tralac Daily News
Trade conditions on an upward trend, Sacci survey shows (Engineering News)
Trade conditions continued to improve in January after an uncertain second half of 2021 and, when seasonal factors are considered, trade conditions are on an upward trend, the South African Chamber of Commerce and Industry’s (Sacci’s) latest Trade Conditions Survey shows. The disruption and mayhem in July 2021 had a negative impact on trade, but it also accelerated the recovery and inspired resilience in communities and businesses, states Sacci.
Kenya’s “Vision 2030” plan charts a path toward an economically sound, sustainable future—and bringing that future within the reach of all Kenyans will depend on how easily they can access the tools they need to build their businesses and improve their quality of life. But access can take many forms. For small business owners and entrepreneurs, access to finance is key to growth. City dwellers need access to affordable housing so they can raise families in neighborhoods near job opportunities. Farmers rely on access to agricultural markets so they can sell their food while it’s still fresh and receive prompt payment. And all will require access to digital platforms as Kenya establishes a diverse and dynamic economy.
Kenya’s dairy sector is estimated at 14% of Kenya’s agricultural GDP. Milk is primarily produced by smallholder dairy farmers who account for 56% of total output. It is estimated that the sector has 1.8 million smallholder farmers (about 80% of producers). There are more than five million dairy cattle producing an estimated four billion litres of milk annually. Milk production is projected to grow by about 150% by 2050. Kenya has the highest per capita milk consumption in sub-Saharan Africa, at 110 litres. The demand, currently at 8 billion litres, is also expected to grow with the population increase.
The government has therefore prioritised the industry in national strategy and plans, such as the Agricultural Sector Transformation and Growth Strategy (2019-2029) and the president’s Big Four Agenda. There’s also a dairy master plan to guide the development of the industry up to 2030. But the sector faces significant challenges that affect the realisation of its full potential. As a result, Kenya has to import from neighbouring countries to meet demand.
Kenya plans to enhance its food safety in order to boost agricultural exports, a government official said on Wednesday. Joseph Kirubi, secretary of administration at the state department of crops, Ministry of Agriculture said in Nairobi that the country’s food safety will be strengthened to be aligned with the Food and Agriculture Organization of the United Nations, World Health Organization and the World Trade Organization agreements. “Government will emphasize on a risk based approach to food safety control and shall require all actors along the food value chain from farm to fork to be accountable,” said Kirubi during a food safety conference. According to the ministry of agriculture, food exports account for over 50 percent of the country’s total exports.
Stakeholders welcome reopening of borders (The Herald)
Stakeholders at the country’s ports of entry have said they are adequately prepared to handle an anticipated surge in vehicular and human traffic following the reopening of borders to the vaccinated public. Bus operators, informal traders and small to medium businesses have also commended the Government for the latest move to allow cross-border travel. Zimbabwe shares four land borders with Botswana at Plumtree, Mlambapele, Mpoengs and Maitengwe, and Beitbridge with South Africa. Prior to the latest decision by Cabinet on Tuesday, only commercial cargo and Zimbabweans with permits to live or work in other countries were allowed to depart via land borders. On arrivals, returning immigrants and migrants with valid permits to be in the country were being allowed via the borders. Matabeleland South provincial medical director, Dr Rudo Chikodzore, said they will continue using tight screening and surveillance measures at the ports of entry in line with the set Covid-19 protocols. “We have been very busy during the lockdown and we are ready to deal with huge volumes of traffic. Adjustments will be made depending on the context of the situation on the ground,” she said.
Nigeria, Ghana seek end to retaliatory tariff, trade policies (The Guardian Nigeria)
Worried about the trade tension between Nigeria and Ghana, members of the private sector in the two countries, many of whom are largely affected, have sought an end to imposition of restrictive trade rules and counter-actions between the countries. While there are claims of resolution, private sector operators are worried about the effect on trade and the two countries’ economic development. Ghana High Commissioner to Nigeria, Rashid Bawa, expressed readiness by the Government of the Republic of Ghana to cooperate, collaborate and work closely with the Nigerian government for the sustainable development of the economies of both countries. He stated this at the 2022 forum of Ghana Nigeria Business Council (GNBC) and Ghana Investment Promotion Council (GIPC) for Chief Executive Officers, in Lagos, yesterday.
He mentioned that the perennial tension between Ghana and Nigerian traders in Ghana are being resolved. Let me disclose that the Ministers of Trade of Ghana and Nigeria, late last year, signed a joint agreement that establishes a framework to guide the engagement between the two countries in resolving issues between Ghanaian retail traders and their counterparts from Nigeria.
“As the economic and trade relations between the two countries warm up, as world economies are beginning to find ways of functioning in the midst of the pandemic, the desire for deepening cooperation among enterprises is growing stronger. It is, however, disheartening to learn that many Nigerian entrepreneurs still fall short of the knowledge of and connectivity to the Ghanaian market. Many are oblivious of the huge potentials that exist in Ghana.
On 15 February 2022, Dr. Kunio Mikuriya, Secretary General of the World Customs Organization (WCO), and H.E. Mr. Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, met at WCO Headquarters to sign a Memorandum of Understanding (MoU). This MoU aims at strengthening the organizational capacity, transparency and effectiveness of African Customs administrations in a sustainable manner through cooperation between both Organizations. In his remarks on this occasion, Secretary General Mene explained that it had been a long road since the establishment of the AfCFTA Secretariat. Today, 41 of its 54 Member States had duly ratified Rules of Origin for 87.7% of tariff headings agreed upon, to name but one milestone. He recalled the mandate of his Secretariat and stated that Customs’ involvement is essential in order to realise the ambitions laid out in the Agreement establishing the AfCFTA. He also noted that expectations were high and that communities were eager to start trading under the Agreement. The AfCFTA Secretary General then acknowledged the WCO’s expertise and role in delivering capacity building in highly-technical areas which were key for implementing the Agreement.
The ongoing COVID-19 pandemic has amplified the sense of urgency in Africa’s quest towards effective and timely implementation of intra-Africa trade and economic recovery, experts have argued. The United Nations Economic Commission for Africa (UNECA) anticipates the African economy to continue its recovery from the COVID-19 pandemic in 2022 by achieving a growth rate of 3 percent, similar to that recorded in 2019. Africa’s recovery is reinforced by the increasing global demand for goods and the recovery of commodity prices, exceeding their pre-pandemic levels, which should stimulate exports from commodity-exporting African countries, economic experts from the UNECA said in a recent email interview with Xinhua.
The historic continental free trade pact that entered into force in 2019 started implementation in January 2021. It envisages creating a single continental market for goods and services, with free movement of people and investments, enhancing competitiveness and supporting economic transformation. The UNECA argued that although COVID-19 disrupted and to some extent delayed the realization of Africa’s vision of creating a single continental market for goods and services, with free movement of businesspersons and investments, and enhanced competitiveness of industry, it also gave Africa the opportunity to improve.
Amid the economic brunt caused by the disruptions as a result of the pandemic, the UNECA said African countries have shown various commitments as part of their mitigation plan, which includes developing and implementing AfCFTA National Implementation Strategies at the country level. They emphasized the crucial imperative of strengthening existing institutions and building new institutions where they do not exist at national, regional and continental levels both in the public and private sectors.
Ms. Jane Karonga, UN ECA Economic Affairs Officer and Project Lead for the AfCFTA-anchored Pharmaceutical Initiative, led a Fact-finding mission to Dakar, Senegal comprising of Dr. Chiluba Mwila, Technical Operations Manufacturing Consultant and Ms. Fiona Dereige, Senior Communications Specialist to meet with Sahel Gaz Limited from Monday 31st January, 2022 to Tuesday 1st February, 2022. The purpose of the mission was to enable the ECA Pharma Technical Team to familiarize themselves with Medical gas production capacity of Sahel Gaz Ltd., (a family owned and run Medical Grade Oxygen Manufacturer established in 1991 by the 95 year old patriarch, who although retired still comes into the business from time to time to check on everything) and facilitate the possibility of investment for scaling up production of oxygen on the African continent, critical in mitigating Covid-19 and other critical conditions.
All SACU member states simultaneously implemented the 2022 version of the Harmonised System (HS) Nomenclature on 1 January 2022, in the context of the SACU Common External Tariff (CET), which has replaced the HS 2017 version. This is the first time that SACU member states migrated the CET to a new version of the HS in a well-coordinated manner across the Customs Union, with the support of the SACU Secretariat. The migration was also made possible by the technical support from the World Customs Organisation (WCO) under a programme known as the HS-Africa Programme, funded by the European Union (EU). The HS 2022 version reflects the amendments to the HS Nomenclature as adopted by the WCO Council (on 28 June 2019 and 25 June 2020) and accepted by HS Contracting Parties in accordance with Article 16 of the International Convention on the Harmonised Commodity Description and Coding System (HS Convention) of the WCO. SACU member states, being contracting parties to this convention, are required to align their Customs and Statistical Nomenclatures with this latest version of the HS.
Elago explained that the changes were necessitated by, amongst others, public health and safety requirements, the inclusion of goods specifically controlled under various conventions, food security and environment protection, new products introduced as a result of progress in technology, deletion of certain products due to low volumes of trade, and clarification of the classification of certain products.
The SACU CET is a legal instrument that provides for various schedules of customs duties on imported goods, excise duties on certain goods produced in the Customs Union and similar imported goods, as well as rebates and refunds of such duties, and trade remedies. The nomenclature used in the CET for classification and application of the duties, rebates, refunds and trade remedies, is based on the HS. However, as some of the HS six-digit codes have been extended up to eight digits to cater for regional requirements, the CET comprises more than 8 000 specific commodity groups referred to as “tariff lines”. In addition, the nomenclature in the CET is used for the collection of international trade statistics.
As the 35th Ordinary Session of the African Union Assembly closes in Addis Ababa, the Ethiopian capital, the African Union Commission (AUC) will soon benefit from an $11.48 million grant from the African Development Bank Fund, AFDB, to strengthen its governance and provide it with institutional support. The approval for the grant, from the Fund’s regional public goods window, was announced by the African Development Bank, AFDB President Akinwumi Adesina when he met with the African Union Commission Deputy Chair Dr Monique Nsanzabaganwa, on the sidelines of the Assembly, to discuss the organization’s future and challenges.
Covid testing: Non-tariff barrier killing EAC trade (The Standard)
Multiple barriers continue to stand in the way of Kenya and Tanzania fully exploiting the potential for cross-border trade between the two countries. While relations have eased and trade picked up following a meeting between the countries’ presidents in 2020, businesses say the movement of goods and people remains restricted by what they term unnecessary requirements. The latest of these barriers that has significantly slowed clearance of cargo and people at the border posts is Covid-19 testing. “In view of the Covid-19 pandemic, the business community is facing challenges in relation to unharmonised Covid-19 testing charges, and the validity as well as mutual recognition of Covid-19 certificates,” said a brief on regional trade by the East African Business Council (EABC).
African leaders are meeting in Brussels on Thursday with European leaders for a two-day summit that will inevitably discuss growth and trade. However, signing the long-awaited economic partnership agreement with the East African Community (EAC) regional bloc remains off the agenda, according to the Tanzanian Ministry of Investment, Industry and Trade. Tanzania, one of the six members of the EAC, has long been the stumbling block of the trade agreement. Addressing rumours circulating on social media, a statement signed by trade ministry spokeswoman Suzan C. Mshakangoto, reads: “Tanzanian position has not changed, the information spreading does not come from any official source.” The European Council president, Charles Michel, the European Commission chief, Ursula von der Leyen, and other European leaders will be meeting African leaders, including Kenya’s President Uhuru Kenyatta, who has already indicated that the deal is ready for signature.
EPA trade negotiations set to resume, Samia confirms (The Citizen)
President Samia Suluhu Hassan said yesterday that Tanzania was ready to host an Economic Partnership Agreements (EPAs) negotiation meeting early next month. The EPAs are trade and development agreements negotiated between the EU and African, Caribbean and Pacific (ACP) partner countries in an effort to boost trade by removing barriers to promote healthy competition in the EU market and lower prices for consumers. EPA negotiations between the EU and East African Community (EAC) member states were finalised in 2014. However, actual signing and ratification of the trade arrangement stalled and in the process, Kenya, which is the biggest exporter to the European market, had to seek temporary access to the EU market under special arrangements. So far, Tanzania, Uganda and Burundi have neither signed nor ratified the agreement, citing various country-specific concerns. The pact requires all EAC countries to sign and ratify for it to take effect, but only Kenya has signed and ratified, while Rwanda had signed but not ratified.
But President Hassan said yesterday that the government had agreed to go back to the drawing board and discuss the sticking points.
Green investments, migration, security and unequal access to vaccines will top the agenda as dozens of African heads of state head to Brussels on Thursday for a two-day summit of European Union and African Union leaders. Around 70% of Europeans have received at least one dose of coronavirus vaccine; In Africa, just 16%. That inequity is among the issues high on the summit agenda. “Donating vaccines is one thing, but ensuring that people are vaccinated is another, and equity demands more than donations. It requires systemic change and access to doctors, to nurses, to hospitals, to medical equipment, to scientists, to technologies and to research. And last, but not least, it requires new manufacturing capabilities,” said Stella Kyriakides, the European commissioner for health and food safety earlier this month, following an EU health summit in Lyon, France.
The EU aims to boost investment in Africa. “The A.U.-E.U. summit is a key moment and opportunity to strengthen political and economic ties between the two continents. Leaders are expected to discuss how both continents can build greater prosperity. The aim is to launch an ambitious Africa-Europe Investment Package, taking into account global challenges such as climate change and the current health crisis,” the EU Commission said in a statement. As it transitions to a green economy, Europe is seeking to diversity supply chains, including those for the rare earth metals needed for battery technologies — Africa is rich in such raw materials. In December, the bloc unveiled a $300 billion “Global Gateway” fund to invest in jobs, green technologies and digital infrastructure.
Africa and Europe: A time for Action (Africa Renewal)
As African and European leaders gather for a crucial EU AU summit in Brussels, Africans are gripped by both a sense of hopeful anticipation – and a sense of fatigued apprehension. Hope because the summit is about Financing for Recovery, and adequate sustainable finance for recovery is exactly what is needed. Apprehension, because too many summits have happened with too little impact in the last few years, and too few leaders north or south of the Mediterranean have grasped the huge challenges – but also even larger opportunities – that lie before us now in this extraordinary historic moment. In a few decades Africa’s youth will be some six times as large as Europe’s. Our youthful creativity, dynamism and problem solving will be essential to a host of challenges Europe is facing today and will increasingly face in the future.
How do we partner to fight climate change and promote democracy? How do we partner to ensure health systems are delivering health security for all regions’ citizens? How might Africa’s dynamic diaspora help be a key part of powering Europe’s own dynamism? How do we rally common efforts to fight illicit financial flows? Europeans and Africans agree – globally we need an average 2-3% more of global GDP invested in sustainable infrastructure to avert a climate catastrophe and deliver a jobs-rich inclusive growth. For African countries the investment need is proportionally more because financing for our recoveries has so far been virtually non-existent, our youth have huge aspirations, and our starting point is from a far lower investment and per capita income point.
The pandemic is of course one of the reasons that so much time has passed since our last meeting. It further reinforces the exceptional dimension that both parties wish to give to this summit. The aim is nothing less than to jointly lay the foundations of a renewed partnership between our two continents, a fresh start that has been in the making for some time now. Growth, shared prosperity and stability are the main objectives of this partnership. Our summit will be based on two fundamental principles.
Respect and values. Our two continents and their peoples share geographic proximity, languages, and human and economic ties. The peace and security of our two continents are interdependent. That is why the first fundamental principle must be respect. The future requires us to accept and respect our differences. The second fundamental principle is the rights and values of dignity, freedom and solidarity, exercised within the framework of the rule of law and good governance. On this common ground, we can learn from each other every day. Finally, our project is based on common interests. At its heart is a prosperous, stable, secure and sustainable Africa which is fully capable of facing all the challenges of the future.
A partnership calls for exchange and sharing. Each of our two continents has enormous potential to contribute to this joint project. The EU will provide public and private investment capacity, as well as expertise with the green infrastructure and technologies that are vital to our common fight against climate change and to transforming African economies. Africa has vast natural resources, a young and dynamic population just waiting to step up, and an impressive capacity for innovation and invention. It also needs better access to resources, including through the reallocation of special drawing rights on a voluntary basis, in order to finance its massive economic and social development requirements. In the same vein, a debt relief initiative for poor countries should be put in place to support the resilience and recovery efforts of African countries.
40 African heads of state head to Brussels for EU Summit (The East African)
At least 40 heads of state and government are expected in the Belgian capital Brussels for a Summit with the European Union, officials said on Wednesday ahead of the crucial inter-bloc meeting. The attendance list on Wednesday indicates more African heads of state will gather in Europe for the meeting than the number that attended the AU General Assembly in Addis Ababa last week.
This will be a first EU-AU Summit in four years. The meeting signals changing tides in relations, and also comes at a time the world is recovering from the Covid-19 pandemic, with Africa still lagging on vaccination rates. Officials told journalists on Wednesday the meeting will touch on an investment package to address the urgent challenges of climate change and insufficient healthcare in Africa, as well as the unresolved issue of intellectual property rights for vaccine production in Africa. “Our investment in Africa responds to demands and needs of our African partners,” said an official during a background virtual briefing to journalists on Wednesday. “The EU is working on a comprehensive response, through the World Trade Organisation…but also the most important issue is the know-how of vaccine production,” he added.
As part of a wide-ranging package of financing, the officials said the EU is allocating up to $170 billion worth of funding for Africa to go into investments in transport, economic integration, green energy, healthcare and security programmes in the next two years. Activists called for “fairness” in negotiating financing deals, warning the African continent that Covid-19 has posed unprecedented challenges, with countries diverting reserves, delaying repayments or borrowing to respond to the pandemic.
President Dr. Akinwumi A. Adesina will attend the sixth European Union-African Union (EU-AU) summit in Brussels this week. He is expected to call for greater access to Covid-19 vaccines and the reallocation of $100 billion in International Monetary Fund Special Drawing Rights (SDRs) to Africa. The Bank Group chief will urge that these SDRs be channelled through the African Development Bank, as a prescribed holder of SDRs. Fresh from the recent 35th African Union summit in Addis Ababa, which passed a resolution supporting the African Development Bank’s position, Adesina will join African and European heads of state and government to discuss measures, including an investment package to address the urgent challenges of climate change and insufficient healthcare in Africa.
Addressing last week’s African Union Assembly, Dr Adesina decried Covid-19 vaccine inequality. He stressed that citizens of industrialized countries had secured as many as four or five Covid-19 shots, while no more than 11% of Africans had received any vaccination at all. Adesina described healthcare as “a national security issue” for Africa and called for a cross-continental healthcare defence system based on strong infrastructure, domestic pharmaceutical industries and Africa-based vaccine manufacturing know-how and capacity. The African Development Bank Group has committed to spend $3 billion over the next 10 years to support pharmaceutical and vaccine manufacturing capacity on the continent.
Adesina gained strong support among African leaders in Addis Ababa and renewed calls for the reallocation of $100 billion in SDRs to African countries via the African Development Bank, a prescribed holder of SDRs with a triple-A credit rating.
Launching an ambitious Africa-Europe investment package and strengthening health systems in Africa, will be among the key discussions that will top the agenda at the Africa Union - European Union Summit. President Cyril Ramaphosa said this when he held a question and answer session with journalists at the Imbizo Centre in Parliament on Wednesday.
“Now this one is an important one because it is with the whole European continent and we are going to be discussing some very important issues that have to do with economic growth on our continent, and how well the European Union could play a supporting role in fostering economic growth on the continent. “So that is top of the agenda and also looking at our infrastructure development, the extent to which the European Union (EU) supports the African continent in economic development and infrastructure roll-out,” he said.
UNCTAD’s Global Trade Update published on 17 February shows that in 2021, world trade in goods remained strong and trade in services finally returned to its pre-COVID-19 levels. “Overall, the value of global trade reached a record level of $28.5 trillion in 2021,” the report says. That’s an increase of 25% on 2020 and 13% higher compared to 2019, before the COVID-19 pandemic struck. While most global trade growth took hold during the first half of 2021, progress continued in the year’s second half. After a relatively slow third quarter, trade growth picked up again in the fourth quarter, when trade in goods increased by almost $200 billion, achieving a new record of $5.8 trillion. Meanwhile, trade in services rose by $50 billion to reach $1.6 trillion, just above pre-pandemic levels.
The coalition for a sustainable and inclusive recovery of the private sector, an international group of 20 development finance institutions that came together in 2020, today announced commitments of over $5.55 billion of financing to micro, small and medium enterprises (MSMEs) in Africa between mid-2020 and end of 2021, beating their set target of $4 billion over the period. The coalition said it had exceeded its initial target by 40 percent, while development finance institutions jointly committed over $5.55 billion of financing of micro, small and medium enterprises in Africa over the period.
In response to the unprecedented global health and economic crisis caused by Covid-19, the coalition recognised the critical role development finance institutions play in supporting the crisis response in vulnerable countries. While micro, small and medium enterprises are the economic lifeblood of emerging and frontier economies, they are also more vulnerable to crises than larger enterprises. In developing countries, formal small and medium enterprises contribute more than one third of gross domestic product and account for 52% of formal employment. Improved access to finance for micro, small and medium enterprises is critically important to boost growth and the prospects of the 450 million young Africans projected to join the labour market by 2050. The Covid-19 crisis put the viability of micro, small and medium enterprises under acute pressure and efforts to expand inclusive financial solutions are crucial for a successful recovery.
African Development Bank President Akinwumi Adesina said: “Micro, small, and medium-sized enterprises are vital to Africa’s prosperity, representing 90% of all businesses and generating more than half of all jobs. Many small entrepreneurs will tell you that limited access to finance is a major hurdle to growth. The $5.5 billion that we are committing together will go a long way in overcoming this hurdle. I am confident our initiative will make a major contribution to the success of micro, small, and medium-sized enterprises all over Africa. If they grow, we all do.”
The World Bank is ringing the alarm bells louder than ever about a debt crisis in the lowest-income nations threatening the economic recovery from the COVID-19 pandemic. “The evidence available so far suggests that the economic effects of the pandemic will be more persistent and severer for emerging economies,” according to the latest edition of the bank’s annual “World Development Report.”
While 40% of advanced economies have exceeded their 2019 economic output levels in 2021, only 21% of low-income nations achieved the same level of recovery. Within countries, vulnerable groups were disproportionately impacted by job losses and other forms of hardship during the pandemic, the report found. For example, women-owned businesses were relatively more likely to see income losses and struggled more to get public support, compared with those owned by men.
Given that the world still is facing the COVID-19 pandemic, the WCO has updated the COVID-19 HS classification reference lists for medical supplies, priority medicines, vaccines and related equipment to reflect the amendments to the HS 2022 edition.
The chair told the Negotiating Group on Rules that he had met with delegations and groups bilaterally and in different formats broadly representative of the whole membership. During the consultations, many delegations had pointed to issues in the negotiations that could benefit from further technical clarifications to pave the way for final decisions by ministers, the chair said. Several members also had noted that it was important that further work does not unravel the progress made in the negotiations.
The European Commission is today publishing a new study on global approaches to trade and sustainable development (TSD) as part of its work to strengthen environmental and sustainability aspects of EU trade policy. The independent study, carried out by the London School of Economics, covers the EU, Australia, Canada, Chile, Japan, New Zealand, Switzerland and the US. It reveals that TSD implementation and enforcement vary significantly, for example when it comes to dispute settlement and the use of trade remedies in case of breaches of TSD provisions. Despite such differences, cooperation remains the watchword for TSD implementation, even for countries that rely on trade sanctions for TSD enforcement. Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade, said: “We are always working on making trade policy better. This is why we are now reviewing whether we need to recalibrate our approach to sustainability in our trade and investment agreements. Today’s independent analysis, together with the contributions to our public consultation, gives us valuable input on what our stakeholders at home want, and what our partners around the world are actually doing on the ground. It shows that positive engagement can be most effective in bringing about positive and sustainable change. The study also demonstrates that TSD policy is dynamic and fast developing and should be tailored to specific contexts. We are now ready to take this forward to make trade policy better, stronger and more sustainable.”