tralac Daily News
Anxious times for South African citrus (Fruitnet)
With the start of the new South African citrus season only two months away, there is still no clarity on the negotiations that are destined to put a new legislation in place regarding citrus black spot (CBS) and false codling moth (CDM). The text needs to be advanced before the end of January when the EU is expected to discuss the details of the new agreement. If there is consensus, the new legislation will come into effect on 1 May this year. South African sources said they wanted to prevent unilateral decisions in the EU that would mean the new agreement would not be effective in mitigating the perceived risks among EU producers.
How Kenya will benefit from global cross-border tax deal (Business Daily)
Countries across the globe are signing up for The Organisation for Economic Co-operation and Development (OECD) initiative that requires tax authorities of participating countries to automatically exchange tax-related information on financial assets held in foreign countries. The initiative is dubbed Common Reporting Standards (CRS). Accessibility of such tax information is a valuable tool that authorities around the world are using to curb cross-border tax evasion. Kenya has not been left behind. The passage of 2021 Finance Act saw Kenya bring forth a raft of initiatives aimed at launching tax information exchange with other CRS participating jurisdictions.
Money circulation hits Sh238bn on recovery (Business Daily)
Cash circulating outside the banking system rose by Sh2.8 billion to Sh238.6 billion last November, a month after the night curfew was lifted, bringing the night economy back to life after 19 months of restrictions. The latest data published by the Central Bank of Kenya (CBK) shows that the metric, which is a blunt measure of the economic health of a country, rose to a four-month high from Sh235.8 billion in October. Improved consumption brought by increased income as a result of new hirings and easing of restrictions aimed at combating the Covid-19 pandemic has been critical in helping the economy recover, increasing disposable income of the population
KRA says unequal treatment of car importers lawful (Business Daily)
The taxman has dismissed a claim by a section of car importers that its demand for registration of imported used motor vehicles before entry at the point of clearance amounts to discrimination. In its submissions to a petition by the Car Importers Association of Kenya (Ciak), the Kenya Revenue Authority (KRA) says unequal treatment between the association members and franchise importers is lawful. Ciak is challenging a requirement that compels its members to have their vehicles assigned registration number plates at the point of clearance as opposed to when selling to a buyer. The association says that franchise importers ship in their new motor vehicles under the warehousing regime while Ciak members import under home use hence the difference.
“The East Africa Community Customs Management Act provide that subject to any regulations, goods liable to import duty may upon first importation be warehoused without payment of duty in a government or bonded warehouse,” KRA said.
Truckers blame slow Covid-19 testing for Malaba traffic (The East African)
Long distance truck drivers along the northern corridor highway have blamed the slow Covid-19 testing at the Kenya-Uganda border in Malaba for the snarl-up. Truck traffic is currently stretching about 130km from Malaba in Busia County to Lwandeti in Kakamega County, Kenya. The traffic jam has persisted despite last week’s decision by the Ugandan government to suspend a $30 Covid-19 testing fee.
Tanzania debt grows by $5b in 12 months (The East African)
Tanzania’s national debt stood at $36.08 billion by the end of November last year, up $5.34 billion year-on-year from November 2020, according to latest figures published by the central bank. External debt closed at $27.95 billion, a $215.8 million drop from October which the Bank of Tanzania attributed to debt servicing payments outweighing disbursements during the month. But the debt was still higher by $4.12 billion compared with November 2020.
Tanzania and Burundi sign railway deal (The East African)
Tanzania on Sunday signed a multimillion-dollar deal with neighbouring Burundi to build a Standard Gauge Railway (SGR) linking Gitega to the Indian Ocean. The planned 282 kilometre SGR railway line will run from Uvinza in Tanzania’s Kigoma region to Gitega in Burundi. Without revealing how much the project would cost, Mwigulu said the two countries have agreed to jointly finance the project.
Two reports produced following the six-month mission led by high-level international experts under the OACPS Research and Innovation (R&I) Programme’s Policy Support Facility (PSF) are expected to assist the Kingdom of Lesotho to develop a new and efficient R&I Policy. The Country Background Report and the Policy Recommendation Report will contribute to boosting the national R&I system for better impact on society and sustainable development.
Uganda’s 2022 economic outlook (The Independent Uganda)
Uganda’s economy underperformed in 2020 as coronavirus pandemic lockdown took toll on economic activities. The economy is projected to grow by 3.5-3.8% in the FY2021/22 and 5.5-6.0% in FY2022/23, before increasing to 6.5-7.5% in the medium-term (2 to 3-years ahead), according to the Bank of Uganda, driven by the ongoing vaccinations and easing of restrictions. However, the economy still faces numerous challenges ahead. Import growth is expected to outpace exports due to recovery in import-intensive household consumption and private investment. As a result, the contribution of net exports to GDP growth will be negative for an extended period.
A Nigerian tech entrepreneur, Joel Popoola, has been appointed to head the task force to improve trading ties between Africa and the United Kingdom. Popoola, a digital democracy campaigner and the creator of the Rate Your Leader app, is to lead a Special Interest Group for Africa established by the UK Institute of Directors (IoD)-one of the world’s oldest and most prestigious business leader groups. According to him, the IoD Africa SIG will stimulate business opportunities, increase networking, and grow awareness of British businesses in Africa and African businesses in Britain.
The IoD Africa SIG will be launched in London on May 19, 2022, with all African diplomatic missions and some heads of state expected to attend. In a statement, he stated that prior to the launch, serious bi-monthly online roundtables would be held to discuss post-COVID-19 and Brexit business opportunities for UK and African businesses.
The UK Government has already negotiated eight free trade agreements with African countries and trading blocs since Brexit, creating tariff and duty-free trade between Britain and 30 African nations-this means significant opportunities for African consumers and companies, not least in 24 English speaking countries.
The Association of Ghana Industries (AGI) has advised government to engage industry players for accelerated national development for the ultimate betterment of the country. “Industry creates jobs, generates revenue, and sustains economic advancement, adding that, in every rank, both great and small, it is the industry that supports us all,” Dr. Humphrey Kwesi Ayim Darke, AGI President stated at the investiture of new President and National Council of the Association.
Mr Chanfiou confirmed Comoros’ high-level political support for WTO accession that was also expressed in the bilateral meeting between Comoros President Azali Assoumani and WTO Director-General Ngozi Okonjo-Iweala on the margins of COP26. He considered accession to the WTO in 2022 to be a realistic possibility, especially in view of the positive progress made in the bilateral negotiations. He also highlighted the importance of technical assistance to support the implementation of Comoros’ economic development plan. This would allow Comoros, a least developed country (LDC), to fully benefit from international trade as part of its WTO accession. He noted that many sectors of the economy, including tourism, food and construction, had been adversely impacted by the COVID-19 pandemic.
TZ hands over AfCFTA ratification instruments (Dailynews)
Tanzania has officially submitted the instruments of its ratification of the African Continental Free Trade Area (AfCFTA) agreement to the African Union Commission (AUC).
The instruments of ratification was presented by the Ambassador of Tanzania in Ethiopia, Innocent Shiyo, who is also the country’s Permanent Representative to the African Union.
He revealed that the opportunity also acts as a crucial catalyst for economic growth and trade between member states (intra-African trade) by promoting African participation in world trade and building its capacity to add value to products through sound technological, innovative and competitive policies.
A year into the implementation of the African Continental Free Trade Area Agreement (AfCFTA), the Ghana Union of Traders Associations (GUTA) wants more stakeholder engagement to ensure success. The President of the Ghana Union of Traders Associations (GUTA), Dr Joseph Obeng, says a lot more effort will be required to ensure the agreement lives up to expectations. “I must say people did not take full advantage of this AfCFTA and the evidence is there for everyone to see. So, I think the earlier we sit down and discuss it the better. I believe that they (the AfCFTA Secretariat) will have to engage with the proper stakeholders than maybe the technocrats, because we are the traders, and they should talk to us.” “They should find a way to bring all traders in Africa for us to tell them what is militating against the success of the continental free trade,” he added.
Ghana President H.E Nana Addo Dankwa Akufo-Addo, represented by the Vice President H.E Dr. Mahamudu Bawumia today in Accra, hosted and presided over the commercial launch of the Pan-African Payment and Settlement System (PAPSS), observing that the ground-breaking platform will save Africa more than US$5 billion annually in payment transaction costs, while it plays an increasingly significant role in accelerating the continent’s transactions underpinning the operationalisation of the AfCFTA.
Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, said in his remarks: “We are eager to build upon the African Continental Free Trade Area’s creation of a single market throughout Africa, and PAPSS provides the state-of-the-art financial market infrastructure connecting African markets to each other thereby enabling instant cross-border payments in respective local African currencies for cross-border trade. Afreximbank as the main Settlement Agent for PAPSS, provides settlement guarantees on the payment system and overdraft facilities to all settlement agents, in partnership with Africa’s participating Central Banks. PAPSS will effectively eliminate Africa’s financial borders, formalise and integrate Africa’s payment systems, and play a major role in facilitating and accelerating the huge AfCFTA-induced growth curve in intra-African trade.”
U.S Ambassador to Ghana, Stephanie Sullivan, has said there is the need for Ghanaian businesses to see the AfCFTA as a game-changer for them to expand their business to better their livelihood. Speaking at the opening of a new office for American Chamber of Commerce (AmCham), Stephanie Sulivan added that the AfCFTA (African Continental Free Trade Area) agreement could make Ghana the gateway to trade and investment in Africa. According to the ambassador, Ghana being the host of AfCFTA secretariat together with its growing middle class and stable political environment was attracting more American investors looking for opportunities in Africa. “The AfCFTA has the potential to be a game-changer, not only for doing business across the continent but also for how the rest of the world thinks of Africa. It can truly make Ghana a gateway for the African market. U.S. companies already see the opportunity,” Ambassador Sullivan was quoted by thebftonline.
The African Continental Free Trade Area got a major boost last week, as the much anticipated Pan-African Payments and Settlement System (PAPSS) was officially launched in Accra, Ghana. According to PAPSS will enable a customer in one African country to pay in their own currency, while a seller in another country receives payment in their own currency.
Also last week, Nigeria’s Trade Minister, Niyi Adebayo, hinted that the FG will focus on improving access to power and infrastructure for manufacturers to improve Nigeria’s manufacturing capacity in Africa. He said, “With regards to power, we are aware that there is a power problem, so however, based on that, what we are doing is creating special economic zones and special industrial parks.”
How would you review the activities of Customs at the Ogun 1 Command in 2021, a year where smuggling seemed to characterise the border region? The fact remains that the borders are closed. So, the main work we do here for now is to enforce the anti-smuggling laws of the federation to ensure that there is no abuse of the law against border closure. Having said that, we are not expected to declare bumper revenue for close to two years.
Despite the border closure, we discovered that we still have over 25 checkpoints comprising Customs and other security agencies on the roads. Does this mean that smuggling still thrives? I answered that question with my assertion earlier that the activities at this border isn’t all about rice and fuel smuggling. It’s also not just about trading also. There are other issues like cross border crime. We used to have issues of people coming in from the border to snatch cars and take them out of the country.
Nevertheless, the fact that the borders are closed doesn’t mean that security operatives should go home. It’s not like we put a padlock at the border. Even after putting a padlock on your gate, you hire a security man to watch the gate.
FedEx says air freight an important part of AfCFTA, Africa’s economic growth (Engineering News)
The rapid change in retail and trade networks caused by the global pandemic has highlighted how logistics, and air logistics in particular, is crucial to the economy. Air express also has a role to play in helping drive economic growth in Africa, says logistics and courier services company FedEx Express sub-Saharan Africa Operations MD Natasha Parmanand.
The African Development Bank (AFDB) estimates that transactions in Africa’s trade finance — the sector concerned with international trade and commerce between indigenous and international organizations—reach $1.1 trillion yearly. The African trade finance sector, despite its potential, has been hampered largely due to the persistent reliance on manual processes. But digitization, led by indigenous solution providers, is slowly changing the dynamics. Trade finance technology ensures the smooth facilitation of international trade business operations. Over time, stakeholders in the African trade finance sector have relied on software solutions developed by international tech companies to automate their operations. However, these software applications are often one-size-fits-all built for global markets and do not take cognizant of the peculiarities in African countries. This reality creates a roadblock for the growth of Africa’s trade finance. To address this, indigenous technology solution companies like Union Systems Limited (USL) have begun to redefine the African trade finance sector by developing and deploying indigenous tech solutions that consider local requirements and optimize processes end-to-end.
The Democratic Republic of Congo (DRC) has reaffirmed her willingness to join the East African Community. The Minister said that DRC has a big population who are consumers that constitute a big market for the EAC, adding that DRC was also in dire need of investors and was therefore offering incentives for entrepreneurs who would like to invest in the country.
The Minister disclosed that DRC had embarked on a national programme of reconstruction in various sectors including infrastructure, agriculture, energy and environmental conservation. He said that DRC had the world’s second largest natural ecosystem in the Congo Forest and was keen on preserving this system from wanton destruction to mitigate the effects of climate change.
EABC calls for review of region’s rules of origin (The East African)
East Africa’s private sector wants a review of the region’s rules of origin in order to maximise its gains from the implementation of the Africa continental free trade area. Traders, under the East African Business Council (EABC), say that the existing rules, which have not been reviewed since 2015, have denied a number of products duty-free access to the EAC markets. The current rules of origin deny edible oil, cement and newly introduced fruits duty-free access, among other products. The EAC rules of origin set the criteria to distinguish between goods that are produced within the EAC Customs territory and are eligible for community preferential tariff treatment, and those produced outside the bloc, which attract import duties specified in the Common External Tariff (CET).”The EAC rules of origin were updated up to 2015 and that is what is being used by all customs unions. Based on the fact that they should be reviewed every five years, the current ones are overdue for review,” said John Bosco Kalisa, the chief executive of EABC, which is the apex body of private sector associations and corporates from the six EAC members.
The Great Lakes Trade Facilitation Project (GLTFP) launched five-years ago to deepen small-scale cross-border trade in Burundi, the Democratic Republic of Congo, Rwanda and Uganda with a special focus on women and young people has closed on a high note and paved the way for increased intra-trade in the region. Financially backed by the World Bank, the GLTFP was launched in 2016 with USD$26 million meant to help increase the capacity for commerce and reduce the costs faced by traders, especially small-scale and women traders, at targeted locations in the borderlands.
The launch of Africa’s first digital currency, eNaira, has cast some doubt of hope on West Africa’s single currency. According to the Economic Community of West African States, the introduction of the Eco, a new currency for the entire area, would help remove trade and monetary barriers, promote economic activity, and enhance living standards in the community of 385 million people (ECOWAS). In West Africa’s 15 countries, seven currencies are now in use, with CFA francs being used by eight largely French-speaking countries.
Most African countries signed onto the Free Movement of Persons protocol in Addis Ababa in January 2018. Its rationale was set out clearly: the free movement of people – as well as capital goods and services – would promote integration and herald in a host of other benefits. These included improving science, technology, education, research and fostering tourism. In addition, it would facilitate inter-African trade and investment, increase remittances within the continent, promote the mobility of labour, create employment and improve the standards of living.
And yet, four years after its ratification, only a handful of relatively small African states have fully ratified the Free Persons protocol. Over 30 countries signed the protocol in January 2018. But only Rwanda, Niger, São Tomé and Principe, and Mali have fully ratified it.
The COMESA Secretariat through the Statistics Unit is planning to conduct a Border Profiling Survey which is expected to add value to the understanding of the border trading environment as it affects small-scale cross-border traders. The survey Is planned for the first quarter of 2022. To kickstart the process, a draft questionnaire suited to borders such as Nakonde between Zambia and Tanzania and Kasumbalesa between Zambia and the Democratic Republic of Congo (DRC) has been developed and discussed with the Zambia Statistics Agency. A report from the Statistics Unit states that the Chief Statistician at COMESA Secretariat Mr. Themba Munalula recently led a team on a scoping mission for the profiling survey to selected borders in Zambia.
Cloud technology and services provider Google Cloud and sub-Saharan African airline Comair are collaborating to accelerate the aviation group’s digital transformation plans in line with its mission to deliver seamless travel experiences for customers and help the travel industry regain momentum. Comair, which operates the British Airways brand and the Kulula budget carrier in sub-Saharan Africa, completed its infrastructure optimisation plans as it migrated six labour-intensive, on-premise data centres to Google Cloud.
Entrepreneurs, financiers, business leaders, governments and regulators will converge in Abidjan, Côte d’Ivoire for the Intra-African Trade Fair in 2023 (IATF2023) to deliberate on ways to boost trade and investment on the African continent. Organised by the African Export-Import Bank (Afreximbank) in collaboration with the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat, the third edition of the fair is expected to build on the successes of the 2021 fair held in Durban, South Africa.
The concept of “gender equality” is sometimes thought of as a fait accompli, at least in the western world. Angela Merkel as the former chancellor of Germany and Halimah Yacob as President of Singapore are just two examples of women leading some of the richest nations; internationally, women outnumber men in university completion and three quarters of white employees consider themselves as allies to women of colour in the Global North. In developing countries in the Global South, however, former president of Liberia Ellen Johnson Sirleaf is very much the exception in Africa as a female leader, and the picture of everyday life for girls and women is markedly different from those living in the Global North.
This report contains an analysis of gas sector value chains and downstream policy tradeoffs. It is intended to enhance the capacity of regional member countries to strike a balance between maximising revenue from production of natural resources, and integrating them into national economies through downstream processing. Achieving this balance will advance the African Development Bank’s drive to industrialise Africa. Increasing downstream processing capacity presents a significant challenge for both the private sector and government. The report recommends that policymakers assess both barriers and economic benefits associated with downstream processing in order to make informed policy choices.
EU Green Deal: A double-edged sword for Africa (TRT World)
While the EU green transition attaches great importance to the African continent, what the future holds for African countries under this deal is the main question. When the European Commission introduced a set of goals to tackle climate change and environmental degradation, it opened up a path for economic recovery for African nations as well. The EU policy, part of the broader European Green Deal (EGD), looks at ways to address issues related to climate, energy, transportation and taxation to reduce net greenhouse gas emissions by at least 55 percent by 2030. The strategy is aimed as a multifaceted map for international climate policy, prominently including boosting and finding economic opportunities following the energy transition.
The European market for avocados continues to grow, and so does global production. Latin America dominates the supply to Europe with increasing exports. But Africa is following a similar trend. What are the opportunities and challenges for emerging suppliers in Africa? Latin America is the biggest avocado supplier to Europe. After years of strong growth, they supply almost 75% of total European imports, valued at 2.15 billion euros. Africa has grown at a similar rate, if not faster. The main suppliers to Europe are South Africa, Kenya and Morocco. Kenya leads the supply from East Africa. This region exported 148 million euros worth of avocados to Europe in 2020.
China, Africa push toward next stage (China Daily)
China and Africa are poised to build on the gains resulting from economic cooperation, with a shift to high-quality development on the way despite the disruptions caused by the pandemic, a forum has heard. Yu Zirong, vice-president of the Chinese Academy of International Trade and Economic Cooperation, or CAITEC, part of the Ministry of Commerce, said that while the pandemic has brought difficulties for the world economy, the steady growth in ties between China and Africa “fully demonstrates the complementarities and resilience of China-Africa economic and trade cooperation, and Chinese enterprises’ confidence in Africa’s future development prospects”.
China has been Africa’s largest trading partner for 12 consecutive years. From January to September last year, bilateral trade recovered rapidly from the pandemic, reaching $185.2 billion, a jump of 38.2 percent year-on-year and a record for the nine-month period, Yu said.
Over $138 million in urgent funding is needed to assist 1.5 million vulnerable people in rural communities in the Horn of Africa whose fields and pastures have been hard hit by an extended drought, the Food and Agriculture Organization of the United Nations (FAO) said today, as it released a comprehensive response plan calling for a range support for agriculture in the region. In a region already prone to food insecurity associated with weather extremes, natural resource limitations and conflict, the COVID-19 pandemic and 2020-21 locust invasion have stretched the coping capacities of rural communities to the limit, undermining agricultural productivity.
“To harness the opportunities of the digital economy and support the trade of goods and services, data should be able to flow freely across borders with trust, including the trust of individuals and businesses,” opens the Data free flow with trust chapter of the Digital Trade Principles agreed by the G7 countries at the G7 Trade Track on 22 October 2021. We strongly support this sentiment and the clear call to action for governments to work together to “address unjustified obstacles to cross-border data flows, while continuing to address privacy, data protection, the protection of intellectual property rights, and security”.
The 113th Session of the Council of Ministers of the Organisation of African, Caribbean and Pacific States (OACPS) was held on 30 November to 2 December 2021. The Session was chaired by the Hon. Mr. Tete António, Minister for Foreign Affairs of the Republic of Angola and President-in-Office of the OACPS Council of Ministers. At the meeting, the ministers and their representatives approved twelve decisions and three resolutions.
Trade issues: World Trade Organization Ministerial Conference, Economic Partnership Agreements, Intra-ACP Trade and UNCTAD Quadrennial Ministerial Conference Commodities and Value Chains European Union (EU) list of non-cooperative tax jurisdictions and high-risk third countries with strategic deficiencies in anti-money laundering and countering the financing of terrorism (AML/CFT) Arrangements.
In its flagship World Employment and Social Outlook Trends 2022 (WESO Trends), ILO has downgraded its 2022 labour market recovery forecast, projecting a continuing major deficit in the number of working hours compared to the pre-pandemic era. “Two years into this crisis, the outlook remains fragile and the path to recovery is slow and uncertain”, said ILO Director-General Guy Ryder.
When you think of tech innovations around the world, you think of global superpowers such as America and China creating the newest and highest quality technology for people around the world. While there is certainly some truth to that, it is often forgotten how many developing nations provide for the tech world. From iGaming innovations to other ways of changing the world, the hottest tech is coming from all corners of the planet. The scale of the gambling industry can be seen by the vast amount of sites offering slot games and other gambling services. However, trends and attitudes around the world towards igaming are certainly still mixed. Many developing countries are embracing gambling as a way to make revenue, and Turkey is a prime example of a developing nation that has done this. Esports and e-gaming have become a massive market in the country, and according to research from 42Matters, Turkish game publishers have an average of more than 796,650 downloads, despite only making up about 2% of the overall market. This is higher than the download average of all mobile games at only 483,320. Furthermore, Turkish publishers use a higher percentage of ads and in-app payments to increase their revenue. As mobile internet becomes more widespread across the globe, trends like this will continue, where the share could well be better spread across the globe.
As research in February from The United Nations Conference on Trade and Development (UNCTAD) showed, there are a few developing nations that are showing stronger capabilities to use and adapt what they call “frontier technologies” than their per capita GDPs would suggest, according to an index of 158 countries in UNCTAD’s Technology and Innovation Report 2021.
Tech in 2022: Where next after pandemic unicorn boom? (African Business Magazine)
Investment flows into Africa’s tech ecosystem have risen dramatically over the past few years. In 2020, African startups raised a record $2.4bn, a figure that more than doubled in 2021 to $4.9bn, according to data collected by Briter Bridges. Clearly appetite for investment in African tech did not diminish throughout the pandemic. In fact, many business models were turbo-charged by Covid-19 as digital platforms quickly became an easy way to offer services in the context of widespread lockdowns and social distancing. The boon for tech companies was reflected in the number of firms to reach the $1bn valuation mark – to become unicorns during the pandemic.
Fashion is an industry capable of fundamental economic transformation for Africa (How we made it in Africa)
As the second largest sector in the developing world after agriculture, the fashion, textile and clothing industry has the potential to transform lives, particularly for women and youth. Global value chains are integral to inclusive growth across the world, and a clear indicator of economic transformation. In Africa, despite this potential, challenges remain. The majority of fashion businesses across the continent are informal, with limited access to finance for growth and high costs of shipping and transportation of raw materials. But though there remains work to be done in strengthening the value chain of the African fashion industry, the rapidly rising awareness and recognition of our extraordinary creative talent on the global stage is something to be celebrated and nurtured.