Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Local news

With half of SA’s exports at carbon-tariff risk, new report calls for 190 GW renewables push (Engineering News)

With almost half of South Africa’s exports at risk as the country’s key trade partners prioritise imports from low-carbon economies, a new report urges South Africa to roll-out at least 190 GW of renewables by 2050 to sustain its economic competitiveness and lay the basis for employment creation. Titled ‘It all hinges on Renewables’, the report has been published jointly by the National Business Initiative, Business Unity South Africa and the Boston Consulting Group. South Africa, the report states, is the second most carbon-intensive economy globally when compared with other economies with a gross domestic product (GDP) of more than $500-billion. It is also more than twice as carbon-intensive as the G20 average. “This puts almost 50% of exports at risk as key trade partners prioritise imports from low-carbon economies via carbon border tax adjustments and other mechanisms. “Amid stalled GDP growth, unemployment at about 35% and rising inequality, ‘more of the same’ will not be enough.”

SA, Côte d’Ivoire strengthen trade relations (SAnews)

South Africa is open for business and ready to forge beneficial bilateral relations with its partners in Côte d’Ivoire. These sentiments were shared by delegates at the South Africa-Côte d’Ivoire Trade and Investment Business Forum hosted by the Department of Trade, Industry and Competition (the DTIC) on Friday.

Addressing the delegates, Industrial Development Corporation (IDC) Head of Continental Coverage, Phiwe Marumo, said South Africa and Côte d’Ivoire have historically enjoyed strong relations, both economically and politically. “But we also acknowledge there is a lot more that needs to be done to improve and enhance a mutually beneficial commercial relationship that can be leveraged between the two countries.” Marumo said the bilateral trade has been consistent at more than R2 billion between 2017 and 2021, except in 2019 when bilateral trade fell under a billion.

U.S., Kenya launch non-tariff trade and investment partnership talks (ZAWYA)

The United States and Kenya on Thursday launched a strategic trade and investment partnership to pursue commitments to boost economic growth, support African regional economic integration and deepen trade cooperation. The U.S. and Kenyan governments will start work within three months to develop a road map for engagement in areas including agriculture safety and digital trade standards, climate change, regulatory practices, and customs procedures the U.S. Trade Representative’s office said in a statement. Kenya has long sought a full free trade agreement with the United States, and negotiations for such a deal to lower bilateral tariffs were launched by the Trump administration with the east African country in 2020. But the Biden administration, which has shunned traditional trade deals, did not resume those talks. Kenya enjoys substantial duty-free access to the U.S. market through the Africa Growth and Opportunity Act (AGOA), a trade preference program for sub-Saharan African countries, but it expires in September 2025.

Adopt home grown policies to help farmers - CSO urges government (BusinessGhana)

The Ghana Agroecology Movement (GAEM), a civil society organisation, has called on the government to adopt home grown policies to support farmers to venture into organic farming and the production of organic fertilisers. It urged the government to collaborate with the private sector to provide adequate financial and logistical support for farmers to adopt agroecological farming practices such as organic farming. The movement explained that in the face of current constraints in the global supply chain, including the high cost of fertilisers and other farm inputs due to the Russia-Ukraine war, resorting to organic farming was the most prudent thing.

President Samia to launch fertiliser scheme in August (The Citizen)

President Samia Suluhu Hassan will inaugurate the country’s fertilizer subsidy programme during Farmers Day (‘Nane Nane’) in August this year. This was revealed by Agriculture minister Hussein Bashe here on Tuesday, saying the Head of State has made it clear that she was determined to revolutionise agriculture in the country. “In this fiscal year (2022/23), the government has committed itself to provide Sh150 billion as a subsidy package for fertiliser, to smallholder farmers, a response to the world’s commodity price upsurge. He added: “The government has also reintroduced the Fertilizer Bulk Procurement System (FBPS) through which a price cap for fertiliser will take effect, to stop businesses from hiking prices as witnessed in recent months.” Unscrupulous traders have been hiking the prices arbitrarily on ground of Covid pandemic and the Russia-Ukraine conflict yet sometimes this was uncalled for, hence the government sought to reinstate FBPS, and control prices.

Nigeria hasn’t been able to produce steel: Remanufacturing could be the solution (Down to Earth Magazine)

Lack of a rail line around Ajaokuta Steel plant, changes in political and operational management stymied completion Nigeria has pumped more than US$8 billion into Ajaokuta Steel Company, a project which began more than 40 years ago but has yet to produce one tonne of steel. Several attempts have been made to bring the plant into production, but without success. It was built to 98% capacity by the Soviet Union’s Tyazpromoexport. But the lack of a rail line around the plant, and changes in political and operational management over the years, stymied completion. Bilateral discussions in 2019 raised the possibility of Russian funding to resuscitate the steel plant, but the COVID-19 pandemic and the Russia-Ukraine crisis may have stalled any unofficial agreements. Another problem for the plant is that some of its installed equipment may have been corroded and degraded by now.

Resilience to Water Scarcity and Commodity Price Shocks are Critical for Moroccan Economic Growth and Stability (World Bank)

After a strong recovery in 2021, Morocco’s economy has suffered this year from the impact of a severe drought, a slowing global economy, and higher global energy and food prices. According to the World Bank’s latest report Morocco Economic Monitor, Spring 2022: The Recovery is Running Dry, the economy will slow down markedly in 2022, with a projected growth rate of 1.3 percent in 2022, compared to 7.9 percent last year. The impact of the drought, compounded by the war in Ukraine, highlights Morocco’s exposure to climate and global commodity price shocks. Successive droughts over three of the last four years are a stark reminder of the vulnerability of Morocco’s economy to increasingly erratic rainfall levels. The report includes an analysis of the macroeconomic impact of droughts and water scarcity in Morocco, carried out as part of upcoming work that looks at climate and development in Morocco.

African trade and integration

Summit of EAC Heads of State commit to revitalize the bloc’s Common Market (EAC)

The Summit of EAC Heads of State have reaffirmed their commitment to implementing the EAC Common Market Protocol. The Summit that met physically for the first time in three years noted that the Common Market was the best way to increase intra-regional trade and spur economic growth in the region.

In his remarks, President Uhuru said that infrastructure development was critical in attaining the region’s objective of being one big market stretching from the Indian Ocean to the Atlantic Ocean.  President Kenyatta said that East Africa would only attain the Common Market if its citizens were able to communicate easily, and to move and ferry goods freely across the region.

President Kenyatta said that if the region is not interlinked through infrastructure, it would remain a market for other nations and blocs, not a producer of commodities for sale. He said that by exporting minerals and raw materials, the region would essentially be exporting jobs as is now the case, adding that value addition to national products was key. President Kenyatta said that EAC had a vast opportunity to grow with its ever-expanding market and therefore reduced economic dependence on the developed world.

Also in the news

Somalia renews push to join East African Community

AfCFTA council ministers agree to commence trade – Anatogu

President Kenyatta underscores importance of infrastructure in regional integration

East African leaders eye closer links, infrastructure growth for economic boost

Report: Africa Countries Partly to Blame for Food Insecurity (VOA)

Economic and trade experts are calling on African countries to increase trade with each other and revive their agriculture sectors to overcome food insecurity and slow economic growth exacerbated by the war in Ukraine. The global food crisis has led to some 300 million Africans being food insecure. The crisis in Africa has multiple causes: persistent drought in eastern Africa, high food and energy prices, and the cutoff of wheat exports from Ukraine. Speaking online to journalists Wednesday, Stephen Karingi, the head of trade at the United Nations Economic Commission for Africa, said African countries also share some blame for the situation. “Our food markets are experiencing a shock that is coming from outside the continent but why we are experiencing this shock is because we have very low intra-African trade in agriculture and agro-foods,” Karingi said. “If we had done better and unlocked the full potential of the agricultural sector, we wouldn’t be experiencing what we are experiencing today.”

ECA says pool procurement platform, ATEX, can help mitigate impact of rising commodity prices in Africa (UNECA)

As part of its regular Price Watch Dialogue series, the African Centre for Statistics (ACS) at the Economic Commission for Africa (ECA) hosted, on 21 July, a policy dialogue on the impact of the Ukraine-Russia conflict on commodity and food prices in Africa. In his welcoming remarks, Oliver Chinganya, ACS Director, stated “Africa, in the last two years, has been hit by exogenous shocks that undermine its dreams of prosperity. Interest rate hikes, increased borrowing costs, weakened currencies and tightening global financing conditions have had dire implications on the fiscal space of low and middle-income countries.”

ECA is supporting Member States to reduce the severity of the food crisis through the Africa Trade Exchange Platform (ATEX). The ATEX is a pool procurement marketplace, which has the potential to strengthen Africa’s economic resilience. “The platform can mitigate the supply shocks by pooling and aggregation Africa’s demand and supply to enable the negotiation of competitive prices and facilitate the delivery of essential commodities at affordable prices while boosting regional trade,” explained ECA economist, Wafa Aidi.

Afreximbank and East African Business Council launch the EABC-Africa Trade and Investment Council (Afreximbank)

African Export-Import Bank (Afreximbank) and the East Africa Business Council (EABC) have launched the EABC – Africa Trade and Investment Council, with the goal of creating a platform for engagement and investment between the East Africa Community (EAC) and the rest of Africa, to unlock investment opportunities, private sector development and business growth. Launched in Rwanda, the Council will help the private sector in EAC to engage with the rest of Africa with a view towards increasing access to intra-African investment as well as trade and market information through trade fairs and investment forums, while increasing knowledge and awareness. Through this arrangement, Afreximbank will provide a range of its financing instruments and trade facilitation initiatives to facilitate intra-African trade and investment under the African Continental Free Trade Agreement (AfCFTA).

AU Commissioner calls countries to address high air transport costs (IPPMedia)

The Commissioner made the statement recently at the 34th African Civil Aviation Commission (AFCAC) extra ordinary plenary that took place from 14-15th July 2022 in Dakar-Senegal. She said while the aviation industry seeks to recover, it has to be affordable to Africans and competitive with other modes of transport, to facilitate intra-African trade and free movement of people and goods. “Our priorities are to address the issue of the high cost of air transport on the continent,” she said.

Giving details she said that Africa’s total international air connectivity in May 2022 was 93 percent of pre-crisis levels and international air connectivity for May 2022 is 77 percent of pre-crisis levels. In addition to that, air cargo, which was a key lifeline for vaccines, supply chains, and airline revenues throughout the COVID-19 crisis, has grown to be an even more vital contributor to Airline revenues.

To capitalise on green transition, Africa urged to add value to critical minerals (Engineering News)

The global transition to lower-carbon economies and societies presents resources-rich Africa with an opportunity to boost growth and employment by playing a greater role in mining and processing the so-called green or critical minerals required for low-carbon technologies. Green minerals are those used in vast quantities in modern electric systems, such as renewable-energy products, batteries and power distribution, and include copper, cobalt, lithium, manganese, graphite and nickel. However, as the world’s major powers increasingly compete for green technology production capacity and search for supplies of green minerals, Africa’s priorities regarding value addition and industrialisation could be overshadowed.

To avert this, Africa needs to add value to its green minerals supply chains to capture a greater portion of the minerals supply chain, boosting its overall contribution to green technology development and the broader manufacturing sector.

Africa Speaks with Unified Voice as AU Executive Council Adopts African Common Position on Energy Access and Just Energy Transition (AU)

The 41st Ordinary Session of the Executive Council adopted the African Common Position on Energy Access and Just Transition, on the 15th of July 2022, a comprehensive approach that charts Africa’s short, medium, and long-term energy development pathways to accelerate universal energy access and transition without compromising its development imperatives.

The African Union Commissioner for Infrastructure and Energy H.E Amani Abou-Zeid calls the adoption of the Common Position ‘a major step forward’. “This is an important and major step forward towards ensuring and confirming Africa’s right for a differentiated path towards the goal of universal access to energy, ensuring energy security for our Continent and strengthening its resilience, while at the same time acting responsibly towards our planet by improving the energy mix.” said Dr Abou-Zeid emphasising that it is a timely measure to push for favourable outcomes and tangible investments in energy and infrastructure at COP 27 set to take place in November 2022 in Sharm El Shiekh, Egypt.

Access to energy currently stands low in Africa compared to other regions, with more than 600 million Africans living without electricity services while 900 million lack access to clean cooking facilities. The African Common Position encourages striking a balance between ensuring access to electricity to catalysing the much-needed socio-economic growth in Africa and smoothly transitioning towards an energy system based on renewable and clean energy sources matching the ambitions of Agenda 2063.

Invest in Africa, African Development Bank chief urges investors at U.S.-Africa Business Summit (AfDB)

The President of the African Development Bank Group Dr. Akinwumi Adesina has given strong assurance to U.S. investors that Africa is a secure, competitive and profitable market for investment. Adesina was speaking on Wednesday at the U.S.-Africa Business Summit in Marrakech where he told American investors to see Africa as a logical investment destination and to engage with the continent in win-win partnerships.

In a video message, Vice President Kamala Harris said: “We are focused on the urgent need to increase food production and exports with and within Africa.” She said public-private partnerships could play a key role in this regard. The U.S. Corporate Council on Africa partnered with Morocco to organize the summit under the theme, ‘Building Forward Together.’

Speech by President Charles Michel at the Mid-year coordination meeting of the African Union (European Commission)]

Exactly five months ago, we, European and African leaders, gathered in Brussels for an exceptional Summit. Together, we decided on a new paradigm, a new software for our strategic partnership, a software anchored in the principles of mutual respect, common interests, shared values and sincere equality between partners.

And now we must follow through on our commitments and that is precisely what we have begun to do together, through respectful and quality partnerships. The goal of our partnership is to create ties, not dependencies, strong bonds to face challenges together.

You have decided to set up the Continental Free Trade Area. Boosting trade and economic integration, this is common sense and this is also the path chosen many years ago by the European Union to build the internal market. It is therefore no surprise that we are ready to support.

you have chosen the path of economic integration, and as President Hichilema put it so perfectly at dinner last night, our shared goal is to promote prosperity through investment, economic cooperation and trade, not so as to share poverty, but so as to share prosperity fairly. It is in that spirit that the Global Gateway project, presented in Brussels five months ago, aims to mobilise €150 billion for investments that promote and support the capacity for prosperity and economic development.

India-African trades reached a record US$89.5 bln in FY2020/2021 (Ecofin)

Trade between India and Africa reached a new record in the 2020-2021 fiscal year that ended on March 31, 2021. From US$56 billion during FY2019-2020, trade between the partners rose to US$89.5 billion, the Indian Minister of External Affairs Subrahmanyam Jaishankar (photo) announced last Tuesday.

Through the Duty-Free Tariff Preference (DFTP) Scheme that extends duty-free access to 98.2 percent of India’s total tariff lines, India has opened its market to African countries. So far 33 LDC African nations have been entitled to get benefits under this scheme,” he said at the17th CII-EXIM Bank Conclave on India-Africa Growth Partnership.

The Indian diplomat added that the implementation of the African Continental Free Trade Area (AfCFTA) would help Indian companies boost their presence on the continent.

Govt notifies five ports for imports of pulses from Myanmar, Mozambique & Malawi (The Financial Express)

To meet domestic shortfall, the government has notified imports of 0.6 million tonne (MT) of tur and urad annually under bilateral agreements with Myanmar, Mozambique and Malawi, through five ports. According to a notification issued by the Directorate General Foreign Trade, import of pulses will be allowed through five ports – Mumbai, Tuticorin, Chennai, Kolkata and Hazira. However, all the imports consignments need to have ‘certificate of origin’ issued by respective countries.

India signed an MoU with Mozambique for import of 0.2 million tonne of tur annually for five years when the retail prices of tur skyrocketed to Rs 200 a kg in 2016. This MoU was extended for another five years in September 2021. In 2021, India entered into a MoU with Malawi for the import of 0.05 MT tur per annum, till 2025. Imports from all the three least developed countries are exempted from import duties. According to estimates, India imports around 15% of annual pulses consumption. Around 2 MT of pulses were imported in FY22.

World Bank approves $100m support Africa Centres for Disease Control program (Devdiscourse)

The World Bank has approved a $100 million support program for the Africa Centres for Disease Control (Africa CDC) that will help enhance the institution’s technical capacity and strengthen its institutional framework to intensify support to African countries in preparing for, detecting, and responding to disease outbreaks and public health emergencies. Today the African continent is addressing several infectious disease outbreaks in addition to COVID-19 and there are growing risks looking ahead. Recent assessments have revealed widespread gaps in the preparedness capacities of African countries that disproportionately impact the poorest and more vulnerable. Regional approaches to health policies and interventions in complementarity with country and global efforts underscore the value of a strong Africa CDC geared towards safeguarding the health of the continent.

“Africa is changing the dynamic in its journey to realizing a New Public Health Order. This project comes at a critical time as we focus on enhancing our support to AU Member States on the health security agenda and standing up our autonomous institution of the AU,” said Dr. Ahmed Ogwell Ouma, Acting Director of the Africa Centres for Disease Control.

Global economy news

DG Okonjo-Iweala to African Union: MC12 outcomes will make a material difference for people (WTO)

One of the most important challenges facing the world today is food insecurity, a crisis already affecting millions in Africa. A number of heads of state at the African Union summit underlined the growing problem of food insecurity, which is being exacerbated by rising costs for food, energy, fertilizers and other agricultural inputs.

The Director-General urged African countries to take part in ongoing talks on making the WTO more supportive of small businesses and climate goals. On the latter, she said the UN Climate Change Conference in Sharm El Sheikh, Egypt, in November would be an opportunity to showcase how trade can be a bigger part of the solution to climate mitigation and adaptation.

UNCTAD urges action to address consumer vulnerability in financial services (UNCTAD)

The cascade of crises facing consumers, from COVID-19 to food and energy price shocks due to the war in Ukraine and climate change, puts billions of people in a vulnerable situation. The digital transformation of economies is also propelling consumer vulnerability to new heights. Amid the heightened vulnerability, world experts discussed financial consumer protection at UNCTAD’s meeting of the intergovernmental group of experts on consumer protection law and policy held on 18 and 19 July. “Accessing and benefiting from financial services is a basic consumer right,” said Teresa Moreira, head of competition and consumer policies at UNCTAD, “It’s essential to realizing most economic transactions nowadays and for improving a consumer’s life,” she added.

How competition enforcement can boost economic recovery (UNCTAD)

Experts explored how competition law enforcement should evolve to contribute to post-pandemic recovery during the twentieth meeting of UNCTAD’s intergovernmental group of experts on competition law and policy held from 20 to 22 July. The pandemic called for a rethink of how authorities administered and enforced competition laws, the exemptions they granted and the activities they authorized. “Disrupted markets required competition authorities across the world to react quickly and show flexibility to the new context. Lessons learned can lead to more effective competition law and enforcement,” said Teresa Moreira, head of competition and consumer policies at UNCTAD.

Global Findex Database 2021 reports increases in financial inclusion around the world during the COVID-19 pandemic (World Bank)

In developing countries today, 71% of people have an account, up from 42% a decade ago. (Globally, 76% of adults around the world have an account today, up from 51% a decade ago.) These tremendous gains are also now more evenly distributed and come from a greater number of countries than ever before. The biggest growth has been in the use of digital payments, which surged during COVID-19 mobility restrictions and when cash was perceived as unsanitary.

Digital payments are typically safer and more convenient, and can be an entry to using other financial services. Findex data show that adults who receive a payment into an account in developing economies make use of financial services more than the average adult.

In developing economies, 36% of adults received a payment into an account, such as private or public sector wage payments, government transfer or pension payments, payments for the sale of agricultural products or domestic remittances.

Standards committee showcases work on transparency, discusses digital and environmental issues (WTO)

The Committee also held a thematic session on how micro, small and medium-sized enterprises (MSMEs) can better participate in international trade. Other activities during the week included work on developing guidelines to help governments improve product certification and on how regulations can help pandemic preparedness. A total of 80 specific TBT-related trade concerns were discussed by members, 13 of which addressed new concerns, most of them related to environmental and digital issues.

WTO issues updated note on trade in medical goods in the context of tackling COVID-19 (WTO)

The updated note points out that total imports and exports of medical goods were valued at US$ 2,028 billion in 2019 and grew to US$ 2,654 billion in 2021, with a yearly growth rate of 14.4 per cent. In 2019, before the pandemic, the medical goods sector comprised 5.3 per cent of total world trade. This share increased to 6.6 per cent in 2020 and was at 5.9 per cent in 2021.

Black Sea grain exports deal ‘a beacon of hope’ amid Ukraine war – Guterres (UN News)

“Today, there is a beacon on the Black Sea,” the UN chief said. “A beacon of hope – a beacon of possibility – a beacon of relief -- in a world that needs it more than ever.” The UN plan, which also paves the way for Russian grain and fertilizer to reach global markets, will help to stabilize spiralling food prices worldwide and stave off famine, affecting millions.

Ukraine is among the world’s leading grain exporters, supplying more than 45 million tonnes annually to the global market, according to the UN Food and Agriculture Organization (FAO). The Russian invasion, which began on 24 February, has sparked record food and fuel prices, as well as supply chain issues, with millions of tonnes of grain stocks stuck in silos. In addition to stabilizing global food prices, the agreement “will bring relief for developing countries on the edge of bankruptcy and the most vulnerable people on the edge of famine,” said Mr. Guterres.

How trade regulations may be opening up a new era of sustainable growth in the Global South (The Conversation)

In our interconnected world the food systems are increasingly under pressure. Cross-border trade has brought prosperity to households and food diversity to our kitchens, but also an increased risk of transporting pests and pathogens. Illegal trade in live animals, which accounts for $8-10 billion annually, exacerbate these hazards yet even more. Climate change is another global challenge.

Several international institutions, such as the World Trade Organisation (WTO), are stressing the importance of the problem and the need to act, and encourage the use of trade policies to support the climate agenda.

Trade policies such as the sanitary and phytosanitary (SPS) measures are pervasive in the agri-food sector and frequently used to regulate trade of products vulnerable to pests and pathogens and exposed to disease outbreaks. Their aim is to protect human, animal or plant life or health through safety standards.

With the Global South accounting for the vast bulk of raw agricultural production (e.g., the value added of agriculture accounted for 17.2% of Gross Domestic Product of Sub-Saharan Africa in 2021), Fabio Gaetano Santeramo and I were curious to see how these regulations impacted national economies and global trade.


Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010