tralac Daily News
Port cargo up marginally as trade recovers from Covid woes (Business Daily)
The Port of Mombasa recorded marginal growth in cargo volumes last year as business steadily recovers following the Covid-19 pandemic. During the period, the port registered 34.54 million tonnes against 34.12 million tonnes handled in the same period in 2020, representing a growth of 1.2 percent.
Kenya Ports Authority (KPA) acting managing director John Mwangemi said the positive performance was mainly attributed to a continued recovery from the Covid-19 pandemic period which in 2020 severely impacted global economies. “The pandemic had disrupted the global supply chain reducing international trade that affected many ports in the world. Similarly, the performance is attributable to improved resource planning and efficiency of business processes,” said Mr Mwangemi.
Supply chain hiccups tops business leaders’ worries (Business Daily)
The risk of interruption of doing business tops the list of concerns for Kenyan companies this year, ahead of the Covid-19 pandemic and market volatility which were the biggest concerns last year. Business leaders told global underwriter Allianz that cyberattacks and supply chain disruptions are the most likely threats to smooth running of businesses this year, mirroring similar concerns globally that has seen supply hiccups push up prices of products such as cooking oil and motor vehicles. Allianz said that fears of cyber incidents reflect an increase in ransomware attacks as companies continue to adopt digital systems and remote working.
Financing for Kenyan startups dips (The East African)
Funding for Kenyan startups by international investors declined by $138 million last year amid a fall in the number of deals valued at more than $1 million. Data from American online platform Substack shows that funding for young Kenyan firms fell to $411 million last year from $549 million in 2020, a 25.1 percent drop. This came as the country’s ranking on deals valued over $1 million raised in Africa fell from position one in 2020 to fourth last year.
Egypt eyes more fruit imports from Kenya (Business Daily)
Egypt plans to import more fruits and other food products from Kenya in a move that looks set to reduce the trade imbalance tilted in favour of the North African country.
Business delegations from the two countries Tuesday started a two-day trade forum where new trade deals would be signed.
Kenya mainly sells tobacco, paper and paperboard, fruits and vegetable textile fibres to Egypt, with the value of the overall imports growing 8.67 percent to Sh18.98 billion between 2014 and 2020.
Exports from Egypt include vegetable and animal products, minerals, chemicals, plastics and rubber — jumped 68.13 per cent to Sh42.93 billion over the same period, highlighting a trade partnership that heavily favours the Maghreb economy.
Kenya to up value addition to bridge trade gap with Egypt (The Star, Kenya)
Kenya is banking on agricultural produce value additional to bridge the trade deficit with Egypt. Speaking yesterday at the opening of the Nile Food Africa Trade Initiative in Nairobi, the Kenya National Chambers of Commerce and Industry (KNCCI) chief executive Samuel Mutonda commended Egypt for opening it’s market to Kenyan small traders, especially in the food sub sector.
Last year, the value of Kenya’s exports to Egypt stood at $80million (Sh9.1 billion) compared to $184 million (Sh20.9 billion) worth of imports from the Mediterranean country.
The value of trade between Kenya and Egypt has grown 43.98 per cent to Sh61.91 billion between 2014 and last year, with the latter being the major beneficiary.
Sh144bn coast roads to bolster Kenya-Tanzania trade (Business Daily)
The national government has in the last ten years injected Sh144 billion in the construction of 2,200km of roads at the Coast geared towards boosting trade between Kenya and Tanzania. The finances have been used to build and improve roads in Mombasa, Lamu, Kilifi, Tana River, Taita Taveta and Kwale counties, enhancing trade in the region. Transport Cabinet secretary James Macharia who inspected preliminary construction works for the 40km-long Mtwapa-Kwa Kadzengo-Kilifi road project, said the network will improve transport between Kenya and Tanzania by reducing travel time, vehicle operating cost, decreasing traffic congestion, and improving safety in the urban sections along the project road.
Horticulture sector producers lobby EU over pesticides (Business Daily)
Stakeholders in horticulture sector wants the European Union to agree on alternative pesticides for farming as it moves closer to restrict the use of over 200 chemicals that are used by local farmers. EU wants to implement its “Green Deal” which will see the continent cut over 50 percent of the pesticides that Kenya uses, a move that will impact negatively on the country’s exports to the political and economic union.
Fresh Produce Consortium of Kenya chief executive Okisegere Ojepati says they will be going to Brussels in March to try and convince Europe to relax the rules that require Kenya to ban at least 260 chemicals, failure to which the country’s produce will be restricted from accessing the lucrative market.
Uganda acts to ease border gridlock that triggered fuel crisis (The East African)
Uganda announced Tuesday it was suspending mandatory Covid testing at the border with Kenya after the measure caused huge truck queues, disrupting fuel supplies across the country. The crisis has led to panic-buying and skyrocketing prices at the petrol pump, with one minister warning traders not to take advantage of the shortages to “cheat” Ugandans. Kenyan media reports spoke of traffic snarl-ups snaking as much as 70 kilometres (40 miles) from its border with Uganda because of the delays caused by the coronavirus testing.
He said the move was also aimed at averting a “potential super-spreader” event at the border with so many drivers caught in the logjam.
Tobacco exports earn US$80m (The Herald)
Zimbabwe has exported tobacco worth more than US$80 million as companies selling to the Far East have started moving the crop to South Africa. Last year, global tobacco movements were affected by Covid-19. There has been an increase in the exports with 15 777 tonnes worth US$80 630 152 having been exported by local companies so far compared to 573 tonnes worth US$17 306 655 tonnes traded during the same period last year. The Far-East was the top destination for Zimbabwean tobacco with local companies exporting 190 153 tonnes of worth US$67 496 051.
TIMB spokesperson Ms Chelesani Moyo yesterday confirmed the increase in tobacco exports. “Companies mainly exporting to the Far East have already started moving their tobacco to South Africa for storage in order to secure shipping lines earlier as pending contracts between countries are being finalised.
Government is likely to continue to record wide budget deficits and arrears, particularly in the short term, despite planned reforms to broaden the tax base, Fitch Solutions, research arm of ratings agency Fitch has said. In its Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of the Ghanaian economy for the first quarter this year, the international research firm, however, said the country has better business operating conditions and greater stability than peer economies such as Nigeria or Cameroon. The report said the high public debt levels will continue to weigh on Ghana’s fiscal outlook over the coming years due to underperformance of government revenue.
On strength, Fitch Solutions, said the country has a better business operating conditions and greater stability than peer economies such as Nigeria and Cameroon, and therefore businesses will benefit from the relatively pragmatic government policy programmes implemented in recent years.
For President Muhammadu Buhari, the commissioning of rice pyramids in Abuja yesterday is an indication that Nigeria is making steady and assured progress towards self-sufficiency in food production. The federal government is pursuing an agenda of Nigerians consuming what is produced locally to discourage importation, reduce pressure on the naira and grow the economy, an idea that is seen as protectionism by some foreign economists. “The measure will aid our efforts at reducing the price of rice in Nigeria,” Buhari said.
“As a critical policy of the government, the Anchor Borrowers’ Programme is expected to catalyse the agricultural productive base of the nation, which is a major part of our economic plan to uplift the economy, create jobs, reduce reliance on imported food and industrial raw materials, and conserve foreign exchange,” Buhari said.
Prioritise local manufacturers in benchmark policy decision – Prof. Quartey (The Business & Financial Times)
Director of Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Professor Peter Quartey, has called on government to be firm in making a decision on the benchmark policy that will favour and support local manufacturers rather than give advantage to importers.
His comments come after the Ghana Union of Traders Association (GUTA) expressed vehement opposition to the decision of government to reverse the up to 50 percent benchmark value it applied on the importation of some products – which was primarily aimed at reducing the duties importers pay in order to increase the volume of goods that come through the country’s ports.
African trade news
Let’s avoid an AfCFTA own-goal – why Africa must invest in connectivity now (Trade for Development News)
The opportunities provided by the African Continental Free Trade Area (AfCFTA) agreement are well-documented. This single continental market for goods and services would create the largest free trade area in the world by membership, boost intra-African trade and investment, increase productivity and value, and create enormous employment opportunities. If implemented fully, by 2035, AfCFTA would increase intra-African trade by 81% and lift more than 100 million people out of extreme and moderate poverty. According to Afreximbank, despite the formation of regional economic communities (RECs) in Africa intended to facilitate trade, in 2019, several African members traded more with Europe than with each other. That year, only 14.4% of total formal trade in Africa was intra-regional. However, an assessment of regional trade would be incomplete if it excluded informal trade. Though difficult to measure, partial surveys and other accounting activities have estimated Africa’s informal regional trade to meet or exceed formal trade, especially for specific products and countries. Some studies have estimated informal regional trade to range between 30% and 40%. One reason for the proliferation of low regional trade is poor connectivity. Hard and soft infrastructure would improve efficiency, drive down costs, and increase cross-border operations. Accelerating public-private dialogue to resolve these issues must be a top priority to ensure that AfCFTA reaches its full potential.
Micro, small and medium-sized enterprises (MSMEs) in low- and middle-income countries suffer from high import and export costs, and uncertain transaction delays caused by limited correspondent bank relations, foreign currency availability and cross-border transaction rail capacity. Until now, payments and documentation need to go from a buyer’s bank through at least two “traded currency” intermediary “correspondent banks” to reach another supplier’s bank. Checks on transactions that take minutes or hours between strong, fully automated economies can take many days and cost a business in a low or middle-income country more than 10% of a transaction’s value. Central banks in these countries tie up millions in precious international currency reserves to settle large and small trade transactions.
With the launch of the Pan-African Payment and Settlement System (PAPSS) on 13 January, Africa shows the developing world and emerging economies how these international transaction challenges can be addressed with a commercially viable modern solution.
‘Agricultural trade will spur AfCFTA’ (The Nation)
The Agricultural commodity trade circle in the country is expected to propel the private sector to take over the African Continental Free Trade Area (AfCFTA), in food and manufacturing, the President, Information Marketing and Management Institute (IMMI), Dr. Ekenechukwu Aloefuna has said. Aloefuna, who spoke at a press conference on Agricultural Commodity Value Chain Expansion project in Abuja, said the reason for the conference is to take the sector to a viable business community synergy engagement that will bring about a full turn around in the entire value chain operation. He said the programme is also geared towards expanding commodity trade through implementation of agricultural research outputs, innovative best practices and multiple channel database, farm mapping, space technology based farm monitoring, farmers reporting, flood and environmental impart mitigation.
A failure to restore trust and solidarity will likely result in a divergence in the global economic recovery, partly reflecting inequitable access to vaccines and financing. Africa’s rapid economic and social change will give the continent a bigger role in world global affairs and the global economy. Here are five ways in which the world and Africa can work together to restore trust on solidarity on key priorities for the region’s development.
Africa Finance Corporation, the continent’s leading infrastructure solutions provider, has raised $400 million in a new syndicated loan to support the post-pandemic recovery through critical development of infrastructure. The three-year facility – the first from AFC since 2018 – was increased from an initial target of $300 million as strong interest from investors led to the offering being 2.5 times oversubscribed. The proceeds will facilitate upcoming infrastructure projects that address the continent’s developmental challenges.
It was an inauspicious start to 2021, with Covid-induced lockdowns keeping much of the world behind closed doors. Fast forward 12 months and the resurgence of Covid globally would seem to suggest that not much has changed. However, that would be very misleading when considered in the context of the African mergers and acquisitions (M&A) and private equity landscape – the last 12 months have seen a huge resurgence in deal activity, fund raising and overall investor confidence in Africa.
The stand-out sector in terms of investor interest has been the technology sector. For the first time in history 10 African technology companies raised USD 100 million or more in a single funding round, in the process conferring ‘unicorn’ status on an additional five African tech companies.
African energy at point of transition to uncertain destination (Engineering News)
Buffeted by a historic recession in 2020, sub-Saharan Africa’s energy sector and economy experienced a challenging 2021, exacerbated by Covid-19-related complications. Now, the region’s economies are rebounding and, spurred by the global energy transition, governments are decarbonising across the energy value chain, insights provider IHS Markit states in a blog post titled ‘Africa Energy and Economy Review and Outlook (2021-22): A Time of Transition to an Uncertain Destination’.
“With the region beset by a multitude of uncertainties, the only thing clear about what these transitions mean for sub-Saharan Africa in 2022 is that there is no clear line-of-sight ahead,” the authors indicate.
Market of 90m people beckons as DRC launches final stage talks to join EAC (The East African)
The Democratic Republic of Congo has begun penultimate steps to be formally admitted into the East African Community, signalling an additional market of 90 million people for the bloc. In Nairobi on Monday, officials of the bloc launched negotiations with Kinshasa, promising to reach a conclusion before the planned timelines of March this year when the DRC is expected to be rubberstamped by the Community’s Summit as the seventh member. “The EAC Council of Ministers is fully committed to drive this process to a conclusion. We all must jointly work tirelessly towards this venture,” said Adan Mohamed, Kenya’s Cabinet Secretary for East African Affairs and the current chairman of the Council of Ministers for the bloc.
Will EU-AU summit reshape Europe-Africa relations? (African Business)
The sixth summit of European Union (EU) and African Union (AU) heads of state and government aims to “completely overhaul” the EU-Africa relationship, according to its host, President Emmanuel Macron of France. Speaking at a press conference in December, he held out the prospect of “reforging an economic and financial New Deal with Africa”, saying that Europe wanted to “establish a genuine system of peace and prosperity to build investments in African economies and build [a] shared future” at the summit, which takes place in Paris on 17-18 February. But some commentators are less sanguine. The summit risks producing nothing more than “grand declarations of intent” that have little substance, says Carlos Lopes, honorary professor at the Nelson Mandela School of Governance at the University of Cape Town. “The announcements will make an effect but there won’t be any concrete changes that augur a profound change in the relationship,” he told French newspaper Le Monde in January.
Air logistics helping to drive economic growth (Bizcommunity)
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.
The first wave of lockdowns brought an urgent need for personal protective equipment such as masks, gloves, gowns, and face shields, as well as sanitising products. Given that minimal stock was held in individual countries, this meant emergency supplies had to be sent across the world as express cargo air freight. These expedited shipments were important to protect citizens in the first wave of the pandemic. Express air logistics is not just about greater speed and convenience, but also fast and efficient cross-border customs clearance – areas where it pays to have experts of specialisation on call.
The Trade Finance Landscape in 2022: Automation and Digitalization (Global Trade Magazine)
Given the rapid pace of digital transformation, it is often surprising to learn how many critical industries and services remain behind the curve, relying on manual processes and large-scale paper documentation. Global supply chain disruption resulting from the COVID-19 pandemic has highlighted that international trade finance is one such industry. International trade finance remains mired in an avalanche of paper, a plethora of conflicting national regulations and processes, and systems that do not communicate well with each other. These burdens, coupled with the industry’s failure to adapt quickly to more modern methods of analyzing credit eligibility, hit medium, small, and microenterprises (MSMEs) particularly hard. As MSMEs account for a large part of total global trade and are the largest employers worldwide, it is far past time for the industry to make changes that provide greater and simpler access.