tralac Daily News
Date of production restart still unsure – Toyota SA boss (Engineering News)
Toyota South Africa Motors (TSAM) says it is following a “systematic and meticulously phased plan” to restart production at its Prospecton assembly plant, south of Durban, after the facility suffered extensive flood damage two weeks ago. TSAM says the approach is designed to ensure a safe start-up, without any potential secondary issues.
The first three phases in the return-to-production plan include the establishment of temporary utilities at the plant, cleaning up and then powering up the machinery. Once the trial power-up stage is reached, certain areas of the facility will be able to move to phase four, which involves “an accurate assessment and equipment check”. On the sales front, TSAM senior VP Leon Theron confirms that while delivery of locally built models will be impacted in the short term, plans have been put into place to prioritise existing orders.
Trade and investment relationships between South Africa and Guinea Bissau are being deepened, says President Cyril Ramaphosa. “Greater economic prosperity should underpin everything that we do and this is what we intend to focus on as we deepen our relations between our two countries. Our goal for this State Visit has been to deepen trade and investment between South Africa and Guinea Bissau,” said the President.
Kenya eyes $244m budget support from IMF (The East African)
The International Monetary Fund (IMF) plans to release $244 million to Kenya to finance its budget “in the coming weeks” after its staff expressed their satisfaction with Nairobi’s economic reforms in the face of Covid-19. The IMF said its staff are satisfied with the progress that the Kenyan government is making in its economic reform programmes, and the deal now awaits endorsement by the Fund’s management and board. Kenya will access $244 million, bringing the total IMF support in a 38-month financing facility to $1.17 billion under the Extended Fund Facility (EFF) and Extended Credit facility (ECF).
Manufacturers Association of Nigeria has called on the Federal Government to fasten the implementation of the African Continental Free Trade Area (AfCFTA) to boost its industrialisation goals. It also called on the FG to tackle Nigeria’s electricity and interest rate issues to take advantage of tariff-free African trade. This was disclosed by Mr Mansur Ahmed, President of MAN at the 11th Business Luncheon of the Apapa Branch Council of MAN on Thursday in Lagos, themed: “Improving Nigeria’s Manufacturers Competitiveness Within the Context of AFCFTA’s Implementation.” The Nigerian National Action Committee on the AfCFTA has already said that its strategic objective is to capture 10% of Africa’s imports by 2035, thereby doubling Nigeria’s export in the process.
On Friday, the Nigeria Customs Service (NCS) announced the reopening of four more land borders comprising Idiroko in Ogun, Jibiya in Katsina, Kamba in Kebbi and Ikom in Cross River. An open border enables the free movement of people (and often of goods) between jurisdictions with no restrictions on movement and lacks significant border control.
In August 2019, Nigeria’s land borders were closed over the rapid increase of illegal importation of drugs, small arms and agricultural products into Nigeria from neighbouring West African countries.
The move, in the wake of the African Continental Free Trade Pact, halted trade relations between Nigeria and neighbouring countries, including Chad, Cameroon, Niger and Benin.
In December 2020, President Muhammadu Buhari ordered the reopening of borders in Seme in Lagos, Illela in Sokoto, Maigatari in Jigawa, and Mfum in Cross River, citing recommendations from a presidential committee on review and advice on the reopening of borders. The other borders were later impacted by coronavirus lockdowns.
Egypt to boost local wheat production to cut on imports (CGTN Africa)
The annual wheat harvest season has begun in Egypt. The harvest this year in the North African country, is particularly significant due to the threats posed by the Russia-Ukraine crisis impacting supplies.
Egypt is the largest wheat importer in the world. It received 12.9 million tons in 2020 out of about 15.5 million tons of annual consumption. 80 percent of its wheat supply comes from Russia and Ukraine. But the ongoing conflict in Ukraine has caused a shortage in supply and doubled the prices of wheat globally. In response, the Egyptian government is accelerating efforts to diversify its sources of wheat.
“The strategy by the state is based on two dimensions. The first is a horizontal expansion that aims at increasing wheat cultivation in empty lands, without replacing other crops. The second dimension involves upscaling efforts to increase yield from the same area of land by using new high-quality and high-producing seeds that we are developing here,” Mostafa says. “So we will increase local production and reduce the import of seeds. We also introduce modern irrigation systems that save water consumption by nearly 40 percent for the farmers.”
Over the past two decades, Niger’s economic growth has been robust, around 5.2 %, placing the country among the region’s growing economies. However, the country’s economy has remained fundamentally the same during this period: undiversified, fragile, and highly vulnerable to shocks.
The level of GDP per capita increased by 30%, reflecting an estimated 2% annual growth rate in productivity gains per person employed over the period. However, due to rapid population growth, the number of poor people has increased.
To achieve a more inclusive development trajectory, Niger would benefit from strengthening institutional capacity and fostering political cohesion to agree on, adopt, and implement broad-based economic and social reforms.
The Niger Economic Memorandum identifies three priority areas for creating the conditions for economic emergence: the use of technology to accelerate private sector development; the development and proper management of extractive industries; and the establishment of financial and risk management frameworks for crises and natural disasters.
Somalia is on the move. It is pushing for foreign investment, and large infrastructure projects are changing the face of its scarred capital city, Mogadishu. These developments could promise better fortunes for Somalis as the country emerges from the Covid-19 pandemic. However, the scale and speed of this transformation could be even more pronounced should a few sticking points receive adequate attention. Besides ongoing security reforms, tackling the country’s energy challenges could have a positive spillover in almost all sectors of the economy. Like many African countries, Somalia grapples with inadequate energy supply, high power tariffs and poor access, a mix that has erected barriers to social and economic progress. At the heart of this energy challenge is a lack of diversification.
African trade news
Head of Product Management at leading fintech company Hubtel, Patrick Asare-Frimpong has said that “the way to increase intra-Africa trade is to provide enough tools to enable fintechs to innovate around all the protocols on the Pan-African Payments and Settlements System (PAPPS). He said the absence of such access tools will not encourage fintechs to innovate and that will work against the continental drive to boost intra-Africa trade. Patrick Asare-Frimpong was speaking at this year’s edition of The Money Summit powered by Business and Financial Times. The Pan African Payments and Settlement System (PAPPS) is the intra-African trade and commerce payments, centralized payment and settlement system. With the participation of banks and fintechs, the deployment of this system is expected to contribute to solving the menace of low intra-African Trade. PAPSS, hailed as a game-changer for intra-African Trade, is expected to be the most important component of the African Continental Free Trade Area (AfCFTA) because it promises to save businesses across the continent US$5 billion in transaction costs each year, with trade between African countries expected to increase by 22 percent by 2040, generating an additional US$70 billion in value. However, some challenges need to be addresses.
AfDB supports African Union’s implementation of Agenda 2063 (African Review)
The African Development Bank has signed a protocol of agreement with the African Union to support reforms that will bolster the pan-African organisation’s implementation of Agenda 2063
The project is expected to bolster the AU’s efforts to implement Agenda 2063. Adopted in 2015, Agenda 2063 is the African Union’s vision for an integrated, prosperous, and peaceful Africa driven by its own citizens and representing a dynamic force in the global arena. The project cost, amounting to US$11.48mn, is being supported with a grant from the Bank Group’s concessional financing window. It was approved by the board of directors in February 2022. The signing of the protocol of agreement signals the start of the implementation phase of the project.
Built for Africa, in Africa (African Review)
In the latest issue of African Review, Mike Whitfield, chairman of Nissan Africa South and managing director Nissan Egypt at Nissan Motor Corporation, discusses the company’s African development following the opening of a new assembly plant in Ghana
Commenting on the advantages the plant will bring to the country, Whitfield said, “The benefit of the plant to Ghana is incalculable, because it is key to the reindustrialisation and diversification of the country’s economy. If we look at South Africa as an example, the automotive manufacturing industry today employs 470,000 people and three times more in the value chain. It contributed 7.1% to the GDP in 2019 and earned US$14.3bn through exports. But that was done over 60 years.”
“The bigger picture involves using the African Continental Free Trade Agreement (AfCFTA) to begin producing vehicles across Africa in what the World Bank believes could increase the combined GDP of the continent by US$450bn by 2035 if it is effectively implemented, lifting 100 million people out of poverty. The automotive plan for Africa involves creating regional manufacturing hubs to begin trading regionally before expanding, and the investment in this plant looks to help Ghana tap into that potential.”
Importers trim use of Mombasa port as Kenyan polls approach (The Star, Kenya)
Traders in landlocked East African countries are slowing down on the use of the Mombasa port as the August elections approach, latest trends show. In the last one month, Dar es Salaam port has seen a spike on imports and exports, leading to a congestion at the port. Traders in the region are using Dar es Salaam more as Kenya campaigns in Kenya heat up ahead of the elections.
The EAC region is served by two major corridors with the main one being the 1,700 kilometre long Northern Corridor that runs between Kenya, Uganda Rwanda, Burundi and Eastern D.R. Congo. The two corridors facilitate export and import activities within the EAC region with a combination of rail, road and lake transportation networks.
Rallying oil prices on the back of the Russia-Ukraine war has presented great opportunities for Nigeria and other oil-exporting countries, particularly in sub-Saharan Africa (SSA), to build buffers that could shield them from further economic shocks, the International Monetary Fund (IMF) advised on Thursday. The IMF is particularly worried that the promising recovery in the region has been disrupted by the war in Ukraine which has exacerbated the already bad fiscal conditions created by the COVID-19 pandemic, leaving no room for manoeuvre. Economic recovery in the region picked up in the third quarter of 2021 and held up despite the onset of a fourth COVID-19 wave at the end of the year. Estimated growth in 2021 has been revised upward from 3.7 to 4.5percent. But this progress has been offset by recent events, especially the Russian invasion of Ukraine which triggered a sharp rise in commodity prices—straining the fiscal and external balances of commodity-importing countries and increasing food-security concerns across the region.
African states urged to coordinate intermodal transport systems (The Star, Kenya)
The lack of an efficient and integrated transport network in Africa means that the continent is missing out on a big opportunity to exchange goods and services freely. National Treasury CS Ukur Yatani has said with a population of 1.4 billion people as of April 2022, representing 16.72 per cent of the world population, Africa provides a large market for intra-Africa trading, but it is still largely uncoordinated and untapped. The CS lamented the paltry three per cent of the global exports and imports that Africa contributes to goods and services. This, he said, is a wakeup call for Africa to improve its intermodal transport systems so as to promote the manufacturing sector, strengthen the export promotion councils, and open up special economic zones for value addition processes for export markets
President Cyril Ramaphosa on Thursday explained that it was urgent that African countries cooperate to manufacture their own vaccines, and strengthen their own health systems so that these vaccines reach the people who need them most. Ramaphosa was speaking during the official talks on the occasion of a State visit by Guinea-Bissau President His Excellency General Umaro Sissoco Embaló. “We have the arduos task of rebuilding our societies, in which so many lives have been lost, and our national economies, which have suffered great damage. Africa’s recovery depends on more of our people getting vaccinated against Covid-19,” he said. He explained that it was a cause for great concern that the global community had not sustained the principle of solidarity and cooperation when it came to equitable access to vaccines. He said a renewed momentum must be given to the process of implementing the agreements that exist between South Africa and Guinea-Bissau, saying this should form part of the country’s efforts to implement the Africa Continental Free Trade Area agreement.
Implementing digital trade facilitation reforms have positive impacts on intra-COMESA exports. It is estimated that an increase of 10 percent in the adoption of digital trade technologies would result in a 5.5 percent increase in intra-COMESA exports. The regional organization is therefore scaling-up the Free Trade Area (FTA) to a Digital Free Trade Area (DFTA), to empower traders to apply ICT tools particularly on cross border trade. This will not only enhance efficiency but also cut costs and minimize physical-related barriers to trade. Pursuant to this objective, COMESA and the Commonwealth Secretariat partnered to host a training on digital trade on 25 – 27 April 2022 to build the necessary capacity within the region on how thrive in a fully digitally enabled trading system. The training targeted policy makers, trade officials and technocrats as well as legal reform officers involved in the digital trade process.
COMESA has developed a draft strategy to harness the benefits of the Blue Economy for its 21 Member States. The draft strategy was presented to delegates from the Members States on 26-27 April 2022 in Lusaka, Zambia, where it was reviewed and validated. The concept of the Blue Economy has been embraced by the COMESA Member States as a mechanism to realize sustainable ocean-based economic development. Currently, there is limited information on the Blue Economy as the focus has been primarily on land-based economic development or on conservation rather than on the sustainable use of the investment in an ocean-based economy, for national benefit. “An integrated approach to ocean-based and inland water development, which brings together economy, environment and society is crucial,” said the COMESA Assistant Secretary General, Dr Kipyego Cheluget when he addressed the delegates.
The current portfolio of World Bank supported projects in the COMESA region is close to five billion dollars and set to rise as other programmes are set to come on board. The largest project is the Regional Infrastructure Finance Facility (RIFF) of US$ 425 million whose objective is to promote access to long-term finance and improve the enabling environment for investment in infrastructure. The bulk of this funding is under the Trade Development Bank, a COMESA institution. The review of the ongoing programmes and discussion on new areas of collaboration formed part of the agenda of a virtual bilateral meeting between COMESA and the World Bank Group (WBG) Tuesday, April 26, 2022. It was led by the World Bank Regional Director for Africa and the Middle East Dr. Bouthenia Guermazi and COMESA Secretary General, Chileshe Kapwepwe. COMESA SG highlighted key areas where the Bank’s support would be crucial including the implementation of smart border initiative, which leverage on technology to improve efficiency at border points. The other is the scaling up of climate smart agriculture focusing on small scale growers to link them to market.
Global economy news
G20 debt relief talks should take three months, says IMF Africa head (Engineering News)
Debt restructuring talks between creditor countries should take three months, the head of the IMF’s Africa Department told Reuters, amid criticisms of the slow speed of negotiations and calls for China to show leadership in tackling debt issues. South Africa has offered to co-chair Zambia’s creditor committee, following China’s pledge to do so at IMF meetings last week, but Zambia’s debt sustainability analysis has yet to be finalized, Abebe Aemro Selassie said in an interview.
US Treasury Secretary Janet Yellen hosted G-7 Ministers and heads of multilateral development banks on Tuesday. The high-level virtual roundtable event to discuss scaling up of infrastructure financing—organized in the context of President Biden’s Building Back a Better World plan—was moderated by US Assistant Secretary for International Trade and Development Alexia Latortue. Speaking at the virtual roundtable, African Development Bank Group President Akinwumi Adesina commended Secretary Yellen and the Biden Administration for mobilizing development resources to expand infrastructure financing, which he said was critical for Africa and other parts of the developing world.
The United Nations Development Programme (UNDP), the United Nations Department of Economic and Social Affairs (UN DESA), the Organisation for Economic Co-operation and Development (OECD), the European Union (EU) and the Governments of Italy and Sweden announced a new joint flagship initiative - the Integrated National Financing Framework (INFF) Facility. The Facility will bring together international partners to align and magnify support to more than 80 countries to channel critical investment to the Sustainable Development Goals (SDGs). Countries’ efforts to finance SDGs must respond to an exceedingly challenging global environment. The UN’s Inter-Agency Task Force on Financing for Development warns of a deepening finance divide that is driving uneven recovery from Covid-19 in the latest Financing for Sustainable Development Report, launched last week. For one in five developing countries, GDP per capita was projected to remain below 2019 levels through the end of 2023, even before the impacts of the war in Ukraine were felt. About 60 per cent of Least Developed Countries and other low-income countries are at high risk of or in debt distress. “Although there is enough money in the world to finance the SDGs, it is not allocated in the right places and amounts -- just 20% of global capital is held in developing countries, which are home to 84% of the world’s population,” said Achim Steiner, UNDP Administrator. “To bridge this gap, this new INFF Facility will provide countries with the technology, expertise, and tools they need to implement ambitious financing strategies that will unlock game-changing levels of finance -- allowing countries to take decisive climate action and make future-orientated investments in key areas like nature, literacy, healthcare and sanitation.”
A new strategic partnership between the International Chamber of Commerce (ICC) and the eTrade for all initiative seeks to strengthen efforts towards more inclusive development outcomes from the digital economy. The partnership was announced on 25 April during the UNCTAD eCommerce Week held in Geneva and online, following a vetting process among the initiative’s 34 members.
The eTrade for all initiative serves as a global helpdesk for developing countries to bridge the knowledge gap on e-commerce. It provides access to information and resources, promotes inclusive dialogues on e-commerce and the digital economy and catalyses partnerships.
It will enable consistent, systematic and strategic engagement of micro, small and medium-sized enterprises (MSMEs) across all sectors, which are affected by the increased digitalization of economies in developing and developed countries.
UNCTAD’s eTrade for Women initiative has joined forces with Deutsche Post DHL Group, a leading player in international logistics, to help women overcome some of the barriers to global digital trade. According to a recent UNCTAD study, inadequate access to reliable and affordable trade logistics is among the top challenges many e-commerce businesses face in developing countries. Such obstacles often affect more women business owners than their male counterparts as they also tend to have less access to knowledge, funding and support.
The new WTO Research Database on Trade and Gender, launched on 29 April, brings together more than 100 studies on how to make trade work for women, providing support for WTO members’ efforts to integrate gender issues into trade policies and agreements. The database will be regularly updated as researchers submit more published papers.
The experience-sharing session followed on from the first session held on 4 March 2022, which addressed two main topics: the definition of lists of essential goods to fight the pandemic and challenges related to tariff classification. Both sessions were well attended by Geneva and capital-based officials, signalling that experience sharing should remain high on the work programme of the Committee.
In the second session, China, the European Union, Thailand, the United Kingdom and India reported on how they have organized their national statistical systems to monitor and measure trade in essential goods to combat COVID-19 since the beginning of the pandemic — for example, by including new tariff codes or statistical breakouts or by relying on other methods. Members also shared the problems faced in data monitoring and collection and how they were addressed.