled Collateral damage reviews the extent to which fraud risk could be mitigated by ramping up warehouse inspections and other goods checks, and whether such a move could ultimately open up more financing to SMEs. Elsewhere, our fintech feature pursues the matter of dodgy dealings, and examines the reasons why technology – which is successfully transforming so many areas of the trade finance ecosystem – has not yet been harnessed to solve commodity finance’s fraud troubles through the digitalisation of warehouse receipts.
Her remarks came during her participation in a high-level panel session during the third day of the World Youth Forum titled ‘The Role of International Institutions in Supporting the Post-COVID-19 Recovery from the Pandemic’. the minister underscored the importance of setting and implementing global frameworks that can be streamlined across all stakeholders in order to ensure transparency as well as inclusion of a variety of actors to push for inclusive and networked multilateralism, such as the private sector, civil society, and youths.
The minister presented her ministry’s framework for implementing international cooperation and development financing for Egypt, which streamlines all financing under one umbrella to avoid repetition and improve the management of international development cooperation to implement projects effectively. The minister added that the strategic partnership between Egypt and international financial institutions delivered substantial results in Egypt’s own local development vision.
A new year has one nothing to ease the global standoff within the World Trade Organization over the waiver of the Trade-Related Aspects of Intellectual Property Rights, as the EU dismissed India’s proposal to discuss it further as “premature.”
One of the factors for this lack of structural transformation is LDCs’ overwhelming dependence on commodities for production and exports. According to the United Nations Conference on Trade and Development’s Commodities and Development Report 2021, over 75% of African LDCs.