Building capacity to help Africa trade better

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Local news

President Ramaphosa receives Just Energy Transition framework (SAnews)

President Cyril Ramaphosa says the Just Energy Transition (JET) Framework will serve as a key evidence-based guide for policy making for South Africa’s transition from a carbon intensive economy towards a greener and cleaner economy. The framework was presented to him by the Presidential Climate Committee (PCC) on Tuesday.

“As this Just Transition framework underscores, combating climate change is not only an environmental imperative, but an economic one as well. This framework is an evidence-based document and a victory for evidence-based policymaking. “The publication of this framework must now serve as a call to action to each of us to embrace the opportunities presented by a low-carbon, inclusive, climate resilient economy and society,” he said.

Namibians show interest in US trade (The Namibian)

Several Namibian entrepreneurs have shown interest in pursuing business opportunities in the United States after making contacts at the Namibia-US trade summit held in Namibia early this month. This was said by Namibia Chamber of Commerce and Industry (NCCI) chief executive officer Charity Mwiya on Monday, although she could not provide further details.

The Ministry of Industrialisation, Trade and SME Development chief information officer Elijah Mukubonda said the ministry was still collating data from different sources to have a clearer picture of the situation. The NCCI small and medium-scale enterprises development officer, Travis Mathews, sent out a memo on Monday last week to the Namibian business community requesting feedback.

Kenya surpasses South Africa as continent’s top avocado exporter (Capital Business)

Kenya has overtaken South Africa to become Africa’s top exporter of avocados. In Central Kenya, where the majority of the country’s small-scale avocado farmers are found, coffee bushes are fast being replaced by avocado trees amid global demand and higher earnings. There is a problem, however, theft. Avocado thieves are keeping farmers in the county awake as they opt to form vigilante groups to guard their crops.

Kenya’s imports from South Africa more than doubles to Sh17.7bn (Capital Business)

Kenya’s imports from South Africa more than doubled in the first three months of 2022 after rising by 64 percent to Sh 17.7 billion from Shs10.8 billion reported during a similar period in 2021. Data from the Kenya National Bureau of Statistics (KNBS) indicate that overall, imports in Africa registered an increase of 24.7 percent from KSh 54.0 billion in the first quarter of 2021 to Shs67.3 billion in the period under review. While imports from Tanzania increased by 23.7 percent compared to a similar period last year, the import bill was a decline from the previous quarter which stood at Shs14.8 billion. The country’s total imports increased from Shs508.7 billion in the first quarter of 2021 to Shs 593.2 billion in the first quarter of 2022.

KEBS urges manufacturers to adopt new standards to boost trade (Capital Business)

The Kenya Bureau of Standards (KEBS) has called on local manufacturers and importers to conform to the 205 new standards which have been developed targeting various products to boost their competitiveness. In the third quarter of Financial Year 2021/2022 (January to March 2022), KEBS developed and published the new standards categorized into seven categories which include; Food & Agriculture standards (5), Chemical standards (49), Cosmetics standards (18).

Speaking during the inaugural Emerging Standards Workshop to assess their implementation on Monday, Kenya Bureau of Standards MD, Bernard Njiraini said manufacturers are expected to ensure they adhere to the new standards when six months window after gazettement elapses in December this year.

Used trucks, buses import ban revs up flagging auto industry (The Standard)

Kenya has stepped up efforts aimed at developing a robust local auto industry by banning the importation of second-hand buses and trucks. The ban took effect last Friday and is expected to play a key role in growing the local vehicle assembly industry. The Kenya Bureau of Standards (Kebs) announced in May plans to roll out new standards aimed at improving safety on Kenyan roads. Other than buses and trucks, Kebs also intends to ban the importation of second-hand tractor heads and prime movers beginning next year.

UN: Over 4 million Kenyans own crypto, highest share in Africa (Business Daily)

Kenya has the largest share of its population with cryptocurrencies in Africa, says the United Nations, pointing to the country’s exposure to the ongoing meltdown in the crypto market. A report by United Nations Conference on Trade and Development (UNCTAD) says that 8.5 percent of the population or 4.25 million people own cryptocurrencies in the country. This places Kenya ahead of developed economies such as the United States, which is ranked sixth with 8.3 percent of its population owning digital currencies.

Transporters protest ban on second-hand buses, trucks (Business Daily)

Long-distance transporters in Kenya have protested the ban on the importation of second-hand buses and trucks, older than three years since their year of manufacture, even as authorities say the policy takes effect on July 1.According to transporters, the new policy will give transporters from other countries in East Africa an edge in the sector as new ones are expensive. Transporters have also claimed that lowering the age limit from eight to three is a further attempt by the government to force the use of standard gauge railway as it will make long-distance trucks more expensive. Car Importers Association of Kenya (CIAK) chairman Peter Otieno said the ban will affect not only importers but Kenyans who will not be able to import new trucks which will in turn increase the cost of transportation as the number of such units will reduce in the coming months.

Yatani: Why we are considering DP World to manage Lamu port (Business Daily)

Kenya turned to port operator Dubai Port World (DP World) to manage Lamu Port due to a lack of capacity at the state-run Kenya Ports Authority. Treasury Cabinet Secretary Ukur Yatani said DP World was among port operators being explored by the government as potential private partners to run the new port. Lamu port was launched last year following delays linked to funding shortfalls and the operalisation of the three berths.

“For us actually the motivation (for signing an MoU with DP World) is Lamu port, we have put Sh50 billion into Lamu port from the exchequer and we do not have the capacity to run it,” CS Yatani said. “There are other players including DP World and others who have done very well in port management so we are asking whether they can be our partners. That does not confer t them any financial gain,” he said.

Kenya has been at pains to explain the rationale behind signing a concession with DP World to undertake the development, operation, management and expansion of transport logistics services in Kenya on various components.

CS Yatani said the country has not yet committed to an agreement but a memorandum of understanding to grant private parties the right to run and operate port terminals and infrastructure such as container freight, dry ports and storage facilities.

Tourism players step up push for open skies policy (Business Daily)

Players in the tourism industry have asked the government to implement the open skies policy to ensure the tourism hubs attract more international airlines. The industry players said they are looking to meet President Uhuru Kenyatta who is expected to tour the Coast region, to deliberate on the importance of implementing the open sky policy to revive the international tourism segment that dwindled at the onset of the Covid-19 pandemic.

“We have a problem and a challenge, international airlines that are trying to get licences to fly to Mombasa are being stopped ostensibly to protect our national carrier. There is a lot of focus on Mombasa because the President is coming to launch his projects. Let’s lobby on the open skies policy,” said Pollman’s Tours and Safaris Director, Mohammed Hersi.

Non-Traditional Export up by 17 percent in 2021- CEO of GEPA (GhanaToday)

Revenue from Ghana’s Non-Traditional Export (NTE) increased from 2.846 billion in 2020 to $3.330 billion in 2021, an increase of $484m representing 17 per cent. The Chief Executive Officer of Ghana Export Promotion Authority (GEPA), Dr Afua Asabea Asare, who disclosed this at the launch of the 2021 NTE Report, said available statistics have revealed that NTE was increasing at an average rate of four per cent over the past five years and has contributed an average of approximately 20 per cent to the total export.

On the sector-by-sector contribution to the NTE, she said the manufacturing sector contributed $2.81billion representing 84 per cent, the agriculture contribution was $467 million representing 14 per cent, and industrial arts and crafts contributed $45.2million representing two per cent.

According to the CEO, the products were exported to 152 countries in the European Union (EU), the United Kingdom (UK), African Union, Economic Community of the West African States and other advanced countries.

Mobile money adoption drives Nigeria’s banking penetration to record high (Businessday)

Higher adoption of mobile money is driving the growth of account ownership in financial institutions particularly in Sub-Saharan Africa (SSA) countries like Nigeria, a recent 2021 Global Findex report by World Bank has said. An analysis of the report titled ‘Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19, showed that Nigeria’s banked population increased by 15.6 percentage points to 45.3 percent in 2021, the highest in 10 years from 29.7 percent in 2011. The 45.3 percent put Africa’s biggest economy in the 18th position out of 25 SSA countries.

“Mobile money has become an important enabler of financial inclusion in Sub-Saharan Africa especially for women as a driver of account ownership and of account usage through mobile payments, saving, and borrowing,” the report stated.

US’s Zambia investment plan targets African food security (African Business)

Zambia’s post-pandemic drive to diversify from mineral exports received a healthy boost as USAID announced an investment package worth over $44m. Aimed at “spurring private investment at a scale that could never be matched by foreign aid alone”, TradeBoost Zambia will build upon USAID’s new flagship, continent-wide Africa Trade and Investment programme.

Just three sectors – retail trade, mineral extraction and construction – constituted almost half of Zambian GDP before the pandemic. USAID’s focus on agricultural development will be welcomed in a country where population growth outstrips domestic agricultural production, which accounts for only 5.8% of GDP despite providing employment to 70% of Zambians. In the short term, it is hoped that an $8.5m export deal with agricultural companies Zdenakie and NewGrowCo will also help to relieve pressure on East African grain importers suffering the consequences of the war in Ukraine.

Curbing Tunisia’s crippling illicit financial flows (ISS Africa)

Tunisia loses about US$1.2 billion annually to illicit financial flows (IFFs) – around 3% of the country’s gross domestic product. These outflows involve the illegal transfer of unlawfully earned money or capital from one country to another.

From 2008 to 2015, the Economic and Social Commission for Western Asia ranked Tunisia first for IFFs and eighth for corruption in the Middle East and North Africa. In 2015, illicit financial inflows made up US$2.6 billion (11.4%), and outflows constituted US$1.28 billion (5.6%) of Tunisian trade. More recent figures aren’t available – highlighting a major gap that needs Tunisia’s urgent attention.

The problem is likely much more extensive than available data suggests.

African trade and integration news

Making the Most of the African Continental Free Trade Area: Leveraging Trade and Foreign Direct Investment to Boost Growth and Reduce Poverty (World Bank)

The creation of the African Continental Free Trade Area (AfCFTA) provides a unique opportunity to boost growth, cut poverty, and reduce Africa’s dependence on the boom and-bust commodity cycle. A World Bank (2020) report estimates that the AfCFTA has the potential to raise income in the continent by 7 percent by 2035 and lift 40 million people out of extreme poverty, mainly by spurring intraregional trade (termed the “AfCFTA trade scenario” for purposes of this analysis). Reductions in nontariff barriers on goods and services and improvements in trade facilitation measures will account for about two thirds of the US$450 billion in potential income gains by removing long delays across most of the continent’s borders and lowering compliance costs in trade, making it easier for African businesses to become integrated into regional and global supply chains. This report builds on that earlier study by including potential gains arising from greater flows of foreign direct investment (FDI), termed the “AfCFTA FDI broad scenario,” and from deeper integration beyond trade, the “AfCFTA FDI deep scenario.” FDI has traditionally been low in Africa. The AfCFTA is likely to attract cross-border investment by eliminating tariff and nontariff barriers and replacing the existing patchwork of bilateral and regional trade deals with a single, unified market. Investors in any one of 55 member countries will have access to a continent of 1.3 billion people with a combined GDP of US$3.4 trillion. Integration in global and regional value chains offers a further magnet for FDI and the jobs, investment, and know-how that FDI brings.

Right infrastructure needed to enhance intra-Africa trade - Trade Expert (Graphic Online)

A trade expert, Maame Awinador-Kanyirige, has urged African governments to put in place the right road infrastructure to facilitate trade on the continent. Although the Africa Continental Free Trade Area is expected to remove trade barriers on the continent, she said one of the critical things that has to be done was the need to put in place an effective transportation system to enable the smooth movement of goods.

In an interview with the Graphic Business on June 29, 2022, on the effect of the two-year border closure due to COVID-19 on the Ghanaian economy in terms of cross border trade, she said an improved transportation system was the only way to move goods at a cheaper cost between states.

COVID-19 poses risk to smooth operation of AfCFTA – AU (Businessday)

The African Union (AU) says COVID-19 poses the most formidable risk to the smooth operation of the African Continental Free Trade Area (AfCFTA) agreement. AU in a statement, Tuesday, ahead of an industrialisation-themed continental meeting said, “COVID-19 pandemic has further heightened the risks of perpetuating the continent’s trade and business vulnerability.’’ It stressed that the pandemic and its attendant disruption of global supply chains have brought to the fore the urgency and significance of driving industrialisation in the African continent.

The statement came ahead of the AU’s high-level industrialisation-themed continental summit, slated for November 20 to 25 in Niamey, the capital of Niger. The summit will be held under the theme “Industrialising Africa: Renewed commitment towards inclusive and sustainable industrialisation and economic diversification.

Making trade easier for Africa’s youthful population (Businessday)

The youth are spearheading a lot of change initiatives not only in Nigeria but also across Africa. The world’s population is estimated to hit 10 billion people by 2055. It’s projected that Africa will account for 57% of the growth at about 1.4 billion people. With Africa’s youthful population growing there is a growing need to ensure that the youth are well resourced. If harnessed, the creativity and innovation of the huge youthful population can play a key role in Africa’s economic transformation.

Across the continent, the informal sector has provided a major source of employment for many youths. Majority of them are in the small and medium enterprises (SME’s) space. This resort to informality is due to the need to explore available opportunities and earn a living. SMEs in Africa have proven to be key drivers of growth, innovation development and job creation.

A vibrant SME segment provides a strong foundation for development, increased standards of living and poverty reduction.

Sadly, the challenges with facilitating trade especially among SMEs are well known. They include, fragmentation, market access, operational and administrative inefficiencies and in some cases, bureaucratic delays.

SADC developing measures to ease trade facilitation in the Region (SADC)

The Southern African Development Community (SADC) is developing and implementing customs instruments to tackle challenges that contribute to higher transaction costs in order to ease trade among countries in the region. The customs instruments include logistics, simplification and harmonisation of documentation associated with cross-border trade, improving transparency in operations of regulatory agencies, harmonisation of standards and technical regulations, harmonisation of Sanitary and Phytosanitary measures (SPS), monitoring and resolution of Non Tarif Barriers (NTBs), as well as improving the business environment in which transactions take place.

SADC is also conducting Time Release Studies (TRSs) along its corridors to assess bottlenecks and efficiency in the clearance of goods crossing the border posts. TRS is a method endorsed by the World Customs Organisation (WCO) for assessing a country’s trade facilitation performance. It does so by measuring the average time from arrival of goods at the border until permission is given for the goods to enter home consumption.

The North South Corridor (NSC) is earmarked for the first regional TRS in 2021/2022 and 2022/2023 financial years. The NSC connects the South African port of Durban to Lusaka, Zambia, Lubumbashi, Democratic Republic of Congo, and to Lilongwe and Blantyre in Malawi, through Johannesburg (South Africa), Botswana, and Zimbabwe, and is a vital corridor for trade and the sustenance of SADC regional integration. SADC is supporting the implementation of trade facilitation measures to both the at-the-border and behind-the-border initiatives. This is with regard to requirements for access to markets outside the SADC Region.

SADC to hold 33rd Committee of Ministers of Trade and 22nd Ministerial Task Force for Regional Economic Integration (SADC)

On 08-09 July 2022, the Southern African Development Community (SADC) will hold the 33rd Committee of Ministers of Trade and 22nd Ministerial Task Force for Regional Economic Integration at Crossroads Hotel in Lilongwe, Republic of Malawi. The purpose of the meeting for the 33rd Committee of Ministers of Trade is to consider progress report on the implementation of the Protocol on Trade and its annexes. The key issues to be discussed include; Rules of origin, Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), ratification of the Free Trade Area and implementation of Trade in Services Protocol. On the other hand, the 22nd Ministerial Task Force for Regional Economic Integration will consider progress report on implementing the Industrialisation Strategy and Road Map 2015-2063. The key issues include a progress report on the ratification of the Protocol on the Industry, Private Sector engagement, Value Chains, Macro Convergence, Infrastructure Development, AfCFTA and rules of origin.

Sacu to refocus on development of value chains…as it prioritises financing for industrialisation (New Era)

The Southern African Customs Union (Sacu) member states have agreed to refocus the bloc’s work programme on industrialisation through the development of regional value chains, export, and investment promotion. Speaking at the 7th Summit of Heads of State in Bostwana last week, Executive Secretary Paulina Elago noted that Sacu has prioritised, financing for industrialisation, trade facilitation and logistics together with the implementation of the African Continental Free Trade Area (AfCFTA) as key focus areas. “This refocused Work Programme is deliberately structured to ultimately position Sacu as the manufacturing and innovation hub for the continent, and in doing so, to take full advantage of the AfCFTA,” said Elago at her last Sacu summit, given her term of office ends in October 2022.

Tax disputes, trade wars headache for new EABC board (The East African)

The East African Business Council (EABC), which last week elected a new executive committee, says it will expedite the formation of a trade remedy committee to deal with disputes and cut disruptions in the East African Community (EAC) Common Market.

The executive committee was scheduled to meet Ugandan President Yoweri Museveni on June 30, amid threats by Kampala to withdraw duty remission in retaliation to a trade war with Kenya involving agricultural products, and blamed on Nairobi’s persistent introduction of tax measures on Uganda’s exports.

“We are having so many challenges in accessing markets for Ugandan goods in Kenya. “In fact, Uganda is trying to pull out of the duty remission scheme but we are working on keeping them there,” said Simon Kaheru, chairperson of the EABC Ugandan Chapter, who was retained as the vice-chair to the council. “Uganda has surplus industrial sugar but there’s nowhere to sell it. The same with milk and other commodities,” he added. If Ugandan manufacturers pull out of the duty remission scheme, this would have far-reaching consequences on intra-EAC trade as no country would have mandate to collect import revenues.

Advancing integrated development (China.org.cn)

Over the past 20 years, the African Union (AU) has made great achievements in promoting African integration and maintaining peace and security in Africa. China advocates multilateralism and supports the democratization of international relations, so it has always attached importance to cooperation with the AU and regarded it as one of the important partners in building a China-Africa community with a shared future.

Africa is an important region for the joint construction of the BRI. With 52 African countries as well as the AU Commission having signed cooperation agreements under the initiative, Africa has become the region with the largest number of countries participating in the initiative.

China has supported the AfCFTA since its establishment. In the China-Africa Cooperation Vision 2035 adopted by the Eighth FOCAC Ministerial Conference in November 2021, China committed to actively participate in the development of the AfCFTA, as it will not only help promote intra-regional trade and African economic integration, but also help combine China’s development experience, technology and capital with Africa’s rich natural and human resources, injecting new vitality into China-Africa cooperation.

At present, China and Africa are striving to build a China-Africa community with a shared future in the new era to further strengthen China-Africa cooperation. The nine programs announced at the Eighth FOCAC Ministerial Conference identified the priority cooperation projects and objectives of the two sides in the next three years.

Global economy news

DDG Paugam calls for coherent standards, support for small players in transition toward decarbonisation (WTO)

the real transition toward a sustainable economy will first and foremost be carried out by the Private Sector. Companies are investing as never before in net-zero strategies, sustainably produced products and decarbonization of global supply chains. Both public and private efforts translate around the world into an incredible effort to put a price on carbon as well as develop carbon measurement and accounting standards. It is also important to take into account issues of verifiability and certification — and to avoid double counting. This is an unprecedented and most welcome commitment to the green economy. Yet, from a world trade perspective, this effort is also associated with some challenges.

The most important one is associated with the risk of market fragmentation. For example, more than 60 different carbon pricing schemes already exist globally. Fragmentation coming from these schemes risks generating trade frictions and unpredictability for businesses seeking to decarbonize. It also risks marginalizing developing countries and small businesses, in their efforts to participate to global value chains.

2022 High-Level Political Forum on Sustainable Development kicks off in New York (UNECA)

The 2022 High-Level Political Forum on Sustainable Development (HLPF) officially opened on 5 July, with a call to action from Collen Kelapile, President of ECOSOC and Permanent of Representative Botswana to the United Nations, to overcome the challenges facing the global community, outlining many reasons for optimism regarding sustainable development.

ECOSOC President champions optimism ‘against all odds’ at key UN development conference (UN News)

The senior UN official outlined five reasons for his optimism “against all odds”, beginning with successes in controlling the COVID-19 pandemic, in many countries. While acknowledging its detrimental effects on societies, people and the global development agenda, he said the pandemic has also “served as a wakeup call in exposing many aspects of our societies which were not right”.

Despite rising inflation, major supply-chain disruptions, policy uncertainties and unsustainable debt in developing countries – all of which have slowed the global economy – Mr. Kelapile cited the latest forecast in the World Economic Situation and Prospects for global growth of 3.1 per cent.

Global natural gas demand set for slow growth in coming years as turmoil strains an already tight market (IEA)

Global natural gas consumption is expected to contract slightly in 2022 and grow slowly over the following three years as Russia’s war in Ukraine pushes up prices and fuels fears of further supply disruptions, according to the IEA’s latest Gas Market Report. Today’s record high gas prices are depressing demand and causing some gas users to switch to coal and oil, while recent sharp cuts in Russian gas flows to Europe are raising alarms about supplies ahead of the winter. The turmoil is damaging natural gas’ reputation as a reliable and affordable energy source, casting doubts about the role it was expected to play in helping developing economies meet rising energy demand and transition away from more carbon-intensive fuels. The recent developments have led to a considerable downward revision of gas’ growth prospects. Global gas demand is set to rise by a total of 140 billion cubic metres (bcm) between 2021 and 2025, according to the new Gas Market Report – less than half the amount forecast previously and smaller than the 170 bcm increase seen in 2021 alone.


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