tralac Daily News
President Cyril Ramaphosa has encouraged South Africans - whether individuals or businesses - to always choose to buy local to support livelihoods, small business development and job creation. The President said that by buying locally-produced goods, people will be supporting investment in research, new technology and innovation. “As long as we are producing quality local goods, we should also be buying them,” he said.
The President said a growing local market enables producers to expand and to start exploring export opportunities in other markets.
President Ramaphosa said the pandemic has both exposed the fragility of global supply chains and revealed the great capacity in South Africa for innovation and adaptation in manufacturing. In the space of just two years, through collaboration and out of necessity, South Africa managed to build local production capability in ventilators, hand sanitisers, medical-grade face masks and gloves, vaccines, and therapeutic drugs and anaesthetics. “Not only did we produce these goods to meet local needs, but also to meet the needs of other countries on the continent. Local production is important because it encourages national pride in the goods, services and products made on our home soil,” he said. The President added that he supports the growth of small businesses and the expansion of larger firms. Local production also supports the manufacturing sector.
Government plans a major expansion of the road corridor connecting Johannesburg and Durban as part of a push to turn South Africa into one of the continent’s major trade hubs. The proposal is included in the government’s national infrastructure plan 2050 which was published by public works and Infrastructure minister Patricia De Lille on Friday (11 March). The project – which has been dubbed the ‘Durban-Free State-Gauteng logistics and industrial corridor’ – will see several developments aimed at strengthening logistics and transport corridors between the main industrial hubs. These planned projects include: Improving access to Durban’s export and import facilities, Integrating the Free State industrial strategy activities into the corridor, Establishing Durban as a hub port Building an aerotropolis around OR Tambo Airport. A separate Saldanha-Northern Cape development corridor is also expected to bolster the country’s integrated rail and port expansion and back-of-port industrial capacity.
The agricultural sector has the potential to be a key driver on South Africa’s road to economic reconstruction and recovery. This is according to President Cyril Ramaphosa who was addressing the Annual General Meeting of the Bonsmara Breeders’ Society. During the last quarter of 2021, the agriculture sector – boosted by increased production of field crops, horticulture and animal products – recorded the strongest growth, surging from at least R114 billion in 2021’s third quarter to some R127 billion in the fourth. “As we saw during the COVID-19 pandemic, agriculture is a resilient sector that was able to sustain food security during times of great uncertainty. “An important contribution to the fight against hunger was the special social relief of distress grants for unemployed people, and the input vouchers provided to small-scale farmers as part of the Presidential Employment Stimulus,” the President said.
Mineral Resources and Energy Minister Gwede Mantashe on Tuesday said South Africa would need to explore and find its own oil reserves if it wanted to mitigate against rising fuel costs. The minister also said the country needed to grow its fuel refinery capacity as the world struggled with rising prices. MPs also asked the department and Mantashe how government can limit its exposure to rising fuel costs.
“And there’s a question that was asked, how do we limit vulnerability? There are two things that I think we should investigate: one is exploration and that’s going to discover our own oil and gas.”
The Gulf state is keen on enhancing its bilateral trade-ties with the South African country officials stated. Qatar and South Africa’s bilateral trade has documented a 37% increase between 2020 and 2021, an increases officials attribute to the strong economic relations between both nations.
Qatar Chamber’s First Vice-Chairman Mohamed bin Towar Al Kuwari revealed that the trade numbers have jumped from 786 million QAR in 2020 to 1.2 billion QAR in 2021, highlighting the significant momentum relations gained in recent years. The hopeful numbers were announced during the ’Qatar-South Africa Business Forum’ held online Monday to strengthen trade ties of both countries.
‘Mineral leakages bleeding Zimbabwe economy’ (The Zimbabwe Mail)
SOCIO-ECONOMIC watchdog, Zimbabwe Coalition on Debt and Development (Zimcodd) has called on government to curb mineral leakages and export of raw minerals to help revive the economy. In its recent statement on mineral leakages, Zimcodd said approximately US$12 billion in potential foreign earnings was lost through export of raw minerals. “Evidence suggests that Zimbabwe continues to bleed in mineral revenue while citizens are disenfranchised, exposed to violence and health risks, and are deprived of economic gains,” read the Zimcodd statement. “In order to curb further bleeding, there is need to strengthen the country’s export earning capacity and promote socio-economic development. “The government must implement the local content strategy for broad-based socio-economic growth at national and sub-national levels. The government should put forward policies that encourage or force businesses to add value and beneficiate minerals to increase export earnings as well as employment of local people.”
Namibia export earnings drop by 24% (New Era)
For the month of January 2022, Namibia’s export earnings stood at N$7.6 billion, representing a decrease of 24% monthly, while the imports bill amounted to N$11.7 billion, down by 6% on a monthly basis. According to the Namibia Trade Statistics bulletin for January 2022 recently released by Namibia Statistics Agency, these trade figures resulted in a trade deficit of N$4.1 billion, compared to N$2.5 billion recorded in December 2021.The value of exports in January 2022 decreased by 24% to N$7.6 billion from its December 2021 level of N$10 billion. On the other hand, when compared to its level of N$6.2 billion recorded in January 2021, exports increased by 22%. Imports stood at N$11.7 billion, reflecting a decrease of 6% month-on-month and an increase of 24.9% on a yearly basis. Following these developments in both directions, NSA stated that Namibia’s total merchandise trade (exports plus imports) with the rest of the world decreased by 14% from its December 2021 level of N$22.5 billion to N$19.3 billion recorded in January 2022. On the contrary, total trade value increased by 23.8% when compared to N$16.8 billion recorded in January 2021.
PRESIDENT Emmerson Mnangagwa on Monday took his ‘Zimbabwe is Open For Business’ mantra to Dubai where he told delegates the country has a zero tolerance to corruption. He was speaking at this year’s World Expo on Zimbabwe national day.
“Zimbabwe’s skills and human capital base, central and strategic location in Southern Africa coupled with political stability, peace and security constitute some of the major attributes that make our country an attractive investment destination for global capital,” Mnangagwa said. “Over and above this we are unwavering in entrenching the values of hard and honest work, transparency, accountability and zero tolerance to corruption.” “Zimbabwe looks forward to drawing from the world renowned UAE and other countries’ ICTs to modernise and leapfrog our industrialisation.”
Current account gap at three-year high on rising oil prices (Business Daily)
Kenya’s current account deficit in the year through January widened to a three-year high on rising petroleum products costs which pushed up import bill at a faster rate than earnings from agricultural exports and diaspora remittances. Data released by the Central Bank of Kenya Friday estimated the gap between the country’s foreign exchange outflows and inflows at 5.6 percent of gross domestic product (GDP) from 4.3 percent a year earlier. That was the highest since 5.8 percent in 2019. The deficit in January means the mismatch between the amounts Kenya spent on foreign payments for imports such as oil and industrial supplies, dividends, interest as well as services outstripped that which it received from abroad by an equivalent of 5.6 percent of the economic output. “The wider deficit reflects a higher import bill, particularly oil, which more than offset increased receipts from agricultural and services exports and remittances,” CBK wrote in its weekly bulletin.
KRA unlocks Sh10bn through out of court dispute resolutions (Business Daily)
The Kenya Revenue Authority (KRA) resolved 319 cases referred to arbitration in the first half of the current financial year ending June, as the taxman opts for out-of-court settlements. The taxman said this represents 57 percent of the cases referred to arbitration in the first half of the current financial year ending compared with 49.29 percent in the previous period.
Paul Matuku, the Commissioner for Legal Services at KRA, said 319 out 559 cases that went through the Times Tower-led Alternative Tax Dispute Resolution (ADR) process were resolved compared with 243 out of 493 cases settled last year.
“The growth in the number of applications to ADR confirms the growth in the number of taxpayers who are increasingly embracing ADR in preference to other dispute resolution mechanisms such as litigation processes,” Mr Matuku said in a statement.
Kenya readies expanded Mombasa port for operations (The East African)
Kenya Ports Authority is preparing to handle more cargo at the Mombasa port after the completion of a second container terminal (CT2) that can accommodate at least 450 twenty-foot-containers at a time. The CT2, which is part of the Mombasa port development programme, is designed to accommodate larger vessels. According to KPA, the terminal will give the port a competitive edge over neighbouring ports, mainly in Dar es Salaam and Djibouti.
By 2023, the port of Mombasa is expected to handle about 1.732 million twenty foot equivalent units up from the current 1.42 million. It is estimated the port will handle 47 million tonnes of cargo in the next 10 years from the current 30 million tonnes and up to 111 million tonnes by 2047.
The developments at the Kenya’s main seaport comes amid a shift in the global shipping industry, which is moving towards the use of large vessels for economies of scale. Mombasa port remains a key facility for the country’s international trade, and serves landlocked Uganda, South Sudan, Eastern DRC, Burundi and Rwanda. To effectively complete with other neighbouring ports, KPA has developed other peripheral infrastructures along the Northern Corridor, including the Inland Container Deport in Nairobi and the Naivasha dry port, which are key for cargo destined for both Kenya and neighbouring states via the standard gauge railway.
Tanzania, Kenya resolve 10 more trade hindrances (The Citizen)
Tanzania and Kenya have resolved ten more trade barriers in effort to grow the trade between the two member states of the East African Community (EAC).
President Samia Suluhu Hassan visited Kenya last May and met her counterpart Uhuru Kenyatta to mend the then deteriorating bilateral ties. The two leaders ordered ministers and other officials to meet and discuss the issues. Through the follow-up meetings, some 56 issues were reported to have been resolved in 2021, prompting the growth of trade between the two countries by 38 percent to $765 million in the same year, according to a communique of the latest meeting.
Minister of Trade and Industry Neveen Gamea asserted the ministry’s keenness on coordinating with all governmental bodies concerned and the private sector to outline an integrated vision to increase the Egyptian exports to global markets to reach the target of dlrs 100 billion annually.
The minister’s remarks were made during her participation in a symposium under the title of “Industry and Exports...Duality of Growth and Development” organized by the Lebanese-Egyptian Businessmen Association (LEBA) chaired by Fathallah Fawzi.
Gamea said the recent measures adopted by the government achieved a positive outcome on the growth of Egypt’s non-petroleum exports which exceeded dlrs 32 billion in 2021 for the first time compared with dlrs 25.4 billion in 2020, recording a rise of 27 percent.
New US Investments Unlock Trade Potential for Businesses in Ghana (African Business)
U.S. Ambassador Stephanie S. Sullivan today announced new co-investments by the U.S. Agency for International Development (USAID) totaling $4.2 million with five companies operating in Ghana. These projects, leveraged with private sector funds, will help these companies scale up operations, develop export opportunities, and create jobs. Ambassador Sullivan made the announcement during the U.S. Embassy’s Providing Opportunity for Women’s Economic Rise (POWER) program for women entrepreneurs from Ghana and the North American diaspora.
“The West Africa Trade and Investment Hub was created to help entrepreneurs like those participating in the Women’s Empowerment Lab take advantage of export opportunities. Ghanaian companies can export more than 6,500 goods duty-free to the United States today, and the AfCFTA opens up a $3.4 trillion market. These co-investments will help these companies access African and U.S. markets, while creating jobs here in Ghana,” said Ambassador Sullivan.
During a recent tour of the continent, a team from Prosper Africa – a US government initiative which focuses on increasing trade and investments between African nations and the United States – visited Nigeria in search of investment opportunities. In an interview during the visit, LESLIE MARBURY who serves as the Acting Chief Operating Officer, spoke of incredible opportunities, particularly in Nigeria’s digital as well as the creative space, which the US is keen to explore. She spoke to ONYINYE NWACHUKWU, BusinessDay’s Abuja Bureau Chief. Excerpts:
Since 2019, the US government has helped to close 800 Prosper Africa deals across 45 different African countries for an estimated value of $50 billion. And we look forward to building on this momentum.
We are reaching out to entrepreneurs, investors and business leaders to raise awareness about market opportunities, and about the US government tools we have available to help advance these opportunities
We are just really pleased to see all of the advancements made in implementing the AfCFTA. And we want it to be a success, we know that when it’s fully implemented, will be the size of the fifth largest economy in the world. And we know it’s not only the US interest, but also the world’s interest that African nations realize this potential. The Biden/Harris administration is ready to help harness these economic gains, and we are committed to providing technical assistance to support cross border trade and investment, whether at the country level, at the regional economic blocs or to the AfCFTA Secretariat.
Ghana, Barbados leverage ties for economic benefits (Business Ghana)
Ghana, the host country to the African Continental Free Trade Area (AfCFTA) and Barbados, the single market to the Caribbean, have initiated steps to leverage on their age long ties to increase trade and investment in their respect countries. The move is aimed at harnessing the opportunities and commercial advantages in each country for mutual economic gains. To this end, the Ghana Investment Promotion Centre (GIPC) on Monday, March 7, hosted the Barbados Prime Minister and her entourage in Accra to a business forum. Dubbed, “Ghana-Barbados Roundtable,” the forum, presented the entourage, the opportunity to interact with some private sector players on ways it could help the Island community tap into the trade and investment opportunities in Ghana. Areas that both countries are seeking to explore include agriculture, tourism, music, finance, health biotechnology, renewable energy, sports, Information and Communication Technology (ICT), and digital technology, life sciences, aviation, and logistics.
The Chief Executive Officer (CEO) of Private Sector Foundation (PSFU), Mr Stephen Asiimwe, has encouraged businesses seeking to export goods and services under the Africa Continental Free Trade Area (AfCFTA) arrangement to embrace technology for high-quality products. “Remember we are competing with 53 other countries under one single market,” Mr Asiimwe said, adding; “technology enhances efficiency and allows you to deliver goods of high standards and on time.”
Africa accounts for just 2.9 per cent of global trade and only about 17 per cent of African exports are intra-continental, compared with 58 per cent for Asia and 65 per cent for Europe. However, limited knowledge and understanding of the free trade area remain a huge challenge to the successful uptake of trade opportunities within the newly created African market.
ECA, ITFC, IEF helping eight countries operationalise AfCFTA (Engineering News)
Multilateral partnership the Enhanced Integrated Framework (EIF), the United Nations Economic Commission for Africa (ECA) and the International Islamic Trade Finance Corporation (ITFC) have partnered on a project to help eight African countries operationalise the African Continental Free Trade Area (AfCFTA) by supporting the implementation of more than 30 activities in the AfCFTA strategies of Burkina Faso, Côte d’Ivoire, Guinea, Mauritania, Niger, Senegal, Togo and Tunisia. By assisting the implementation of priority actions formulated by the ECA, the project will help to create an environment where trade can be more efficient and inclusive in the eight beneficiary countries. By the end of the project, their capacity will have been enhanced towards tangible outcomes, such as the creation of jobs and other economic opportunities. “The ECA values the substantive work and productive collaboration undertaken since August 2021 with ITCF and EIF to support the operationalisation of the AfCFTA. This joint project can potentially push regional trade levels up from 18% to 25% within a decade,” says UN under secretary-general and ECA executive secretary Vera Songwe.
AfDB cushions indebted poor states (The East African)
The African Development Bank (AfDB) has approved a new borrowing policy to help the poorest African states survive a debt burden and vulnerabilities linked to economic shocks. The Sustainable Borrowing Policy will replace the previous Non-Concessional Debt Accumulation (NCDA) policy, with emphasis on transparency in debt management and coordination and partnership with other multilateral banks. In a statement Thursday, the AfDB said the policy targets recipients of the African Development Fund – the bank’s concessional window, which brings together 37 of the 54 regional member countries of AfDB. The new policy is meant to “address cross-subsidisation of concessional financing with non-concessional financing as well as debt limit policies.”
African airlines ready to weather storms of post-Covid prospects (The East African)
African airlines are dusting off plans for operations in a post-pandemic market even as the continent faces mixed prospects in global air traffic recovery. IATA, the International Air Transport Association, predicts a firm path to resumption of global air travel, with passenger numbers expected to surpass the 2019 peak in 2024. The bullish outlook is informed by the easing of travel restrictions in key markets as Covid-19 vaccinations reach optimal levels and infection rates recede. Across the globe, airlines posted strong performance in January 2022, with Europe leading the pack and Africa also looking up. Improvements in the major North Atlantic and intra-European markets, are the backbone for recovery with Asia-Pacific’s recovery expected to continue to lag because China, the region’s largest market, continues to cling to restrictive border controls. Meanwhile, a sudden spike in fuel prices means airlines will lose more than the $11 billion that IATA had predicted for 2022.
On the upside, many governments are removing or relaxing their Covid-19 travel protocols as a growing body of evidence suggests that airline passenger do not pose a greater than average risk of transmitting the disease. For instance, Singapore has introduced vaccinated lanes at its airports allowing vaccinated travellers to transit faster. “The past few weeks have seen a dramatic shift by many governments around the world to ease or remove Covid-19-related travel restrictions and requirements as the disease enters its endemic phase. It is vital that this process continue and even accelerate, to more quickly restore damaged global supply chains and enable people to resume their lives,” says Walsh.
A $1 billion plan to boost wheat production in Africa should be accelerated to avert potential food shortages arising from Russia’s invasion of Ukraine, according to the head of the continent’s biggest multilateral lender .The African Development Bank is raising the funds to help 40 million African farmers utilize climate-resilient technologies and increase their output of heat-tolerant wheat varieties and other crops, Akinwumi Adesina, the lender’s president, said in an interview.
This is the majority position of the regional private sector consultative meeting held mid last week on Nairobi, bringing together manufacturers’ confederations from the EAC region. The current maximum CET is 25 per cent in which case the proposed 35 percent maximum CET rate seeks to reinforce protectionism in the EAC zone against current efforts to widen the free trade zone to beyond the EAC zone, in the African Continental Free Trade Area (AfCFTA). The proposals of leading industrialists are designed to “provide an adequate tariff degree of difference required to incentivize industrial development in the EAC region, by safeguarding products that are sufficiently produced in the region against similar cheap imports,” they said, in a spirit that it basically contrary to AfCFTA intentions.
The proposed 10 percent tariff difference implies maintaining EAC as a cohesive zone, instead of implicitly expanding to create a continental free trade zone, with relative ease of trading within the EAC zone less by tariff walls as proposed but market presence and supply channels.
The latest analysis on the proposed rates of the CET by the EAC Secretariat shows that under a maximum CET rate of 35 per cent, “the partner states stand to benefit most through increased revenue generation by 5.5 per cent and a boost to intra EAC trade of $18.9m,” it said, implying that trade with the outside world would actually decrease and there is no difference in that regard between cheap products from abroad and from nearby African countries..
With a 10 per cent tariff wall added to the current 25 per cent taxation of goods from outside the EAC, industrialists say employment generation would create infinitesimally by 0.03 per cent (6,781 persons) if the maximum rate of 35 per cent is adopted, while not exploring its impact on purchasing power or input to inflation in the zone.
ECOWAS single visa to boost Ghana’s economy – France Ambassador (Ghanaian Times)
A single visa for the Economic Community of West Africa States (ECOWAS) could increase tourist visits to Ghana and spur economic growth, Ms Anne Sophie- Ave, the Ambassador of France to Ghana has said. Currently, tourists coming to Ghana needed to get a Ghanaian visa before they enter Ghana, but Ms Ave said a unique ECOWAS visa would be a game changer. The Ambassador of France was speaking in an interview with the Ghanaian Times on lessons Ghana could learn from France, to develop its tourism sector and tackle climate change. Ms Ave said a tourist with the ECOWAS visa, especially citizens outside the West African sub-region, could travel to Nigeria, Burkina Faso, Togo, Liberia and other ECOWAS countries without stress. According to her, France, the world’s leader in tourism was able to achieve that feat partly because of the schengen visa which enables visitors to enter all the 26 Schengen countries.
IMF urges African countries to rev up fiscal policy reforms (BusinessLIVE)
The IMF has called on SA and the rest of the continent to prioritise public spending, strengthen social protection programmes, mobilise tax revenue and tackle debt vulnerabilities. It said this is so these economies can enhance their resilience in the aftermath of the Covid-19 pandemic, as well as tackle policy constraints they are likely to face in the coming years.
Corporate Council on Africa (CCA) will organize the next edition of the U.S -Africa Business Summit on July 19 – 22, 2022 in Marrakech, Morocco. The Summit will build on the momentum of last year’s virtual Summit, which focused on the unique opportunity for the new U.S. Administration and its African partners to reset and redefine their relationship as they work together to shape the path for economic recovery needed as a result of the COVID-19 pandemic. After 2 years, CCA will return to the continent this July for the 14th iteration of its flagship conference. “We are delighted to co-host and partner with the Government of the Kingdom of Morocco to bring the 2022 Summit to Marrakech. The 2021 Summit was a tremendous success and the caliber of engagement by U.S. and African business and government leaders was outstanding. The partnerships forged, investment opportunities identified, and deals closed are still being cited by attendees. We believe the 2022 Summit in Morocco will be even more successful and serve as a significant opportunity to expand and deepen the U.S.-Africa trade, investment, and business relationship.” said Florizelle Liser, President and CEO, Corporate Council on Africa.
Egypt chaired on Monday 14-3-2022 the third meeting of the Governance Council of the Arab Africa Trade Bridges (AATB) Program. Egypt was represented by Minister of Planning and Economic Development and Egypt’s Governor at the Islamic Development Bank Group (IsDB) Hala el Said.
Minister of Planning and Economic Development Hala el Said said during her speech that the meeting comes as an opportunity for consultation and exchange of ideas, visions and successful experiences to promote the governments’ efforts to boost trade between African and Arab countries.
Global economy news
Ground set for 5th Un Conference on LDCs In New York (Malawi Broadcasting Corporation)
The stage is set for discussions on different development areas for the 46 member grouping of the Least Developed Countries LDCs at the United Nations Headquarters in New York. This is the fifth Conference for the United Nations on the LDCs since 1981 and it takes place every 10 years. As Chair of the LDCs group, the Malawi leader Dr Lazarus Chakwera is expected to deliver a keynote address on behalf of the member countries and Malawi in particular. “The conference will launch the Doha programme of Action for LDCs which are critical for developing countries and are aligned to Malawi’s development aspirations,” reads the statement in part.
Meeting the needs of present and future generations for goods and services in ways that are economically, socially and environmentally sustainable is ever more urgent amid the climate and COVID-19-induced economic crises. Shifting to responsible consumption and production patterns can not only lead to more efficient resource use but also lead to reduced pollution, restore ecosystems and prevent habitat loss. To mark World Consumers Rights Day on 15 March, UNCTAD brought together policymakers, businesses and consumer groups to share experiences in fostering sustainable production and consumption and promoting business and consumers responsible behaviour. “We must move away from the notion of consumers as passive receivers of goods and services towards that of a consumer that is an actor for change,” said UNCTAD Secretary-General Rebeca Grynspan while opening the event.