tralac Daily News
SA celebrates new e-certification system for exports (Food for Mzansi)
With more than half a billion e-certificates already issued, South Africa now counts among the first nations in the world with an electronic certification system for the import and export of agricultural products. Agriculture, land reform and rural development minister Thoko Didiza launched the electronic certification system earlier today. “We are delighted to have reached this milestone within a short period of time and we also owe the existence of this system to our industry. We had extensive stakeholder consultations and ensured that there was awareness created and, therefore, a better opportunity to implement the painful process of change management with ease,” Didiza said.
According to Didiza, the e-certification process will not only help South African inspectors to save time during the inspection and certification processes, but be of equal value for inspectors in the Netherlands and other countries. A lot of time will be saved when examining certificates accompanying South African fruit and vegetable consignments, especially through pre-clearance procedures of consignments en route to European Union nations.
The news that the ANC is seeking greater co-operation from the private sector in revitalising state-owned entities (SOEs) could signal an important shift in policy and mindset. It has become all too apparent that the state lacks the resources and capabilities to go it alone in delivering critical infrastructure and related services. Yet privatisation is no panacea either because of the risks of fragmentation in crucial network industries and of domestic public interests being sidelined in the pursuit of commercial objectives. Responsive partnerships are required that harness the funding and know-how of global operators, while strengthening local linkages, competencies and quality standards in the process. This was an important message emerging from a review of the transport sector in a Human Sciences Research Council (HSRC)-World Bank workshop hosted in March to better understand the performance of firms involved in tradable services in SA.
The event drew attention to the role of both public and private services in supporting the industrial, mining and agricultural base. In fact, services have been the mainstay of domestic job creation over the past decade. SA boasts many service firms with an international reputation, including Naspers, Discovery, MTN, Vodacom, Standard Bank, Absa, Sanlam and Imperial Logistics. Service exports have been even larger than those of motor vehicles. Yet the service sector has been neglected historically by researchers and policymakers, with little recognition of its contribution to trade and growth. The omission has been compounded by a shortage of evidence on the significance of services to national economic development.
Minister of Transport, Fikile Mbalula, has called for a ban on the export of scrap metal as the theft and vandalism of critical rail infrastructure sabotage the country’s economy. “We are unequivocal in our call to ban the export of scrap metal and will support any measure that will bring us closer to this reality,” the Minister said on Monday. Addressing a media briefing on the White Paper on the National Rail Policy in Pretoria on Monday, he said taking this step will reinforce government’s interventions aimed at protecting public assets and making the theft of cables and other metals less lucrative.
The Minister said the National Rail Policy is critical for fast tracking the implementation of priority structural reforms in the economy to support economic recovery. “The key policy position on the introduction of third-party access on the rail network is one of the key thrusts to drive efficiencies and improve competitiveness. “The National Rail Policy will guide the building of the local industry capacity thereby boosting the manufacturing capacity and localisation. “Government will ensure that industrialisation and the local production of steel and other inputs, rail lines and supplies, and rolling stock is promoted through policies that will require state and private operators to procure all supplies from South African-based manufacturers,” the Minister said.
The Minister said a localisation strategy will be used to develop the industrial base for an active export strategy, particularly to other African countries. This will also support the Steel Master Plan of government.
Minister Gwede Mantashe: Africa Mining Indaba (South African Government)
As a result of the effects of the Covid-19 induced economic shocks, the current global economic environment remains uncertain. We must build on the experiences learned from the pandemic to reimagine our economic growth path and protect our economies from future shocks. This year’s mining indaba happens with the backdrop of high energy prices, which pose a significant inflationary risk to the poor and emerging markets. Without any doubt, increased energy prices continue to be of great concern for our governments and investors alike. The African continent needs to build resilience against energy supply shocks through the exploration and development of our indigenous energy sources. It is, therefore, not surprising that we convene this Indaba under the theme: “Evolution of African Mining: Investing in the Energy Transition, ESG, and the Economies.”
One of the most promising developments on the continent is the African Continental Free Trade Area (AfCFTA) which has the potential to create the biggest free trade area in the world, cutting red tape and boosting trade throughout the continent. This will significantly improve mining supply chains and reduce input costs.
The Just Transition to a low-carbon future will require “green metals” to which Africa has in abundance of untapped resources such as lithium, copper, cobalt, nickel, and zinc. There is no doubt that the transition will drive demand for these minerals. The Democratic Republic of Congo (DRC) demonstrates this and together with Zambia are among the largest producers of copper and cobalt in the world. The DRC, for example, accounts for about 70% of global cobalt output and half of the world reserves. In addition, global targets to reduce greenhouse gas emissions entail transitioning away from pollution-emitting combustion engines to greener alternatives that utilise electric or hydrogen fuel cell technologies. The catalytic convertors that vehicle manufacturers use to reduce or neutralise harmful pollutants from exhaust emissions require PGM metals. South Africa accounts for the largest percentage of the world’s Platinum Group Metals reserves with Zimbabwe ranked third. This will ensure that both countries play a crucial role in the world’s emerging energy transition. Minerals of the future that Africa has in abundance hold great potential for the continent. These minerals can be used in the development of the hydrogen economy.
Namport increases total cargo handling (Namibia Economist)
Despite the ongoing global shortage of containers, the Namibian Ports Authority (Namport) recorded positive growth during its just-ended 2021/22 financial year, increasing total cargo handling to 6.5 million tonnes, an increase of 380,541 tonnes. According to Namport, the increase in volumes was mainly due to the increase in vessel visits by 289 vessels or 22%. The vessel’s gross tonnage also increased by 3.4 million. Contributing to the increase was TEU (twenty equipment unit) handling which amounted to 168,278, of which, 61,106 TEUs or 36% were exported, 69,467 TEUs or 41% were imported and 37,705 TEUs or 22% were transshipments. TEUs increased by 12,298 or 8%. “This increase was mainly due to increased containerized commodities such as copper, charcoal, frozen fish, marble, frozen poultry, sugar, chemicals, scrap steel, and wooden products,” Namport stated.
cross border volumes increased by 10% from 1,464,000 gross tonnages (2020/2021) to 1,606,984 gross tonnages (2021/2022). South Africa held the majority of the port’s total cross border market share at 48%, followed by Zambia at 23%, DRC (15%), Zimbabwe (6%), Botswana (6%), Angola at 2%) and Malawi at (1%). Major commodities exported from SADC countries through Namibia included copper, manganese ore, and wooden products (Timber) while major commodities imported to Namibia destined to SADC Countries: frozen poultry, vehicle on own wheels, machinery, spare parts, Tires, chemicals (for mining use), electrical goods, electrical equipment and malt.
Kenya’s Agoa exports climb to Sh50 billion (Business Daily)
Export of duty-free goods to the US under the African Growth and Opportunity Act (Agoa) has crossed the Sh50 billion mark after declining last year. Data from the Kenya National Bureau of Statistics (KNBS) indicates that the value grew by 20 percent, marking one of the biggest leaps in seven years. The goods, mainly textile products, increased from Sh42.2 billion in 2020 to Sh50.6 billion in the review period. “All the selected indicators under the EPZ garment and apparel subsector reported growths in 2021,” said the KNBS.
Agoa allows Kenya to export selected goods at preferential terms, exempting them from paying tax. Textile and apparel products, which have dominated exports under Agoa since it was enacted in 2000, remain the main items in Kenya-US trade, defying efforts made at product diversification over the 18 years. Increasing trade volumes and range of products are some of the grounds that Kenya used to successfully push for a 10-year Agoa extension, now open up to 2025. Nairobi’s bid to expand its initiative beyond apparel falls short of its exports target as the volumes of tea, coffee, and edible oil, which Kenya has been shipping to the US remain low.
Used truck dealers risk closure on imports ban (Business Daily)
Dealers in used commercial vehicles have protested the impending ban on second-hand imports of buses and trucks, saying the market dynamics will threaten their viability once the restrictions are enforced. The Kenya Bureau of Standards (Kebs) said in a notice that used buses more than seven metres in length will not be imported into the country effective July 1. Trucks with load capacities of 3.5 tonnes and above will also be banned from the same date. Tractor heads and prime movers not older than three years will continue to be imported until June 2023 after which only new units will be allowed in. Used commercial vehicle dealers say supply gaps in the market and inconsistent policy in the East African Community (EAC) will shift the business to neighbouring countries as local players face closure. They note that countries such as Uganda continue to allow imports of used commercial vehicles which also operate transport businesses in Kenya, adding that most European models of prime movers are not assembled locally.
Global supply woes hit Kenyan consumer with costly imports (Business Daily)
Kenyan households and businesses are feeling the pinch of global supply constraints and weakening shilling that has increased the cost of importing essential goods, further squeezing earnings. Official data shows that landed cost of basic food items like wheat, cooking gas, as well as key materials used in farming and construction, have shot up by as much as 67 percent in the past year. An analysis of commodities shipped into the country last year based on data collated by the Kenya National Bureau of Statistics (KNBS) shows the cost of importing cooking oil rose the highest, followed by fertiliser, iron and steel. The emerging global geopolitical and persistent supply chain concerns have exposed Kenya’s soft underbelly as a net importer of raw materials for manufacturing basic household items. The rising cost of importation has hit households hardest, prompting some of them to postpone or scale down projects.
“The freight costs have also increased by more than 30 percent and we all know what is happening in the fuel market.” The farmers have not been spared. The average landed cost of fertiliser last year averaged Sh51,168.10 per metric tonne, a 56.05 percent jump from Sh32,788.80 in the prior year, according to the KNBS data, sourced from the Kenya Revenue Authority.
The largest jump was, however, recorded in the landed cost of vegetable oils and fats that climbed 67.39 percent per kilogramme to Sh130.40 last year from Sh77.90 in 2020. “We have tried to minimise cost to consumers by being creative and innovative with other parts of the supply chain, but overall we have had no choice but increase the prices by about 10 percent,” Rajul Malde, the commercial director of Pwani Oil, the makers of products such as Fresh Fri cooking oil and Sawa soaps, told Business Daily on April 25.
Kenya resolves fuel dispute with Uganda (Business Daily)
Kenya has moved to avert a diplomatic spat with Uganda over a decision to localise fuel cargo meant for Kampala. Petroleum Principal Secretary Andrew Kamau told Business Daily on Monday that Kenya shared a record of available stocks of diesel and super for Uganda in this month’s allocation quotas, easing fears of a looming fuel shortage in the neighbouring country. Kenya last month ordered oil marketers to localise 133.5 million litres of super and 104.7 million litres of diesel that were meant for the transit market prompting protests by the Ugandan Parliament over looming outages. Uganda relies on Kenya for transportation of 75 percent of its fuel requirements highlighting the adverse effects in the likelihood of disruptions from Nairobi.
Manufacturers propose higher taxes on imports (The East African)
Importers of beauty products, textiles and motor vehicles face higher taxes should the East African Community settle on a unified policy on the fourth band of the Common External Tariff (CET). The maximum CET rate has been 25 percent but has risen to 35 percent after conclusion of negotiations to adopt the fourth band are ongoing. The CET is considered an important instrument of EAC Customs Union Protocol as it determines the tax paid on imports from outside the region. Under the current CET, raw materials attract zero percent tax, intermediate goods 10 percent and finished products attract 25 percent levy. “Among the EAC partner states, it is only Uganda that has proposed a 35 percent tariff. Kenya and Tanzania propose the maximum rate to be 33 percent, while Rwanda and Burundi propose 30 percent,” said Phyllis Wakiaga, chief executive of the Kenya Association of Manufacturers. “We as manufacturers have already agreed on a proposal by the Kenyan private sector of 35 percent as the fourth CET tariff band,” she added. Most of the products considered for a maximum CET rate (the fourth band) are under the EAC priority value chains as provided for in the EAC Industrialisation Policy (2012-2032). They include textiles, iron, steel and motor vehicles.
Manufacturers want higher tariffs to bar importation of items that could otherwise be made locally. “Some of the products have a long value chain and face unfair competition from cheap imports from Asian countries hence need higher rates to safeguard their production.”
“It will mean that we now have to change our strategy and re-invent and use local substitutes, which are likely to be even more expensive. This is likely to drive the local beauty industry out of business and benefit countries such as Nigeria, which are more established in the business,” said Jayne Okoth of the Rapenzel Hair Care.
The East African Business Council Board has indicated that In 2020, EAC countries imported goods worth USD.49.2million from the DRC while they exported USD. 584 million to DRC. Top EAC exports to DRC include: lime and cement, iron and steel, Tobacco, Beverages, spirits and vinegar, animal or vegetable fats and oils, wheat gluten, Sugars & confectionery, Plastics, and Soap among other products. Women cross-border traders in DRC have appealed for trainings on how to export to the EAC to be rolled out. The Goma One-Stop Border Post links Rwanda and DRC. In 2019 Rwanda’s exports of goods to DRC stood at USD 372.5 million while Rwanda’s imports from DRC stood at USD. 16.7 million.
BUA Foods, one of Africa’s leading FMCG companies has taken delivery of the first of two shipping vessels to augment its sugar export operations to the West African market, which kicked off successfully earlier this year. BUA Food’s export of refined sugar will benefit the economy, providing alternative source of income, while significantly diversifying the company’s markets. The vessels will depart and berth at BUA’s port and terminal increasing export capacity while reducing operating cost. The Mitsubishi of Japan built vessel is named MV Bundu – after the area in which the refinery is located. The vessels cargo capacity is suited to enhance quick and sustainable delivery of more refined sugar in the face of growing export demand from across the African region.
“As we drive our business for growth with focus on sustainable returns, and benefit to all our stakeholders and the Nigerian economy, owning a shipping vessel is an important step in BUA Foods strategy” said the Chairman BUA Foods Plc, Abdul Samad Rabiu. “We see an increased and continued demand for refined sugar across the region with attendant increase for logistics support to aid timely delivery, which is why it is important for us to strengthen our current capability with an own-controlled asset as we advance further in our business strategy. These new vessels will create operational efficiencies in our business and open possibilities for new services.”
The Cooperation Agreement is expected to provide a framework for bilateral cooperation on the initiative to develop the battery value chain as well as strengthen collaboration between Zambia and DRC. Once actualised, the combined strategy will create jobs for Congolese and Zambians and boost economies of the two countries. President Hakainde Hichilema said the signing of cooperation agreements between Zambia and the DRC to start manufacturing electric car batteries is key milestone towards poverty alleviation in Zambia and DRC.
“Today’s agreements prove that my attendance of the DRC Business Forum held in November 2021 was a right decision as it gave birth to today’s historical event. However, signing is one thing and there is need to actualize the agreement. Africa has for long been viewed as a source of raw materials, but the narrative is now being changed” the President emphasised.
President Tshisekedi notes that African countries should put their resources together to unlock their economic potential. He said the agreement will strengthen the value chain for production of batteries for electric cars which will be key to economies of Zambia and the DRC. Mr. Tshisekedi said Africa’s economic power will be advanced with such initiatives which will create jobs for many youths.
Speaking earlier, Commerce, Trade and Industry Minister, Mr Chipoka Mulenga the signing ceremony signified a key milestone for both countries as the initiative provides a great to harness mineral resource wealth and foster the development of mineral-based industrialisation and value chains.
The government of the Central African Republic has made significant efforts in recent years to improve public financial management, including through digitalization of services. Reforms aimed at digitalizing the tax administration have also been introduced. To support the additional work needed to scale up these reforms, the World Bank approved a $35 million grant for the Public Sector Digital Governance Project and $30 million for the Investment and Business Competitiveness for Employment Project. “Improving public financial management, transparency, and efficiency is central to the World Bank’s partnership with the Central African government, as is creating job opportunities for youth through a better private sector development,” said Han Fraeters, World Bank Country Manager for the Central African Republic. “Despite the difficult circumstances facing the country, it is important to remain engaged on an agenda that brings sustainable development impact to the people of the Central African Republic.”
Djibouti Border Set to Rise (COMESA)
Small scale cross border trade is set to thrive along the Djibouti- Ethiopia borders following the first joint border trade committee meeting on 27 – 30 April 2022. The meeting was driven by the need to identify and resolve challenges facing the implementation of the Djibouti – Ethiopia Border Trade Protocol signed in 2015. The meeting, which was conducted at Semera in Ethiopia brought together officials from different ministries and agencies, representatives of regional trade bureaus, customs control offices from Ethiopia and Djibouti and COMESA Secretariat. Key on the agenda was how to bring the Protocol, into compliance with the COMESA Simplified Trade Regime (STR). The STR is a trade facilitation instrument for small scale cross border traders dealing in small quantities of goods. It enables their goods to benefit from the removal of customs duty if those goods are on the Common Lists Also on the agenda were bilateral negotiations on the Common List of Goods that qualify for preferential treatment under the STR. The delegations agreed to amend the list of tradable goods to make the list compatible with COMESA STR and to include the Harmonized System (HS) code.
African trade news
Africa Competition Report 2022 (Baker McKenzie)
Competition authorities play an important role as champions, advocates and enforcers of competition policy across economies and view competition policy as a key driver of economic growth. The Report outlines how 29 of the 32 surveyed African jurisdictions and regional bodies have national competition laws in place. Although over the past two years African competition regulators have actively engaged in efforts to address pandemic-related challenges, there has also been a general upward trend in competition policy enforcement across the continent. African jurisdictions have strengthened their competition and antitrust regimes by way of amendments to existing legislation, the introduction of new laws and regulations, and renewed fervor and political will to enforce existing laws.
he Pan-African Private Sector Trade and Investment Committee (PAFTRAC) has announced today the launch of the 2nd edition of its Africa CEO Trade Survey. The focus this year will be on the opportunities being created by the African Continental Free Trade Area (AfCFTA) Agreement. The AfCFTA agreement creates the largest free trade area in the world, by the number of countries participating, and under which trading commenced in January 2021. The participation of the private sector is crucial to the success of the AfCFTA. The Africa CEO Trade Survey is an initiative by PAFTRAC that provides the continent’s private sector a platform to engage on localized and pan-African trade policies. The survey results are presented in a report format that seeks to advocate private sector views to inform policy reform and shape the future of African trade.
“The opportunity that the AfCFTA brings to businesses across the continent is enormous, that is why we must get the implementation right. The private sector wants and needs to be an ally in this process.” said Prof Patrick Utomi, Chairperson of PAFTRAC, commenting on the launch of the Africa CEO Trade Survey. “We call on business leaders from across the continent to make your voices heard by participating in this survey” he added.
Two years after the emergence of COVID-19, Africa has absorbed a number of lessons which will prove crucial as the continent confronts the new food, fuel and fertilizer crisis reverberating across the world as the Russia-Ukraine war creates historic, global trade and commodity disruptions. Ongoing studies will in time, no doubt, offer compelling explanations as to why the overall incidence of COVID-19 on the continent has remained low. But already, two things are clear: Africa reacted collectively, and it reacted early – and this has paid off.
Faced with a new crisis, Africa must build on the experience of the past to pull together once again. The COVID-19 experience showed that organised pooling of demand can overcome supply chain challenges and deliver much needed goods at competitive prices. New markets within Africa were created, as pooled demand was matched with existing and repurposed capacities in the continent. Crucially, these achievements are replicable – and the same can be done to address the food, fertiliser and energy commodities crisis being experienced today.
Building on the African Development Bank’s $1.5 billion emergency food production plan to mitigate the effect of the war on food prices through rapid production of wheat, maize, rice and soybean, AFREXIMBANK has undertaken a collaboration with other key continental institutions including, the AfCFTA Secretariat, and UNECA to launch the Africa Trade Exchange (ATEX), a platform to pool-procure bulk basic commodities and ensure countries access scarce supplies in a transparent and equitable manner. ATEX is a digital trade platform which will complement the existing digital ecosystem constructed to support the implementation of the African Continental Free Trade Area (AfCFTA) Agreement. ATEX will help realize the development potential of e-commerce and digitalisation, particularly by facilitating access for small and medium-sized enterprises (SMEs) to the wider African market. This will enhance intra-African trade and the African trade position in the global market, thus assisting in adjusting to disruptions in supply chains and continued growth of African businesses and economies.
The restrictions on cryptocurrency transactions and the outright ban of Twitter in Nigeria have crippled foreign direct investment in the financial technology sector, according to a new report. The report titled ‘Africa’s Urbanisation Dynamics 2022: The Economic Power of Africa’s Cities’ was published under the responsibility of the secretary-general of the organisation for economic cooperation and development and the secretary-general of the United Nations, with support from the African Development Bank (AfDB). The report said the ban affected millions of young Nigerians who earn a living from the sector as well as tax revenue for the government. It added that the jobs in the technology sector give more room for young people to tap into the global economy.
“The restrictions on cryptocurrency transactions and the outright ban of Twitter in Nigeria have crippled foreign direct investment in the fin‑tech industry and negatively impacted millions of young Nigerians who earn a living from the sector. Many have found a way, however, to lawfully bypass these restrictions and continue the business, effectively denying Nigeria the taxes and transaction fees that would otherwise come into the system.”
If there has ever been a time when strong parliamentary leadership is most needed, it is now. This is so, especially because the COVID-19 pandemic has had a widespread effect on economies across the world, destabilizing health systems, upending supply chains, disrupting industries and above all, precious lives have been lost.
Various African countries took decisive measures to contain the spread of the virus and limit its socioeconomic impact. Public health interventions were rolled out, and several programmes and measures were put in place to combat the pandemic, such as lockdowns, stimulus packages, financial support to households and MSMEs, and so on. We all achieved some level of progress with those measures.
I think it is clear that the post-COVID economic recovery strategy for Africa must go beyond efforts in our individual countries. There is a need for increased collaboration and integration of efforts to drive sustainable economic growth and recovery across the African Continent.
A crucial concern for all African economies is how to improve liquidity, reduce the debt burden and improve our balance of payments positions, especially in the wake of the huge damage done to our finances by the pandemic.
The COVID-19 experience reiterates the need to leverage technology in building stronger delivery systems for wider coverage towards protection for all. Our legislation across the continent must be designed to support technology and technology innovation.
Africa’s post-COVID recovery must leverage the African Continental Free Trade Area (AfCFTA). The AfCFTA is a unique opportunity to consolidate Africa’s enormously large market, which will create and recover millions of jobs, reduce Africa’s import dependency, boost intra-Africa trade and exports; and strengthen intra-Africa cross-border ties and trade relations. The opportunities are simply mind-boggling, but they will involve the magic word – collaboration!
Afrexim Bank, as the main settlement agent for PAPSS, provides settlement guarantees on the payment system and overdraft facilities to all settlement agents, in partnership with Africa’s participating Central Banks. PAPSS will effectively eliminate Africa’s financial borders, formalise and integrate Africa’s payment systems, and simply make trade within Africa using local currencies easier.
This is the way to go. Domestic legislation will be required as time goes on, and we must anticipate and be prepared to act on these promptly.
The 10th Aviation Stakeholders Convention, hosted by the African Airlines Association (AFRAA) and Kenya Airways (KQ), started today in Nairobi at the Emara Ole-Sereni hotel. The two day convention will provide a platform to showcase new developments and innovations in aviation, discussing industry business trends, networking and forging new partnerships.
Speaking at the convention on the importance of establishing lasting relationships and partnerships between aviation stakeholders for the benefit of African Aviation, Mr. Abdérahmane Berthé emphasized the need to draw out-of-the box solutions and regional initiatives for Africa: “AFRAA, in coordination with African Union Commission (AUC), African Civil Avation Commision (AFCAC), and African Aviation Industry Group (AAIG), will convene the first lab meeting to be held from 27 June to 01 July 2022. I call upon stakeholders to join this noble initiative which will bring experts from various sectors to craft solutions to transform business in the region and ensure the efficient development of intra-Africa air transport.”
Minister of Sport, Arts and Culture, Nathi Mthethwa, has called for a worldwide, Africa-based digital platform to store the work of the creative sector on the continent. “There is a dire need to have a worldwide, Africa based digital platform that houses all online creative arts, copyright and patents, and sporting platforms for control and sustainability of the collective intellectual property of the African Union (AU) member States’ intangible heritage,” the Minister said on Monday. He was addressing the launch of Africa Month under the theme, ‘Strengthening Resilience in Nutrition and Food Security on the African Continent for a Better Africa and a Better World’.
He emphasised the importance to develop modern agriculture for increased proactivity and production by radically transforming African agriculture to enable the continent to feed itself and be a major player as a net food exporter.
China lockdowns, Ukraine invasion delay imports to regional ports (The East African)
East African countries are set to suffer more importation delays following new Covid-19 cases in China and the Russian invasion of Ukraine increased congestion in the supply chains. Already, authorities in Beijing have imposed lockdowns in regions reporting infections, restricting workers to port yards. At the same time, the region, which imports more than half of its wheat from Ukraine, must now accept delays as the war disrupts routine transportation. Shippers have already raised concern over expected delays in the supply of key goods, saying the number of ships docking at the ports of Mombasa and Dar es Salaam is expected to reduce in the next few weeks.
“Reports indicate that nearly one third of goods leaving the port of Shanghai are held up due to a strict Covid-19 lockdown that is threatening freight. As a result, the end of April witnessed more than 23,000 ships rerouted to avoid the Chinese port thus causing shipping delays,” said Mr Kututa.
Mr Kututa said congestion will affect Africa considering the business in the continent contribute a small percentage of global shipments.
Trade experts from COMESA Member States are meeting this week to continue with the negotiations on the draft schedules of specific commitments under Trade in Services sector. This is the 11th Committee Meeting on Trade in Services, the apex forum of the Member States in the subsector. Since 2009, following the adoption of the COMESA Regulations on Trade in Services, negotiations have been taking place in the priority sectors: business, communication, financial transport, construction, energy-related and tourism services. The sector accounts for more than 70 per cent of the global output and 51.1 per cent of labour force. The conclusion of the negotiations on the priority sectors, which is in the second phase, will guarantee preferential market access in both negotiated services sectors and goods. According to the COMESA Director of Trade and Customs Dr Christopher Onyango, this will unlock the opportunities for regional businesses and suppliers to expand and strengthen existing value chains.
“The conclusion of the second phase of the negotiations would reflect the strong commitment of COMESA towards the creation of a transparent, stable, and predictable environment for trade in services not only in the region but beyond including global markets,” he said when he addressed the delegates at the opening of the virtual meeting, Monday 9 May 2022.
“A liberalized goods trading regime cannot offer its business community the freedom to expand and exploit existing potentials without complementary services sectors free of unnecessary restrictions and controls,” he said.
Regional business executives on Monday, May 9, started their earlier planned business trip to DR Congo to engage their Congolese counterparts with a view to exploit business and investment opportunities in the vast country. Speaking to The New Times from Goma, the capital of DR Congo’s North Kivu Province, John Bosco Kalisa, CEO of the East African Business Council (EABC), said his delegation started with Goma and will move to Bukavu on Wednesday.
Kalisa earlier told The New Times that his delegation wants to bring their Congolese counterparts to speed about the opportunities provided by both the EAC Common Market and Custom Union frameworks.
DR Congo President Félix Tshisekedi, on April 8, signed the Treaty of accession by his country to the East African Community (EAC).
DR Congo is expected to bolster the bloc’s economic potential in various ways including opening the corridor from the Indian Ocean to the Atlantic Ocean, as well as North to South, hence expanding the economic potential of the region.
China’s economic expansion benefits Africa, including SA (BusinessLIVE)
A few days ago, China’s National Bureau of Statistics released data on the performance of the Chinese economy in the first quarter of 2022. The new information dispels the international community’s doubts about the Chinese economy and provides much-needed heat for the world economy in a winter of recovery. The Chinese economy is performing smoothly. The GDP for the first quarter was more than 27-trillion RMB, up 4.8% year on year and ranking the highest among the world’s major economies. The value-added of industries above a designated scale grew by 6.5%, a growth rate that is 2.6 percentage points higher than the previous quarter. The consumer price index (CPI) rose by 1.1%, which is below the target of 3%. The national surveyed urban unemployment rate averaged 5.5%, which is on a par with the same period in 2021. Foreign exchange reserves remained stable at about $3.2-trillion. Imports and exports of goods grew 7.5% and 13.4% respectively, and paid-in foreign investment increased by 25.6%.
China’s economic development will continue to benefit African countries, including SA. China is now the world’s second-largest economy, number one trader in goods, number one manufacturing powerhouse, holder of the largest foreign exchange reserves, the second-largest consumer market and the recipient of the second-largest foreign direct investment (FDI) inflows. An International Financial Forum (IFF) report forecasts that China will remain the largest contributor to global economic growth, accounting for 26.3% of world growth in 2021.
China has remained Africa’s top trading partner for 12 consecutive years. China is also a major source of FDI for Africa. In the first quarter data from the General Administration of Customs of China showed that China-Africa trade reached $64.86bn, up 23%. Among this volume China’s exports to Africa totalled $35.16bn, up 18.2%, and China’s imports from Africa reached $29.69bn, up 29.3%. Trade between China and SA reached $12.29bn, up 13.5%. China’s exports to SA topped $5.28bn, up 23.7%, while China’s imports from SA reached $7.01bn, up 6.9%.
AGOA Exporter of the Year Awards 2022 open for nominations (Engineering News)
Nominations are now being accepted for the 2022 South Africa AGOA Exporter of the Year Awards. It is hosted by the International Trade Institute of Southern Africa with the support of the USAID Southern African Trade and Investment Hub.
The awards aim to recognise and reward outstanding performance and noteworthy efforts of exporters in overcoming market entry hurdles and achieving successful and consistent trade with the US under the US African Growth and Opportunity Act (AGOA).
Award categories include small-sized exporters to the US under AGOA; medium-sized exporters to the US under AGOA; large-sized exporters to the US under AGOA; black-owned enterprise exporters to the US under AGOA; youth-owned exporters to the US under AGOA; and female-owned exporters to the US under AGOA.
CAR’s adoption of Bitcoin not taken firmly by Central banks in Africa (The Coin Republic)
Bitcoin adopted by the Central African Republic has not been taken well by banks. The legislative leader of the Bank of Central African States has given a searing letter to the Central African Republic (CAR). It is in regards to the country’s reception of cryptographic forms of money like Bitcoin.
In a letter addressed to the CAR Finance Minister Hervé Ndoba, legislative leader of the BEAC Abbas Mahamat Tolli depicts the significant adverse consequence that the CAR embracing crypto will have on the financial association of Central Africa.
CAR passed a bill declaring its expectation to embrace cryptographic forms of money in April. It is nothing unexpected that the International Monetary Fund (IMF) has proactively called the choice concerning. Yet, presently, the BEAC is stoking the fire.
Global economy news
“What the world needs right now is a responsive WTO, one that helps us meet the many challenges of our time and delivers on the aspirations of the people we serve,” DG Okonjo-Iweala said in her role as Chair of the Trade Negotiations Committee (TNC).
The DG told members that she sensed a willingness to try to work towards some deliverables at MC12, among them the importance of addressing the food crisis, the need to reach a credible WTO response to the COVID-19 pandemic, successfully concluding the negotiations on fisheries subsidies, making some progress on agriculture, and addressing reform of the WTO.
This report examines the implications of the COVID-19 pandemic for stakeholders involved directly or indirectly in the production and trade of biodiversity-based products and services, including those sustainably sourced and traded as BioTrade products and services.
This study starts with an analysis of the opportunities provided by the pandemic to certain organizations by investigating the nature of positive impacts, in particular in terms of shifts in demand, access to markets and increased sustainability efforts. It then looks at the challenges respondents’ organizations faced since the advent of the pandemic, in terms of different types of impacts, their duration and the extent of their severity, as well as how it affected their revenues. Finally, the report focuses on the different types of solutions implemented by respondents’ organizations to navigate the exceptional circumstances brought by the pandemic. Solutions specifically relate to measures implemented in response to the pandemic, to the shift towards the digital space in the face of reductions in personal mobility and in-loco operations.
Cracking the code on a thriving partnership (Trade for Development News)
The past two years have been a rollercoaster as COVID-19 and climate change challenged global, national and local systems and traditions. The war in Ukraine, an event no longer expected in post-world war Europe, and its dire impacts in countries far away from the warring parties, is adding stress, complexity and growing uncertainty to the already challenging international landscape. In this context, the importance of partnerships cannot be underestimated as no one, or group alone can tackle the immensity of the challenge.
Even the trade community is feeling the partnership push. Historically, trade was considered as a separate world operating independently from development. The idea of development in multilateral trade was often reduced to the principle of special and differential treatment, which exempts developing countries from certain obligations imposed by the trade regime. But recently, trade and trade policy have been forced to reconsider their interconnection with development, environmental and social issues.
In practical terms, trade must now be addressed in the wider context of economic development and related financial and regulatory frameworks but also take into consideration the interaction of trade with social, environmental, and political issues, including health disasters, climate change and conflict.
Digital technologies can support industries in achieving their sustainability and net-zero emissions goals. Efficiency is the largest driver of sustainability, but also of profitability, says industrial software multinational Aveva global head of digital acceleration Michele Cacciari. “Digital technologies can become an important enabler of a sustainability journey by first unlocking the efficiency of existing facilities and then, over the short- to medium-term, processes can be modified and changed to enable new feedstocks to be used. Eventually, old equipment that consumes less energy can be replaced and, over the longer term, technologies can help a company move to using new energy sources, such as hydrogen,” he adds.