tralac Daily News
5 global export bans that shook SA agriculture (Food for Mzansi)
In less than two years South Africa’s agricultural sector has been dealt a few blows by countries who are seemingly weaponising trade policy instruments and banning exports during times of uncertainty to ensure adequate domestic supply.
However, according to Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa (Agbiz), countries should pull the plug on taking drastic self-interested policy measures. Instead they should focus on supporting farmers to increase production and fill the gap in supplies. Since last year, there’s been at least four bans impacting global agricultural trade. The war by Russia on Ukraine has also had a direct and more severe impact on the international market.
In 2020, the likes of Vietnam and Kazakhstan banned grain export. agriculture ministers from the G7 countries however criticised the move and the bans were subsequently reversed.
In July 2021, China went as far as banning exports of fertiliser in an attempt to ensure adequate domestic supply. According to Sihlobo, “Such inward-looking policy actions often have a notable disruption on the highly interconnected global agricultural market.”
Sihlobo explained that the first significant agricultural exporter to introduce restrictions this year was Indonesia at the end of April. Indonesia temporarily banned palm oil exports.
The impact of the Russia-Ukraine invasion has had a direct and severe impact on the agricultural market. This is because both countries contribute substantial volumes of grains, oilseeds and fertiliser exports.
The most recent country, India, has followed with similar steps announcing a ban on wheat exports.
“Overall, with heightened uncertainty, the ban on exports of essential commodities should not be a preferred policy instrument, especially by major agricultural producers such as India and Indonesia, among others,” said Sihlobo.
In December 2018, a leaked letter from the Kenyan auditor-general’s office sparked a rumour that Kenya had staked its bustling Mombasa Port as collateral for the Chinese-financed Standard Gauge Railway. Our new research shows why the collateral rumour is wrong. The former auditor-general, Edward Ouko, was completing the 2017/18 audit of the national ports authority. He warned that the port authority’s assets – of which Mombasa Port is the most valuable – risked being taken over by China Eximbank if Kenya defaulted on the US$3.6 billion railway loans. The profitable Mombasa Port is East Africa’s main international trade gateway. Launched in 2017, the railway was intended to seamlessly link the port to Kenya’s capital, Nairobi, and landlocked countries beyond.
Farmers to get training on avocado export rules (Business Daily)
The Avocado Society of Kenya (ASOK) has started sensitising farmers on the new avocado export regulations announced by the Horticulture Crops Directorate, chief executive officer Earnest Muthomi has said. Last week, the Directorate raised the minimum solid content for export avocados from 20 and 21 percent for Fuerte and Hass varieties respectively to 24 percent in order to comply with international standards. The horticultural regulator said the changes would ensure Kenyan fruits are competitive in the global export market.
“Some farmers don’t understand what these regulations mean in terms of their earnings and we have launched an initiative to educate them on the same. We are telling them that they are not being targeted unfairly and that the regulations are for their own good,” said Mr Muthomi.
“There has been stiff competition from the world market and our farmers should know that they have to produce quality fruits. The most serious problem is that farmers are enticed by brokers to harvest immature avocados which spoil Kenya’s reputation in the international markets and we want this to stop,” he added.
Inside Uganda, Tanzania power lines deal (The East African)
Uganda and Tanzania have committed to building the 400kV Masaka-Mutukula-Kyaka-Nyakanazi-Mwanza transmission line. Uganda will sell surplus power, and Tanzania will meet its demand for electricity. During her two-day state visit to Kampala last week, Tanzanian President Samia Suluhu and her Ugandan counterpart Yoweri Museveni witnessed the signing of an inter-governmental memorandum of understanding for the development of the 400kV transmission line linking the two countries.
Officials of the Uganda Electricity Transmission Company Ltd (UETCL) said it is too early to talk about the start, cost and completion details. “The MoU has just been signed meaning there is nothing really done yet [before] there is sourcing for funding, feasibility studies and all,” said Pamela Nalwanga Byoruganda, the UETCL spokesperson. With additional generation from Karuma and other smaller hydropower plants, Uganda’s total installed capacity will increase to nearly 2000MW, up from the current 1,346.6MW, against the country’s peak demand for electricity, of 794MW, the Electricity Regulatory Authority said.
Deputy Minister for Transport Hassan Tampuli has underscored the importance of a new national airline in improving the country’s economy. According to him, the setting up of a home-based carrier will not only boost the country’s aviation industry but will also open up other avenues under the African Continental Free Trade Area.
“In terms of infrastructure, we have embarked on massive infrastructure developments to improve all our sea ports, airports and railway connectivity. Currently, two of our regional domestic airports in Kumasi and Tamale are being upgraded into international status,” Tampuli said.
Traders justify sale of counterfeit goods (The Namibian)
Joyce Paolo has been selling brands of second-hand shoes and other high-end T-shirts from Vietnam for over nine years, from her house at Walvis Bay. After eight years of looking for a place to trade formally, she was able to secure a small shop on Sam Nujoma Avenue, where she has been trading since 2020. “We buy our things from overseas and the Democratic Republic of Congo. We don’t buy the original because no one in Namibia would be able to afford a pair of US$500 shoes from the real Nike shop. There is first hand and second hand, and we buy second hand which is affordable for our people,” she said.
“The only problem we encountered at the borders is when we import more than 20 pairs of shoes. This is not ideal because we have customers who have paid for their orders,” said Paolo. Walvis Bay community activist Knowledge Ipinge attributes corruption, bribery, poor intellectual property legislation and weak enforcement to what he terms favourable conditions for counterfeiting. He believes the country urgently needs a copyright bill.
Low prices, market access brew storm for EA tea industry (The East African)
East Africa’s tea sector is threatened by underperformance as its two key markets – Russia and Ukraine – remain closed. Observers worry that besides dealers not fully harnessing the quality of tea produced in the region, they are now going slow on production fearing it would lead to a glut that would push down prices that have been recovering after a pandemic slump. Rwanda’s tea prices at the Mombasa auction continued to fetch premium prices, having been on a recovery trajectory from $2.94 per kilogramme in 2021 to $3/kg in January 2022, and heading towards pre-pandemic prices of $3.05/kg of January 2020.Rwanda has grown its exports to 35.2 million kilogrammes a year.
But Mr Iruta says Rwanda’s key markets are not fully opened and now the Russian invasion of Ukraine threatens further logistical disruptions as both countries are some of the biggest consumers of tea.
Egypt records 29.4% decrease in trade deficit during February 2022 (Daily News Egypt)
Egypt recorded a trade deficit of $2.7bn in February 2022, down from February 2021’s $3.82bn — a decrease of 29.4% — according to the Central Agency for Public Mobilisation and Statistics’ (CAPMAS) monthly bulletin for foreign trade. However, the value of exports Increased by 41%, bringing in $4.12bn, up from $2.92bn. This is due to an increase in the value of some commodities such as other articles of textile materials by 76.8%, potatoes by 56.8%, Ready-made clothes by 19.5%, and fertilisers by 11.6%. Meanwhile, the value of some exported commodities decreased, including fresh oranges by 31%, miscellaneous edible preparations by 11.7%, dairy products by 6%, and carpets and Kelem by 4.3%.
Eng. Tarek El Molla, Minister of Petroleum and Mineral Resources, participated in the meeting organized by the American Chamber of Commerce in Cairo with the delegation of American institutions working in the field of green energy investment (Greentech), who is currently visiting Egypt.
The Egyptian minister added that after passing that stage, Egypt adopted the use of natural gas, the cleaner fossil fuel as a transitional fuel towards the energy transition and the expansion of its uses of hydrocarbon until the percentage of its use reached 65% compared to 35% for other hydrocarbon sources. 167 duplicates removed
Under Secretary Fernandez Visits Zambia, Strengthens U.S.-Zambia Economic Partnership (U.S. Embassy in Zambia)
During his May 12-13 visit to Zambia, Under Secretary for Economic Growth, Energy, and the Environment Jose W. Fernandez met His Excellency President Hakainde Hichilema to discuss opportunities to enhance bilateral trade and investment, and support for Zambia’s economic recovery agenda and debt restructuring efforts. The Under Secretary and President Hichilema also discussed the importance of building stronger people-to-people ties to promote inclusive economic growth and prosperity. Under Secretary Fernandez visited one of Zambia’s largest mining operations and spoke to industry experts about how the United States can help promote efforts to build robust and responsible critical mineral supply chains.
Morocco, Spain reopen land borders after two-year COVID-19 closure (Al Arabiya English)
Morocco and Spain have reopened the land borders between the north African country and the Spanish enclaves of Ceuta and Melilla, two years after they were shut due to COVID-19 restrictions and a major diplomatic row. The enclaves on the Mediterranean coast in northern Morocco have the European Union’s only land borders with Africa.
At the Fnideq border post, smiles lit up the faces of the travelers crossing to see their families on the Moroccan side. The local economies on both sides of the borders depend on the crossing of people and goods.
African trade news
New tool to measure ease of inter-Africa trade launched (The New Times)
The Economic Commission for Africa (ECA) on Sunday, May 15, launched the first-ever comprehensive tool that measures how easy, or hard, it is to do business between African countries. The AfCFTA Country Business Index (ACBI) has three key objectives including assessing the perceived impact of the African Continental Free Trade Area on the private sector’s ability to trade and invest across African borders once the Area is operational.
“It will be used to identify key challenges that the private sector faces in its cross-border activities,” Stephen Karingi, Director of the Regional Integration and Trade Division of UNECA said.
AfCFTA risks losing its vision without good logistics – Krapa (BusinessGhana)
African countries have been asked to expand their logistics and transportation networks in order to keep the African Continental Free Trade Area (AfCFTA)’s goal alive, or risk losing its benefit. Member countries should enhance their regional value chains and build an efficient transportation system across the continent, a Deputy Minister for Trade and Industries, Herbert Krapa, has said. He called on African countries to build links that improve their abilities and capacities to feed industry in a sustainable manner, while speaking at the Chartered Institute of Logistics and Transports (CILT) African forum.
Report: Global Pandemic Increased Poverty in Africa (VOA Africa)
The global pandemic has pushed more than 55 million Africans into extreme poverty and reversed two decades of hard work in poverty reduction on the continent. The Economic Report on Africa for 2021 blamed the growing poverty on job losses, reduced income and the inability of households to manage the risks In a 150-page report launched in Dakar, Senegal, the United Nations Economic Commission for Africa said the coronavirus negatively impacted the continent’s economy.
Hanan Morsy, deputy executive secretary of the commission, said the pandemic eliminated 20 years’ worth of achievements made in fighting poverty. “The implication for the continent, one of the most critical implications of COVID-19, has been the reversal of very hard-won gains that the continent has managed to achieve in terms of reducing poverty,” she said. “So, we’ve lost two decades of hard-won gains of reducing poverty in Africa due to the pandemic.”
The economic decline caused by the lockdowns and the restrictions on people and the movement of goods has increased the number of newly poor on the continent by 55 million people and pushed 39 million others into extreme poverty.
Trade and investment relations with Africa are increasingly important to the European Union’s strategic goals. Given their geographic proximity and historical ties, the EU and Africa should both seek to build the foundations of comprehensive and mutually beneficial economic cooperation – as this would have economic and political benefits in everything from job creation, migration, and security to the green and digital transitions. The EU should engage in such cooperation: it is Africa’s most important trading partner, accounting for around one-third of African trade, and is a vital source of foreign direct investment (FDI) on the continent. Nonetheless, players such as China and Russia have an increasing influence on the African commercial landscape, and could weaken the position of the EU as Africa’s leading economic and political partner.
In this context, EU policymakers should view the recent creation of an Africa-wide market under the African Continental Free Trade Area (AfCFTA) as an opportunity to consolidate and strengthen commercial and geopolitical ties with Africa.
President Macky Sall of Senegal has called on Africa’s development partners to agree to a renegotiation of the terms of the current multilateral system in light of shocks dealt to the global economy by the COVID-19 pandemic and the war between Russia and Ukraine.
Cameroon: COBAC Bans Cryptocurrency In Cemac zone (Journalducameroun.com)
The sub-regional institutions continue to ban cryptocurrencies as a means of payment in the countries of the Economic and Monetary Community of Central Africa (CEMAC). Meeting on 6 May 2022 during an extraordinary session, it was the Banking Commission of Central Africa COBAC that categorically rejected any use of cryptocurrencies in financial transactions in the region. Cryptocurrencies are now banned in the Cemac zone (Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea). This decision results from the will of the Cobac to “guarantee financial stability and preserve customer deposits”. As a result, the COBAC prohibits any operation related to crypto-assets. It concerns “the subscription or holding of crypto-currencies of any kind for own account or for third parties”, says the financial institution. The ban also applies to “the exchange or conversion, settlement or hedging in currency or CFA franc of transactions relating to crypto-currencies”.
Cobac’s decision comes after bitcoin was formalised as a legal currency in the Central African Republic on 27 April 2022. The CAR becomes the 2nd country in the world after Salvador to grant this status to the virtual currency. In Cameroon, proposals have been made to regulate the use of cryptocurrency. But so far, there is no regulation in this area.
Digitalisation: Helping African businesses rise (The New Times)
There is strong potential for robust, sustained, and inclusive economic growth in Africa, and it is being fuelled by accelerated adoption of digitalisation. As Africa continues its transition to a digital economy, new technologies are positively disrupting sectors such as agriculture, manufacturing, financial services, urban development, transport, and logistics, resulting in the creation of new products, services, and jobs. The continent is also starting to see an increase in investment, the opening up of new markets, improved efficiencies — particularly within the supply chain — and cost savings across businesses.
Digital innovation has given rise to new goods and services, created opportunities for new business models and markets and has the ability to drive efficiencies in both the public and private sectors. Digitalisation is an enabler of e-commerce and provides many benefits to small and medium-sized enterprises (SMEs) and can help them integrate more easily into global markets. It can contribute to convergence of e-payment platforms, reduce transactions costs by providing quicker access to information, enable better tracking and management of logistics, and can provide advanced warning of potential delays or other issues to traders. It can also facilitate access to resources such as finance through peer-to-peer lending, and training.
According to the United Nations Conference on Trade and Development (UNCTAD) Economic Development Report for Africa (2021), thirty-four percent (34%) of African households are poor, living in some of the world’s most unequal societies with a regional Gini index of 0.40. Several African Union (AU) Member States have yet to develop efficient ways to support long-term growth and raise living conditions for most citizens who remain impoverished. The present rise of the 4th Industrial Revolution (4IR) holds immense potential for improving Africa’s sustainable development trajectory by creating more employment opportunities and promoting a level of entrepreneurship that reduce poverty.
Investing in Science, Innovation, and Technology (STI) is critical for Africa to achieve both Agenda 2063 and the 2030 Agenda for sustainable development. Research and innovation aim to boost the continent’s socio-economic development in the current knowledge-based and innovation led-economy. STI is a prerequisite for moving forward with the implementation of frameworks like the Science, Technology, and Innovation Strategies for Africa (STISA-2024) and the African Continental Free Trade Area (AfCFTA) which promote the attainment of both continental and global development goals. STISA-2024 supports a target pledged in the Lagos Plan of Action of 1980 requiring all AU member States spend at least 1% of their GDP on research to include national science, technology commissions, councils, and research institutions across African to keep up with the changing digital 4IR environment.
Despite the potentiality of the 4th Industrial Revolution, Africa appears to be lagging compared to other continents despite its wealthy youthful population and natural endowments. Fostering an innovation-driven and knowledge-based economy in Africa will be entirely dependent on how member States develop science and technology and innovation policies based on evidence.
Digital Earth Africa is steadfastly becoming the “connecting-the-dots” part of Africa’s efforts to harness information resources for the society and knowledge-led economy, says Oliver Chinganya, Director, Africa Centre for Statistics at the Economic Commission for Africa (ECA).
Opportunity and issues-based coalitions formed between entities under the UN umbrella on one hand, and the African Union (AU) and African countries on the other, were able to record significant successes over the last year.
United Nations Economic Commission for Africa (ECA), through its Sub-regional Offices for North Africa and West Africa and the Institute for Economic and Development Planning (IDEP), in collaboration with the Government of Senegal, discussed on Saturday Innovative financing small and medium-sized enterprises for resilient recovery in Africa: a gender and youth perspective.
Zambia’s Attorney General, Mr. Mulilo Kabesha has urged businesspeople in the region to utilize the COMESA Court of Justice for arbitration of disputes. Addressing judges of the Court during their one-week annual retreat in Lusaka, Zambia, Mr. Kabesha observed that trade disputes are taken to other courts based in far flung areas, such as United Kingdom instead of using the COMESA Court which offers affordable services to aggrieved parties. He called for robust sensitization campaigns about the Court’s services in the region.
Egypt Calls for African Coordination Meeting Ahead of COP-27 (Ashraq Al-awsat)
Egypt on Sunday urged the African states to hold a meeting to coordinate the continent’s stances in preparation for the COP27 Climate Summit, which it will host in Sharm el-Sheikh next November. During a workshop held by Morocco via videoconference on “The challenges of mobilizing capital markets to finance the transition to a sustainable energy market,” Egyptian Ambassador to Ethiopia and the African Union Mohamed Omar Gad said Cairo invited the African states to hold the consultative session on the issues related to climate and energy before the Climate Summit. The workshop in Morocco comes on the sidelines of a conference for African ministers of finance, planning, and economic development, which will kick off Monday in the Senegalese capital, Dakar.
Egypt is seeking to increase its dependence on renewable energy from 18 percent to 45 percent by 2025, according to Gad, who urged the African states to focus on achieving just transition to renewable energy and providing sustainable energy to the green energy projects in Africa in addition to following up the implementation of commitments which Africa received in previous climate summits.
Africa Fintech Summit Washington D.C. 2022 — Where African and Global Fintech Stakeholders Met in April (Business Insider Africa)
Like every April edition before it, #AFTSDC2022 was scheduled to hold during the World Bank/IFC Spring meeting. This presented the summit with the opportunity to host fintech leaders already in town for the World Bank event alongside attendees billed to be at the fintech summit.
Further, the U.S.-Africa investment relationship meant that a summit in D.C. would connect African entrepreneurs with some of the U.S. investors responsible for 62% of the top twenty investment deals in Africa in 2021.
The main event kicked off with a keynote address by Deniece Laurent-Mantey, Director for Africa, White House Security Council. In keeping with the event’s theme centered around growth and expansion trends in Africa’s fintech industry, Ms. Laurent-Mantey touched on the potential for Africa’s technology industry to thrive in the coming years. In her words, this potential is limitless because “we are in the midst of an unprecedented revolution in the digital technology - one which is impacting every sector of the economy and social life, bringing people and nations closer together, and making the world a true global village.”
Following Ms. Laurent-Mantey’s keynote, various panel sessions took the better part of the day. There were 16 insights-driven sessions focused on fintech hotspots, including embedded finance, investment trends in the industry, web3 and cryptocurrency, diaspora banking and remittances, fintech regulatory best practices, the future of banking, and more.
Global economy news
The international production footprint of digital multinational enterprises (MNEs), which was already expanding, has grown even faster during the COVID-19 pandemic. UNCTAD’s Global Investment Trends Monitor published on 27 April unveils new rankings of the top 100 digital MNEs, whose total sales were almost 160% higher in 2021 than in 2016, with an average increase of 21% per year.
Their net income grew by over 60% between 2020 and 2021, in contrast to a flat trend for the traditional top 100 MNEs, excluding those in the technology sector. The top 100 digital MNEs include leading players such as Uber, Twitter and Meta. The report also looks at the impact of the world’s largest digital MNEs on trade and investment. “Digital MNEs can provide a boost to competitiveness across all sectors, new opportunities for business and entrepreneurial activity and new avenues for market access and participation in global value chains,” said James Zhan, UNCTAD’s director of investment and enterprise development.
5G can play a pivotal role in transforming industries to be more flexible, productive and sustainable. But the digital evolution will also affect human work – it will create new roles that do not exist today while making working environments safer, smarter and more creative. We should not see automation and digital transformation as a way to replace humans; it is about bringing out the best in humans, in collaboration with machines and algorithms.
“The negotiations are at a very critical juncture, as we are just four weeks away from our 12th Ministerial Conference. This is the moment our members cannot afford to miss,” DG Okonjo-Iweala said after receiving the letter addressed to the full WTO membership. “I therefore welcome your letter and your hard work in support of a successful conclusion of the negotiations,” she said. “Your call is an encouragement to deliver on UN SDG 14.6 and the tangible contribution the trading system can make to stop overfishing and help protecting marine life. The fish and the people that live from fish will be very happy.”
Briefing ambassadors on the progress made in trade negotiations, DG Okonjo-Iweala said: “A successful MC12 is a necessary step in the long haul towards making the WTO fit for purpose for the 21st century. Delivering results will create a new dynamic for future discussions.” The Director-General talked about the response to the COVID-19 pandemic, agricultural reforms and fisheries subsidies.
Discussions also focused on how to strengthen the WTO to make it more responsive to the needs of LDCs. “As we prepare ourselves for the busy weeks ahead, let us all remember that the WTO is about people — about using trade as a tool to raise living standards, create jobs, and promote sustainable development. So, let’s redouble our efforts, let’s deliver results and let’s reinvigorate the WTO,” DG Okonjo-Iweala said.
Many hoped that FCDO’s much-awaited development strategy would provide direction to the United Kingdom’s international policy. But the document is not everything that observers would have liked it to be.
Davos 2022 convenes at a crucial time for Africa (African Business)
The World Economic Forum’s 2022 meeting in Davos, taking place in person for the first time since 2020, has come as a welcome, and timely respite as the world seems to be lurching into yet another crisis, with the war in Ukraine showing little signs of coming to an end. Appropriately, the theme for Davos 2022 is “Working Together, Restoring Trust”. We can only hope that the collective diplomatic skills of the organisation, honed over the decades, will encourage global political, social and business leaders to step back for a while from their own domestic concerns and take a clear and hard look at the state of the world today. In this report we focus on the issues facing Africa as the Forum takes place.
Changes to the World Trade Organization’s compulsory licensing regulations are coming for COVID-19 vaccines. Those changes are unlikely to help people in developing countries but could reduce innovation among biopharma companies and ultimately do more harm than good. A draft of the changes proposed to Article 31 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreements states that WTO member nations: Needn’t contact the patent holder to try to gain authorization to use the patent Can invoke compulsory licensing by multiple means, including executive orders, emergency decrees, government use authorizations and judicial and administrative orders Can export any amount of the product The proposed TRIPS waiver is for COVID-19 vaccines – not just mRNA vaccines. As of March 16, 2022, nine vaccines have emergency use listings, according to the World Health Organization.
”The developing world needs more COVID-19 vaccination and more doses, but the WTO is applying the wrong Band-Aid. This is not an intellectual property issue,” Jürgen Schneider, co-chair of the intellectual property group of BIO Deutschland and VP, head of global IP and licensing at Qiagen, told BioSpace.