tralac Daily News
4th SA Investment Conference 2022 (Mail & Guardian)
In an effort to boost economic growth and facilitate the creation of more employment opportunities, President Cyril Ramaphosa committed to raising more than R1.2 trillion in investments for South Africa over five years. This initiative culminated in the launch of the South African Investment Conference (SAIC), which now spearheads the government’s investment drive. Since its launch in 2018, SAIC has hosted three consecutive annual investment conferences, but the Covid-19 pandemic caused a postponement in 2021. To date SAIC has gathered a combined R774 billion worth of investment pledges — 64% of the President’s target — spread across a range of economic sectors including, mining, manufacturing, agriculture and the digital economy.
It’s a considerable achievement, considering the several challenges facing the local and global economy. To this end, the fourth investment conference scheduled in Sandton, Johannesburg on 24 March 2022 will mark the President’s next leg of his ambitious programme to raise R426 billion over the next two years — the remaining 36% of his R1.2 trillion target. In the challenging economic environment, it is encouraging that green shoots are slowly emerging in the local economy. The gradual but steady realignment of supply chains across the globe that were disrupted at the height of the pandemic is certain to add momentum to its recovery. The evidence suggests that South Africa is creating an attractive platform on which to do business by focusing on economic growth and the rapid introduction of economic reforms, including the improving regulatory environment.
The Economic Reconstruction and Recovery Plan provides a great opportunity for South Africa to train a new crop of black industrialists, including women and youth entrepreneurs, who have long been consigned to the periphery of productive sectors of the economy.
The International Energy Agency (IEA) has released a 10-point plan for speedily cutting oil demand in response to the emerging global energy crisis triggered by Russia’s invasion of Ukraine. The agency calculates that, if implemented by all advanced economies, the plan will reduce demand by 2.7-million barrels a day within four months, equivalent to the oil demand of all the cars in China.
Delivery costs major hindrance in switch to online shopping (Business Daily)
Kenyans who prefer to order goods online are grappling with elevated logistical costs which are slowing down the growth of e-commerce in retail space in an economy where homes are struggling with reducing disposable income. Players in e-commerce say expenses involved in transporting goods from a store to a buyer are a major damper to the growth of the sector. “The biggest barrier to growth in e-commerce is logistical cost. The cost is still very high and we have a population that doesn’t have enough disposable income,” Sendy co-founder and chief executive Mesh Alloys says. The rising fuel costs in Nairobi with a poorly planned transport infrastructure — characterised with traffic snarl-ups on key roads with no separate lanes for cycling — has not helped matters.
The latest review is on the back of economic sanctions on Russia for its brutal war in Ukraine which has created demand-supply mismatches, pushing up global crude prices to levels that state-run fuel subsidy cannot fully absorb.
Kenya has taken the first major step towards easing restrictions imposed two years ago with the onset of the COVID-19 pandemic. Notably, it has waived the requirement for PCR test for travellers to Kenya, for those that are fully vaccinated. This includes truck drivers who will also be exempted from the PCR test if fully vaccinated, a move that will facilitate movement of goods across the borders. All eligible unvaccinated travellers arriving at any port of entry to Kenya must however have a negative PCR test result conducted not more than 72 hours before departure. Unvaccinated travellers arriving in Kenya will be subjected to a rapid antigen test at their cost of $30.
Besides easing travel to Kenya, the new measures are also expected to scale- up vaccinations in the country and thereby help the economy to return to the pre-COVID-19 normalcy. Kenya is a leader in intra-COMESA trade and the new measures are expected to have a positive impact across the region.
Maize flour prices to rise on tax, shortages (Business Daily)
The price of maize flour could go up by Sh2 for a two kilogramme packet in the coming days on the back of a shortage and costly maize in the market, coupled with a recently introduced cess on grains delivered to Nairobi. Unga Limited chief executive officer Joseph Choge said cess alone could see the cost of flour go up by Sh2 once the cost is factored in the pricing. Kenya Revenue Authority (KRA) announced last week that it had started charging the levy effective March 11 on deliveries made in Nairobi where all the large-scale millers are based with a few branches in other cities. “Cess will definitely affect new stocks that we are buying and prices will increase,” Mr Choge said. He added that the company had not yet increased prices, noting that this will be done for new supplies coming to Nairobi. Speaking on Wednesday during the millers annual conference in Nairobi, chairman of the United Grain Millers Association Ken Nyagah said they were hardly getting grain from farmers as supply of the grain tightens in the market.
Nigeria’s fuel import rise to N4.5 trillion in 2021 (Nairametrics)
Nigeria spent a total of N4.56 trillion on the importation of moto spirit (fuel) in 2021 about 128% higher than the N2 trillion spent on fuel importation in 2020. This is according to foreign trade data recently published by the National Bureau of Statistics. This is the highest amount spent on the importation of motor spirit since Nairametrics started tracking the data. Nigeria spent a whopping N6.3 trillion on Fuels and Lubricants imports in 2021 dwarfing the N2.83 trillion, N2.5 trillion, and N3.8 trillion incurred in 2020, 2019, and 2018 respectively. The country is currently experiencing one of the worst fuel crises in recent years and fuel queues remain sticky due to protracted clear out of adulterated fuel and the challenges with the importation of fuel. Diesel prices have also recently shot up to over N700 per litre.
The Debt Management Office (DMO) has revealed that Nigeria’s total public debt has risen to N39.55 trillion as at December 2021. This represents a N1.55 trillion or 4.1% increase in 3 months when compared to the N38 trillion total public debt that was recorded as at September 2021. This was made known on Thursday by the Director-General of DMO, Patience Oniha while addressing journalists on the country’s current debt situation. According to NAN, Oniha said that the amount represented the total external and domestic debts of the Federal Government, 36 state governments as well as the Federal Capital Territory (FCT).
She said, “For the Federal Government, it would be recalled that the 2021 Appropriation and Supplementary Acts included total new borrowings of N5.48 trillion to part-finance the deficits. “Borrowing for this purpose, and disbursements by multilateral and bilateral creditors account for a significant portion of the increase in the debt stock.’’
Traders and consumers alike have reacted to the significant surge in the prices of food items in Kano State and the Federal Capital Territory (Abuja). The price of yam, beans, groundnut oil and other staple food items skyrocketed in March, following the scarcity of fuel across the country.
A trader identified as Tochukwu attributed the rise in food price to the hike in the cost of transportation. “Since fuel became scarce, vehicle owners now charge higher for transportation. I use to come to this market from Galadima for N200. Now I pay N300, If it’s you won’t you increase the price?” he asked. Another trader named Chioma who sells groceries lamented the cost of waybill.
Similarly, Mahmoud, a trader who sells yam and plantain at Wuse Market decried the recent hike of transporting goods.
Naco engages exporters on trade info repository under afcfta (The Business & Financial Times)
The Ghana National Coordinating Office (NACO) of the African Continental Free Trade Area has engaged stakeholders in the business community to develop an electronic Trade Information Repository interfaced with the African Trade Observatory (ATO) to increase trade prospects of Ghanaian businesses in the AfCFTA market.
The platform, known as the Ghana Trade Information Repository (GTIR), will provide a real-time information on product-market opportunities across Africa so Ghanaian exporters are enabled to increase trade with the sub-region.
The Deputy Minister of Trade and Industry, Herbert Krapa, has called for a strong collaboration between the ministry and other stakeholders in the export industry to promote and boost the economy. According to him, this would strengthen government’s agenda on One District, One Factory and promote agribusiness in the country. He urged the stakeholders; namely the Ghana Export Promotion Authority, Ghana Exim Bank, Ghana Free Zones Authority, Ghana Standards Authority, Food and Drugs Authority and the private sector to work hand in hand to promote the sector. Mr Krapa made the call at the Ghana Exim Bank’s stakeholders forum which had the theme, “Facilitating International Trade: the role of GEXIM” in Accra yesterday. The Deputy Minister said government had developed a blueprint for a sustained increase in non-traditional exports, hence it needed all hands on deck to sustain the gains. He said the National Export Development Strategy when fully implemented, would facilitate a significant increase in exports to other continent adding that, “it will increase non-traditional export revenue from the current 2.9 billion United States dollars to 25 billion United States dollars by 2029.”
MITC changes approach from trade forum to B2B meetings (Malawi Nyasa Times)
Malawi Investment and Trade Centre (MITC) has announced the change of its trade forum to Business to Business (B2B) meetings, which will take place in Dubai from 29th to 30th March. The trade forum was scheduled to take place on 10th March, 2022. B2B sessions are geared towards promoting Malawi as an ideal trade and investment destination in Africa.
The sessions also provide a platform for Malawian project promoters and exporters to market their projects and products to potential investors and buyers in Dubai. MITC Chief Executive Officer, Paul Kwengwere, said they have changed their approach from a forum to a B2B event where Malawi businesses will have a chance to meet international businesses one on one. “We believe B2B is ideal, especially linking our private sector players with key business decision makers we have identified in Dubai,” he said.
To ensure that our private sector is prepared for the meetings, he said, the MITC has organised a coaching session for those who have shown interest to participate so that they make the most of their time in Dubai in terms of marketing their projects to potential investors.
African trade news
SADC Council to strategize on regional integration (Namibia Economist)
The SADC Council of Ministers meets this week in Lilongwe, Malawi to discuss progress towards regional integration and sustainable development. The Council meeting on 18-19 March will consider the status of implementation of key decisions made by the 41st SADC Summit held in August 2021, as well as the previous SADC Council meeting. The 41st Summit of SADC Heads of State and Government approved a number of initiatives aimed at driving socio-economic development by deepening integration through industrialisation and ensuring the maintenance of peace and security in the region. One such decision was the transformation of the SADC Parliamentary Forum into a SADC Parliament which will be a consultative and deliberative body.
at the top of the agenda for the SADC Council will be how the region can intensify its response to the COVID-19 pandemic, including strengthening national campaigns by the Member States to mobilize citizens to get vaccinated against the virus.
Another priority issue is the status of implementation of the SADC Industrialisation Strategy and Roadmap (2015-2063), and Council will review progress. The region has pursued activities in recent years to roll out the SADC Industrialisation Strategy and Roadmap, which provides a framework for major economic and technological transformation at national and regional levels, within the context of deepening integration. The activities include the development of value chains linked to the three priority sectors of agro-processing, mineral beneficiation and pharmaceuticals. The theme of the 41st SADC Summit held in Malawi last year continues with the industrialization trajectory of the region — “Bolstering Productive Capacities in the Face of the COVID-19 Pandemic, for Inclusive, Sustainable Economic and Industrial Transformation”.
A business model on operation and implementation of a regional online payment platform for Micro and Small Medium Enterprises (MSMEs) in the COMESA region has been developed. The model was created by the COMESA Business Council (CBC) as part of its digital financial inclusion plan for MSMEs. It is aimed at supporting the design, development and deployment of an integrated digital financial services infrastructure that is low-cost, interoperable, real time and fraud resistant. It is intended to serve (MSMEs) and the customers they transact with at the bottom of the financial pyramid. The model was validated during the 4th Digital Financial Inclusion Public-Private Dialogue conducted by the CBC on 10th March 2022. Close to 200 delegates attended the dialogue physically in Lusaka, Zambia and virtually.
According to the experts, MSMEs contribute an estimated 50% to 70% of the Gross Domestic Product (GDP) in COMESA and account for 50% to 60% of the employment opportunities in the region. The key drivers of financial inclusion in the region have been mobile money and agent banking, now reaching millions of previously unbanked individuals, households and SMEs offering affordable, instant, reliable services on payments, savings, credit and insurance services among others.
The ECOWAS Commission, in collaboration with United Nations Conference on Trade and Development (UNCTAD), organized the Second Regional Meeting on the development of the Regional Ecommerce Strategy on the 14th of March 2022, to present the findings of the ECOWAS E-Trade Readiness Assessment. Representing Mr. Tei Konzi, Commissioner for Trade, Customs and Free Movement, Mr. Kolawole Sofola, Ag. Director for Trade welcomed the results of the eTrade readiness Assessment. He noted that it confirmed the high development priority ECOWAS Member States have placed on digital transformation and e-commerce. He further added that “the Commission foresees an ECOWAS e-commerce strategy that addresses identified challenges and strengthens cross-border e-commerce development efforts, deepens integration, boosts intra-regional trade, and creates sustainable and decent jobs for women and youth in the community”.
Ms. Cécile Barayre-El Shami, Chief, Digital Economy Capacity-building section, Division on Technology and Logistics, UNCTAD, stated that the meeting marked “an important milestone in the journey towards the development of the ECOWAS regional e-commerce strategy; as the assessment of the readiness of the region sets the stage for the strategy formulation by providing a baseline analysis of the current e-commerce situation.” She noted that the excellent collaboration and trust the ECOWAS Commission and its Member States have placed in UNCTAD was the result of a past and ongoing collaboration to support the region’s efforts to strengthen the e-commerce ecosystem through the review of e-commerce legislation at the regional level, as well as individual country readiness assessments and support for the implementation of related policy recommendations.
The overall objective of the meeting was to present to Member States the findings of the E-Trade Readiness Assessment conducted by UNCTAD, which consist of assessing the state of e-commerce preparedness in countries or regions based on seven (7) policy areas namely: i) e-commerce readiness and strategy formulation ii) ICT infrastructure and services iii) trade facilitation and logistics iv) legal and regulatory framework v) payment solutions vi) skills development and vii) access to finance.
‘Africa should seize fast-developing digital market space’ (BusinessGhana)
The AU Commission deputy chief made the remarks as the African continent joined the global community in commemorating the 39th World Consumer Rights Day, which is annually marked on March 15, under the theme; ‘Fair Digital Finance’. “Seizing the fast-developing digital market space is particularly important in our African context where access to countless goods and services remain restricted for the vast majority,” Nsanzabaganwa said in her statement concerning the World Consumer Rights Day. Noting that the African continent has an internet penetration rate of 43 percent, the deputy chief said innovation was transforming how people conduct financial transactions and live their lives throughout the continent, emphasising that digital finance and its implication on financial inclusion and financial stability was crucial for development in Africa.
On the 9th March 2022, the Kingdom of Morocco signed the Revised Constitution of the African Civil Aviation Commission (AFCAC) and the Memorandum of Implementation (MoI) of the Single African Air Transport Market (SAATM).
Currently, 35 AU Member States with a total population of more than 800 million people, accounting for 61% of the population on the African continent and 89% of intra-African air transport market have joined SAATM and have opened up their markets to each other, removing restrictions in terms of frequency, capacity and granting to each other traffic rights and this will enable intra-African transport connectivity and support improvement of trade and tourism.
Global economy news
Landlocked developing countries (LLDCs) face many challenges due to their geographical remoteness from international markets. One of these challenges is high transportation costs due to their dependence on commodity exports. LLDCs also face constraints to improving the quality of their transport infrastructure to become more competitive in regional and international markets. UNCTAD developed its Productive Capacities Index (PCI) to support LLDCs and other developing economies to overcome structural challenges, including transport, connectivity and related hurdles. The PCI is an analytical tool designed to support developing countries in identifying their systemic vulnerabilities across different areas of productive capacity
According to studies conducted by UNCTAD and UN-OHRLLS, LLDCs’ relatively higher transport costs are mostly due to their geographical remoteness and high commodity dependence. LLDCs also grapple with infrastructure, connectivity and market access challenges due to their low levels of governance and productive capacities.
While Africa and Asia account for most of the LLDCs, comparing median PCI scores of the latter across regions enables us to define benchmarks for targeting productive capacity development efforts. Figure 4, for example, identifies the magnitude of connectivity gaps between LLDCs, which would enable policymakers to address the necessary reforms for bridging such gaps.
The challenges facing LLDCs are not limited to transport connectivity. They encompass a range of other issues, including logistics, physical infrastructure and trade facilitation, among others, reflected in gaps observed when analysing other PCI components.
Lose-Lose Trade Sanctions (Project Syndicate)
Ruthless trade and financial sanctions against Russia may be morally satisfying for Western politicians and their constituents, but that doesn’t mean they will be effective. In fact, the historical record suggests that such measures are often self-defeating and politically dangerous.
Recent research shows that the US-China trade war has had substantial economic costs. But the political costs may be even worse. International cooperation has broken down, multilateral institutions have been disempowered, and the world has entered an era of increasing polarization – both within and across countries. The best hopes for the future have seemed to lie in regional blocs and alliances, auguring a new, more fractured form of globalization.
News of a provisional compromise to waive intellectual property rights for COVID-19 vaccines between the EU, USA, India and South Africa in the World Trade Organisation (WTO) leaves out treatments for COVID-19. A provisional compromise between the EU, USA, India and South Africa, which still lacks formal approval, is a sign that parties could be moving towards an agreement to waive IP rights for COVID-19 vaccines. It is almost 18 months since India and South Africa asked the World Trade Organisation (WTO) to waive intellectual property (IP) rights for medicines aiding the “prevention, containment and treatment of COVID-19”. Today there is still no such thing and countries remain divided. “This is a major step forward and this compromise is the result of many long and difficult hours of negotiations. But we are not there yet. We have more work to do to ensure that we have the support of the entire WTO membership,” said the WTO Director-General Ngozi Okonjo-Iweala
When they agree to a final compromise, all 164 members of the WTO will be presented with the compromise and must reach a consensus before there can be a final agreement. Leaving out treatments against COVID-19 has left many wondering about the effectiveness of such an agreement.
For over seven decades, trade has helped promote and sustain peace in many parts of the world. Fuelled by trade growth, the global economy expanded at an unprecedented rate, lifting billions out of poverty. Trade has also been a key driver for integration projects in parts of the world which had suffered from conflict. According to the World Bank, the world extreme poverty ratio fell from 42.7% in 1981 to 9.1% in 2021
The trade for peace agenda had been taken for granted in the WTO and had not been explicitly pursued. It took a group of nine fragile and conflict affected Least-Developed Countries (LDCs) (3) to recall one of the raisons d’etre of the rules-based multilateral trading system: namely, that trade can and should play a role in promoting peace and stability. This group, called the g7+ WTO Accessions Group, was established in 2017 and has been the leading voice calling for the WTO to play a more active role in supporting the fragility agenda.
It was the vision of the fragile and conflict-affected countries which drove the establishment of the WTO’s Trade for Peace Programme. In collaboration with partners from the Trade for Peace Network, the WTO has implemented activities through the programme’s four pillars which include: (i) Political Engagement and Partnerships; (ii) Outreach and Dialogue; (iii) Research; and (iv) Training and Capacity Building. These activities are aimed at gaining a better understanding of the necessary and sufficient conditions to establish and maintain peace, and the role that trade and the multilateral trading system can play in this regard.
Two years have passed since the beginning of the COVID-19 pandemic. As the economic fall-out is still being felt all around the globe, its impacts are not fully captured. In particular, the accelerated digital transformation, with digital solutions developed and used to facilitate economic and social activities from a distance, has been accompanied by a surge in e-commerce, with potentially long-lasting effects. It has also revealed wide gaps in digital readiness, especially in the most vulnerable economies. UNCTAD’s research has shown that the pandemic has further exposed gaps in policy areas central to improving digital readiness in least developed countries (LDCs). Many LDCs are being challenged by the fast transition needed but have realized the vital importance to develop digital infrastructures and policies to support e-commerce and the digital economy, as well as the education and health sectors. Both the public and private sectors have important roles to play in creating an enabling environment for the creation of jobs through ongoing digital innovation that is changing our economies - producing new products and services for national, regional and international markets. It is now more urgent than ever to ensure that those trailing in digital readiness can catch-up. The alternative is even greater inequalities.
The 4th edition of Namibia’s International Energy Conference (NIEC), which has become the official meeting place for the energy industry, will be held from 20 to 21 April in Windhoek, under the theme ‘The energy mix: positioning for industrialisation, investment and growth.’ Organised by RichAfrica Consultancy with the support of the Africa Energy Chamber, the two-day energy sector event will be held under the patronage of the Ministry of Mines and Energy led by Honourable Minister Tom Alweendo. The NIEC thought leadership event will convene energy stakeholders with investors and international partners to drive industry growth and development, as well as promote Namibia and Africa as a destination for energy investments. Participating companies, international investors, service companies and various international delegations will share updates on exploration activities, renewable energy and regional gas and other ongoing projects and announce future projects while highlighting upcoming business and investment opportunities.
Aircraft operators stop pretending rules don’t apply in African skies (The East African)
For aircraft operators, the sky is a place without physical barriers, governed by common rules. But for some, this changes when they reach Africa. From the small and local through to intergovernmental organisations and global NGOs, a minority of aircraft operators still believe the rules don’t count when it comes to our continent. Much like we can pay tolls to use roads, aircraft operators must pay for the benefit of flying through sovereign airspaces, through overflight fees. This is a principle enshrined by the UN’s International Civil Aviation Organisation (ICAO), and for generations, it’s been a rule adhered to across the globe. For the countries in Africa that can collect them, these fees can be worth hundreds of millions of dollars annually. But their real value is greater, as overflight fees are mandated under UN law to be reinvested back into the airspace, ensuring safety and, crucially, infrastructure development that generates far broader economic value.
Fee avoidance continues to be an Africa-wide problem, preventing our skies from being a modern space of seamless travel and trade that can power our economic prosperity, and drive forward sustainable, self-generating development.
There is “no guarantee” that post-Brexit trade deals will deliver any real economic benefits unless firms are given greater support to take advantage of them, MPs have warned. A cross-party report said the Government had not provided sufficient clarity about the “trade-offs” involved in the deals signed by the UK since leaving the European Union, particularly the impact on British farmers, while the environmental impact of increasing business with countries further afield than EU neighbours “remains uncertain”.
The Commons Public Accounts Committee also cast doubt on the Government’s goal of having 80% of the UK’s trade covered by free-trade deals by the end of the year, particularly as progress on an agreement with the United States is “on hold”. The MPs said there was a “lack of clarity” from the Department for International Trade (DIT) about how it will measure whether it is achieving any benefits from its negotiations on free-trade agreements (FTAs). “There is no guarantee that the agreements will deliver actual economic benefits unless the department provides vital support to help businesses use the agreements, particularly for smaller businesses wanting to export worldwide,” the report said.