tralac Daily News
The Department of Trade and Industry blamed capacity challenges at the World Trade Organisation and “imbalanced” international trade law enforcement for a range of consistent challenges South Africa continues to experience with major trade partners. The department briefed Parliament’s Portfolio Committee on Trade Industry and Economic Development on Tuesday morning, providing MPs with an update on the state of trade between South Africa and other regions of the world.
Front and centre are the challenges South Africa has experienced with the US, which imposed a 25% duty on steel imports and a 10% duty on aluminium imports from South Africa in 2018 as the world’s largest economy entered into a trade war with China. As South Africa continues coming to grips with the dumping of cheap imports such as poultry from other markets, government has also highlighted the importance of intra-Africa trade and support for local manufacturers.
Tips to get your poultry farming operation off the ground (Eyewitness News)
The poultry industry has been identified by the Agriculture, Land Reform and Rural Development as an industry with growth opportunities for new entrepreneurs and small-scale farmers. Poultry farming in South Africa is becoming increasingly popular, with many people flocking to start their own operations. However, most of them do not know how to get their business off the ground and ensure its sustainability. Vutivi News spoke with poultry farmer and poultry expert, Sifiso Tshonaphi, on the first steps one should take if they are interested in chicken farming.
“The first thing prospective farmers should do is do some research,” he explained. “If they have internet access, they can always read articles and watch YouTube videos that teach people how to raise chickens. “If they don’t have internet access, they can download a document called the Broiler Manual, which gives them step-by-step instructions on how to grow a chicken from day one to the slaughter,” he said.
More needs to be done to strengthen trade and investment between South Africa and Ireland, says the Deputy Minister of International Relations and Cooperation (DIRCO), Alvin Botes. Botes said this in his concluding remarks at the second South Africa-Ireland Joint Commission for Cooperation (JCC) in Pretoria on Tuesday. “The positive outcomes of the 2nd JCC meeting is evidence of our joint commitment to work as equal partners in enhancing our good relations and by further identifying and moving into new areas of opportunity, such as tourism, energy, sport, arts and culture, as well as working together to end gender-based violence in South Africa and elsewhere in the world. “Also, more work needs to be done in strengthening efforts for increased trade and investment,” he said.
Botswana, Zimbabwe finalise plans for one-stop border (Caj News Africa)
Neighbours Botswana and Zimbabwe have intensified efforts to establish a one-stop-border post (OSBP) between the two countries. Such a facility to be set up at the Plumtree/Ramokgwebana port of entry will bring a lot of benefits, including enhanced movement of people and goods between the two nations, tackle border jumping and human trafficking as well as boost tourism. Botswana and Zimbabwe seek to sign Memoranda of Understanding (MoUs) that will lead to agreements towards setting up of the OSBP. A similar project is underway on Beitbridge, in the Zimbabwean boundary with South Africa.
Why Kenya could do with a central bank digital currency (Business Daily)
Last week, the Central Bank of Kenya invited the public for comments on a very interesting subject; central bank digital currencies (CBDCs). The assessment will be on whether there’s a potential for their use in the country.
Central banks exploring CBDC issuance are citing various potential advantages such as lower costs of handling cash (especially cross-border), improving financial inclusion and stability among other reasons. aAround 100 countries are exploring CBDCs at one level or another. Some researching, some testing, and a few already distributing CBDC to the public. A key example is the Bahamas where the Sand Dollar—the local CBDC—has been in circulation for more than a year.The big question is; Is Kenya ready for such a digital evolution? Will the potential upside outweigh the risks?
Industries want import duty on raw materials scrapped (Business Daily)
Manufacturers are pushing for the removal of import duty on raw materials and a reduction in the number of levies in a bid to lower production costs and increase competitiveness of locally-made goods. The Kenya Association of Manufacturers (KAM) said the government should tax the final product and harmonise taxes to avoid double taxes by national and county governments. KAM said the proposal will lower production costs of local goods and improve their competitiveness in the global market, boosting job creation and contribution of the sector to the gross domestic product (GDP). Imported raw materials and semi-processed goods attract a duty of ten percent which KAM says has been a major contributor to the high prices of locally-made goods, making them less competitive in the global market.
“Kenya is increasingly subjecting many raw materials and intermediate goods to taxation thereby harming export competitiveness of our manufacturing firms,” KAM chief executive Officer Phyllis Wakiaga said while launching the second manifesto for the sector to guide debate on key issues facing manufacturers into the election.
60pc of Kenya’s exports used to buy China goods (Business Daily)
Kenya spent 60 percent of its export earnings on China-made goods, cementing Beijing’s dominant position in the country’s economy. Imports from China hit a new high of Sh441 billion in 2021, a 22 percent jump from the previous year, while Kenya’s total export earnings stood at Sh739 billion. This means that Kenya paid China Sh60 for every Sh100 it earned from selling items like flowers, tea and coffee in Europe to buy Chinese products such as electronics, textiles and household goods. Kenya spent an additional Sh107.5 billion in debt repayments to China in the period, effectively raising the total forex outflows to Beijing to 74 percent of total export earnings. These loans are, however, serviced from the official forex reserves held at the Central Bank of Kenya, while imports are financed from commercial dollar deposits. Cheaper imports from China have edged out local products and costlier imports from other countries in recent years, dimming the growth of Kenya’s industrial sector whose share of jobs in the economy has fallen.
Kenya sources a wide array of consumer and capital products from China while exporting just Sh15 billion worth of goods to the Asian economy. The trade deficit with China is the largest among Kenya’s major trading partners.
Kenya, Ethiopia in talks over electricity imports (The East African)
Kenya and Ethiopia have started talks on Nairobi’s plans to buy electricity from the $ 4.5 billion Grand Ethiopian Renaissance Dam (GERD) that began generating power on Sunday. This is according to Ethiopia’s ambassador to Kenya, Meles Alem.
The Nairobi meeting came a day after the Horn of Africa nation announced that its controversial dam on the Blue Nile river had begun generating electricity. Earlier this month, Kenya reached a new agreement with Ethiopia to import hydro-processed cheap power.
A statement from Ethiopia’s ministry of foreign affairs said the new deal made in Nairobi intends to “realise the aspirations of both countries’ respective people for regional economic integration and sustainable development”.
Afreximbank to advance Zanzibar’s development agenda (Afreximbank)
African Export-Import Bank (Afreximbank) and the Revolutionary Government of Zanzibar have agreed to collaborate to industrialize and diversify Zanzibar’s economy by pursuing a sustainable and inclusive economic growth underpinned by a robust blue economy with cross linkages to priority sectors, such as, agro-processing, fisheries and aquaculture, marine trade, marine tourism and energy The overarching objective being to assimilate the country’s manufactured value-added goods and services into regional and global value chains.
ITC shares Rwanda coffee (ITC)
A new ITC pilot uses blockchain technology and digitized traceability systems to support women coffee farmers in Rwanda.
Coffee is central to Rwanda. It is a key driver of economic growth, stability, and improved income for over 450,000 coffee farmers. As the country’s leading export crop, it has contributed an average of 24% to total agricultural exports over the last decade. Agriculture contributes 26% to GDP, with 79.5% of the population reliant on mostly subsistence agriculture.
Since the COVID-19 pandemic, a strong digital presence has, more than ever, become a key element for small businesses in the coffee sector to access new buyers and benefit from international markets. However, as consumers increasingly lose trust in food supply chains, buyers are also under pressure to increase traceability and provide full transparency to consumers on where their goods are sourced.
Traceability along the coffee value chain is indeed crucial for inclusiveness and the lives of coffee producers. Moreover, they encourage better risk management in terms of climate change, poverty, and environmental degradation.
How NACCIMA is strengthening public, private ties (The National Newspaper)
Nigeria now lays emphasis on private sector led development to drive government economic programs. The private sector in the country plays a huge role in helping to fight the problem of extreme poverty by taking responsibility for tasks performed by the state, thereby relieving the pressure on public expenditure and allowing the federal government to focus its resources on key social and physical infrastructure. However, the sector’s growth over the past 30 years has not been encouraging despite an increase in the number and brands of financial institutions because of various reasons.
The Deputy Minister of Finance, Mr John Ampontuah Kumah, has called for value addition of the country’s cocoa beans to fully benefit from the $130-billion global market. According to him, the current earnings on cocoa which was just around $2 billion was paltry and there was the need to focus on value addition to boost the economy.
The Chief Executive Officer (CEO) of the Ghana Investment Promotion Centre (GIPC), MrYofi Grant, said despite being one of the world’s largest cocoa producers in the world, Ghana did not earn much from cocoa due to the inability of the country to add value to cocoa.
Let’s drive AfCFTA with agriculture – FAO (Graphic Online)
The Food and Agriculture Organisation (FAO) representative to Ghana, Mr Ndiaga Gueye, has indicated that several opportunities abound in agriculture as a driver of the African Continental Free Trade Area (AfCFTA) for businesses in Ghana to take advantage of.
He noted that agriculture contributed slightly 30 per cent of the labour force in Ghana and through the AfCFTA, it could lead the growth and structural transformation of the economy. He, however, said in spite of the emerging opportunities of agriculture in the AfCFTA, there were still some gaps in the country’s preparedness to participate competitively and benefit from the increased envisaged trade prospects in the agreement.
The World Bank Group Board of Executive Directors endorsed a new Country Partnership Framework (CPF) for the period of 2022-2026 in support of stabilization and development in the Democratic Republic of Congo (DRC). This CPF will guide the Bank Group’s work for the next five years, supporting the DRC government’s strategic priorities and critical governance reforms. The new CPF places strong emphasis on human development, with a commitment to strengthening systems for improved access and quality of basic services, protecting DRC’s large rainforest—the second largest in the world, strengthening governance, and supporting ongoing stabilization efforts.
The government’s stabilization efforts are a key pillar of this CPF. Investments will aim to reduce fragility and conflict through improved connectivity and access to basic services such as water and electricity and scaling up targeted social protection mechanisms. Stabilization work will be undertaken with provincial authorities and focus on the most vulnerable, including refugees. The World Bank will also support the government’s efforts to establish a countrywide social safety net system that targets poor, vulnerable, and conflict-affected people. The new approach will bring investments of close to $1 billion in social protection activities, benefiting about 1.2 million people.
Liberia: Global Development Initiative Injects New Impetus into China-Africa Joint Development (Liberian Daily Observer)
Today, with major changes and a global pandemic unseen in a century, the United Nations 2030 Agenda for Sustainable Development is facing a serious impact. In order to meet the challenges of global development, President Xi Jinping solemnly proposed the “Global Development Initiative” (GDI) when attending the General Debate of the 76th United Nations General Assembly in September 2021, calling on the international community to form a joint force to accelerate the implementation of the 2030 Agenda for Sustainable Development, and to achieve a stronger, greener and healthier global development.
At the recently concluded 8th Ministerial Conference of the FOCAC, President Xi Jinping put forward a four-point proposal for building a China-Africa community with a shared future in the new era, and announced the implementation of the “Nine Programs”. It not only focuses on the practical needs of African countries’ development, but also echoes the eight cooperation areas that are being promoted by the GDI, which fully demonstrates China’s sincere desire to support Africa’s development and revitalization.
Liberia is a participant and contributor to such cooperation mechanisms as the FOCAC and the “Belt and Road” Initiative (BRI), and participated in the launching meeting of the Group of Friends of the GDI. In recent years, under the strategic guidance of the two heads of state, China and Liberia have achieved fruitful results in pragmatic cooperation in infrastructure
“We see PAPSS as both an enabler and facilitator of intra-African trade,” says MFS Africa’s founder and chief executive Dare Okoudjou. “Its ability to allow both the buyer and seller of the trade transaction to pay and receive in their national currencies is a game-changer.” Africa’s payments architecture is highly fragmented, with dispersed systems, regulations and infrastructure. That makes it harder to send and receive digital payments. PAPSS, backed by Afreximbank and the African Union, aims to harmonize inter-Africa payments and lower the cost of transactions, with a potential saving for Africa of $5bn per year.
Deal to boost aviation safety, efficiency in African skies (Business Daily)
The African Airlines Association (AFRAA) and the African Civil Aviation Commission (AFCAC) have joined hands to boost aviation safety and efficiency on the continent. The MoU, between the two entities was signed by AFRAA’s Secretary General Abdérahmane Berthé, and AFCAC’s acting Secretary-General Angeline Simana. It will ensure the two associations reinforce the collaboration by aligning their actions and working jointly on various areas including aviation safety, air transport liberalisation such as the adoption and implementation of the Single African Air Transport Market (SAATM), and improving efficiency of air navigation systems through adoption of latest technology.
Under the partnership, AFRAA and AFCAC will also work together on developing human capital, building infrastructure and regional integration, research, exchange of statistical data, information and best practices.
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%, while development finance institutions jointly committed over $5,55-billion of financing of micro, small and medium enterprises in Africa over the period.
Sub-Saharan Africa ICT regulatory landscape evolves (Engineering News)
Sub-Saharan Africa’s information and communication technology (ICT) sector’s regulatory landscape is constantly in a flux as regulations are re-examined to address ever-emerging new technological and economic realities. The IDC Market Perspective report, analysing the current ICT regulatory landscape across the region and the ongoing developments that influence digital regulations and emerging technologies, reveals a shift away from “rigid and overly complex” policies that limits ICT growth toward more collaborative approaches that attract more players into the market.
Data from the Kenya Ports Authority (KPA) shows the Mombasa port’s overall throughput was 34.44 million tonnes in 2019 compared to 30.92 million the previous year.
Declining shipping costs between China and the Kenyan port of Mombasa is set to benefit east African consumers, the Kenyan industry said on Tuesday.
“We expect the cost of shipping between China and Mombasa to come down by as much as 35 percent from March as there is now much more available shipping capacity,” Gilbert Langat, CEO of the Shippers Council of Eastern Africa, said on the sidelines of the launch of Manufacturing Manifesto 2022-2027 by the Kenya Association of Manufacturers.
Relations between Africa and Europe were severely tested in recent times owing to ongoing instability in parts of Africa and the growing threat of a Russia-Ukraine war, which has occupied EU leaders in recent weeks. Covid-19 has also continued to wreak havoc on diplomatic relations, after the identification of the Omicron variant in South Africa. This led a number of countries, including those in the EU, to close their borders to travel from parts of Africa. The move was considered premature and discriminatory by African governments and scientists, because the variant was subsequently also identified in other parts of the world.
Ironically, China has maintained a strict lockdown since the start of the pandemic in early 2020 and, although travel to and from the country is severely restricted, it doesn’t discriminate against African countries. There is also the refusal of the EU to budge on an intellectual property rights waiver – known in full as the The Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS – that would enable African countries to manufacture their own vaccines.
Money – investments, aid and trade – will possibly speak more loudly. The EU’s recent pledge of €150-billion in investments and loans to the continent at first glance seems to dwarf that of China, which has scaled down its investment pledges to the continent to $40-billion, from $60-billion at the 2018 Focac meeting. It is important, because one of the first questions African journalists ask at summits of this nature usually revolves around money. On the ground it is a different issue, as Chinese infrastructure development has taken place at such a speed that it now dominates the African continent.
What could a non-China centric US-Africa policy look like (African Arguments)
If speeches by senior politicians are a reliable indicator, then the US’ approach to Africa has undergone a significant shift since Joe Biden took office in January 2021. In his message to the African Union Summit last year, for instance, President Biden committed to working with the AU on a wide range of issues from pandemic recovery and security to climate change and human rights “as a partner, in solidarity, support, and mutual respect”. In Nigeria last November, Secretary of State Antony Blinken insisted that the US wants to give African countries more choices and said explicitly that its “Africa policy is about Africa, not about China”.
If this reflects a genuine change, it would be a significant development that merits a closer examination. It would certainly stand in stark contrast to when former National Security Advisor John Bolton presented “A New Africa Strategy” in 2019. In that speech, he mentioned China over twenty times and declared that “China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands”. It would also mark a shift from when then Secretary of State Hilary Clinton gave a speech in Lusaka in 2011 in which she presented the US as an alternative to China’s “new colonialism”.
The steady economic growth West Africa has experienced over the last decade is slowly subsiding. In particular, low commodity prices and China’s economic slowdown have stunted growth in oil-rich countries. To overcome these challenges and sustain high growth rates, West African countries need to think innovatively and creatively about how to harness the potential of existing untapped and underutilized resources. A sector of tremendous promise is natural gas.
Nigeria is the eighth-largest natural gas reserve holder in the world and the largest in Africa. The country has proven reserves of 180 trillion cubic feet (Tcf) that are projected to supply gas for 100 years. In addition, Ghana has proven reserves of 800 billion cubic feet (Bcf), and Côte d’Ivoire has proven reserves of 1 Tcf. Unlike oil, gas reserves are largely unexplored, leaving a strong possibility of significant discoveries in member countries of the Economic Community of West African States (ECOWAS). In Nigeria, experts estimate that unexplored reserves could amount to 600 Tcf.
If harnessed, West Africa’s extensive gas reserves could help meet the region’s existing and future energy demands. An indicator projecting the increase in energy demand is the population growth rate. Sub-Saharan Africa is expected to see a population increase of 1 billion by 2050; but the region produces the same amount of energy as Belgium for approximately 960 million more people. These numbers suggest that energy demand will increase significantly as populations expand and move higher in the economic ladder. Some experts posit that electricity demand could increase as much as fourteen fold by 2050.
Vaccine patent standoff mars EU-Africa summit (Science Business)
The dispute over COVID-19 vaccine patents continues to overshadow the EU’s efforts to broker closer research links with Africa, with campaigners for health equity arguing Brussels is stymying Africa’s attempt to build its own independent manufacturing capacity. At the EU-Africa summit in Brussels last week, South African president Cyril Ramaphosa demanded that the EU stop blocking a proposed waiver on vaccine patents, so that African researchers will have the legal certainty to develop home-grown versions of COVID-19 vaccines.
In response, Commission president Ursula von der Leyen said she supported African “strategic sovereignty” for vaccines, and reaffirmed €40 million of support for the World Health Organisation (WHO) backed technology transfer hub in Cape Town run by Afrigen Biologics and Vaccines.
Airlines see revival signs as Covid restrictions ease (Business Daily)
Airlines are staring at good times ahead as more countries are now relaxing the Covid-19 containment measures that nearly crippled the aviation sector in the last two years. A number of countries including the major economies such as the US and UK are relaxing their restriction measures, coming as a major boost to the aviation industry that is now recording an increase in the number of bookings. The sector through their lobby-International Air Travel Association (IATA) has been calling on governments to ease the restriction measure to allow for recovery of the industry.
Five years since the Trade Facilitation Agreement (TFA) entered into force on 22 February 2017, global trade flows are well positioned for a COVID-19 recovery on the back of WTO members’ steady progress in implementing the landmark Agreement. Director-General Ngozi Okonjo-Iweala said the TFA has helped support global supply chain resilience and called for further work to help economies withstand future challenges.
Global Trade Outlook 2022. High global trade volume growth in 2021 and significant moderation in 2022. Supply chains disruption is likely to continue in the first half of 2022 (Hellenic Shipping News)
2021 was the second year of the ongoing COVID-19 pandemic, marked by rapid recovery from the dramatic 2020 resulting from the initial outbreak in Q1 2020. Q2 of 2020 proved to be the worst quarter for global trade on record, but the situation started to improve relatively fast. Global trade is already at levels seen before the pandemic, but the growth rates peaked in Q2 2021 and then moderated. The recovery brought nonetheless several problems which proved to be persistent and will still affect global economic activity, at least in H1 2022.
IHS Markit GTAS Forecasting team now estimates the contraction of global merchandise trade in 2020 to USD 17,921 billion or -5.5% year-on-year. In terms of volumes, GTAS Forecasting estimates a contraction of global trade in 2020 to 13.94 billion metric tons or by -4.2% year-on-year.
In comparison, the WTO estimated the fall in volume to be -5.3%, IMF estimated it to be -8.3% (for the volume of trade in goods and services), and WTO (June 2021 Outlook) at -8.3% for the volume of trade in goods and nonfactor services.
Global shipping crisis: no quick fix (Global Trade Magazine)
While recent data from the Federal Reserve Economic Data (FRED) and Descartes Datamyne point to a slight softening of economic indicators (although not enough to suggest a change in the levels of disruption), U.S. import volumes continued to break records in January and amplify supply chain and logistics challenges. The big picture reveals ports are still struggling to handle the increased import volumes, as the pandemic continues to limit consumers’ service-based expenditures in favor of durable and non-durable goods purchases. Factors such as lengthy port wait times, labor and container shortages, the backlog of containers waiting to be emptied or transported, and the uncertainty of the impending International Longshore and Warehouse Union (ILWU) contract negotiations continue to disrupt the supply chain. With no clear indicator of when the pressure on supply chains and logistics operations will begin to lift, importers and logistics service providers (LSPs) must hold the line as they contend with ongoing supply chain challenges.
Democratising trade finance access to drive sustainable development (Global Trade Review)
Global trade is about more than moving goods; it can serve as a conduit through which the ambitious agenda of the United Nations Sustainable Development Goals (SDGs) can be achieved. From climate action to poverty reduction, reduced inequalities and economic growth, trade can be leveraged to transform lives and uplift entire communities – as long as everyone can participate.
The pandemic-related disruptions of the last two years brought the interconnected nature of supply chains around the world into sharp focus – for all the wrong reasons. But, as numerous participants in global trade are fast realising, this very same interconnectedness can serve as a means to achieve broader economic and sustainability objectives.
”Trade accounts for approximately 52% of world GDP, which gives it an outsized influence,” says Natasha Condon, global head of core trade at J.P. Morgan. “If we can solve for an issue in trade, the multiplier effects across the global economy are enormous.”
Global trade in liquefied natural gas rose 6 per cent to 380 million tonnes in 2021 on the back of higher demand as economies recovered from the coronavirus-induced slowdown and countries focused on cutting emissions. China, the world’s second-largest economy, and South Korea led the growth in LNG demand in 2021. China surpassed Japan to become the world’s largest importer amid a strong rebound from the pandemic, with its imports growing by 12 million tonnes to 79 million tonnes, according to Shell’s latest annual LNG Outlook report. “Last year showed just how crucial gas and LNG are in providing communities around the world with the energy they need as they strive to get back on track following the difficulties caused by the Covid-19 pandemic,” said Wael Sawan, director of integrated gas, renewables and energy solutions at Shell. “As countries develop lower-carbon energy systems and pursue net-zero emissions goals, focusing on cleaner forms of gas and decarbonisation measures will help LNG to remain a reliable and flexible energy source for decades to come.”