tralac Daily News
Team South Africa will host a mining investment forum at the Investing in African Mining Indaba at the Roof Terrace of the Cape Town International Convention Centre tomorrow, Tuesday, 10 May 2022 from 14:00-16:00. The theme of the session will be Accelerating Economic Growth by Building Partnerships in Mining and Mineral Beneficiation. The Mining Indaba gets under way this morning and will take place until Thursday, 12 May 2022 under the theme Evolution of African Mining: Investing in the Energy Transition, ESG, and the Economies.
“The purpose of hosting the investment forum is to provide potential investors from the targeted countries with the opportunity to interface with the South African ministers as well as obtain clarity on the issues relating to the South African mining environment. The session will be an exclusive event for about 150 delegates, who will include investors, senior mining executives, senior government officials and key media figures where government will present its offerings to the investment community. Discussions at the session will centre on current and critical issues affecting the mining industry,” says Head of Invest South Africa at the Department of Trade, Industry and Competition (the dtic), Mr Yunus Hoosen.
He adds that the session and South Africa’s participation in the Africa Mining Indaba will contribute in positioning the country as an investment destination of choice with a large presence of mining sector multinational investors with thriving businesses, thereby promoting the country’s investment proposition
Port of Saldanha Bay Could Boost South Africa’s Container Capacity (The Maritime Executive)
Plans are underway in South Africa to develop an international business zone at the deep draft Port of Saldanha Bay, located 65 miles to the north of Cape Town, to provide for the transportation needs of the oil and gas industry. There may also be opportunity to develop container operations at Saldanha Bay.
Kenya rich with opportunities for local exporters (Sunday Mail)
The ongoing engagement and re-engagement drive being spearheaded by President Mnangagwa is bearing fruit. An increasing number of countries are warming up to bilateral trade and economic relations with Zimbabwe. Of late, the Second Republic has intensified engagements with fellow African countries as it looks to unlock opportunities availed by the African Continental Free Trade Area (AfCFTA). In March, President Mnangagwa was in Kenya on a State visit, during which he held high-level talks with his counterpart, President Uhuru Kenyatta. The two Presidents discussed the need to expand cooperation between Harare and Nairobi in critical areas such as trade, investment and tourism. In addition, the Zimbabwe-Kenya Joint Permanent Commission for Cooperation (JPCC) has over the past few years been engaging in areas that will bolster ties between the two countries. What is perhaps important going forward is for local companies to explore opportunities available in Kenya, as well as create strong synergies with like-minded businesses in the East African country.
Kenya’s economy booms as Tanzania softens borders (The East African)
Tanzania’s “softened” borders with Kenya, reduced non-tariff barriers and solutions to bilateral issues have resulted in the growth of businesses in both countries, a year after President Samia Suluhu took office. The survey shows that the pandemic notwithstanding, Kenya imported more goods during the past year than before from Tanzania.
Poor roads, port inefficiencies blamed for high transport costs (Business Daily)
The cost of moving goods in Africa is 3.5 times more expensive compared to high-volume global trade routes because its ports have little economy of scale, according to logistics experts. Increasing operational costs due to underdeveloped rails, road networks and regulatory bottlenecks have also been cited as major contributors to slow traffic through Africa’s ports. Speaking during the 26th Intermodal Africa Exhibition and Conference in Mombasa, participants said capacity constraints at the ports have limited accommodation of large ships in line with international shipping trends.
The CS said the cost of logistics in Africa is pushed up by the states of infrastructure. “We cannot deny the fact that the cost of doing business in Africa is directly determined by the state of infrastructure. Undoubtedly, transport systems interconnectivity in the continent is still poor and the state of affairs cannot be improved if governments do not integrate their investment plans,” Mr Yatani said.
Uganda parliament delays decision on coffee exports deal (The East African)
The future of Uganda’s coffee sector and the 15 million people engaged in the crop’s value-chain remains unclear after the Deputy Speaker of Parliament declined the tabling and debate of a key report on the sector. The document prepared by the House committee touched on the contentious agreement between the government and Italian investor Uganda Vinci Coffee Company Ltd.
The report, which was signed by all 27 committee members, will be debated followed by a vote to decide whether to terminate the coffee deal or uphold it. On February 10, Uganda government through Finance Minister Matia Kasaija and Permanent Secretary Ramathan Ggoobi, signed a deal with Vinci Coffee Company, represented by Enrica Pinetti.
Uganda bans crypto trade – TechCrunch (TechCrunch)
Uganda’s financial regulator has warned payment service providers from enabling cryptocurrency transactions in the East African country. The Bank of Uganda, in a letter, said it had not licensed any payment provider or operator, including banks or fintechs, to sell or facilitate trade using crypto — while also making reference to the government’s stand that crypto is still not legal tender. Payment providers found selling or facilitating trade will have their licenses revoked, the bank said. “Bank of Uganda has noted press reports and adverts advising the public that they can convert crypto currencies into mobile money and vice versa. We are also aware that such conversion cannot happen without the participation of the Payment Service Providers and or Payment System operators,” the bank’s acting director Andrew Kawere, said in a statement, according to this report.
“This is to advise that Bank of Uganda has not licensed any institution to sell crypto-currencies or to facilitate the trade in crypto-currencies. This is in line with the official Government position…this is to warn all licensed entities under the National Payment Systems…to desist from facilitating crypto currency transactions.”
In 2021, the Port of Maputo achieved a new handling record of 22.2 million tons, representing 21% year-on-year growth compared to the previous year’s handling volume of 18.3 million tons.
A reflection of a post-Covid market recovery, Mozambique’s Maputo Port Development Company (MPDC) CEO Osório Lucas says this growth can also be attributed to a more efficient usage of several of the port’s rehabilitated berths, as well as an expanded ferro slab footprint and dedicated rail siding.
“Investment in automation solutions within the port were carried out throughout last year, as part of a strategic expansion plan prepared by the MPDC to address the bottlenecks within the Maputo Corridor and therefore improve the efficiency of cross-border cargo flow in Sub-Saharan Africa,” says Lucas.
Akinwumi Adesina, the president, of the African Development Bank (AfDB), says the bank has secured a 15.6 billion dollars investment for the construction of the Lagos-Abidjan highway. He said that the investment would strengthen regional trade and integration in West Africa by linking the hinterlands of different Participating Member Countries (PMCs). The president said that the investment would include providing seaport access to landlocked countries and some transition states of West Africa to the vibrant seaports. NAN reports that the Lagos-Abidjan highway interconnects the capital cities of five Western African States, covering approximately 1,028 km and eight border crossings. They are Cote d’Ivoire, Ghana, Togo, Benin and Nigeria.
Amidst the present administration’s current efforts aimed at diversifying the base of the Nigerian economy from the perils of oil, the need to provide adequate funding and attention to the non-oil export sector cannot be over-emphasised. Analysts have contended that most of the economic challenges bedeviling the country could simply be addressed by boosting local production and strengthening its non-oil export potential.
a vibrant non-export sector has the potential to solve much of the country’s unemployment challenges by providing millions of direct and indirect job opportunities. Strengthening the appropriate non-oil export facilitation institutions to live up to their mandate of providing short-medium- and long-term financing to the private sector will not only boost the government’s revenue receipts thereby enhancing its fiscal profile amidst the current revenue challenges but also benefit the economy in several ways.
Stranded vehicles litter ports over controversial CET levy (The Guardian Nigeria)
Thousands of vehicles are currently littering the Lagos ports as a result of the brouhaha between the Customs brokers and the Nigeria Customs Service (NCS), over the controversial 15 per cent Common External Tariff (CET) Levy, lingers. The abandoned vehicles are now accumulating demurrage and rents, which creates serious bottleneck to revenue collection and impediment to trade. With the Customs changing the controversial 15 per cent National Automotive Council (NAC) levy on motor vehicles imported into the country to 15 per cent Common External Tariff (CET) levy, the clearing agents have abandoned vehicle clearing, describing the levy as illegal.
The clearing agents, who have threatened to shutdown activities at the Lagos ports any moment from now, decried the ‘desperation’ of the NCS on the imposed levy.
The Ghana Ports and Harbours Authority (GPHA) has assured the Ghanaian trading community that the country’s seaports are ready for Africa’s trade integration agenda through the African Continental Free Trade Area (AfCFTA). She said, “Therefore, GPHA sees AFCFTA as a great opportunity to continue to invest in the infrastructure required to propel the economy for the future.” Mrs. Essel stated this at the 12th monthly stakeholder engagement seminar organized by the Ghana News Agency Tema Regional Office which is a platform rolled out for state and non-state actors to address national issues.
African trade news
The African Continental Free Trade Agreement Can Succeed With Bitcoin (Bitcoin Magazine)
The African Continental Free Trade Agreement (AfCFTA) is the dawn of a fresh start for the continent, and if implemented successfully, it will unleash a new era of prosperity on the back of increased intra-African trade.
As the continent grapples with the negative economic effects of the pandemic, it became very clear that developing decentralized regional value chains is necessary
Cross-border payments within Africa are very slow and costly. This is partly due to the fact that 80% of African cross-border transactions originating from African banks are routed offshore for clearing and settlement through correspondent banking relationships. With over 42 different currencies on the continent, currency conversion costs amount to $5 billion annually. Additionally, the majority of these currencies don’t have any value outside of their home country and, coupled with disparate regional exchange rate regimes and payment systems, transacting with African currencies becomes impractical. Without a uniform or robust payments network, the AfCFTA is unlikely to succeed, and this is where Bitcoin is a viable solution.
With the continent grappling with the introduction of a single currency for almost 30 years, the Afrexim Bank with support from the Africa Continental Free Trade Area (AfCFTA) Secretariat recently introduced PAPSS which is expected to guarantee instant payment of goods and services between African jurisdictions in any local currency.
Speaking at a summit organised by the Bank of Ghana and its partners, the Head of Payment Systems at BoG, Dr Settor Amediku, said the central bank would ensure that all financial institutions were onboarded to PAPSS, noting that no institution would be left behind.
He said the financial institutions would be able to do this through the GhIPPS platform after it was successfully linked to PAPSS. “PAPSS will work with all regulated payment institutions in every African country. For example, in the case of Ghana, all our banks are going to be linked to the PAPSS infrastructure through GhIPSS. “We have licensed fintechs, we have savings and loans companies, and we have
Experts from across academia and policy sectors have concluded the external peer review of the 2022 edition of the Economic Report on Africa (ERA 2022), a flagship of the Economic Commission for Africa (ECA). The report on the theme: ”Leveraging digital technology and innovation to promote regional value chains in building forward better in Africa” will be formally launched later in the year after being presented at the 54th session of the ECA Conference of Ministers (CoM2022) scheduled for 11 -17 of May 2022 in Dakar, Senegal.
The industrial sector in the East African Community (EAC) is set to benefit from a new tariff for imported goods. This follows adoption of a 35 percent common external tariff (CET) by the partner states for goods that are imported into the bloc. This will be the fourth band of the tariff for the imported goods and whose implementation will start on July 1, this year. The current maximum CET for goods that are imported into the Community is 25 percent. The agreement to the effect was made during a comprehensive review of the CET held in Mombasa, Kenya on Thursday.
“The new tariff will also safeguard consumer welfare on products where the region is net importing,” said Ms Maina who is the Kenya Cabinet Secretary for Trade, Industrialisation and Enterprise Development. EAC Secretary General Peter Mathuki echoed saying the new tariff would encourage the local manufacturing and safeguarding locally made goods.
Among the tariff lines in this fourth band include; dairy and meat products, cereals, cotton and textiles, iron and steel, edible oils, and beverages and spirits.
Policymakers in Africa should not bow to pressure to introduce broad climate-linked trade regulations aimed at reducing emissions in the African Continental Free-Trade Area (AfCFTA) agreement, say trade law experts. Such regulations could prove overly burdensome for African countries that have to rely on fossil fuels to power industrialisation initiatives that would help reduce poverty and unemployment in the world’s least industrialised region, they say.
Global wheat prices are so high that African consumers are starting to ditch the grain from their diet. Food producers in Kenya, Egypt, Democratic Republic of Congo, Nigeria and Cameroon say they’re mixing cheaper alternatives into their breads, pastries and pastas. Local rice, manioc flour and sorghum are substituting for wheat, which has spiked about 40% this year as Russia’s invasion squeezed exports from Ukraine, one of the biggest shippers. These domestic crops are less exposed to trade disruptions and global inflation, thus offering some protection from food prices that remain near record levels. Kenya imports about 44% of its wheat from the Black Sea region, and the surging prices helped stoke inflation to 6.5% in April. Unga Group Plc, the Nairobi-based maker of Exe brand wheat flour and Jogoo maize flour, is seeing a shift in sales to its Amana line of rice and pulses.
Countries in western Africa, like Nigeria, Senegal, and Angola, in particular have largely untapped potential for liquefied natural gas, the European Commission said in the document, per Bloomberg. A number of gas pipeline projects linking Africa to Europe have been studied in recent years, and feasibility studies are ongoing to build the world’s longest offshore pipeline, carrying natural gas from Nigeria to Morocco and Europe, according to a Nigerian presidential adviser. Europe gets about 40% of its natural gas from Russia, but the country’s invasion of Ukraine has accelerated the EU’s efforts to reduce reliance on Russian supplies. The European Commission has proposed cutting EU demand for Russian natural gas by two-thirds before the end of the year under a plan to diversify supplies and speed up the rollout of renewable gases. The EU has agreed to stop imports of Russian coal starting later this year, but hasn’t announced an embargo on natural gas or oil. In the draft strategy document, the European Commission said it planned to boost imports of liquefied natural gas by 50 billion cubic meters and pipeline gas from countries other than Russia by 10 billion cubic meters, per Bloomberg.
World’s Best Banks 2022: Africa (Global Finance)
In March, many banks in Africa reported their 2021 annual results. Across the board, the recurring theme was a return to profitability with a bang. After the banks had witnessed their operations and books ripped apart by Covid-19, 2021 not only marked a return to near normalcy but also a bumper crop of mindboggling results. From a global perspective, 2021 can be summarized as a recovery year, according to Sim Tshabalala, CEO of the Standard Bank Group. For the banking industry, the easing of pandemic restrictions and increased access to vaccines fueled the economic resurgence.
“Having consistently maintained robust balance sheet metrics across capital, liquidity and credit provisions, the results reflect a rebound on the back of a more supportive operating environment and the focused execution of their digitally led strategies,” says Francois Prinsloo, Africa Banking and Capital Markets leader at PwC.
Across Africa, banks are optimistic that the tough season is behind them. Measures taken in 2020 to build up capital buffers to ensure sound footing and preserve credit strength are now paying off. Besides, the problems of provisions for nonperforming loans (NPLs) and forced holdback in lending are no longer necessary.
Yet again, Standard Bank overcame competition from its pan-African and domestic peers to emerge as the Best Bank in Africa overall and its home market of South Africa. Emerging as the top bank on the continent comes against the backdrop of an impressive rebound for the banking powerhouse with operations in 20 countries, seven international markets and 15 million active clients.
Having strong ambitions for Africa made Societe Generale become a formidable banking group on the continent, where it is a leading bank in many countries, with large market shares. “When Africa is inventing its ways of using banking products and services, Societe Generale reaffirms its commitment to playing a key role in this transformation,” reckons the bank’s Goutard.
The bank seeks to help clients take advantage of the African Continental Free Trade Area and focused on connecting Africa with China and the rest of the world as well as further developing intra-Africa trade.
Global economy news
In her opening remarks to the event, WTO Deputy Director-General Anabel González noted the significant impact subsidies can have on trade and trade policy. Subsidies can distort trade and investment flows, undermine the predictability and stability created by trade commitments, and erode public support for open trade. In addition, important issues have emerged which have prompted new debates about the role of subsidies. These issues include: the emergence of global value chains; digital markets; the global importance of economies in which the state plays a central role, and of international state-owned enterprises; the urgent challenge of climate change; and the recognition that well-crafted subsidies can be an important part of the public response to economic and health emergencies.
The meeting was the first opportunity for the whole membership to share their initial views on the text forwarded by WTO Director-General Ngozi Okonjo-Iweala and shared immediately by Ambassador Gberie with all delegations after an informal meeting of the TRIPS Council on 3 May. After an impasse of more than one year in the TRIPS Council, DG Okonjo-Iweala, working with Deputy Director-General Anabel González, supported an informal group of ministers’ efforts to come together around what could be a meaningful proposal, without prejudice to their respective positions, that could provide a platform to be built upon by the membership.
Honest, inspirational and properly tailored messages can turn around the fortunes of Micro, Small and Medium Enterprises (MSMES) for the better, according to some experienced sector entrepreneurs. Key sector players further argue that “sharing past experiences among peers – in this case the MSMES – is one of the most fitting prescription needed right now to inspire entrepreneurs whose enterprises are struggling to cope with the Covid-19 pandemic-induced shocks.” In agreement with the above view, global entrepreneur Dr Kalpana Abe observed that veteran entrepreneurs have a responsibility to inspire the upcoming generation. “This inspiration should not only be on how to go about the good times but perhaps most importantly drill them on how to cope with the terrain when the going gets tough,” she said during the Go for Gold campaign launched in Kampala early this week. Just like Dr Kalpana, the CEO of Goldmine Finance, Mr Allan Tayebwa, suggests that “there is no better time than now- to provide motivation and necessary resources to MSMES sector players currently enduring the effects of the pandemic as well as the dire implications of the inflationary pressures on the cost of doing business.”
The FAO Food Price Index averaged 158.2 points in April, down 0.8 per cent from the surge in March, but remained nearly 30 per cent higher than in April 2021. The Index tracks monthly changes in the international prices of a basket of food commodities, and the decrease was led by a slight decline in the prices of vegetable oils and cereals.
“The small decrease in the index is a welcome relief, particularly for low-income food-deficit countries, but still food prices remain close to their recent highs, reflecting persistent market tightness and posing a challenge to global food security for the most vulnerable,” said Máximo Torero Cullen, FAO Chief Economist.
CHOGM2022 will foster Commonwealth prosperity – SG (The New Times)
The Commonwealth Heads of Government Meeting 2022 (CHOGM2022) will be held from June 20 to 25 in Kigali, Rwanda. This is the 26th CHOGM since 1971, and the second to be held in Africa after that held in Uganda in 2007.
The New Times’ Emmanuel Ntirenganya had an interview with Commonwealth Secretary-General, Patricia Scotland QC on May 04, 2022, in Kigali, about what this major meeting means for this voluntary association of 54 countries home to 2.5 billion people, opportunities that it presents, tackling rising cost of living, and destructive climate change effects.
Q: What opportunities are expected at CHOGM2022, and how could they help address problems such as unemployment, especially among the young people?
A: We have the youth forum where we will be specifically looking at the young entrepreneurs, and how we enable them to get better. But look at the trade initiative that we’ve got. The good thing about our Commonwealth is that we share so much in common: We share common language, common structure in terms of parliamentary structure, we have similar institutions which share the rule of law. All of that makes us more than 21 percent cheaper, easier, faster for us to do trade one with the other.
But, we hope to be at [$]1 trillion by 2030. And you know that in Africa, African countries have become party to the African Continental Free Trade Agreement. So, when you look at the opportunities that brings to Africa and to our Commonwealth, together with the trade facilitation, we believe that working together as the Commonwealth, we will be able to enhance trade, particularly digital trade.