tralac Daily News
Industry association the South African Tyre Manufacturers Conference (SATMC) says more than 70% of tyres sold by its members are produced in South Africa. It further notes that its application to the International Trade Administration Commission of South Africa (Itac) is part of efforts to rescue the local tyre industry. The SATMC’s comments follow a briefing earlier this week by the road transport and freight industries, as well as the Tyre Importers Association of South Africa (Tiasa), in which they said they would be opposing the application to Itac by domestic tyre manufacturers seeking increases in respect of import tariffs for tyres originating from China. Tiasa said it was worried that the proposed tariff increases would raise the prices of tyres in South Africa.
“The SATMC supports healthy trade and competition at fair prices. However, tyres designed and manufactured in China are imported unfairly into South Africa at unsustainable, rock-bottom rates, which limits the competitiveness of domestic manufacturers.
Govt suspends chicken import tariffs to ‘help cash-strapped consumers’ (Engineering News)
The South African Meat Imports and Exporters Association (Amie) has welcomed national government’s decision to suspend anti-dumping duties on chicken imported from Brazil, Spain, Poland, Ireland and Denmark for 12 months. Trade, Industry and Competition Minister Ebrahim Patel indicated in the Government Gazette on August 1 that, in making the decision, government considered the current rapid rise in food prices in the Southern African Customs Union (SACU) market and globally, and the significant impact this has on the poor. Patel said the imposition of anti-dumping duties may impact on the price of chicken as one of the more affordable protein sources. The Minister therefore decided to suspend the imposition of anti-dumping duties for 12 months.
South Africa: Agriculture minister steps up efforts to save citrus shipped to EU (The Africa Report)
“Our farmers must have confidence that our minister and the department are working around the clock to negotiate a positive outcome,” says Reggie Ngcobo, spokesperson of the agriculture department. The short-term goal is to negotiate for the citrus consignments to be off-loaded, which would avoid a worst-case scenario of the produce being destroyed. However, South Africa has lodged a formal dispute against the EU at the World Trade Organisation. The trade fracas has caused an uproar among South Africa’s citrus-growing farmers and even reached the highest corridors of power, with the issue being raised when European Council president Charles Michel met President Cyril Ramaphosa a week ago. South African citrus exports to the EU generate more than €1bn ($1bn) for the industry, according to the CGA.
New-vehicle sales, exports surge – but compared with a weak July 2021 (Engineering News)
Domestic new-vehicle sales in July surged by 30.9%, to 43 593 units, compared with the same month last year. The Automotive Business Council warns, however, that last month’s performance was distorted by the cyberattack on Transnet, as well as the widespread riots that plagued parts of the country in July last year.
In celebration and commemoration of 28 years of bilateral economic relations, the Ministry of Trade and Industry of the Republic of Botswana together with the Department of Trade, Industry and Competition (the dtic) of the Republic of South Africa are convening a High Level Business Forum and Roundtable on the 03rdand 04th of August 2022, in Gaborone, Botswana.
both countries anticipate the following outcomes: identification and recommendation of measures to address trade and investment barriers between the two countries; identification of trade and investment opportunities as a basis to strengthen cooperation at government and private sector level to advance localization, joint export promotion efforts and industrialization efforts identification of a package of concrete actions to create a conducive environment to strengthen business to business linkages and cooperation to support the implementation of Southern African Customs Union (SACU) Regional Value Chains and the African Continental Free Trade Area (AfCFTA).The Deputy Director General for Trade and Investment South Africa at the dtic, Ms Lerato Mataboge says this session is critical in cementing ties between the two countries.
Tanzania’s meat exports to Middle East hit record high (The Citizen)
Tanzania exported a record 10,000 tonnes of meat to the Middle East in the first six months of this year. This offers prospects of a reliable market there as only 7,000 tonnes were exported during the whole of 2021.”By December this year, the tonnage will certainly be double the amount exported until June,” said Livestock and Fisheries minister Mashimba Ndaki. He revealed this during a regional meeting on meat production for the Southern Africa Development Community (Sadc) member states.
Import cover in six-year low as bond cancelled (Business Daily)
Kenya’s import cover has fallen to the lowest levels in six-and-a-half years after the National Treasury cancelled more than a $1 billion sovereign bond, shrinking the country’s stock of dollar reserves. The Central Bank of Kenya last Thursday held foreign currencies amounting to $7.74 billion (Sh919.90 billion) which can cover the country’s import needs for 4.46 months, the lowest backup since 4.44 months of cover on January 28, 2016.The foreign exchange reserves are largely tapped for government payments like servicing external debts and essential government imports such as medicines.
Kenya abandoned plans to borrow at least $1 billion (Sh118.85 billion) from international capital markets — Eurobond — in the recently ended fiscal year after interest demanded by investors doubled to about 12 percent from 6.3 percent Kenya paid a year earlier for a similar amount.
The import cover is, however, still within the target level of four months, but has fallen below the desired 4.5 months cushion recommended by the seven-nation East African Community bloc.
Kenya risks losing the Sh1.5 billion Japanese coffee market after the authorities in Tokyo raised a red flag over the use of non-recommended pesticides in the produce.
The Japanese said samples taken out of Kenyan coffee have been found to have Chlorpyrifos- an active ingredient found in the insecticides and which is not recommended for use in coffee. The authorities say they detected 0.06 parts per million in the coffee that was sampled, which was above the required minimum of 0.05 percent. Japan is currently Kenya’s sixth largest importer of coffee having earned the country Sh1.5 billion in foreign exchange last year.
Zimbabwean minister decries low level of trade with Rwanda (The New Times)
Zimbabwe’s Minister of Foreign Affairs and International Trade, Fredrick Shava, has bemoaned the low levels of trade and economic cooperation with Rwanda saying this does not match the levels of friendship the two countries enjoy. Shava said there is an urgent need to enhance trade and economic cooperation between Rwanda and Zimbabwe in line with the cordial relations the two countries enjoy.
“The framework of the Zimbabwe Rwanda Trade and Investment Conferences which we have started implementing should therefore spur us to greater heights in this field of economic endeavor,” Shava said. “I am confident that coupled with opportunities presented by the African Continental Free Trade Area our economic and trade relations will greatly improve.”
Both countries have held reciprocal trade and investment conferences aimed at identifying and exploiting opportunism presented by each of the two countries.
President Hichilema Hakainde of the Republic of Zambia has expressed concern that national incomes for African countries remained low coupled with high inequality and poverty rates partly due to huge infrastructure deficits and low levels of human development and private investment. To address this the Zambian President underscored the need for Africa to access low-cost capital and a establish predictable, competitive and stable economic policy environment.
President Hichilema stated in a speech read on his behalf at the AU Member States Ministers of Finance, Monetary Affairs, Economic Planning, and Integration which focused on “Improving Africa’s access to Capital: Debt Management and the Rising Influence of Credit Rating Agencies.” A document made available to the Ghana News Agency in Tema explained that the 5th Ordinary Session of the Specialized Technical Committee also made far-reaching recommendations on assessments by the Member States on the state of the debt crisis in their respective countries as a way of promoting transparency and accountability, which in turn facilitates debt restructuring and reduces vulnerabilities.
The Chief Executive Officer (CEO) of Ghana Export Promotion Authority (GEPA), Dr Afua Asabea Asare, has disclosed that the Authority will be establishing an Export School and Impact Hub in Kumasi. She said this when she called on the Ashanti Regional Minister, Mr Simon Osei-Mensah, at his office in Kumasi after a broadcast show GEPA undertook to sensitize the public on available opportunities under the African Continental Free Trade Area (AfCFTA). Dr Asare said the school is a strategy adopted to build and expand the required human capital for the export industry.
The CEO said the Impact Hub is designed to provide value-added services to Small and Medium Enterprises because it incorporates other entities like the Ghana Standard Authority, Food and Drugs Authority and the Food and Agriculture Ministry.
Egypt, Djibouti discuss developing trade exchange, joint investments (Daily News Egypt)
Egypt’s Minister of Trade and Industry Nevine Gamea met Djibouti’s Minister of Trade and Tourism Mohamed Warsama Dirieh and his accompanying delegation in Cairo on Monday. The meeting discussed ways to develop joint economic and trade relations between the two countries. The meeting also tackled the current global economic developments in light of the COVID-19 pandemic and the Russian-Ukrainian crisis.
The volume of trade exchange between the two countries witnessed a tangible development during the past year, reaching $95m, compared to $82.1m in 2020, an increase of 15.7%. Egyptian exports to Djibouti amounted to $88.3m, and Egyptian imports reached $6.7m. The most prominent goods of trade exchange between the two countries included nitrogen fertilizers, mixtures of aromatic materials, cleaning preparations, live camels, and Arabic gum, according to the Egyptian Minister.
Nigeria and Egypt test different approaches to tax digital economy (Daily News Egypt)
The booming digital economy in many African countries like Nigeria and Egypt raises the hopes for more revenues for the countries in their COVID-19 fatigued economies. More tax revenues derived from the digital economy could help governments of African countries save their crumbling education and healthcare systems.
But much of these funds from the digital economy are being sucked out of the continent by non-resident multinational enterprises (MNEs). These companies escape taxes on the profit they make in various countries because of the age-old international tax rules which require companies to be physically present in a country to be taxed by the country.
On October 8, 2021, the 137 member countries and jurisdictions (the list has since grown to 141) of the OECD/G20 Inclusive Framework on BEPS unveiled a Two-Pillar solution deal to tackle the tax challenges arising from the digitalisation of the economy and introduce a global minimum tax. Pillar 1 seeks to remove the requirement of physical presence of firms in a country for the country to have a right to tax them. Pillar 2 seeks to curb the incentives for MNEs to shift profits from high tax jurisdictions to tax friendly jurisdictions.
Nigeria and Egypt, like many countries of the world just recovering from the devastating impact of COVID-19, are in desperate need of money. But, unlike Nigeria, Egypt rests its hope of raising its tax revenues from the digital economy on the Inclusive Framework Two-Pillar solution deal.
The construction of the Nigeria-Morocco gas pipeline is underway and everything points to the project having very positive consequences. Younes Maamar, a Moroccan energy and development expert, was interviewed by the official Moroccan news agency, MAPNews, where he stated that the pipeline will be beneficial in every way.
“The importance of this project is the development of a regional gas infrastructure for the benefit of all the countries that this pipeline will cross, because it would do three things. Firstly, it would consolidate the small markets of all these countries that, on their own, do not have the critical mass to develop a gas infrastructure for their own market,” the energy expert says.
The African Development Bank and the government of Côte d’Ivoire initiated a preliminary dialogue in Abidjan on July 18-22, 2022, to lay the foundations for the Bank’s strategy in Côte d’Ivoire over the next five years.
The discussions focused on the first version of the country diagnostic note, prepared by the Bank for Côte d’Ivoire, and the completion report of the Bank’s 2018-2022 Country Strategy Paper (CSP) for Côte d’Ivoire, which expires at the end of the year. The dialogue also included a performance review of the portfolio of projects financed by the Bank in Côte d’Ivoire during 2022. Lessons were learnt regarding cooperation between the Bank and Côte d’Ivoire, and a number of strategic and operational recommendations were formulated with a view to improving future projects.
The Bank’s current Country Strategy Paper (CSP) for Côte d’Ivoire, which runs to the end of 2022, supports implementation of the Ivorian government’s National Development Plan for 2016-2020. The two pillars of the plan are: strengthening key infrastructure and governance for greater competitiveness and investment efficiency; and the development of agro-industrial value chains to promote inclusive and sustainable growth.
Morocco’s trade deficit widened 48.7% to 150.5 billion dirhams ($14.6 billion) in the first six months of this year, as global commodities prices surged, the foreign exchange regulator said on Monday. Imports rose 44.2% from a year earlier to 365.5 billion dirhams, while exports increased 41.2% to 215 billion dirhams, the regulator said in a monthly report. Morocco’s energy bill soared the most, up 124.7% to 71.4 billion dirhams, while cost of wheat imports climbed 55% to 13.3 billion dirhams, as the drought-hit country reaps a meagre harvest.
The African Union Commission (AUC) in collaboration with the Republic of Malawi and the United Nations Economic Commission for Africa (UNECA) organised the 11th African Internet Governance Forum (AfIGF 2022) in Lilongwe, Malawi from 19th to 21st July 2022 under the theme Digital Inclusion and Trust in Africa.
Speaking during the occasion, President of the Republic of Malawi H.E. Dr Lazarus Chakwera stated that his government attaches high priority to digitalization. “The vision for a “digital Africa” can only be realized if we invest in indigenous solutions and workforce to drive this transformation. Africa must be a leader in this revolution with its youthful population is already strategically positioned to create tailored made digital solutions for Africa’s problems”. Said the President. On her part, the African Union Commissioner for Infrastructure and Energy, H.E. Dr Amani Abou-Zeid said “Since 2020, digital technologies have proven to be the lifeline that made our communications easy, our work going and businesses functioning. “We can’t go back as we need to ensure digitalization is deep-rooted in our economies since our ultimate goal is to create a single digital market for a united Africa”, she added.
The Yearbook series is a result of joint efforts by major African regional organizations to set up a joint data collection mechanism of socioeconomic data on African countries as well as the development of a common harmonized database. The Joint African Statistical Yearbook is meant to break with the practices of the past where each regional/subregional organization was publishing statistical data on African countries of the continent in an inefficient way, leading to duplication of efforts, inefficient use of scarce resources, increased burden on countries and sending different signals to users involved in tracking development efforts on the continent. It is expected that the joint collection and sharing of data between regional institutions will promote wider use of country data, reduce costs and significantly improve the quality of the data and lead to better monitoring of development initiatives on the continent.
On 22 July 2022, Heads of State of the East Africa Community (EAC) launched the Arusha Bypass Road, during the EAC Heads of State summit, which took place in Arusha, Tanzania. The 42.4 km bypass seeks to decongest traffic in the towns of Arusha and Moshi and to promote intra-regional trade. It is a component of the multinational Arusha-Holili/Taveta-Voi Road project, funded by the African Development Bank Group, and connects Tanzania and Kenya. The funding, from the African Development Fund, the Bank’s concessional window, amounts to $217 million, $112 million for Tanzania and $105 million for Kenya.
Speaking during the event, President Kenyatta said the road would reduce traffic congestion and foster integration of the EAC. He also noted that that it will make transporting goods between Tanzania and Kenya and the wider EAC easier.
The African Development Bank Director General for East Africa, Nnenna Nwabufo, was present at the launch of the road project and said: “The Arusha Bypass will not only enhance trade between Tanzania and Kenya, but will also facilitate trade for landlocked regional neighbors, namely Rwanda, Burundi, Uganda and eastern Democratic Republic of Congo.”
African Governments must invest in indigenous digital solutions and workforce to drive the agenda of transforming the digital space in Africa.
“Africa must be a leader in this revolution with its youthful population who are already strategically positioned to create tailored made digital solutions for Africa’s problems,” Dr Lazarus Chakwere President of Malawi stated at the 11th African Internet Governance Forum (AfIGF 2022) in Lilongwe, Malawi.
The vision for a “digital Africa” can only be realized if we invest in indigenous digital solutions, Dr. Chakwere stated as captured by the Communication for Development and Advocacy Consult (CDA Consult) in Tema.
How Agtech can ‘dramatically improve’ food insecurity on the continent (The Africa Report)
Hopes have grown in recent days that grain shipments could resume, following a deal to unblock exports from Black Sea ports. But the intense disruption to one of the world’s largest bread baskets this year has worrisome implications for Africa’s food security. In the opinion of the World Food Programme (WFP), famine is likely unless urgent action is taken. A sustainable solution to food security cannot rely purely on the traditional approach of Western aid transfer. Instead, Africa’s leaders should lean into a continent-wide revolution in agricultural technology. This debate is not just about food; it’s about how Africa develops and prospers in the years ahead.
According to the WFP, the number of people effected by food insecurity in the Sahel has more than tripled since 2018, to 43 million people this year. There are three key areas where African leaders should focus their attention to turbocharge agtech and have a lasting impact on food security: data, digital tools, and start-ups.
Over the past few decades, Africa’s food import bill has also tripled, reaching around $35bn a year (World Bank figures). Many countries rely on agricultural exports from Russia and Ukraine and the continent is highly vulnerable to global supply chain disruption. The recent reduction in the supply of seeds and fertiliser has led to soaring prices, food shortages, and the risk of starvation.
The fourth edition of the intensive and engaging Africa Climate Talks (ACT!-4) closed yesterday in Maputo, Mozambique.
This was the first session of ACT!-4 organized as part of a regional Climate Talks series by the African Climate Policy Centre (ACPC) of the ECA to pursue the theme, “Ensuring a just and equitable transition and human security in Africa: Building resilience.” This year’s theme builds up on the gains realized from last year, which run under the aegis, “Climate Change and Development in Africa: African perspectives on climate resilient recovery from COVID-19”.
Speaking on behalf of Vera Songwe, the Executive Secretary of the ECA, Jean Paul-Adam, who heads the Technology, Climate Change and Natural Resource Management division at the ECA, noted that ACTs! serves as an all-inclusive climate change and development dialogue forum. “The fourth ACTs! is an opportunity to deliberate on viable solutions on Just Transition, Loss and Damage, innovative financing models including green and blue bonds as well as Climate-Debt-Swaps to boost resilience in Africa.”
The African Growth and Opportunity Act (AGOA) is a preferential trade program that gives countries in sub-Saharan Africa preferential access to U.S. markets, allowing them to export products tariff-free.1 AGOA was created with the aim of increasing trade activity between the United States and sub-Saharan African countries and with a broader goal of fostering economic and political development in Africa.2 To date, AGOA has greatly increased total exports to the United States, but data on utilization rates has caused some to question why certain countries are able to capitalize on AGOA more than others. Despite some successes, the continued dominance of oil and apparel exports along with the decline in AGOA exports after their peak in 2008 has lowered confidence among some leaders and experts in AGOA’s ability to deliver on its promises. The potential of AGOA remains powerful to promote regional integration and diversified economies, but the data and experience of the past two decades must be examined to understand how the policy can be better structured and implemented in the future. While there is limited empirical evidence on the effects of these factors on AGOA implementation and success, this testimony suggests that they can be analyzed by comparing across commonalities and by using the lens of policy implementation theories. Themes that emerged from the discussion with Commissioners included the role that the African Continental Free Trade Area can play in widening and deepening AGOA’s successes, and the importance of value-adding activities being located in African countries.
Twenty-nine diplomats from 15 African countries visited the pilot zone for the In-Depth China-Africa Economic and Trade Cooperation Program in central China’s Hunan Province from July 27 to 29. They expressed confidence in China’s economy and said they expected closer economic and trade ties between their country and China. Despite recurring COVID-19 outbreaks and the complex and volatile international situation, the diplomats said China’s economy is resilient and the Chinese market is full of opportunities. They expressed hope to strengthen cooperation with China in sectors such as agriculture, the digital economy and health care. According to the Tanzanian ambassador to China Mbelwa Kairuki, China’s 1.4-billion-strong consumer market has plenty of opportunities for all African countries.
“China-Africa trade and economic cooperation has been increasing in the last 20 years,” said Kairuki, who is convinced that there will be more opportunities for Tanzania to export products to China, especially high value-added products.
Partnership can boost rural industrialization in Africa (China Daily)
Africa remains the world’s least-industrialized region, despite the continent’s ongoing infrastructure development. Its economies still rely on raw materials, so its share of global manufacturing is only around 1.9 percent, according to the African Development Bank. Thus, when the global community faces unprecedented challenges emanating from changing global governance, the socioeconomic impacts of COVID-19 and the ongoing Russia-Ukraine conflict, Africa becomes the hardest-hit continent on matters related to food security and economic growth.
The African Development Bank recently launched the $1.5 billion Emergency Food Production Facility to mitigate the effects of the Russia-Ukraine Conflict, climate change and COVID-19 on food security in Africa.
The EU’s investment package for development, the “Global Gateway”, which the EU Commission president Ursula von der Leyen described as the “future of the EU’s development cooperation”, seems fixated on boosting private sector investments in energy, infrastructure and climate-smart solutions in Africa. But it is unclear whether this investment package of the world’s largest aid donor will trickle down within African communities, reaching those needing it the most. It is also unclear if it will be part of the problem or the solution when it comes to fighting hunger and transforming our broken food systems.
Transparency is critical for the individuals and companies that make the global economy work. That’s why Members have placed transparency at the heart of the multilateral trading system — and of this monitoring exercise, which provides you a fact-based platform for analysis and non-legal peer review.
Overall, the Report shows that Members have shown restraint in the use of trade-restrictions. The trade coverage of the import-facilitating measures far exceeds that of import-restrictive measures. This is positive and it shows that Members understand the importance of keeping markets open and letting trade flow.
Another challenge that has emerged even as the number of pandemic-related trade restrictions has waned relates to what is happening in the area of global supply chains. Open trade and global value chains have historically fostered increased competition, specialization, and scale. But over the past two years, the pandemic has upended supply chains — factory closures and transport restrictions constrained the supply side, while consumers pivoted from services to durable goods, even as fiscal and monetary stimulus boosted aggregate demand.
This new policy tool “complements the ongoing work of the Informal Working Group on Trade and Gender on issues related to data collection, one of our priorities”, said Ambassador Athaliah Molokomme of Botswana, co-chair of the Informal Working Group on Trade and Gender. The database maps more than 300 gender provisions included in more than 100 regional trade agreements (RTAs), representing almost a third of RTAs currently in force and notified to the WTO by members. The provisions identify the type of gender issue being addressed, the implementation instruments, and the enforcement mechanism.
The WTO Trade and Gender Officer, Lolita Laperle-Forget, who designed the database, stressed the importance of demystifying gender provisions in order to support the formulation of gender responsive RTAs and ensure that women are not left behind in trade opening policies.
China will offer zero-tariff treatment on 98 percent of taxable products from 16 least-developed countries, including Togo, Djibouti, Cambodia and Rwanda, according to a statement released by the Customs Tariff Commission of the State Council on Monday. Coming into force on September 1, the move will facilitate to share market opportunities with these countries, push for common growth and advocate the building of a community with a shared future for mankind, said the statement.
Nigeria and other African countries have written a letter to the Group of 20 (G20) countries to extend their debt servicing timeline. They took the step to ensure that debt servicing obligations do not cripple their economies.
The plea is contained in a letter by the Ministers of Finance of Ghana, Senegal and Egypt, on behalf of African Ministers of Finance and Central Bank Governors, and copied to the Chairperson of G20 Chairperson, African Union (AU) Managing Director, International Monetary Fund (IMF) President, The World Bank.
In the letter, the African Ministers of Finance and Central Bank governors said: “We ask for immediate liquidity support akin to the global response during the COVID-19 pandemic to help support our economies.
“The end of the G20 Debt Service Suspension Initiative (DSSI) in December 2021 meant that countries are due to resume payments on their debt obligations, despite a deteriorating global context, particularly for middle and low-income economies on the African continent.
In a statement issued by his Spokesperson, UN Secretary-General António Guterres said that ensuring “existing grain and foodstuffs can move to global markets is a humanitarian imperative.” The deal dubbed a “beacon of hope” by Mr. Guterres when it was signed in the Turkish city of Istanbul on 22 July, is a “collective achievement” of the newly-established Joint Coordination Centre, or JCC, set up in Istanbul, under the auspices of the UN, by representatives from the three governments who inked the deal, known officially as the Black Sea Grain Initiative.
Since the deal was signed, the parties involved “have been working tirelessly” to begin the process of shipping grain and cereals out from Ukraine’s Black Sea ports.
“The Secretary-General hopes that this will be the first of many commercial ships moving in accordance with the Initiative signed, and that this will bring much-needed stability and relief to global food security especially in the most fragile humanitarian contexts.”
Record high food prices have triggered a global crisis that will drive millions more into extreme poverty, magnifying hunger and malnutrition, while threatening to erase hard-won gains in development. The war in Ukraine, supply chain disruptions, and the continued economic fallout of the COVID-19 pandemic are reversing years of development gains and pushing food prices to all-time highs. Rising food prices have a greater impact on people in low- and middle-income countries, since they spend a larger share of their income on food than people in high-income countries. This brief looks at rising food insecurity and World Bank responses to date.