tralac Daily News
Both the South African and Angolan economies are abound with opportunities that the South African and Angolan businesspeople can take advantage of and explore in order to produce food products for the two countries for the purpose of food security. This was said by the President of the Angola-South Africa Chamber of Commerce and Industry, Dr Victoriano Nicolau. He was speaking on the sidelines of a business networking session that was hosted by the Department of Trade, Industry and Competition (the dtic) in Luanda, Angola.
“The far-reaching and negative impact of the Ukraine-Russia conflict on food security provides a timely and perfect opportunity for businesspeople from Angola and South Africa to think about how they can work together to come up with ways and means of plugging the gap created by the shortage of products that we import from other countries as a the result of the conflict,” said Nicolau.
He added that there were unlimited opportunities in the agricultural and agro-processing sectors that companies from Angola and SA could collaborate in to produce food products for the two countries in particular, and the SADC region in general, in order to be self-sufficient.
Uganda, South Africa agree to deepen cooperation (New Vision)
Uganda and South Africa have agreed to strengthen cooperation in agriculture, energy, trade, health, finance, tourism and investment. During the 2nd session of the Joint Commission of Cooperation between Uganda and South Africa, the State Minister for Foreign Affairs, Henry Okello Oryem, noted that the good relationship will create an enabling platform that allows the two countries’ public and private sectors to discuss business challenges, identify opportunities, share experiences and create business networks.
Traders urged to use customs advance rulings (Namibian)
NAMIBIAN traders have been encouraged to use advance rulings to reduce the time spent at the border, which would further contribute to reducing the cost of doing business, improve Namibia’s performance and rating in the trading across borders index as well as the ease of doing business. This was said by the executive secretary of the Southern Africa Customs Union (Sacu) Paulina Elago at the launch of the advance ruling programme in Namibia yesterday. Advance rulings are binding decisions by customs at the request of a trader on specific particulars in relation to the intended importation or exportation of goods. They can be requested regarding either the classification, the origin or the customs value of the goods in preparation for importation or exportation. Elago said the launch of the advance ruling in Namibia has come at an opportune period, as globally nations are recovering from the effects of the Covid-19 pandemic.
“This initiative will also go a long way in responding to the broader international framework of the World Trade Organisation (WTO) trade facilitation agreement that places an obligation on WTO members to issue advance rulings in respect of tariff classification, origin and valuation matters,” she said.
Zim exporters can tap UK, Ghana markets (The Herald)
ZIMBABWEAN exporters should take advantage of national trade promotion and development body, ZimTrade’s, trade missions to diversify exports into the United Kingdom (UK) and Ghana as well as unlock opportunities in the wider African Continental Free Trade Area (AfCFTA). ZimTrade chief executive officer Mr Allan Majuru said this in a speech read on his behalf by the agency’s operations director Mr Similo Nkala during a UK and Ghana market survey dissemination seminar in Harare on Tuesday. Zimbabwe’s national trade development and promotion organisation conducted the survey in the two markets in May this year.
”The UK is heavily dependent on imports for most of its products and the market survey that was conducted by our team aimed to gather information on what type of produce Zimbabwe can export to that country following the signing of the Economic Partnership Agreement. “Historically, we all know that the UK was a traditional trading partner for Zimbabwe where we exported a wide range of products.
“At one time, the UK was among the top five export markets for Zimbabwe,” said Mr Majuru, adding that the UK market was heavily dependent on imports for most of its products and the market survey that was gathered by the agency aimed to gather more information on what type of products Zimbabwe can export to that country.
“In our endeavour to diversify our exports markets as well as take advantage of the AfCFTA, this year we targeted the Ghana market, which is in West Africa (a first for us to explore this region).
“Our plan is that as we penetrate the Ghanaian market, it will be a springboard into other West Africa countries using the AfCFTA trade agreement. Buyers in these markets don’t know much about some of our brands, therefore, we need to invest a lot in terms of brand development. This should be both at company level and us as your trade promotion organisation investing into the promotion of our brands as a nation,” he said.
Zimbabwe has received reassurance of support for a strong push to help it clear its debt arrears. African Development Bank Group President Dr. Akinwumi Adesina, representatives of multilateral finance institutions, the Zimbabwean government, and other partners have agreed to work together to develop an action plan that will resolve the country’s debt arrears. Zimbabwe owes $13.5billion to multilateral financial institutions, bilateral partners, and other creditors.
The African Development Bank supported Zimbabwe with $13.8 million under the Bank’s Covid Response Facility. The Bank has focused on strengthening the country’s public finance management capacity through a Transition Support Facility. It will also provide Zimbabwe with $4.2 million in technical support for the implementation of its arrears clearance and debt resolution strategy.
Growing Kenya’s share of exports to African markets (Business Daily)
Kenya is expected to rise above the waves of the Covid-19 pandemic in terms of economic recovery, according to the 23rd Edition of Kenya Economic Update recently launched by World Bank. The Economic Survey 2022 shows Kenya’s real GDP grew by around 7.5 percent in 2021, compared to a contraction of 0.3 percent realised the previous year.
There has been gradual, normalisation in economic activity in most sectors, including manufacturing and exports. Against the back of a weaker global economy due to the effects of the pandemic, Kenya has shown signs of resilience in most sectors. The total exports in 2021 grew to Sh743.7 billion compared to Sh643.7 billion in 2020 — an increase of 15.5 percent.
Vegetables, fruits sold locally get new safety standards (Business Daily)
Local consumers of horticulture produce are now assured of their safety following the unveiling of new standards, a departure from the previous practice where only export commodities were subjected to quality checks. The launch of the Kenya Bureau of Standards backed KS1758 will now ensure that whatever is consumed locally is also safe for consumers and adheres to international practice on the minimal levels of pesticides accorded to exports. The bulk of Kenya’s horticulture produce is consumed locally with only four percent finding its way to the export market.
The rolling out of the standards started last week with the launch at Beyond Fruit, a local outlet dealing with fresh produce. The new safety code has also been rolled out in the Kongowea market starting with mchicha- a popular traditional vegetable at the coast. It will also be rolled out in hotels and restaurants as well as other open-air markets. The produce that has been certified as being safe will be clearly labelled on the shelves with the new standard.
Current account widens over oil, food import bill (Business Daily)
Kenya’s current account deficit widened further in May on sustained pressure from high fuel and food import costs, which negated improved dollar inflows from remittances and agriculture exports. The deficit as a percentage of GDP rose to 5.3 percent in the 12 months to May 2022 from 5.1 percent in April, piling more pressure on the shilling as it meant there was a higher demand for dollars in the local market to fund the rising imports. The current account measures the difference between a country’s forex inflows and outflows, falling into deficit when outflows are higher.
Higher crude and food prices in the global market-driven in part by the Russia-Ukraine war—pushed Kenya’s inflation to a 58-month high of 7.9 percent in June, breaching the government’s upper limit target for the first time since August 2017.
“A widening current account deficit, amid a fuel-linked increase in the import bill, has elevated the local demand for US dollars and as such sustained the Kenya shilling’s depreciation by an average 4.56 percent this year,” said NCBA in a weekly fixed income note.
Kenya intercepts scrap metal to TZ despite ban (Business Daily)
Kenya has intercepted illicit scrap batteries destined for Tanzania barely two months after the State lifted a ban on dealings in scrap metal. Authorities on Monday intercepted a truck along Mombasa Road ferrying scrap batteries to neighbouring Tanzania.
The government in May issued strict regulations that require licensed scrap metal dealers to transport their cargo between the prescribed 6.30am and 6.30pm.With the new regulations in place, the State lifted a January 20, 2022 ban that President Uhuru Kenyatta imposed on scrap metal business following a surge in vandalism of critical national assets including power transformers. The new rules impose a Sh10 million fine or a three-year jail term to anyone found operating without a license.
Rwanda eyes more trade with ECCAS bloc (The New Times)
Rwanda plans to put more efforts in its trade with the Economic Community of the Central African States (ECCAS), a bloc where the country is exporting far more than it imports and has more economic opportunities, the Minister of Trade and Industry has said. Béata Habyarimana made the remarks on Wednesday, July 13 while interacting with Senators, Members of the Committee on Foreign Affairs, Cooperation and Security on the trade benefits that Rwanda gets from regional and continental organisations.
According to data from the Ministry of Trade and Industry, Rwanda’s trade with other ECCAS countries amounted to Rwf171.9 billion in 2021 from Rwf88.2 billion in the previous year. This figure includes Rwanda’s exports worth over Rwf155.4 billion (or 90 percent of total trade) to those countries and its imports from them worth over Rwf16.4 billion.
Last month, during the State-of-the Nation Address we were astounded with an incredible announcement that Uganda was now a lower middle income country having crossed the threshold of an average national income estimated at just over $1,000. The World Bank uses $1,045 as the threshold of Gross National Income (GNI) per person (total income including money by nationals from abroad but not foreigners in the country). Last Thursday, the World Bank released a report that contradicted Mr Museveni’s claims of middle income status, insisting that at $840 GNI per person, Uganda was still a poor, low-income country.
Then on Wednesday, the head of Uganda Bureau of Statics dug in on the government side about the promised land of ‘middle income’. The difference between the World Bank’s $840 and the government’s quoted figure of $1,046 is huge.
DR Congo cancels 14 customs levies in bid to smooth trade (The East African)
The Democratic Republic of Congo’s Trade ministry has ordered the cancellation of 14 levies on exports and imports and the reduction of 20 more duties at the borders in a bid to make trading more smooth and stamp out “illegal” taxes. Africa’s biggest copper producer and the world’s biggest cobalt producer, Congo has battled with lengthy queues of trucks carrying metal at its borders, which mining companies blame on poor infrastructure and inefficient customs systems. The move aims to “rationalise import and export taxes and reduce costs and delays”, Trade minister Jean-Lucien Bussa Tongba wrote in a letter to the prime minister dated July 6 and seen by Reuters on Wednesday.
Sierra Leone jumps in for exploration offering (Energy Voice)
Sierra Leone is in the midst of a licence round as it aims to cash in on a return of interest to the energy sector. Petroleum Directorate of Sierra Leone (PDSL) director general Foday Mansaray struck a bullish tone in comments to Energy Voice last week. Sierra Leone launched the round on May 18, he said. “We saw the positive oil prices and realised this was a good time to take action. Europe is thinking again about energy security and where energy supplies will come from,” he said. The West African state aims to “fill that void. The opportunity is now.”
African countries must diversify their exports to survive economic shocks from global crises such as the COVID-19 pandemic and the war in Ukraine, says the United Nations Conference on Trade and Development (UNCTAD). In its Economic Development in Africa Report 2022 published on 14 July, UNCTAD says African countries can diversify their economies through boosting exports of high-value services, expanding private businesses’ access to financial services, tapping into new financial technologies and implementing effective policies. Despite decades-long efforts to diversify, 45 out of the continent’s 54 countries remain dependent on exports of primary products in the agricultural, mining and extractive industries. UNCTAD considers a country to be dependent on commodities when these products make up more than 60% of its total merchandise exports. The report outlines how African countries can rethink efforts to diversify their economies.
Secretary, National Action Committee on African Continental Free Trade Agreement (AfCFTA), Francis Anatogu, has disclosed that trade was yet to commence due to delays in the conclusion of negotiations on rules of origin and trade in services. Anatogu, who made the remark while speaking on the theme: “Implementing AfCFTA in Nigeria – the journey so far,” noted that although official commencement date of trading under the AfCFTA was January 1, 2021, as at May 31, 2022, rules of origin have been concluded on 88 percent of tariff lines.
However, the outstanding rules of origin on automobiles, textile and apparels, fisheries, sugar and tobacco, under discussion centre on how to treat goods produced within free trade zones and special economic zones.
The Financial System Africa Needs - Vera Songwe (Project Syndicate)
For African economies that have yet to recover from the COVID-19 pandemic, Russia’s war in Ukraine could not have come at a worse time. The economic wounds of the previous crisis had been stitched up, but more time was needed for them to heal, let alone for the scars to fade. Now, commodity-price spikes and supply-chain disruptions are compounding inflationary pressures, causing currencies to depreciate and food and fuel costs to skyrocket. Since the war began, oil prices have reached their highest levels since 2008, wheat prices have soared to 14-year highs, and fertilizer prices have surged by nearly 30%. These macro trends have high human costs. As many as 25 African countries depend on wheat imports from Russia and Ukraine.
With grain products often accounting for a large share of local diets, the risk of hunger and undernourishment is rising fast – and not just for low-income households.
But many African governments have little scope to respond to this escalating crisis. Pandemic-related uncertainty led to massive capital flight from the continent, output shrank, and countries’ debt burdens grew heavier. Over $40 billion in debt repayments were due in 2021, and debt service is expected to exceed 7% of Africa’s GDP in 2022 even before the Ukraine crisis and the US Federal Reserve’s interest-rate hikes.
Implementing the Southern African Development Community (SADC) Industrialisation Strategy and Roadmap (2015-2063) remains a key priority, therefore, there is a need to create a conducive environment for trade to continue flourishing in the region, Honourable Mark Katsonga Phiri, Minister of Trade and Industry of the Republic of Malawi, said.
Hon. Minister Phiri said this at the official opening during the 22nd Meeting of the Ministerial Task Force on Regional Economic Integration in Lilongwe, the Republic of Malawi, on 9th July 2022. He commended SADC Member States for their pragmatic decision to open up and resume economic and social activities while observing all necessary measures and precautions against the spread of the COVID-19 pandemic.
The Ministers urged Member States to incorporate some of the recommendations of the Industrial Upgrading and Modernisation Programme and Gaps analysis study which was undertaken in 2021 by the Secretariat, including establishment of industrial intelligence units and the Industrial Observatory functions in their national industrialisation programmes. On the same note, the Ministers directed the Secretariat to continue working with the SADC Business Council in implementing the study recommendations that require the involvement of the private sector.
Member States of the Southern African Development Community (SADC) need to step up efforts to accelerate intra-regional trade by addressing challenges that humper the region’s quest for increased trade in the SADC region. Honourable Mark Katsonga Phiri, Minister of Trade and Industry of the Republic of Malawi and Chairperson of the 33rd Committee of Ministers of Trade has said this during the official opening of the 33rd meeting of the Committee of Ministers of Trade which was held in Lilongwe, Republic of Malawi on the 8th July 2022. The Minister urged Member States to address issues that include low supply capacity, limited industrialisation, poor logistics for movement of goods and services, protectionism, poor infrastructure and non-harmonisation and cooperative mechanisms for cross-border infrastructure, imposition of non-tariff barriers including stringent rules of origin, poor implementation of trade commitments, among others.
The Ministers hailed the entry into Force of the Protocol on Trade in Services and urged Member States to widely publicise the Protocol; directed the Secretariat to fast track the development of the Regional Implementation Action Plan and urged those Member States that need technical assistance in the development of their National Implementation Action Plans to submit their requests to the Secretariat. The Ministers approved the SADC Simplified Trade Regime Procedure Manuals and related training materials which are aimed at building capacity of customs officials and other stakeholders and raise awareness on the SADC Simplified Trade Regime Framework.
From the Horn of Africa on the strategic Red Sea to the buoyant ports of Mozambique, East Africa’s ancient “Swahili Coast” provides a logistical nexus between Africa’s massive population centres and other continents. Foreign direct investment is driving expansion and rehabilitation of existing seaports, while entirely new facilities are also being rolled out. Ports that shun partnerships with experienced foreign investors are set to lose out as competition for market share intensifies. One of the flagship infrastructure projects identified by the Government in Kenya Vision 2030 is the development of a new transport corridor linking a new and modern Port of Lamu with Garissa, Isiolo, Maralal, Lodwar and Lokichogio and branching at Isiolo to Moyale at the border with Ethiopia and proceeding to the border with Southern Sudan. The facilities at Lamu port once complete will lead to creation of substantial job opportunities that covers not only direct jobs related to the Port operation but also indirect jobs of all fields (Agriculture, fishery, manufacturing, logistics, transport, trade, commerce, etc.) No tender has yet been issued for the management of this port.
Congo’s entry into EAC doubles regional market (Business Daily)
The Central Bank of Kenya (CBK) has backed the admission of the Democratic Republic of Congo (DRC) as the East African Community (EAC) seventh member, saying the move will boost the regional bloc’s market by half to 300 million people and create new investment opportunities. “The admission of the DRC as the seventh member—joining Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda—expands the market size of the EAC, offers a path between the seas for trade and cultural integration, as well as new investment and employment opportunities for a dynamic population of about 300 million,” CBK said in a statement on Tuesday.
East African GDP jumps to Sh29trn after DRC joins bloc (Business Daily)
Trade finance grows for Ecobank as Africa emerges from pandemic (African Business)
With the global trading system emerging from the impact of Covid-19, the financial instruments and products that are used by companies to facilitate international trade and commerce – are becoming ever more important. Trade finance revenues for the world’s top transaction banks were up by 10% in 2021 and are set to grow further this year, after almost a decade of decline or stagnation, according to figures from research company Coalition Greenwich. The world’s 10 largest transaction banks posted a combined revenue of $6.3bn from trade finance in 2021, up from $5.7bn in 2020, surpassing pre-pandemic levels. In the second half of 2021, banks’ trade finance revenues grew by 13% year on year, driven in part by higher post-pandemic trade volumes and banks efforts to finance trade on behalf of SMEs, according to S&P Global.
The Board of Directors of the African Development Bank Group has approved a $175 million Trade Finance Funded Risk Participation Agreement facility between the African Development Bank and Trade & Development Bank (TDB). The agreement is expected to boost intra-Africa trade, promote regional integration, and contribute to the reduction of the trade finance gap in Africa. The Bank will provide liquidity of up to 50% (the other 50% to be matched by TDB), to Issuing Banks on a risk share basis, to support trade activities of local corporates and SMEs in member countries of the Common Market for Eastern and Southern Africa (COMESA). Together, the two institutions will provide a ticket size of $350 million to support trade transactions. This is a strategic effort by the African Development Bank to support the Africa Continental Free Trade Area’s agenda of reshaping markets and economies across the region by helping to boost output in the services, trade, manufacturing, and natural resources sectors.
African Ministers of Finance, Economy, Development and Environment are expected to meet ahead of the 2022 United Nations Climate Change Conference (COP27), and to participate in Egypt – International Cooperation Forum to ensure an African led position at the global meeting. Egypt is the host of COP27 and the Finance Day that will take place in November 2022. Ahead of these events, a high-level meeting of African Ministers with related mandates is expected to take place beforehand to deliver an articulate and strong African position. The ministers’ meeting scheduled for 7-9 September 2022, in Egypt, is being organised by the Government of the Arab Republic of Egypt with the support of the United Nations Economic Commission for Africa. Key international and regional partners will be invited to engage in the discussion and contribute to the development of key messages to be taken to COP27. African countries have called for delivery on finance to accelerate a green transition- and while development partners need to step up through upscaling public finance, the conference will also discuss how to better channel private finance into climate resilience on the continent and de-risk investments through Multilateral Development Banks’ contributions.
The meeting is an opportunity to address the continent’s specific challenges, potential, financing needs and innovative instruments for its development. African ministers will discuss Africa’s needs, ambitions and challenges regarding climate finance which is paramount to face challenges prevailing in the global environment. Egypt has already explored numerous innovative financing initiatives- we need to ensure that we can deliver a framework which allows new and additional resources to be invested in climate resilience from both public and private sources” said Mohamed Maait, Minister of Finance of Egypt.
Sustainable economic development based on the oceans and meeting the aspirations of individual countries, the African Union, economic actors and the African public has many different labels. The choice of either of the terms ‘blue’ or ‘ocean’ linked to ‘economy’ are used in different contexts, but the key attributes desired include minimizing damage to the environment and natural assets, generating benefits and opportunities equitably for people, and promoting resilience to climate change. This report uses the terms ‘blue economy’ and ‘ocean economy’ synonymously – as the business, local and national economies, citizens, beneficiaries and potential victims are the same. Natural ecosystem assets generate goods and services which are the primary resources of the blue or ocean economy, with annual benefit flows estimated at $20.8 billion for ten Western Indian Ocean countries and $47 billion for the five North African countries bordering the Mediterranean. The national dependence on ocean economy sectors varies, with the highest levels for Small Island States, where the estimated ocean output may be as high as 50% of Gross Domestic Product (GDP).
Globally, the coronavirus pandemic (COVID-19) is killing thousands of people daily and has resulted in production and supply chain disruptions, termed as ‘supply-demand shocks’. The pandemic has caused ripple effects across all economic sectors including those linked to natural resources, manufacturing, services and entertainment. The impacts of the pandemic are being felt in Africa particularly because most national economies are commodity-dependent, and demand for commodities has generally declined over the first quarter of 2020 and may continue to decline if the future remains uncertain.
Emerging markets need new engines of growth (Atlantic Council)
In 2022, the difference in growth between emerging and advanced economies is projected to shrink to its smallest level this century. Forecasts suggest developing nations will grow at just over half a percent more than advanced economies, ending a two-decade period during which emerging markets (EMs) consistently grew much faster than their rich counterparts. Prior to the 1990s, it was unusual for EMs to persistently grow more than their rich counterparts. From 1945 until 1995 fewer than one-third of developing economies grew faster than developed economies at any given time. Periods of explosive EM growth during one cycle were often reversed in the next. In the late 1990s, that changed. Starting at the turn of the century, EMs experienced a period of rapid growth that, if maintained, would have converged their income levels with advanced economies in a single generation. Unfortunately, it seems as though the era of rapid EM growth is over. Now, many of the world’s lesser developed economies risk being ejected from this economic convergence process. A confluence of factors, including trade conflicts, a global pandemic, supply chain breakdowns, rising interest rates, and the war in Ukraine, have dismantled the engines of growth that had supported their rapid development throughout the 2000s and 2010s. These factors may not only halt, but also reverse this trend in the 2020s.
Ahead of this week’s G20 Finance Ministers’ meeting, ICC is calling on G20 leaders to avoid a global debt crisis by suspending debt payments for all countries in need. Governments in emerging economies have very limited – if any – fiscal space to support business and families in dealing with the worrying inflationary pressures prevailing in global food, agricultural and energy markets. The wave of economic shocks caused by the war in Ukraine risks precipitating a widespread debt crisis in emerging markets which could result in further disruption to global trade and supply chains – thus placing a further drag on growth in advanced economies. As a recent report from the United Nations’s Global Crisis Response Group makes clear, there is now an acute risk of severe hunger in many developing economies absent of action to ensure that governments have the fiscal space to provide appropriate social safety nets.
When the G20 last met in April, the IMF had just cut its global growth forecast to 3.6 percent for this year and next—and we warned this could get worse given potential downside risks. Since then, several of those risks have materialized—and the multiple crises facing the world have intensified.
Recent indicators imply a weak second quarter—and we will be projecting a further downgrade to global growth for both 2022 and 2023 in our World Economic Outlook Update later this month. Indeed, the outlook remains extremely uncertain.
That is why we need decisive action and strong international cooperation, led by the G20. Our new report to the G20 outlines policies that countries can use to navigate this sea of troubles.
The new ePing SPS & TBT Platform facilitates the tracking of sanitary and phytosanitary (SPS) and technical barriers to trade (TBT) measures, making it easier for users to notify and follow changes in product requirements.
The platform brings together all stakeholders involved in the process of notifying, consulting and coordinating on product requirements at the national and international level. The new ePing makes it easy for businesses, particularly micro, small and medium-sized enterprises, to track a specific sector or market through filtering options and offers several communication features to share information on and discuss notified measures.
Most major aid agencies are now transparent, but for how long? (Publish What You Fund)
The 2022 Aid Transparency Index reveals that more aid organisations than ever before are publishing good quality information and score “very good” or “good” in the global ranking. However, the whole data set could be under threat as the Aid Transparency Index, the only tool driving tangible improvements in data quality, is set to close for lack of funding.
Produced by Publish What You Fund, the Index is the only independent measure of aid transparency among the world’s major aid donors. At a time of climate, hunger, health and debt crises, and some worrying trends in the way official development assistance (ODA) is counted, transparency is more important than ever.
Improvements in the timeliness and quality of aid data, coupled with advances in tools and dashboards to enable easier access and analysis, have led to a dramatic rise in use of the data for activities as diverse as tracking global health finance investments, monitoring Covid spending, and helping recipient government’s track flows alongside their national spending.