Building capacity to help Africa trade better

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tralac Daily News

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S. Africa eyes more benefits from BRICS (China Daily)

South Africa has benefited from increased trade with other countries in the BRICS grouping and the synergies that come with joint efforts against the pandemic, South African President Cyril Ramaphosa said in highlighting the opportunities created by greater cooperation. Ramaphosa will join the leaders of the other emerging economies-Brazil, Russia, India and China-that make up the grouping at the 14th BRICS Summit to be hosted by China on Thursday. In a statement on Monday, he said the five countries have embraced the BRICS economic partnership, which enables increased market access while promoting broader mutual trade and investment benefits as part of an overall business-friendly environment. “An important part of this strategy, particularly for South Africa, is to diversify trade so that more manufactured goods, rather than raw commodities, are traded,” the South African president said.

Fellow BRICS nations have become increasingly important partners for South Africa. Last year, imports from the other four countries accounted for 29 percent of South Africa’s imports, while exports to them made up 17 percent of the country’s total, he said. Ramaphosa said South Africa’s trade within the grouping jumped from about $30 billion in 2017 to $44 billion last year.

He said that BRICS membership will help the country to further improve its competitiveness, trade linkages and economic growth. South Africa is reforming large areas of its economy, including in the energy, telecommunications and transport sectors, Ramaphosa said. It is also seeking to boost investments in infrastructure and reduce red tape. Tourism is another sector in policymakers’ sights.

He said the BRICS Business Council and the BRICS Women’s Business Alliance have been tapped to build ties in sectors including agribusiness, aviation, financial services and energy. These initiatives have also helped to improve the regulatory environment and boost skills.

Ramaphosa notes that the summit will discuss the reform of the multilateral system, including the United Nations, as well as efforts to promote sustainable, fair and inclusive economic growth. In doing so, the gathering of leaders will discuss how to build a better world, he added.

South Africa on weak footing amid global recession fears (Mail & Guardian)

Talk of an impending global recession is difficult to avoid these days, especially as central banks appear determined to tame runaway inflation in the face of weaker economic growth. If a global recession does unfold, it will be the fourth in three decades, each of which rippled through South Africa’s economy. Another downturn will be no different — and may be even more difficult to recover from than the last, the pandemic-driven recession.

Patel says ‘pragmatic solution’ to be found to localisation-linked renewables delays (Engineering News)

Trade, Industry and Competition Minister Ebrahim Patel reports that government is working to find a “pragmatic solution” to the problem where local-content requirements contained in government’s electricity procurement programmes are delaying the construction of utility scale renewable-energy projects. “I’ve asked the Department of Trade, Industry and Competition (DTIC) team to meet with the energy team to see how we can ensure that our localisation goals don’t retard the development of green energy, and that we find ways to speed up processes,” Patel said in response to a question posed by Engineering News on the side-lines of the Manufacturing Indaba.

R6bn plan to overhaul SA’s busiest border posts (Moneyweb)

The Department of Home Affairs plans to issue a public request for proposals “in a few months’ time” for an ambitious R6 billion project to completely overhaul and rebuild South Africa’s six busiest border posts, Minister of Home Affairs Aaron Motsoaledi has confirmed. Responding to a Moneyweb question during a joint briefing with Transport Minister Fikile Mbalula on Monday related to addressing trucking blockades, Dr Motsoaledi said the planned border post upgrade project is linked to the African Continental Free Trade Area (AfCFTA) agreement and is to ensure the border posts have appropriate infrastructure.

Final Just Energy Transition Partnership Investment Plan expected by November (Engineering News)

A Just Energy Transition Partnership Investment Plan (JETP-IP), which will seek to unlock $8.5-billion in concessional climate finance to accelerate South Africa’s transition from coal to renewables and support workers and communities currently reliant on the coal value chain, is expected to be finalised by October for sign-off during the COP27 climate talks in Egypt in November. The JETP-IP, a first draft and revision of which are expected in July and September respectively, is viewed as the crucial next step in the conversion of a Political Declaration signed at the COP26 climate talks in Glasgow, Scotland, last year between South Africa, and the International Partners Group (IPG) of France, Germany, the UK, the US, and the European Union.

‘Jackpot’ oil discoveries may help Namibia double GDP by 2040 (Engineering News)

Namibia expects its biggest oil discoveries since independence to help double its economy by 2040, Jennifer Comalie, chairperson of National Petroleum Corp of Namibia, said in a Bloomberg TV interview. TotalEnergies in February said it had made a “significant” oil discovery off the coast of Namibia, three weeks after Shell announced a find off the southwest African nation. Explorers have drilled more than a dozen exploration wells in search of oil and gas. Consultants Wood Mackenzie estimated the combined recoverable finds at almost four-billion barrels.

Beitbridge border automation excites freight, customs agents (Chronicle)

CUSTOMS clearing and freight forwarding agents have hailed the Government for fully implementing the US$300 million Beitbridge Border Post transformation project that will among other things see services and operations being automated. In separate interviews they said the new state of affairs will enhance efficiencies and improve the speedy flow of human traffic and cargo.

Delays in the movement of goods have been a perennial headache at the country’s busiest inland port of entry until the New Dispensation, in partnership with the Zimborders Consortium, moved in in 2018. Chairperson of the border project subcommittee on ICT, Mr Shami Moyo, said the automation of the modernised border post will involve the use of cameras and more paperless transactions.

“The idea is to go hi-tech and use more of the prepayments and pre-clearance systems. People must spend as little time as possible to go through this port of entry,” said Mr Moyo.

“Where the clearance of cargo used to take days, we are now seeing the same process being done within a few hours due to changes at the border,” said Mr Itayi Misihayirambwi of Cutting Lyne Investments

Another freight forwarder, Mr Martin Dube said the border automation has led to efficiency, and that the flow of trucks north and south-bound is now clear and more defined. He said a number of loopholes and bottlenecks affecting revenue collection had been addressed under the new systems.

Gov’t launches Kenya’s eTrade Readiness Assessment (Kenya News Agency)

The government is developing a national E-Commerce Strategy (ECS) to boost Kenya’s economic opportunities that are supportive to the country’s strategic goals and Vision 2030. Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina said the State is cognizant that e-commerce that is driven by enhanced digital skills and innovative entrepreneurs is the foundation of economic growth. “Historically, the country’s export has been relying on narrow products and export destinations. E-Commerce will therefore be critical in steering the country to increase its products exports and expand export destinations,” said Maina.

Kenya exporters protest expensive Chinese vetting (Business Daily)

Kenyan exporters have raised concerns of high demurrage charges and loss of their agricultural produce over food certification required by China, making it difficult to trade. The Asian country on January 1 implemented new registration requirements for companies that export food to China. According to the regulations, all overseas manufacturers of foods that export to China are required to register with the General Administration of Customs China), a move that has led to products being confiscated and spoiled. Some of the exports affected include macadamia nuts, vegetables, fruits, tea and coffee.

BOT increases monetary policy objectives targets for 2022/2023 (IPPMedia)

The monetary policy statement for June 2022 indicates that the monetary targets for reserve money, extended broad money and growth of credit to private sector for 2022/2023 were increased against targets for 2021/2022. The three indicators are important components to keep the economy running, in a time when there is a huge supply chain disruptions caused by ongoing Russia-Ukraine war, as they are main stimulants to growth of economic activities and job creation. The monetary policy statement published last week says during 2022/2023, BOT is targeting an annual growth of reserve money of 11.4 percent against targeted 9.9 percent in 2021/2022.

However, the import cover will be lower than EAC benchmarks of at least 4.5 months and the SADC benchmark of at least 6 months of imports.

Economy recovers as URA gets sh133b revenue surplus (New Vision)

Uganda’s economy is steadily recovering from the shocks of COVID-19, evidenced by the improved revenue collections. According to the latest performance of the economy report, which the finance ministry released on Friday, Uganda Revenue Authority (URA) achieved its revenue collection target for last month. URA has been registering revenue shortfalls in the previous months since the financial year started in July 2021. Huge revenue shortfalls of sh3 trillion and sh2 trillion were registered in the 2019/2020 and 2020/2021 financial years, respectively, mainly due to the effects of COVID-19 on the economy.

The report indicates that domestic revenue collections in May 2022 were to the tune of sh1.75 trillion, which is much higher than the month’s revenue collection target of sh1.62 trillion. This implies that in May 2022, the Government realized a revenue surplus of sh133.2b. Of the total revenue collection of sh1.75 trillion, sh1,649.60b were tax collections, while sh106.94b were non-tax collections.

Surplus collections on international trade and transactions were registered mainly on account of higher than planned collections on petroleum duty, import duty and VAT on imports during the month.

Nigeria adopts WTO stance on e-commerce, others (Daily Trust)

The federal government has joined other countries to adopt the 10 ministerial resolutions of the World Trade Organisation (WTO) on food security, e-commerce among others.

Trade ministers from member countries adopted these at the 12th Ministerial Conference in Geneva, Switzerland, which ended at the weekend. Speaking, the Minister of State for Industry, Trade and Investment, Amb. Mariam Katagum, who led the Nigerian delegation, said it was important for Nigeria to synergise with other countries of the world to promote economic prosperity.

She called on trade ministers “to develop an institutional framework that would foster discussions towards the delivery of outcomes that would address the needs of members while adhering to WTO principles of transparency, inclusiveness, fairness and equity within the balance of the rights and obligations of all members under the covered agreements.”

Mozambique’s insecurity endangers cross-border trade (Anadolu Agency)

A violent insurgency in Mozambique’s Cabo Delgado province has shattered informal cross-border trade with Tanzania which has for many years been the mainstay of the local economy as terrorists continue to wreak havoc, dashing hopes for improved livelihoods, according to local residents. The region’s insecurity is an obstacle to cross-border trade, affecting the flow of manufactured goods and agricultural products, including maize and cashews, along with trade in livestock and timber as well as fishing activities, they said.

In October 2020, militants launched a deadly attack on a village near Tanzania’s port of Mtwara, a major oil and gas logistics base, after crossing the border from Cabo Delgado. The attack signaled a worrying trend and expansion of terrorism, raising security concerns for people engaging in informal cross-border businesses, said local analysts.

Jehonaness Aikaeli, an economist from the University of Dar es Salaam, said informal cross-border trade is a major feature in the region’s economic and social landscape, supporting livelihoods and reducing poverty and food insecurity. “The ongoing terrorism in Mozambique is a serious setback to transboundary trade with the potential to affect local livelihoods,” she told Anadolu Agency.

A spot check by Anadolu Agency revealed that informal business through porous border routes goes on unabated in some areas thanks to strong networks and relationships that persist without the knowledge of the authorities.

However, ever since Tanzania imposed a ban on the entry of its food products into the Mozambican territory through the Namoto border due to the conflict in Cabo Delgado, some traders in neighboring towns have suffered, said local residents.

UAE to build Red Sea port in Sudan in $6 billion investment package (Reuters)

The United Arab Emirates will build a new Red Sea port in Sudan as part of a $6 billion investment package, DAL group chairman Osama Daoud Abdellatif, a partner in the deal, told Reuters. Abdellatif said the package includes a free trade zone, a large agricultural project and an imminent $300 million deposit to Sudan’s central bank, which would be the first such deposit since an October military takeover. Western donors suspended billions in aid and investment to Sudan after the coup, plunging an economy that was already struggling into further turmoil and depriving the government of much needed foreign currency.

Ibrahim told Reuters on Wednesday that a memorandum of understanding had been signed with the UAE for a port and agricultural project, but the details have not previously been reported.

AfDB-supported 4th Cabo Verde Investment Forum successfully ended in Sal Island (Devdiscourse)

The fourth edition of the Cabo Verde Investment Forum has successfully ended in Sal Island, with active support from the African Development Bank. The Forum, held from 16-17 June 2022, was set up to accelerate private and public financial sector investments to drive sustainable economic growth and job creation in Cabo Verde. The island nation’s prime minister, Dr. Ulisses Correia e Silva, who presided over the two-day event, noted that it offers the island nation new avenues to mobilize partners and resources for local economic diversification and private sector investment. The Forum’s goal for this year was to mobilize €2 billion in financing for projects in the tourism, agriculture, fishery, energy, digital, transport, youth, and SME sectors.

African trade and development news

Russians must take advantage of the African Continental Free Trade Area (Modern Ghana)

Russians have to consider seriously the mutual benefits while taking advantage of the African Continental Free Trade Area (AfCFTA), which was signed in March 2018, and came into force on January 1, 2021. The AfCFTA provides a unique and valuable platform for businesses to access an integrated African market of over 1.3 billion people. The growing middle class, among other factors, constitutes a huge market potential in Africa.

In order to have an in-depth understanding of these, Russians must at least invest in initial market research and development (R&D) collaborations, as the basis for designing entry strategies, with their African partners. The call was made at the Russia-Africa Business Dialogue held on June 16.

Sadc harmonises SPS measures to boost regional trade (Chronicle)

SMALL-SCALE farmers and private sector players in the Southern African Development Community (Sadc) are being capacitated on how to comply with sanitary and phytosanitary (SPS) measures in an effort to protect the health and welfare of human, plant, and animal life in the region and beyond.

SPS measures are bio-security actions applied to protect human, animal or plant life or health from risks arising from the entry, establishment and spread of plant pests and animal diseases as well as from risks arising from additives, toxins and contaminants in food and feed. If poorly applied, experts say SPS measures could result in the emergence of non-tariff barriers (NTBs) to trade.

In a latest update, Sadc said the capacity building programme is being done under the Trade Facilitation Programme (TFP), which the bloc is implementing with support from the European Union (EU) to enable the region to further integrate in various areas of economic development. While Sadc has committed to removing NTBs in order to improve regional trade, the bloc says it recognises that imported agricultural products, which include plants, animals, and food products, could carry or contain harmful pests or contaminants. “One of the failures in trade among member States, which contributes to low intra-Sadc trade is the non-recognition of conformity assessment results between member States. “This stems from the lack of trust in each other’s national conformity assessment regimes, hence the need for a common framework for the mutual recognition of same,” said Sadc.

The EAC Post Tax And Budget Dialogue for FY 2022/23 (Uganda Media Centre)

EAC Post Tax and Budget Dialogue for FY 2022/23 is held under the theme; “Accelerating Economic Recovery and Enhancing Productive Sectors for Improved Livelihood in the EAC Region: Defining Joint Strategies for a Faster Recovery.”

2022 shall be remembered as a phenomenal year for the EAC following the admission of the Democratic Republic of Congo into the EAC bloc in April. EAC now has seven-member states including Uganda, Tanzania, Kenya, Rwanda, Burundi, South Sudan and DR Congo. I would like to reiterate that the Budget is an important tool because through the Budget, Uganda and the rest of the EAC governments can influence income distribution, provide services to its citizens, and transform the country through strategic investments.

It is also worth noting that the East African Community (EAC) member states agreed in 2007 to harmonize their budget reading as part of efforts towards harmonizing their taxation regimes. This is particularly important because when the budgets are read on the same day, it reduces the risk of policy leaks and unfair business practices. Yet again, EAC member states (except Kenya) read their respective national budgets for FY 2022/23 on June 14. For FY 2022/23 Budget, EAC Partner States also agreed on a common theme; “Accelerating economic recovery and enhancing productive sectors for improved livelihood”. Throughout the FY 2022/23, the EAC member states will continue with the implementation of the economic policies and practices for the realization of inclusive and equitable post COVID-19 economic recovery and EAC regional integration that works for everyone.

Trade with DR Congo will double exports, open new markets (Monitor)

The DRC economy is begging for regional trade in East Africa, with Uganda being the most advantaged, given its proximity. According to a survey conducted by Prosper magazine in the DRC, it did not take too long to establish that 90 percent of what is on their supermarket shelves are imports from all over the world except Africa and curiously East Africa, which by virtue of its proximity should have taken that space. The aforementioned statistic was corroborated by the SMEs sector players in Congo. This was during the Uganda DR-Congo Business Summit fact finding mission, where it emerged that DRC is a virgin economy and efforts are in place to wrestle that huge untapped market from foreign imports. During the summit, Mr Stephen Asiimwe, the chief executive officer for Private Sector Foundation Uganda (PSFU), said the Ugandan delegation of 200 people, visited DRC to market Ugandan products, to engage with business people in Congo, and to buy or sell goods and services.

sector players from Uganda are discussing with the government of Congo and the business people, to create means through which goods from Uganda can reach a particular place, so that business people can access a variety of merchandise. “Uganda is largely an agricultural country. We hope and believe we can get good clean, reliable and sustainable commodities that can be picked up from the collection centres,” Mr Asiimwe said. Despite the abundant opportunities in DR-Congo, there are other teething issues that deserve attention.

The transformation of the DR - Congo into a dollar economy according to economic analysts and sector players, poses limitations on potential investors, which limitation is bound to increase the cost of doing business.

Digital transformation of agri sector could address sub-Saharan Africa’s food insecurity: UN Report (Down to Earth Magazine)

Digital transformation of the agriculture sector could address food insecurity in sub-Saharan Africa, paving the way for prosperity in the region, a recently released report by the United Nations Food and Agriculture Organization (FAO) has said.

Saharan Africa has the largest area of arable uncultivated land in the world. It also has a youthful population and vast natural resources. It is thus uniquely positioned to double or even triple its current agricultural productivity, according to the report. Such an increase in agricultural productivity would help lift more than 400 million people in sub-Saharan Africa who live on $1.9 or less a day, out of poverty. It would also improve the livelihood of approximately 250 million smallholder farmers and pastoralists in the region, the report said.

A comprehensive approach of digital technology and policy reform could increase crop production by more than 500 per cent in some countries across the region, with positive results for food security and livelihoods, according to a separate study published by the Global Challenges Research Fund Programme. But for that, a digital transformation of the food and agriculture sector was needed. The FAO report assessed the region’s digital agriculture landscape through six key themes: Infrastructure; Digital penetration; Policy and regulation; Business environment ;Human capital and Agro-innovation

Domestic tourism low hanging fruit Africa must pluck (Business Daily)

Tourism is a major contributor to the GDP of African economies. In 2019, the industry accounted for about seven percent of Africa’s GDP and contributed $169 billion to its economy — about the size of Côte d’Ivoire’s and Kenya’s combined GDP. But Covid-19 changed all that. In July 2020, the African Union estimated that Africa lost nearly $55 billion in travel and tourism revenues and two million jobs in the first three months of the pandemic. The International Monetary Fund (IMF) predicted that real GDP among African countries dependent on tourism dropped by 12 percent in 2020.However, as Covid-19 restrictions ease, tapping domestic tourism demand has offered the sector some respite, as a growing middle class and young population shows more interest in travel.

Africa’s growing middle class and population of young travellers hungry for adventure, and the recently launched African Continental Free Trade Area (AfCFTA), the world’s largest free trade area by the number of participating countries, are among the pillars seen supporting the future growth of domestic and regional tourism on the continent. This, therefore, calls for a rethink of strategy, especially in terms of building a domestic client base to match or even exceed the international base.

But a shift to domestic tourism requires capacity-building for service providers on leveraging digital technologies for product development and marketing.

Global economy news

DDG González: “Now more than ever, business needs the WTO” (WTO)

DDG González highlighted that businesses everywhere face growing uncertainty in global trade due to continued supply chain disruptions, the COVID-19 pandemic, climate change, trade tensions, war, a looming food crisis and galloping inflation. “But this is also a time of opportunity, and businesses that are nimble, flexible and imaginative will be in a strong position to reap the gains from a rapidly changing trade landscape”, she said.

World Trade Organization steps back from the brink of irrelevance – but it’s not fixed yet (The Conversation)

After decades of conflict that has neutered its work, the World Trade Organization looks to be back in business. Its highest decision-making body – a conference of ministers from the organisation’s 164 member nations – has just met for the first time since 2017. None of what the ministerial conference (dubbed MC12 due to being the 12th such meeting) agreed on was particularly groundbreaking. But the fact there was agreement at all – on areas such as agriculture, fishing, intellectual property, e-commerce and food insecurity – was itself a milestone.

The question is what happens now, with considerable challenges ahead for the WTO and its role in promoting and protecting a global rules-based trading system.

Inclusive growth remains elusive as inequality persists globally (UNCTAD)

The fourth edition of UNCTAD’s SDG Pulse released on 21 June shows that the world is highly unequal in living conditions, with development opportunities beyond the reach of many. The report introduces an index measuring inclusive growth, defined as equal and non-discriminatory opportunities for everyone to participate in, and benefit from, economic development. The Inclusive Growth Index (IGI) analyses countries’ ability to achieve such growth, with a focus on gender equality and environmental sustainability.

The SDG Pulse – an online statistical report updated annually – indicates uneven global progress and, for too many countries and goals, even reversion in accomplishing the 2030 Agenda for Sustainable Development. It shows that progress has deteriorated under the compounding effects of the COVID-19 pandemic, the war in Ukraine and the rising costs of climate change. The analysis is based on a range of Sustainable Development Goals (SDGs) indicators and official statistics relevant to trade, investment, financing for development, transport, technology and transition towards greener and higher value-added economy.

The index’s top 30 performers are all developed economies, with Luxembourg, Iceland and Norway leading the global ranking. In contrast, developing countries in Africa have the lowest IGI scores.

The SDG Pulse shows that developed countries generate twice as much waste per capita as developing countries. Developing nations in Africa are responsible for the least waste per capita, but often face challenges in waste management, for instance due to limited institutional and organizational capacity.

Clean and affordable energy top of mind in road towards COP27 (ESI Africa)

As the world inches closer to COP27, top of discussions is ensuring clean and affordable energy for all, especially Africa. One such initiative that will could have a positive effect on the continent is the new Climate Finance and Energy Innovation Hub that will launch at COP27. The Hub will accelerate access to clean and affordable energy throughout the global South. The OPEC Fund for International Development has partnered with the UN Capital Development Fund (UNCDF) and Sustainable Energy for All (SEforALL) to design and deliver a new Climate Finance and Energy Innovation Hub.

Food security: EU to step up its support to African, Caribbean and Pacific countries in response to Russia’s invasion of Ukraine (European Commission)

The European Commission adopted today a proposal to mobilise €600 million from the reserves of the European Development Fund to address the current food security crisis aggravated by Russia’s invasion of Ukraine. These funds will support African, Caribbean and Pacific (ACP) countries to cope with the dire situation, through humanitarian assistance (€150 million), sustainable production and resilience of food systems (€350 million) and macro-economic support (€100 million).

Announcing the new support measure at the 2022 European Development Days in Brussels, President of the European Commission, Ursula von der Leyen, said: “Russia’s war of aggression is taking a heavy and senseless toll, not only on the Ukrainian population, but also those most vulnerable around the world. Russia is still blocking millions of tonnes of desperately needed grain. To help our partners we will mobilise an additional 600 million euros to avoid a food crisis and an economic shock.”


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