Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Local trade news

Trade Statistics for February 2022 (South African Revenue Service)

The South African Revenue Service (SARS) today releases trade statistics for February 2022 recording a preliminary trade balance surplus of R10.60 billion. These statistics include trade data with Botswana, Eswatini, Lesotho and Namibia (BELN). The year-to-date (01 January to 28 February 2022) preliminary trade balance surplus of R14.67 billion is a deterioration from the R45.21 billion trade balance surplus for the comparable period in 2021. Exports increased by 7.3% year-on-year whilst imports increased by 31.4% over the same period. The R10.60 billion preliminary trade balance surplus for February 2022 is attributable to exports of R141.15 billion and imports of R130.55 billion. Exports increased by R10.51 billion (8.0%) between January and February 2022 and imports increased by R3.98 billion (3.1%) over the same period.

White Paper on rail lauded as SA loses at least 1% of GDP to Transnet inefficiency (Engineering News)

The South African coal, chrome, iron-ore and manganese mining sectors lost between R39-billion and R50-billion in export earnings last year as Transnet struggled with capacity to rail bigger volumes of these commodities to ports, says economists.co.za chief economist Mike Schussler. “To put this into context, this is about 1% of the country’s gross domestic product, and it would have added about 12.5% to the whole mining sector.”

More fruits will be exported to China: S. African growers association (Xinhua)

The Citrus Growers’ Association of Southern Africa CEO Justin Chadwick expects local lemon producers to export more tonnes of lemon throughout this year to China after having exported 225 tonnes to the market since the start of the year. “To date, only (225 tonnes) of lemons have been exported to China; it is very early in the season and we expect considerably more to go as the season ramps up,” he told Xinhua. South Africa, a leading lemon producer in Africa, now has the capability of exporting lemons due to a revised lemon protocol. According to the previous agreement, signed bilaterally in 2006, all citrus exports from South Africa were required to undergo cold treatment for 24 days at or below 0.6 degrees Celsius to prevent fruit flies and false codling moths. Following the implementation of the new agreement, lemons will have to be chilled for a minimum of 18 days at a temperature of 3 degrees Celsius.

Kingdom of Lesotho: Staff Concluding Statement of the 2022 Article IV Mission (IMF)

Lesotho has been hit simultaneously by the pandemic, declining Southern African Customs Union (SACU) transfers, and climate shocks since 2020. The government’s swift response to the pandemic—through containment, social, and economic mitigation measures, and vaccination—has been notable. Nevertheless, the resulting fiscal and external pressures have once again exposed the fragility of the current economic model and underlined the urgent need to diversify the economy and consolidate public finances to preserve fiscal and debt sustainability. Alongside this, broad-ranging structural reforms will be vital to support a durable, resilient post-pandemic recovery built on green, job-rich, sustainable, and inclusive private sector-led growth. In the run-up to the general election, the government should continue to initiate policies and institutional reforms that are less constrained by the political economy.

Harare prioritises economic recovery from COVID-19 in its stabilisation plan (UNECA)

The Mayor of Harare, His Worship Councillor Stewart Mutizwa, has underscored economic recovery from COVID-19 as a priority for the city’s stabilisation plan in a meeting with a delegation from the United Nations Economic Commission for Africa (ECA), led by Ms. Edlam Yemeru, acting Director of ECA’s Gender, Poverty and Social Policy Division, with both parties agreeing to their deepen collaboration. Since 2020, ECA has provided assistance to Harare for the formulation of its Economic Recovery and Resilience plan in light of the COVID-19 pandemic. This is expected to be adopted by the city’s executive leadership (council) as an input to the city’s stabilisation plan, which will operationalise priority action areas.

Zimra implements strategic plan (The Herald)

The Zimbabwe Revenue Authority is in the process of implementing various projects that are part of its five-year strategy to transform service delivery, ease of doing business as well as plugging revenue leakages and modernising the agency. The projects, that have been aligned to the National Development Strategy 1, began being implemented last year and will run until 2025 with funding from the $6,1 billion received from the Treasury. Speaking at a media engagement breakfast meeting yesterday, Zimra director of research, strategy and modernisation, Mr Joey Shumbamhini, said the projects would contribute towards the NDS1 national priority on economic growth and national stability.

President Mnangagwa calls for greater trade ties with Rwanda (The New Times)

Zimbabwean President Emmerson Dambudzo Mnangagwa has stressed that the trade and investment partnership between Rwanda and Zimbabwe must yield increased trade volume between both countries. Mnangagwa made the observation on Monday, March 28 while opening the second edition of Zimbabwe-Rwanda Trade and Investment conference in Harare.

“The conference gives impetus to our quest to strengthen our commercial ties and accelerate the implementation of mutual programmes and projects towards improving the standards and quality of life of the people of Rwanda and Zimbabwe,” President Mnangagwa told both delegations. He added, “This timely visit to Zimbabwe demonstrates the focus, determination and commitment to the prime objectives we set for ourselves with regards to broadening the trade and investment partnerships between our two countries.”

Global economists cut Kenya’s growth on war, debt costs (Business Daily)

Global economists have further trimmed Kenya’s growth outlook for 2022, largely citing reduced expenditure on infrastructure projects amid rising external debt costs and price pressures from Russian war on Ukraine. A consensus growth outlook from 14 world-leading banks, consultancies and think tanks shows economic activity will likely expand 5.1 percent this year, a drop of 0.3 percentage points from 5.4 percent at the beginning of the year. “The outlook is clouded by the country’s reliance on foreign capital for infrastructure and a rise in external debt,” analysts at Barcelona-based FocusEconomics wrote in their April outlook report on Kenya.

Kenya unveils $399m internet cable hoped to unlock digital economy (The East African)

Thirteen years since Kenya welcomed its first ever fibre optic cable, the country has now unveiled a sixth submarine internet cable that promises to offer higher speeds, lower latency and broader bandwidth. The launch of the Pakistan and East Africa Connecting Europe (Peace) cable on Tuesday comes at a time when the country’s internet economy is rapidly growing, thanks to digital transformation acceleration occasioned by the Covid-19 pandemic. As demand rises for cloud storage, heavy internet content streaming, e-commerce platforms, e-learning apps, telehealth systems, fintech innovation and online businesses, the new cable is expected to offer additional broadband to the national fibre backbone network. The $399.9 million cable connects Africa to France and Pakistan through the Europe-Asia route, providing a direct connectivity to Asia which is expected to reduce communication delays between Africa and Asia.

Horticulture earnings drop Sh7bn in Jan (Business Daily)

Horticulture earnings dropped by Sh7.1 billion in January this year as the volume of produce exported also declined. Data from the Kenya National Bureau of Statistics (KNBS) indicates the export value of the produce declined to Sh8.1 billion in the month under review from Sh15.2 billion a year earlier. All segments of horticulture exports –flowers, vegetables, and fruits recorded a decline both in value and volumes.

The horticulture sector had been enjoying good earnings during the Covid-19 period. For instance, in 2019, income from the export of fresh produce declined to Sh144 but picked up during the first year of the coronavirus outbreak to Sh150 billion.

Earnings from horticulture exports hit a historic high last year at Sh158 billion to remain the leading foreign exchange earner in the last two years by staying ahead of tea and tourism.

Traders commit to fight illicit trade (The Observer)

Key stakeholders in the trading and manufacturing industry together with law enforcement agencies and government bodies in charge of trading activities have vowed to strengthen their efforts of fighting illicit and counterfeit products on the Ugandan market.

According to Joseph Lubulwa, UBL brand protection manager, they have partnered with the private sector and government agencies to conduct nationwide sensitization engagements to inform the public and relevant authorities on the dangers of illicit trade and how to spot the difference between genuine and counterfeit products. He said that in 2021, UBL seized illicit alcohol worth Shs 375 million and between 2019 and 2020, government lost Shs 1.9 trillion in revenue from the sale of illicit alcohol alone.

“Counterfeits take 64.5 per cent of the alcohol market share, leaving the remaining smaller percentage to genuine dealers. We, therefore, appeal to lawmakers to enable tougher penalties and timely prosecution of offenders,” Lubulwa said.

Rwanda’s export revenues grow by 8.8 per cent (The New Times)

Rwanda recorded strong growth in export earnings in 2021 thanks to the rebound of business activity from the Covid-19 pandemic as well as the rise in global commodity prices and improvement of trade in the region. The central bank said on Tuesday that last year the country generated $1,531 million from exports, a rise of 8.8 per cent from $1,407.5 million in 2020 when export revenues contracted. Merchandise exports gained the most as they raked in $1,167.8 million for the country compared to $761.3 million in 2020, central bank governor, John Rwangombwa, disclosed as he presented the monetary policy and financial stability report. The report also highlights the status of the economy.

Rwanda launches technology centre to drive Africa innovation (WEF)

For the last 28 years, Rwanda has deliberately explored every avenue available to deliver national transformation through economic growth. Technology and innovation have been at the heart of our transformation. We expect this to become an even greater driver of our economic development in the coming years.

With the advent of the Fourth Industrial Revolution and the rapid innovations witnessed during the COVID-19 pandemic, there is an increased urgency to develop digital and technological capacities to build more resilient systems for a healthier society and more sustainable economy. This is as true in Africa and the developing world as it is anywhere.

African trade 

DR Congo joins East Africa trade bloc: Who gains? (BBC News)

The Democratic Republic of Congo has joined the East African Community (EAC) as its seventh member, massively expanding the territory of the trade bloc, giving it access to the Atlantic Ocean and greatly increasing the numbers of French speakers in what began as a club of former British colonies.

DR Congo applied for membership in 2019, hoping to improve trade and political ties with its East African neighbours. It will allow Congolese citizens to travel freely to the other countries and trade will become much quicker, simpler and cheaper, which should benefit businesses and consumers in all countries. The country shares borders with all EAC members except Kenya, and hopes to attract more investors from the region.

Dr Abel Kinyondo, an economist at the University of Dar es Salaam, believes that DR Congo’s inclusion will boost the bloc’s bargaining power globally. “Numbers matter in international trade - the addition of DRC’s economy to the community implies increased purchasing power,” he said.

How Congo’s EAC entry will affect regional cargo transport routes (Business Daily)

The admission of the DRC into the East African Community is likely to shift a share of cargo from the northern corridor to the central highway. With DRC’s entry, the focus will now be between the Port of Mombasa and that of Dar es Salaam as truckers weigh options on which route to use in ferrying goods to the vast DRC state. The central corridor, which is 1,300km long, begins at the Port of Dar es Salaam and serves Tanzania, Zambia, Rwanda, Burundi, Uganda and Eastern DRC. On the other hand, the northern corridor, which is 1,700km long, commences from the Port of Mombasa and serves Kenya, Uganda, Rwanda, Burundi and Eastern DRC.

Dennis Ombok, former chief executive officer of the Kenya Transporters Association, said there are many factors that will determine the route that truckers would use. “Truckers will also be keen on incentives at the ports such as free storage period and lower charges to decide whether to use the port of Dar es Salaam or Mombasa,” he said.

Congolese cautiously optimistic as DRC joins East African bloc (The East African)

Importers eye wagon ownership in bid to reduce transport costs (Business Daily)

East African importers want to be allowed to own rail wagons to reduce transport costs which have been on the rise. Private sector players called on relevant authorities to work on modalities to open up rail transport as is the case in developed countries such as South Africa, Brazil and a number of European countries, to allow them own wagons as a way of bringing down transport costs. The traders said investing in freight wagons will increase cargo-handling capacity on rail and reduce on the expensive road transport. Truckers have already announced an increased cost of ferrying cargo by between 5 per cent and 10 per cent as a result of high fuel prices. “Traders always seek convenient, cheap and safe ways of transportation. With East Africa developing rail systems, we can own wagons to reduce cost of transportation. We will then buy wagons instead of trucks to save due to economies of scale,” said Gilbert Lang’at, Shippers Council of Eastern Africa (SCEA) chief executive.

Executive Secretary Statement SACU Book Launch - 29 March 2022 (pdf, SACU)

As you will note from the book, industrialisation is a central objective for deepening regional economic integration through the development of regional value chains. Thus, regional industrialisation is seen as the main vehicle through which the SACU region can transform its economies to generate sustainable growth, employment and reduce poverty. The aim is to develop regional value chains and position the region to tap into the market access opportunities presented by the African Continental Free Trade Area and beyond.

Another important focus area towards deeper integration has been the implementation of the SACU Trade Facilitation Programme that is anchored on the Customs Modernisation Programme (CMP). The main objective of the CMP is to enhance the efficiency of Customs operations. The SACU Trade Facilitation Programme has evolved over the years and yielded positive results which have partly contributed to an increase in intra-SACU trade from R63 billion in 2004 to R192 billion in 2018.

I also wish to thank Ms. Trudi Hartzenberg, Executive Director of TRALAC, for her role a peer reviewer of the Book and for graciously agreeing to give us a review of the Book this morning. Trudi, you are an authority on trade and regional integration matter, and we are so pleased to have benefited from her expertise in the production of our book.

Remarks by Honourable Ms. Peggy Serame, Minister of Finance and Development Planning of Botswana and Chairperson of the SACU Council of Ministers (pdf)

pdf Download the book (16.04 MB)

Sadc member states urged to address food insecurity through intra regional trade (sardc.net)

SADC Member States have been urged to address food and nutrition insecurity in the region through intra-regional trade, and to prepare contingency plans showing areas of surplus and shortages, after an uneven season of generally low rainfall. This is the recommendation of the SADC Council of Ministers who met on 18-19 March in Lilongwe, Malawi to review the implementation of programmes aimed at promoting and deepening regional integration, cooperation and economic development.

“In relation to food and nutrition security, Council noted that most Member States received low rainfall that will affect crop production in the region, and urged Member States to prepare contingency plans, taking into account areas with surplus and shortages of food production and through intra-regional trade, to deal with potential food shortages, and be able to assist food and nutrition insecure people,” reads part of the communiqué released soon after the SADC Council.

Experts to explore export opportunities for Central African countries (UNECA)

With the advent of the African Continental Free Trade Area (AfCFTA), Central African governments adopted AfCFTA national strategies with the support of ECA and its partners. These countries have also developed national industrialization and economic diversification plans (PDIDE) and industrialization strategies (PDIs), in accordance with the Douala Consensus. In 2020, Cameroon was the first country in the sub-region to finalize its strategy with the support of the ECA, but also to review its Master Plan for Industrialization (PDI, 2015), with the ambition of becoming “the factory of the new industrial Africa”. In an effort to align trade and industrial strategies, the Government of Cameroon had requested the expertise of the ECA, which partnered with researchers from Trade Advisory, an entity attached to North-West University (NWU), which has unique expertise in the Decision Support Model (DSM). The results of the DSM approach applied in Cameroon have made it possible to identify African markets where Cameroon can sell the products identified in its Master Plan for Industrialization (PDI) and its trade ambitions highlighted by the AfCFTA strategy. The exercise highlighted the integrated approach to harnessing the trade potential of Cameroon.

Africa has prime opportunity to provide commodities usually supplied by Russia (Engineering News)

As Western Europe accelerates a structural transition away from Russian energy dependence, Africa will play a salient role in filling this void, says Oxford Economics Africa (OEA). During a webinar on March 29, the research company unpacked how a more pressing shift towards renewable energy and a reduction in Russian hydrocarbon dependence will increase demand for African renewable and non-renewable resources.

European Commission president Ursula von der Leyen on March 8 proclaimed that Europe must become independent from Russian oil, coal and gas. “We simply cannot rely on a supplier who explicitly threatens us. We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition. “The quicker we switch to renewables and hydrogen, the quicker we will be truly independent and master our energy system.”

Green Investments, the New Black for Sustainable Development in Africa (IDN InDepthNews)

Less than ten years to the deadline to meet Sustainable Development Goals (SDGs), Africa is at development cross roads. The big question is how can Africa achieve inclusive and sustainable development to meet the twin agendas; 2030 Agenda and Agenda 2063? Research assessments indicate that Africa is off the mark on some Sustainable Development Goals but has made great progress on others such as reducing maternal and child deaths and a decrease in the rates of malaria, tuberculosis and HIV. Yet the African continent needs to escalate progress on halving poverty and hunger, increasing access to health care and tackling high unemployment on the back of the challenges of food insecurity, growing debt and rapid population growth.

Global economy news

WTO releases update to statistical profiles on trade in value-added for 66 economies (WTO)

The profiles draw from the OECD’s Trade in Value-Added (TiVA) database and provide an update to the profiles published in 2019. They highlight the cross-border exchange of parts and components taking place within global value chains (GVCs), affirming that economies rely on imports from partners in order to export. An explanatory note provides guidance on the definitions and interpretation of the indicators in the profiles. The full set of profiles can be found here.

New WTO statistics dashboard provides graphical presentation of trade and tariff data (WTO)

The WTO Stats Dashboard allows users to filter and change displayed information. Depending on the graph, data can be explored by reporting economy, trade flow, period (annual, quarterly, monthly), trade category, and product or sector breakdown. Data sets available on the WTO Stats Portal are presented visually in the new tool via three distinct dashboards. The Merchandise Trade Dashboard provides a global overview of merchandise trade values via a global map, as well as regional breakdown and trends over time that can be explored by reporting economy and time period. This dashboard also presents merchandise trade indices in graphical form.

General Council endorses final decision on Bali tariff rate quota underfill mechanism (WTO)

The chair of the General Council, Ambassador Didier Chambovey of Switzerland, welcomed the achievement: “I would like to congratulate all members for their pragmatism and constructive spirit, which facilitated arriving at the solution. This is the spirit that will characterize our work, and I’m grateful to all for this positive action.”

Tariff rate quotas (TRQs) allow imports of certain agricultural goods to be imported at lower duties up to a specified amount, with increased duties applied to amounts over the limit. The mechanism was agreed as a means of allowing exporters some access to other countries’ markets when the normal tariffs on imports are high. The 2013 Understanding seeks to address cases where importing members’ quotas are persistently underfilled.

Strategy for graduation with momentum: Bridging pre-graduation and post-graduation development processes in the least developed countries (pdf, UNCTAD)

The development path followed by a country prior to graduation from the least developed country category has significant implications with regard to the challenges to be faced after graduation. The current conceptualization of a smooth transition strategy primarily aims to create a short-term post-graduation “soft landing” and ease concerns with regard to preparation for engaging in economic relations as a non-least developed country. Therefore, the concept currently does not have a focus on preparing countries for graduation with momentum.

UNCTAD has maintained that the post-graduation success of a country significantly depends on the foundations built prior to graduation. Graduating countries need a new strategy, one that prepares them for the challenges ahead by linking the graduation process with the development of productive capacities and sustainable development. UNCTAD has proposed an alternative policy framework to help refocus the objectives and strategic direction of graduation strategies, as well as a new time frame for implementation.

UN Dubai Forum closes with calls for focus on women entrepreneurs, innovation and sustainable development for all (UN News)

Youth and innovation were the highlight of the Forum’s closing ceremony, as the three top winners of the ‘Arab Rally’ for Entrepreneurship and Innovation were announced. The entrepreneurship competition for university students from the Arab Region was taking place on the sidelines of WEIF 2022.

The closing day of the WEIF 2022 saw the participants, partners and co-sponsors, including the UN Industrial Development Organization (UNIDO)-ITPO, as well as the Arab League, Arab Chambers of Commerce, Bahrain Chamber of Commerce & Industry, and the Government of the United Arab Emirates (UAE), express their strong commitment to achieving the 17 Global Goals outlined in the 2030 Agenda for Sustainable Development. Further, the UAE Declaration stated: “We recognize that entrepreneurship and innovation are the driving force to the creation of jobs, spurring of economic growth and the realization of social gains; We recommend that all efforts are focused towards achieving sustainable development through entrepreneurship and innovation that can be accomplished via strong, inclusive, sustainable and resilient economic growth.”

Factories of the future call for responsible scaling that prioritizes the planet and people (WEF)

The World Economic Forum announces today the addition of 13 new sites to its Global Lighthouse Network, a community of 103 world-leading manufacturing facilities and value chains using Fourth Industrial Revolution technologies to increase operational performance and environmental sustainability. Local manufacturing and supply chain resilience are crucial in the current geopolitical context, as organizations strive to engage their workforces and sustain operations amid international unrest and economic headwinds. There are also new pressures to maintain sustainability commitments and accelerate the transition towards renewable energy, while addressing more immediate energy market disruptions.

Renewable-energy transition ‘only true path to energy security’ (Engineering News)

The renewable energy transition “is the only true path to energy security”, United Nations secretary-general António Guterres has asserted, adding that the current energy crisis, precipitated by Russia’s invasion of Ukraine, underlined the need to accelerate rather than slow the transition. In a recorded address to the 2022 edition of the Berlin Energy Transition Dialogue (BETD), Guterres warned that the world was not on track to achieve the goal of carbon neutrality by mid-century, or limiting the global temperature rise to 1.5 °C. “Last year, global energy-related carbon dioxide emissions grew by 6% when they should be falling. In fact, with current national commitments, emissions are projected to increase by almost 14% this decade,” he said, describing the global energy mix as broken.

Wealthy Nations, Corporate Titans’ False Promises of Fair COVID-19 Recovery Exposed, How Africa’s Inequality Deepened (Inter Press Service)

Even as COVID-19 brought Africa’s already fragile health care and economic systems to the brink, wealthy states colluded with corporate giants to dupe people with empty slogans and false promises of a fair recovery from the ongoing health pandemic, a newly released report by Amnesty International report finds. The global human rights organization says at the heart of the report are revelations of how “global leaders peddled false promises of a fair recovery from COVID-19 to address deep-seated inequalities, despite only 8 % of Africa’s 1.2 billion people being fully vaccinated by the end of 2021.” Amnesty International Report 2021/22: The State of the World’s Human Rights finds that wealthy nations, alongside corporate titans, have driven deeper global inequality. As a result, African countries are worse off and left struggling to recover from the pandemic against a backdrop of significant levels of inequality.

WTO issues inventory of COVID-19 information resources (WTO)

The inventory currently contains 70 information resources managed by international organizations, non-governmental organizations, academics and the private sector. It covers a variety of topics, such as vaccination, production of vaccines, government procurement, cases, diagnostics, therapeutics and intellectual property-related issues.

Rising energy prices will make us poorer but we don’t blame climate policies, say consumers (WEF)

Wherever you live in the world, energy prices are surging upwards. But a new global survey shows that people don’t blame climate policies for rising energy costs and strongly support moves to end the use of fossil fuels. A survey of over 22,500 adults in 30 countries, conducted by Ipsos for the World Economic Forum, found that, on average, more than half of consumers expect rising energy costs to significantly reduce their spending power in 2022.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010. Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.


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