tralac Daily News
A package of investments worth more than R26 billion in South Africa’s oceans economy, and that will create hundreds of new jobs, has been unveiled by Transport Minister Fikile Mbalula. Speaking at an event at the Port of Durban on Monday, Mbalula said these critical investments will contribute towards advancing South Africa’s interests through Operation Phakisa. Operation Phakisa is an initiative of the South African government that is designed to fast track the implementation of solutions on critical development issues.
LEMON producers in the country are on tenterhooks over an impeding decision by the US International Trade Commission (ITC) on whether South Africa is dumping lemons in that country, which may effectively close off a viable market for the local industry.
While there are various products including lemon juice concentrates, cosmetics, cleaning material and others that could be produced from local harvest, the fresh lemon market in the US is a mainstay for local producers and would lead to a glut, if South Africa is closed off.
Textile, footwear industries gain traction in region (The Herald)
Trade promotion body ZimTrade says textile and footwear industries made momentous progress on the export front in 2021 as the country continued to make inroads into regional markets. Statistics show that exports of these products in the first eight months of 2021 to August, grew to US$32,3 million in 2021 from US$17,7 million in 2020 which translates to an 85 percent surge.
Traditionally Zimbabwe’s textile market sector exports products mainly to South Africa with an estimated export market share of 91,74 percent, Zambia (1,91 percent), Germany (0,34), Malawi with an exports contribution of 0,12 percent, and Mozambique.
Kenya begins oil exploration in disputed Lamu Basin wells (The East African)
Kenya has stepped up oil and gas exploration activities in the Lamu Basin after rejecting a ruling over a four-decade maritime dispute with Somalia. Petroleum commissioner James Ng’ang’a said that ENI Kenya Business Venture, formerly Agip, started drilling last month at Mlima-1 well, which is also known as Block L11B. This follows seismic surveys that revealed that the area has potential for oil and gas. The company expects to release deposits results of the commercial viability of the block in two months.
Oil and gas explorers use seismic surveys to produce detailed images of the rock types and the location beneath the earth’s surface and to determine the size of potential oil and gas reservoirs.
Kenya extends avocado export ban indefinitely (Business Daily)
The horticulture regulator has extended the ban on the export of Kenya’s popular avocado varieties to overseas markets to curb the harvesting of immature crop. Head of Horticultural Crops Directorate (HCD) Benjamin Tito said the ban on Fuerte and Hass varieties will continue indefinitely.
The ban was placed on November 15, 2021, with exceptions given to exporters specialising on the Jumbo variety and those having off-season crop. “The harvesting of Hass and Fuerte avocado varieties will remain suspended until further notice,” said Mr Tito.
Kenya seeks to regain fuel business from Dar with its new reserve in Mombasa (The East African)
Kenya is banking on the $385 million new Kipevu Oil Terminal to wrest the petroleum business from Dar es Salaam port, which has been supplying the Great Lakes region. Tanzania turned the tables on the port of Mombasa after persisted allegations of adulteration of petroleum products on the Northern Corridor. Then the three-year closure of the border between Uganda and Rwanda, and lower tariffs made both countries depend more on the Tanzanian port.
Now, with the new Kipevu facility, Nairobi plans to create a petroleum products hub for the region, hoping to regain its lost business. The government has also begun converting the Kenya Petroleum Refineries Ltd (KPRL) Changamwe depot in Mombasa, a few kilometres from Kipevu, into a storage facility for fuel and liquefied petroleum gas.
Kenya’s Petroleum Principal Secretary Andrew Kamau told The EastAfrican that the procedures for Kenya Pipeline Company (KPC) to take over the KPRL are about be concluded to make the facility a hub for bigger vessels. Mr Kamau said the Kipevu Oil Terminal (KOT) will serve as an import and export facility.
Kenya, Uganda speed up clearance at Malaba border (The East African)
Kenya and Uganda have introduced new measures to expedite the clearance of goods still stuck at Malaba border posts after weeks of protests by truck drivers over Covid-19 testing. Although the Uganda authorities suspended the testing, the 70km traffic jam created by the drivers’ strike has taken more than a week to clear. More measures were needed to speed up the clearing of trucks as Ugandans struggled over the last one week to get fuel, whose price has increased tremendously. Hundreds of trucks have been cleared at the border, but for a border post such as Malaba which clears over 1,000 trucks daily, it is still a tall order to clear the thousands of trucks still on the queue.
Uganda: Budget Committee questions role of EAC Ministry (African Business)
Members of the Budget Committee have questioned the role of the Ministry of East African Community Affairs over its reported failure to engage the East African Community Membership on trade barriers. The East African Community Affairs Committee chaired by Hon Noeline Kisembo Basemera was on Monday, 24 January 2022 presenting the budget framework paper for the Ministry of East African Community. The MPs are concerned that of the ministry’s budget of shs30.6 billion, shs21 billion will be spent on subscription into the community, according to the Budget framework paper of the Ministry. The committee also queried the Shs1.8 billion request for sensitising Ugandans about the East African Community.
Hon Elijah Mushemeza (NRM, Sheema South) said: “I have not seen a budget proposal on how to deal with issues of borders, because if the borders are closed and you are talking of non-tariff barriers and improvement of trade, there is a problem there.”
Delays in financial remittances from member states are still a major impediment to the operations and activities of the East African Legislative Assembly (EALA). This was revealed by EALA MPs sitting on the accounts committee who are in Uganda to benchmark on the best parliamentary practices.
Hon. Dr Gabriel Garang Aher, EALA member from South Sudan said that with the exception of Uganda, other East African Community (EAC) member states do not make their financial remittances on time suffocating EALA activities. “Our biggest challenge as EALA is the issue of finances. There are times members go without pay because there is no money. Sometimes, we are forced to defer or cancel some of our activities because we do not get remittances on time from member states,” Garang said. However, the challenge of finances is not the only impediment of the East African Assembly. Hon Suzan Nakawuki, Uganda’s representative, blames EALA’s struggles on the EAC Council of Ministers for politicising and frustrating its legislative agenda and decisions.
The Terminal Three of Tema Port being operated by the Meridian Port Services Limited (MPS) is to have additional 15 Gantry Cranes as part of the expansion drive of the Port. A 53.31 million US dollars purchasing agreement has therefore been signed between the MPS and the Shanghai Zhenhua Heavy Industries Company Limited (ZPMC) to supply the additional 15 additional Gantry Cranes.
Mr Mohamed Samara, Chief Executive Officer of MPS, and Mr Liu Cheng Yun, President and Chairman ZPMC on January 18, 2022, signed a virtual agreement to cement the commencement of the project.
He noted that several shipping lines were attracted to put MPS Terminal three to the test as a potential transhipment hub, adding that MPS stood the test and therefore was determined to continue providing top services and the platform to connect its clients to major shipping routes around the world.
Clearing agents operating at the nation’s seaports have described the N4.1trillion revenue target set for the Nigeria Customs Service (NCS) as outrageous, saying, the pressure to meet such target will either reduce or threaten investments by the organised private sector. This was even as the group urged the federal government to consider the huge debt profile of the country before signing into law the $3.1billion Customs Modernisation Project. Speaking during a press conference in Lagos after the association’s National Executive Council (NEC) meeting over the weekend, ANLCA president, Tony Iju Nwabunike said the revenue target would undermine the productivity of the nation’s economy. Nwabunike said: “this high revenue target will place the NCS under pressure of high revenue collection and undermine the trade facilitation role the Service should render.
“Pursuing bigger revenue and failing to strengthen trade results in greater losses to the country as investments are either threatened, reduced or made non existent. “Totality of Customs efforts deployed into revenue pursuit reduces the service productivity in many ways.”
In the last two years, Nigeria has experienced low cargo importation into its seaports as Togo’s Lomé port has become a preferred destination for foreign shipowners operating Very Large Container Carrier (VLCC) vessels. Shallow draught, high vessel turnaround time, and decaying, archaic port infrastructure, among others have forced foreign shipping companies to abandon Nigerian seaports for Lomé Port. Data from the United Nation Conference on Trade and Development’s (UNCTAD’s) Review of Maritime Transport 2020 indicated that Nigeria lost over 196,750 Twenty Foot Equivalent Units (TEUs) or 30 per cent, of its container traffic to Lome Port due to lingering congestion and the poor quality of its services.
The new Central Bank of Nigeria (CBN) guidelines for the e-Valuator and e-Invoice is set to entrench accuracy and global best practice in exports and imports transactions in the country, the apex bank noted. The e-invoicing, and valuator, which become operational from February 1, 2022 will replace hard copy invoices
The bank said it “would operate on a Global Price Verification Mechanism guided by a benchmark price”. “The benchmark price is the actual spot market price obtainable at the time of consummation of invoicing, in that market where the goods are traded”. According to the circular, “effective, February 1, 2022 all Import and Export operations will require the submission of an Electronic Invoice (e-Invoice) authenticated by the Authorised Dealer Banks on the Nigeria Single Window portal Trade Monitoring System (TRMS)”.
“An importer/exporter of goods into Nigeria shall ensure that the purchase/sale contract with a foreign supplier/buyer stipulates compliance with the obligations set out in the CBN regulation and the supplier’s/seller’s invoice must be submitted in electronic format and authenticated by Authorised Dealer Bank (ADB) as part of the documentation for payment.
The Nigeria Customs Service (NCS) yesterday said the federal government’s revenue target for the service is N3.019trillion and not N4.1billion recently reported.
In a chat with LEADERSHIP yesterday, the national public relations officer, Compt. Joseph Attah said the target for the year was N3.019 trillion, saying, the N4.1billion was for internal target given to commands. Speaking, he said, plans were underway to surpass the revenue target. Attah said: “this year, we have been given N3.019 trillion as the target for 2022. As usual, we will be looking at meeting the target and even surpassing it. Usually after we are given this target, inwardly, we set another target for ourselves as a strategy not to only meet the Federal Government target but to even meet our own target which is usually above what is set for us.”
With the introduction of the Pan-African Payment and Settlement System (PAPSS), Nigerians will no longer need dollars for intra African trade. Consequently, intra Africa trade could reach $300 billion by 2025. This was disclosed by the Managing Director/Regional Executive of Ecobank Nigeria, Mr Patrick Akinwuntan, during an interview with Arise TV. He stated that consumers don’t need to look for an international bank, as PAPSS will work in Africa, the same way Nigeria Inter-Bank Settlement System Plc (NIBSS) works in Nigeria. PAPSS is expected to boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.
Decisive structural reforms and an improved business climate are essential to put Tunisia’s economy on a more sustainable path, create jobs for the growing youth population and better manage the country’s debt burden, according to the Winter 2021 Edition of the World Bank’s Tunisia Economic Monitor. Titled “Economic Reforms to Navigate out of the Crisis” (in French, “Réformes économiques pour sortir de la crise”), the report estimates a slow economic recovery from COVID-19, with projected growth of 3% in 2021. Weighing on this recovery is rising unemployment, which increased from 15.1% to 18.4% in the third quarter of 2021, affecting the youth and people in the western regions hardest.
The second chapter elaborates on key barriers to competition, arguing that Tunisia’s current regulatory environment restricts competition and discourages the development of new businesses. Looking ahead, the report recommends that policy reforms to ensure a level playing field in every sector are essential in order to boost employment for Tunisians and to increase purchasing power.
Petroleum Industry Act let us down, say Niger Delta communities (African Business)
Dissatisfaction over funds allocated to the communities of Nigeria’s Niger Delta Region by Nigeria’s historic Petroleum Industry Act in August has been exacerbated by the recent oil spill at Nembe in Baysela state.
The Delta region has born the brunt of environmental damage from oil industry activity since Shell-BP became the first joint venture to drill for oil in 1956. In January, Morris Alagoa, an environmental activist and representative of the Environmental Rights Action (ERA), described the situation to Nigerian daily The Nation as “grievous”, commenting that no water body in the region is unaffected by oil pollution.
The development expected from oil profits has rarely materialised in the region, even as Nigeria became one of the world’s biggest oil and gas producers.
Environmental damage and a lack of local economic opportunity have fuelled sporadic insurgencies in the region which have targeted oil infrastructure and government forces. As a result, when Nigeria’s President Muhammadu Buhari signed into law the country’s long-awaited Petroleum Industry Act (PIA) in August 2021, it contained measures aimed at addressing the demands of the disaffected communities.
Mozambique kicks off first offshore gas project (African Business)
A floating plant for liquefying natural gas arrived in Mozambican waters on January 3 after a seven week maritime voyage from South Korea. Constructed by Samsung Heavy Industries (SHI), it is the first offshore project to come online in the nation’s embattled gas industry. It is also the first floating LNG facility to be deployed in the deep waters of the African continent, and the third in the world.
The plant will extract gas from Area 4 of the Rovuma basin, located off the shore of the Cabo Delgado province of northern Mozambique, starting in the second half of the year.
The project comes as Mozambique’s government assures oil majors that the security situation in the Cabo Delgado region is under control after four years of disruption and halted projects.
In reaction to the EU and US support to Economic Community of West African States (ECOWAS) new sanctions against Mali, Oxfam together with 12 NGOs called upon the international community to protect the people of Mali. The agencies also urged sanction bodies to unequivocally commit to applying humanitarian exemption to allow life-saving aid to reach all those in need.
Last week, the European Union supported the Economic Community of West African States (ECOWAS) in the implementation of collective sanctions on Mali, which include closing borders and imposing a trade embargo, as well as cutting off financial aid and freezing the country’s assets at the Central Bank of West African States.
Economic Outlook 2022: Africa faces rickety rebound (African Business)
When the pandemic hit in 2020, Africa entered one of the most torrid recessions in half a century, its combined GDP contracting by 2.1%. The epic contraction was largely driven by African governments implementing strict lockdowns amid fears that Covid-19 would overrun fragile health services across the continent. 2021 was a different story. Last year, sub-Saharan Africa grew by a modest 3.7% according to the IMF, driven by a partial resumption of tourism, a rebound in commodity prices and the rollback of pandemic-induced restrictions. However, the outlook for 2022 looks barely unchanged as the Fund predicts that sub-Saharan Africa’s growth will only increase by 0.1% to 3.8%.
The second threat to growth is the accelerated pace of climate change, the IMF says.
FDI in Africa fell by 16% in 2020 to $40bn, from $47bn in 2019 – with commodity-dependant countries more seriously impacted than non-resource based countries. Mirroring Africa’s rebound from one of the worst recessions in more than half a century last year, FDI is expected to have improved in 2021 but only to a limited extent. The investment outlook in 2022 remains muted with a possible downtrend due to rising inflation and a slowdown in the global economy.
In a recent paper, we contribute to the emerging literature that analyses structural transformation in low-income economies using micro data as opposed to a focus on trade, global value chains, and broad sectoral shifts and aggregate indicators of output and employment at the country level. In this column, we present new data on the composition of jobs in services at the sub-national level in a sample of 13 African countries, describe how this has changed over time, and explain how employment in services correlates with indicators of economic development commonly used in the literature. A companion project webpage provides country specific graphs and maps plotting changes in sectoral employment and occupational dynamics over time.
East Africa council pushes for seamless trade (The Standard)
The East African Business Council is pushing for the revival of business committees to facilitate the seamless flow of goods and services at border points. The regional apex body of the Private Sector Association and Corporate has embarked on an ambitious plan to revamp joint border committees in Kenya, Tanzania, Uganda, Rwanda, South Sudan and Burundi under the East Africa trade protocol. “We are focused on revamping the joint border committees and work in collaboration with Kenya and Uganda revenue authorities and all other relevant agencies,” said John Kalisa, the council chief executive officer.
Speaking during a multi-agency forum that brought together different actors from both Kenya and Uganda at Malaba border yesterday, Kasila said they are focused on formulating robust systems that will guarantee fast clearance of trucks along the border towns of Kenya and Uganda.
US trade pact suspensions: what it means for Ethiopia, Mali and Guinea (The Conversation Africa)
Three African countries’ manufacturers have lost their tariff-free access to the US market this year. This follows the US decision in November last year to suspend Ethiopia, Mali and Guinea from the African Growth and Opportunity Act. The reason given for the decision was that it was in response to human rights violations and recent coups. The African Growth and Opportunity Act (AGOA) is a trade programme designed to enhance sub-Saharan African countries’ access to US markets.
The criteria and conditions for African countries to be eligible depend entirely on the US. Each year, Washington determines which nations qualify. And the US president grants or withdraws beneficiary status at discretion. Critics view the African Growth and Opportunity Act as an economic instrument of American foreign policy in Africa.
Despite commercial preferences granted under the African Growth and Opportunity Act, it’s difficult for these countries to access the US market. Ethiopia, Guinea and Mali are among the poorest countries in the world, with a major shortage of infrastructure and logistics, and a low income and highly
The virtual 43rd Ordinary Session of the Permanent Representatives’ Committee (PRC) kicked off today, ahead of the 35th Ordinary Session of the AU Assembly Meeting, scheduled to take place on 5-6 February 2022 under the theme “Building Resilience in Nutrition on the African Continent: Accelerate the Human Capital, Social and Economic Development”. Addressing the Ambassadors in his opening remarks, the Chairperson of the AU Commission (AUC), H.E Moussa Faki Mahamat reiterated his hope that this year will be marked by stronger collaboration between the Commission and the PRC, in the continuation of a successful practice that has been strengthened in recent times.
TRIPS waiver, developing nations’ policy space key, India tells WTO (Economic Times)
India on Friday insisted on the inclusion of waiver of certain provisions of the global intellectual property rights agreement for Covid-19 medicines and products in the World Trade Organization’s pandemic response package, and cautioned against attempts at using the pandemic as a veil for securing market access concessions from developing countries. At the virtual informal World Trade Organization (WTO) ministerial meeting organized by Switzerland, New Delhi said that the topmost priority should be to address the supply-side constraints, including IP barriers to augment the manufacturing of vaccines, therapeutics and diagnostics, essential for treatment, prevention and control of the ongoing pandemic.
The Tenth China Round Table on WTO Accessions, held virtually on 18-20 January, celebrated 10 years of the China Programme, with participants reflecting on its impact on the accession of least-developed countries (LDCs) and discussing the future direction of this initiative. The event also provided an opportunity for trade experts to present a study reviewing the results of accession for the nine countries that have joined the organization as LDCs since 1995 — Nepal, Cambodia, Cabo Verde, Samoa, Vanuatu, Lao PDR, Yemen, Liberia and Afghanistan.
The last two years of the pandemic have led to the great supply chain disruption in the world. From a shortage of semiconductor chips to the unavailability of containers, the trade and supply chain network has been in constant chaos. The need of the hour is not to go back to pre-pandemic times, but to build a stronger, resilient supply chain network. Pat Gelsinger, CEO, Intel emphasises on the importance of diversification and believes that the company’s facilities should be global. “We believe that from all of our factories that we have around the world, along with two more sites that we’ll be announcing, they should supply to the world. They will also benefit by having a local presence and we believe that those benefits clearly can be satisfying local markets as well as global markets. That’s why we want a globally distributed, resilient supply chain where no market is uniquely dependent on any other supply, or any singular location,” he said. Gelsinger was speaking at a panel at the World Economic Forum’s Davos Agenda 2022 titled ‘Restoring Trust in Global Trade and Supply Chain’.
U.S. Trade Representative Katherine Tai said on Thursday that global trade policy makers should not try to recreate the pre-pandemic trading system but build one that is more resilient, sustainable and supportive of higher living standards.
Speaking in a virtual panel of the World Economic Forum, Tai cautioned against a backward-looking "return to normalcy" after two years of COVID-19-induced disruptions. "I think that it is time for us to acknowledge that our goal really shouldn't be to try to go back to the way the world was, say in 2019, but to take lessons, very hard earned lessons, very painful lessons that we have experienced over the past two years and take this opportunity to build toward something that is different and better," Tai said. Key to this will be to strengthen and diversify supply chains, she said.
As 2022 gets underway, the temptation to quote Dickens — it’s the best of times and the worst of times, etc. — is more powerful than usual. For business, the ongoing pandemic and geopolitical risks (the threat of a further Russian invasion of Ukraine at the fore) are conflicting with strong economic growth and technological progress. It all presents an intense mix of challenges and opportunities. U.S. Chamber of Commerce President and CEO Suzanne Clark highlighted some of these issues in her State of American Business address earlier this month. On the international front she notes: “By one vital measure—trade—we’re standing still. And that means we’re falling behind.” Clark explains in no uncertain terms why the United States must demonstrate leadership on international trade in the year ahead.
Trade: The boom continues. Expanding international trade is both a cause and an effect of the recovery. The World Trade Organization estimates global merchandise trade expanded by 10.8% in 2021 and forecasts a 4.7% rise in 2022. Trade is surging even compared to pre-pandemic levels: U.S. goods exports in 2021 topped 2019’s level by 5% while imports rose by 11%. Indeed, major U.S. ports processed almost one-fifth more container volume in 2021 than they did in 2019. Services trade presents a mixed picture: digital trade continues its robust growth, but depressed travel and tourism continues to be a drag on some sectors that are major employers.
US and UK launch talks to resolve metal tariffs dispute (BusinessLIVE)
The US and Britain on Wednesday agreed to launch talks aimed at resolving their trade dispute over US steel and aluminium tariffs, the countries said in a joint statement. No specific date or timeline was given for the talks but discussions will address "global steel and aluminium excess capacity, including the US’s application of tariffs" on the metals from Britain. "Both parties are committed to working towards an expeditious outcome that ensures the viability of steel and aluminium industries in both markets against the continuing shared challenge of global excess capacity and strengthens their democratic alliance," the countries said in the joint statement.