tralac Daily News
The Department of Public Enterprises (DPE) has hailed Transnet Freight Rail (TFR) for the “significant progress” made in repairs to its Durban Rail and Ports following the heavy rains and flooding in that area in April. The Port of Durban is one of South Africa's most important freight ports and serves as a gateway to Gauteng.
“The recovery from the damage caused by the flooding in KwaZulu-Natal will enable exporters and importers that utilise the Port of Durban to return to normality and Transnet will endeavour that all shipping lines continue to service the Port of Durban.
“Much work still needs to be done in the south basin area and Transnet continues to work with the province, municipality and other stakeholders in that area to ensure that work is concluded speedily,” the department said in a statement.
There are positive perceptions from potential investors to South Africa, and continued interest among existing investors in the country, despite impacts such as the Covid-19 pandemic and the July 2021 civil unrest; however, it is critical that challenges be addressed to engender even more interest. This was highlighted by European Union (EU) Chamber of Commerce and Industry of Southern Africa chairperson Rui Marto on June 14, presenting the key findings of two studies undertaken by the chamber between November 2021 and March this year.
Today, the World Bank Group Board of Executive Directors approved a 454.4 million euro (ZAR 7.6 billion or $480 million) loan for South Africa’s COVID-19 Emergency Response Project. The loan comes following a request by the Government of South Africa (GoSA) for assistance in financing vaccine procurement contracts. Specifically, this project will retroactively finance the procurement of 47 million COVID-19 vaccine doses by the GoSA. South Africa is the epicenter of the COVID-19 pandemic in Africa, with the highest cumulative numbers of infections and deaths. By supporting the country’s COVID-19 vaccination program, the project will help the government better cope with the pandemic, as the country experiences its fifth wave, and support the GoSA to create the fiscal space needed to strengthen its health system and ensure financial and institutional sustainability.
Uhuru roots for better ties between Kenya, Barbados (The Standard)
President Uhuru Kenyatta has emphasised the need to enhance transport connectivity between Kenya and Barbados to boost the mutually beneficial ties the two countries enjoy. The president said that the two countries possessed great potential that could be harnessed for the benefit of their citizens if transport hurdles that are an impediment to trade and interpersonal interactions were addressed. The transport impediments include lack of direct flights to and from the Caribbean nation.
Noting that Kenya is a big agricultural producer while Barbados boasts of being a strong financial hub, Uhuru said increased people-to-people interaction through improved transport connectivity will accelerate economic growth and create jobs for the youth of the two countries.
Kenya, US revisit trade talks, agree to expedite process (The Star, Kenya)
Kenya and the US have revisited trade talks between the two countries as ministers meet at the World Trade Organization's 12th Ministerial Conference in Geneva. As a next step, the two countries have agreed to work to finalise a list of areas for cooperation to deepen economic engagement. This was during an engagement between the US Trade Representative ambassador Katherine Tai and Kenya’s Industrialization, Trade and Enterprise Development Cabinet Secretary Betty Maina. The two have agreed to meet again in the coming weeks to announce next steps before end of next month (July).It will build on the successful consultative meeting of experts from the two countries held in Kenya in May 2022.In a statement yesterday, the US said ambassador Tai and CS Maina agreed to explore pathways towards a deeper bilateral trade and economic relationship that promotes sustainable and inclusive economic growth.
They are also keen on a deal that benefits workers, consumers, and businesses (including Micro, Small and Medium-sized Enterprises),and one that supports African regional economic integration.
Uganda faces storm in a coffee cup (African Business)
Coffee has rarely been out of the headlines in Uganda this year. In February the finance ministry signed an agreement with the Uganda Vinci Coffee Company – a mysterious firm, led by an Italian businesswoman, which promised to build a factory processing 60,000 tonnes of coffee annually. The deal sparked outrage, not least because it gave Vinci huge tax breaks and priority supply. In May a parliamentary inquiry found that the deal was “unconstitutional, illegal, void and unenforceable”, and parliament voted to terminate it.
In June, in his state of the nation address, President Yoweri Museveni hit back. “The continued export of raw materials by Africa is the new form of slavery,” he said, explaining why he was willing to offer such generous incentives for the processing factory. “The farmers are now cheated because the biggest beneficiaries from our coffee are the external roasters, grinders and packers of coffee.” Although there was suspicion about the president’s real motives, few could dispute the point he was making. Uganda is Africa’s largest coffee exporter by volume, which earned it $627m in 2020/21. Yet most of the value is captured elsewhere, in an international market dominated by European and American traders.
The Bank of Tanzania (BOT) and Tanzania Revenue Authority (TRA) data show the value of manufactured goods increased by a third to 1.3tr/- during the year ending April 2022, higher than 1trn/- recorded in April last year. The amount is nearly half of total value of gold exports of 2.7trn/ recorded during the year ending April, 2022 or the total value of traditional exports, horticultural products and cereals combined. The sharp rise of manufactured goods according to BOT and TRA data were on textiles, cereals, paper and paper products, iron and steel. Most of the manufacturing activities in Tanzania centered on simple consumer products such as foods, beverages, tobacco, textiles, chemicals, plastic, wood and steel allied products. This has also increased the value and volume of industrial supplies imports, as the report shows they increased by 39 percent to $3.8 billion during the year ending April, 2022 from $2.7 billion recorded in 2021.
Nigeria is in a paradoxical situation: growth prospects have improved compared to six months ago but inflationary and fiscal pressures have increased considerably, leaving the economy much more vulnerable, highlights the latest World Bank Nigeria Development Update (NDU).The report, titled “The Continuing Urgency of Business Unusual,” says that inflation in Nigeria, already one of the highest in the world before the war in Ukraine, is likely to increase further as a result of the rise in global fuel and food prices caused by the war. And that, the World Bank estimates, is likely to push an additional one million Nigerians into poverty by the end of 2022, on top of the 6 million Nigerians that were already predicted to fall into poverty this year because of the rise in prices, particularly food prices.
African trade and integration news
Long-awaited Africa free trade area takeoff delayed by six states (The East African)
Six countries drawn from three regional economic blocs are yet to ratify the African Continental Free Trade Area (AfCFTA), delaying its implementation more than a year after it was formally launched in January 2021. The AfCFTA, a brainchild of the African Union’s integration and prosperity Agenda 2063, was supposed to create one large market for its member states. But more than a year after inception, some countries are still dragging feet in adopting its legal framework in domestic laws. In the East African Community (EAC), South Sudan is yet to ratify the AfCFTA and in Southern African Customs Union (SACU), Botswana is yet to ratify and deposit its instrument of ratification.
A second coordination meeting of the Heads of Regional Economic Communities held in Arusha on June 7 also revealed that Benin, Guinea Bissau and Liberia, members of the Economic Community of West African States (Ecowas), are yet to become State Parties.
“While it is now possible for State Parties whose Customs procedures are ready to trade under the AfCFTA preferential terms, no trade is taking place. There remain a few outstanding issues hampering our collective efforts to facilitate effective trading under the AfCFTA preferential trading regime,” said Wamkele Mene, Secretary-General of the AfCFTA at the meeting in Arusha.
"How do we want to be remembered in history? As simple consumers? Or as transformers of our potential and resources?" With this question, Kate Fotso, the boss of Cameroon's Telcar Cocoa, sums up the challenge that Africa must take up to build its economic independence. This debate, at the heart of the Africa CEO Forum held in Abidjan, was discussed during a round table on 13 June. The starting point is clear: Africa’s dependence on the outside world is greater than that of other continents, with 84% of its trade being with the rest of the world. “It is no coincidence that Africa, the continent that trades the least internally, is also the poorest,” pointed out Ghana’s President Nana Akufo-Addo, seeing the development of the African Continental Free Trade Area (AfCFTA) as the only way out for African countries. A few moments earlier, at the opening ceremony, Côte d’Ivoire’s President Alassane Ouattara said much the same thing. “The current crisis has revealed the vulnerabilities [of globalisation] and marks a calling into question of international trade. This is very disturbing for developing countries,” the Ivorian head of state warned.
Despite the groundswell of popular support expressed for the African Continental Free Trade Area (AfCFTA), concerns have grown about the slow progress of its implementation in recent months. Contrary to expectations, 2021 did not start with a bang, but with skepticism among senior trade officials, which also spilled over to the private sector. Trading was put on hold as negotiations dragged on, particularly on rules of origin and tariff schedules—an indictment that technical level processes had not kept pace with the political decisions. What, then, should happen to take the AfCFTA to the next stage to become a functional agreement? We propose the following:
1. Don’t wait for the conclusion of the negotiations.
2. Focus initially on the largest continental traders.
3. Prioritize the elimination of barriers to imports.
15 most underdeveloped countries in Africa, based on UN's Human Development Index (Business Insider South Africa)
Over the years, the United Nation's Human Development Index (HDI) has become the most widely used and universally agreed tool for gauging countries' developing status.
Some of the key indicators tracked by the HDI are: life expectancy rate, adult literacy rate, gross national income per capita, access to the internet, etc. Business Insider Africa understands that these indicators are all compiled into a number between 0.00 and 1.00. Countries that score very low on these indicators (0-0.55) are classified as having low human development ratio.
Here are Africa's least-developed countries - Niger: Has a human development index of 0.394. Central African Republic: Has a human development index of 0.397. Chad: Has a human development index of 0.398. South Sudan: Has a human development index of 0.433. Burundi: Has a human development index of 0.433. Mali: Has a human development index of 0.434. Sierra-Leone: Has a human development index of 0.452. Burkina-Faso: Has a human development index of 0.452. Mozambique: Has a human development index of 0.456. Eritrea: Has a human development index of 0.459. Guinea: Has a human development index of 0.477. Liberia: Has a human development index of 0.480. Guinea-Bissau: Has a human development index of 0.480. Democratic Republic of Congo: Has a human development index of 0.480. Malawi: Has a human development index of 0.483.
The African Union Commission (AUC) is set to convene the 2nd Extraordinary Session of the Specialized Technical Committee on Transport, Transcontinental, and Interregional Infrastructure, and Energy (STC-TTIIE) from June 14th -16th to consider pressing issues pertaining to the Russia-Ukraine Crisis, CoP27 and pending decisions under the transport sector.
The meeting scheduled to take place via video conference is expected to discuss the impacts of the Russia-Ukraine Crisis on Africa’s energy and infrastructure sectors whose knock-on effects transcend across many sectors. The session is especially expected to review a paper titled ‘Implications of the Russia-Ukraine Crisis on the African Energy and Infrastructure Sectors’ that aims at proposing imperative actions to mitigate the impacts and, support Member States to manage arising risks. Another critical topic to be tabled before the 2 nd extraordinary session of the STC-TTIIE is a paper on Common African Position on Energy Access and Transition to be presented for the CoP27 set to happen in Egypt in November this year. The paper highlights Africa’s short, medium and long-term priorities for energy transition while devising an apt approach to address the huge energy access gap in the continent compared to other regions despite the resource abundance.
H.E. Dr. Amani Abou-Zeid, African Union, Commissioner for Infrastructure and Energy, says Africa has great expectations from the COP27 which is happening on its soil for the fifth time. The Common Position is thus meant to clearly put Africa’s expectations, pathways, and demands on the global climate agenda considering its strides to achieve the Universal Energy Access stipulated under goal 7 of the SDGs. “The COP in Sharm El-Sheikh is very critical for the continent as we seek to speak in one voice regarding our priorities on energy access and transition, and push for the outcomes to recognize and embrace Africa’s unique realities,” added the Commissioner.
The 2nd STC-TTIIE is also expected to consider and adopt agenda items under the transport sector including the Dispute Settlement Mechanism for the Single African Air Transport Market (SAATM), policy guidelines for negotiation of air services agreements between African countries and other countries and regions as well as the final report of the study on African Road Safety Observatory (ARSO).
Digital rights forum calls for more digital transparency & protection across Africa (Technology Zimbabwe)
While many governments in Africa have made welcome progress toward digital transformation in the last year, more work needs to be done towards offering transparency, digital inclusion, and the protection of digital rights to citizens across the continent. This was the main finding of the Londa report, launched recently at the Digital Rights and Inclusion Forum (DRIF) 2022.
The Londa report features contributions from digital rights and inclusion experts from 22 African countries, and its findings are a timely assessment of the state of digital rights and inclusion in Africa. It provides recommendations on what each country must do to move towards realising the huge gains that rights-respecting and inclusive digital policies and practices bring. Furthermore, it calls on governments to set policies ensuring a free and open Internet, which is safe for all, while working with relevant stakeholders to eliminate online violence, bullying, hate speech and misinformation.
The report states that there have been some notable positive developments in the last year. Rwanda and Zambia’s governments, for example, have enacted legislation concerning data protection and privacy.
As Africa looks forward to end hunger by 2025, stakeholders in the fisheries sector in the African continent have converged in Abuja to chart way forward in closing the deficit in fish production. The meeting also sought to review the progress made at the Fisheries Governance project phase 1 and develop work plan for the phase 2 of the project. The Director African Union – Interafrican Bureau for Animal Resources (AU-IBAR), Dr Nick Nwankpa in his address, said the Regional Economic Communities (the RECs) are strategic regional institutions with the political mandate for regional integration agenda, enhancing regional cooperation and fostering regional policy coherence. He said the Fisheries Governance project (FishGov) Phase 2 project therefore considered the RECs as important partners in facilitating the implementation of the Project at regional and national levels.
Dr Nwankpa said the project would leverage on their unique mandates to promote regional cooperation on issues of fisheries and aquaculture to gain political commitments and facilitate the implementation of activities that are regional in nature.
“The African Fisheries Reform Mechanism and the policy framework and reform strategy for fisheries and aquaculture in Africa underscored the importance of regional collaboration, coordination and coherence in the governance of the African fisheries and aquaculture sector.
The African Forest Forum has called for enhanced integration of nature-based solutions for climate resilience in Africa. Nature-based solutions have been recognised as important elements in forest conservation, sustainable use, and restoration to address climate change mitigation and adaptation.
An AFF hybrid side event titled “Strengthening forest management for enhanced livelihoods and resilience in a changing environment in Africa,” which took place, in Seoul, South Korea, last month examined the continent’s transition to a green and resilient future, as well as other crucial challenges.
Executive Secretary of the African Forest Forum (AFF), Prof. Godwin Kowero, stated that while international forest policy dialogue had aided in the development of a green and resilient agenda for the African continent, more work was needed to improve synergies across related agreements and processes.
According to him, the frequently difficult and complex challenges associated with implementing these processes necessitated a comprehensive reassessment of the continent’s prevailing policy approaches.
ECOWAS Court laments poor law application by member states (Daily News Egypt)
ECOWAS Court of Justice has complained about the poor application of community law by the national courts of member states. The court stated that this impacts negatively on the growth of the law and the region’s integration project. “In twenty years of operation, the Court has never been seized of a referral by a national court”, said Vice President Justice Gberi-be Ouatttara. Ouatttara spoke at the opening of the first ordinary session of the 2022 ECOWAS Parliament.
The judge expressed concern about the absence of nationally designated focal points for the execution of the court’s decisions in many member states. He further lamented that states were taking too long to trigger the procedure for the domestication of the instruments and urged them to make amends.
Global economy news
The WTO’s 12th Ministerial Conference (MC12) is taking place on 12-15 June 2022 at WTO headquarters in Geneva, Switzerland. Ministers from across the world will have the opportunity to review the functioning of the multilateral trading system, to make general statements and to take action on the future work of the WTO. Originally scheduled to be hosted by Kazakhstan in June 2020, the Conference was postponed due to the COVID-19 pandemic. tralac is carefully monitoring this process.
The thematic sessions were followed at the end of the day by a meeting of Heads of Delegations, where the WTO Director-General Ngozi Okonjo-Iweala said she is hopeful that members “will be gaveling agreements as quickly as possible to close on those areas where we have been able to converge and find landing zones”. DG Okonjo-Iweala noted that the thematic sessions “provided a glimpse of where we could be a day from now or two days from now.”
Beyond ODA and Aid for Trade: The critical value of alternative trade funding (Trade for Development News)
Least Developed Countries (LDCs) have continued to struggle with the challenges that led to the development of the category over 50 years ago. Periods of economic growth have been generally insufficient to address the challenges of long-term income divergence with the rest of the world. With a share of global trade which continues to hover around 1 per cent, the economic effects of the COVID-19 pandemic have further dampened prospects for some convergence with the rest of the world. The added challenge of the climate crisis has amplified vulnerabilities for many LDCs that are at the intersection of climate and economic impacts.
Official Development Assistance (ODA) has remained a key source of financing for many LDCs rising to about USD 33 billion in 2021 according to preliminary data from the OECD. One of the key ways ODA is channelled to LDCs is through Aid for Trade. OECD statistics on Aid for Trade drawn from the Creditor Reporting System (CRS) shows Aid for Trade disbursements increased on an average of 6.6% per year since 2006. Support to LDCs has also grown at a sustained pace of around 8.2% to 8.4% per year. Most recent developments such as global conflicts may have impacts on Aid for Trade, preliminary indications also point to a re-alignment of priorities that might have implications on Aid for Trade disbursements in the short to medium term at least.
The World Trade Organisation’s boss insisted Monday (13 June) that turning trade green was now urgent business, with the WTO putting climate change at the heart of its negotiations. The WTO is staging its first meeting of trade ministers in nearly five years and environmental issues are rocketing up the agenda at the global trade body.
“Greening trade is urgent: climate change isn’t waiting,” WTO chief Ngozi Okonjo-Iweala said after attending the new coalition’s launch on day two of the WTO ministerial conference in Geneva. EU trade commissioner Valdis Dombrovskis said the new group would try to tackle the climate crisis in a fair manner through trade policy. “Trade has to be part of the solution. It is an engine of growth that can create new green jobs, reduce poverty and support the transition to climate-neutral economies,” he told the group’s launch.
WTO, UN-OHRLLS sign pact to better engage LDCs in global trade (Fibre2fashion.com)
World Trade Organisation (WTO) director general Ngozi Okonjo-Iweala and Sandagdorj Erdenebileg of the UN High Representative for Least Developed Countries (LDCs) recently signed a partnership agreement in Geneva aimed at strengthening cooperation to boost participation of LDCs in the global trading system. It was signed on the eve of the 12th Ministerial Conference (MC12). Trade ministers and WTO ambassadors from over 40 LDCs attended the ceremony.
“LDCs have a special place in the multilateral trading system. Over the last decade, our members have provided increased trade opportunities to expand LDC exports and the WTO remains the main forum to achieve the Doha Programme of Action targets in the area of trade,” Okonjo-Iweala said.
Strengthening pandemic defenses will require deeper cooperation on trade (World Bank Blog)
The COVID-19 pandemic has exposed the upsides and downsides of international trade in medical goods and services. Although global trade was a critical component in addressing the pandemic, it fell short in important ways. A new joint report from the World Bank and World Trade Organization draws lessons from the pandemic experience and proposes steps to better prepare for the next emergency.
Deepening international cooperation on trade will be critical to that effort. Key steps include negotiating tariff reductions on medical goods and greater market access in services; harmonizing national health regulations or creating international standards; and agreeing on a crisis rulebook to be deployed during an emergency. Open trade will be increasingly important to meet growing demand for health-related goods and services, support innovation, and contain costs. Global health spending is expected to surge amid emergent infectious diseases (Figure 1), income convergence, and increasing life expectancy. Technological improvements and digitalization will make the delivery of medical products even more international, and increasingly complex global value chains will be crucial to innovation and production.
The World Free Zones Organization (World FZO) announced the Global Alliance for Special Economic Zones Conference (GASEZ) at its eighth Annual International Conference (AICE). The conference is taking place in Montego Bay, St. James, Jamaica from June 13 - 17 and features world-class speakers, senior policymakers, academics, multilateral organizations, and global business leaders from over 100 countries. The first annual Global Alliance for Special Economic Zones conference was launched during AICE under the theme ‘Zones, your partner for Resilience, Sustainability, and Prosperity,’ in partnership with the United Nations Conference on Trade and Development (UNCTAD).
The alliance aims to address the most prominent and emerging issues related to the special economic zones and highlights the role of partnerships in enabling the exchange of experiences in the post-pandemic recovery phase. The alliance also seeks to develop global partnerships to facilitate cross-border and cross-sectoral cooperation in the areas of trade, investments and achieving the United Nations Sustainable Development Goals. It also helps in promoting policies to develop frameworks to enable special economic zones at the local, regional and global levels.
IMO takes baby steps to increase ambition, but immediate action still missing (Hellenic Shipping News Worldwide)
More countries than ever before agree that the global shipping industry must step up action to tackle its impacts on the climate. A clear majority of delegates intervening at the International Maritime Organization (IMO) climate talks last week (MEPC 78) were in favour of revising the IMO’s current climate strategy to decarbonise shipping by 2050 – moving the sector much closer to the Paris Agreement’s goal of keeping global heating below 1.5°C. Although long-overdue, this is an encouraging development and makes the IMO’s adoption of greater ambition more likely. However, achieving the Paris Agreement’s goal requires immediate action to halve emissions by 2030 and reach zero emissions by 2040. IMO member states have a clear duty as well as the necessary tools already at their disposal, both nationally and internationally, to bring down shipping emissions today. These include:
Time for open data in fibre infrastructure (Business Daily)
Open data standards for transparency have proven to be an effective approach to creating high-trust collaboration among multiple stakeholders for sharing data. Open data ensures that information is available to all on an equal basis and that there are common mechanisms for describing and sharing. Today, as the world pursues more open data standards through initiatives like open contracting, which is about transparency in public contracting and Open Ownership, another aspect of open standard that has been given less importance is open data for fibre networks despite being in the digital evolution era. The telecoms sector is increasingly underpinning every aspect of our lives, from education to commerce, access to government services to family life. This is more prominent during the Covid-19 where due to the lockdowns most of our daily activities were shifted to virtual and access to communication. Yet, there is little information about the physical infrastructure that carries the information highway. And the lack of transparency is holding back efforts to grow connections.
Commonwealth Business Forum: what is on agenda? (The New Times)
The Commonwealth Business Forum (CBF) is around the corner. As the public and private sector gears up to leverage the opportunities it presents, here is what you need to know about what is on the agenda. The CBF is one of four special forums that will be held during the Commonwealth Heads of Government Meeting (CHOGM), slated to take place in Kigali from June 21 to 23. It will bring together government leaders, captains of industry and business executives, leaders of global and regional development institutions, young entrepreneurs and representatives of trade and investment organizations from across the Commonwealth.
Discussions and initiatives will address the theme: "Delivering a Common Future: Connecting, Innovating, and Transforming." As such, the CBF is expected to address key topics like connecting the Commonwealth in terms of trade and regional integration, bridging the digital divide, and improving ecosystems and global value chains. The participants will explore topics such as financing future growth, trade and regional integration, and the future of work.