tralac Daily News
Science, Innovation dept envisions a solid hydrogen economy by 2050 (Engineering News)
South Africa’s Department of Science and Innovation (DSI) views hydrogen as a key enabler of decarbonisation, particularly in the transport sector – heavy-duty trucking, shipping, aviation, and rail – and in major polluting industries such as steel, cement and chemicals manufacturing, as well as mining.
By 2050, government aims to have established an inclusive, competitive and sustainable green hydrogen economy. To this end, it has various policies that support the development of green hydrogen, including the Hydrogen Society Roadmap which was published in February.
SA, Botswana strengthen business relations (SAnews)
South Africa and Botswana share borders and it is therefore important for the two countries to work together, says Trade, Industry and Competition Minister Ebrahim Patel. “There are opportunities for both countries,” Patel said on Wednesday at a media briefing at the conclusion of the South Africa-Botswana Business Forum in Gaborone. He said however that both countries have high unemployment challenges. “We have to resolve these challenges, we need to create millions of job opportunities for our youth. We need to complement each other,” he said. Patel emphasised the need to start thinking about how to address the challenges facing both countries.
Traders face fines as e-customs clearance system law kicks in (Business Daily)
Traders risk up to Sh500,000 in fine or a year in jail if they fail to register online for clearance of all imports and exports as the State moves to plug loopholes manipulated to ship in or export products. This follows the creation of the National Electronic Single Window System, which is now the only entry point to register and clear all inbound and outbound cargo. The online clearance system is linked to the Kenya Revenue Authority and the Kenya Ports Authority, giving the State more tools to tame tax evasion.
“The system shall serve as a single entry point and platform for any person involved in trade and transport to lodge documents electronically, including import or export documents for processing and approval,” the Act reads in part. The law took effect on July 11 and revokes an Executive Order of 2010 that the government relied on to ensure that imports or exports are cleared electronically and ensure compliance with all taxes and duties.
KAM urges govt to address gaps in the implementation of AfCFTA (Capital FM)
The Kenya Association of Manufacturers (KAM) has urged the government to put in place measures that will enable the country to enjoy full benefits from Africa Continental Free Trade Area (AfCFTA) agreement. Speaking during the launch of KAM’s study findings on the implications of AfCFTA on Kenyan products, the association’s acting Chief Executive Officer Tobias Alando noted that even though the agreement offers the best opportunity for the country’s business goals, the lack of proper mechanisms to achieve this remains a major hindrance block. “Kenya’s export market in Africa is expected to increase with the full implementation of AfCFTA. However, if unaddressed, challenges such as dwindling country competitiveness, lack of product competitiveness, and supply chain constraints shall hinder local manufacturers from reaping the benefits that come with AfCFTA,” he stated.
Mid-year budget: Slash E-Levy rate to 0.75 or 0.5% – ISSER boss reiterates (GhanaWeb)
The Institute of Statistical, Social and Economic Research (ISSER) has called for aggressive domestic revenue mobilization through efficient tax and non-tax revenue generating measures to firm the country’s fiscal space. The Institute also called for a unified common platform for collecting property rates to boost domestic revenue.
Professor Peter Quartey, Director, ISSER, speaking at this year’s mid-year budget in Accra, commended the Government’s plan to spend within its means, but said achieving a fiscal deficit of 6.6 per cent of Gross Domestic Product (GDP) was ambitious and daunting.
The Government in the 2022 mid-year budget statement revised the country’s GDP growth rate from 5.8 per cent to 3.7 per cent in 2022.
Effort to export to other African countries: Govt outlines plans for local businesses (Business Ghana)
In a speech read on his behalf at the launch in Accra yesterday, he said the National AfCFTA Policy Framework and Action Plan was geared towards the harmonisation of relevant policies, programmes, laws, and regulations to boost the productive capacities of the private sector, particularly the small and medium scale enterprises to harness the full benefits of AfCFTA.
“A successful implementation of the Action Plan will boost the capacities of the Ghanaian private sector to take advantage of market access opportunities in Africa to promote ‘Made in Ghana’ goods and services,” he stated.
“The effective operationalisation of the AfCFTA Agreement in Ghana would significantly boost Ghana’s balance of trade, stimulate investment and innovation, diversify exports, improve food security, foster structural transformation, enhance economic growth, and above all, provide jobs for the youth,” the President stated.
We can sustain $500m oil palm investment in Edo, says Obaseki (The Guardian Nigeria)
Edo State government has built a formidable structure to sustain the gains of the $500 million investment in the state’s oil palm sector. Governor Godwin Obaseki, in a chat with Africa Report, said the investment would drive Nigeria’s diversification targets, as the plantations developed through the Edo State Oil Palm Programme (ESOPP) would provide feedstock for manufacturing companies in the country. His words: “We decided to be strategic in the development of oil palm, rubber and cassava value chains in Edo. We developed plans and went to the Federal Government for support. This is why we got financing from the Central Bank of Nigeria (CBN).
“There has to be a market. Agriculture is a business. We located companies and partnered them. We looked at what they needed and asked them to come to Edo to invest in the raw materials they needed to run their factories and plants. “One of the criteria we considered is that they must have a market for their product and require a steady source of raw materials. We asked them to walk back through the production value chain and come and site in Edo as the source of their raw materials. With this arrangement, the investment is sustainable,” he explained.
Republic of South Sudan: 2022 Article IV Consultation And Second Review Under The Staff-Monitored Program (IMF)
South Sudan is a very fragile post-conflict state and one of the most vulnerable countries in the world to climate-driven disasters. The pandemic reversed the economic recovery that followed the 2018 peace agreement. The oil price shock from the pandemic resulted in a massive loss of revenue, causing the government to run up expenditure arrears and resume monetary financing. This led to sharp exchange rate depreciation and runaway inflation. The policies implemented under a Staff Monitored Program (SMP) that was approved in March 2021 and supported by two disbursements under the RCF (in November 2020 and March 2021) have helped restore macroeconomic stability and eliminate a long-standing system of multiple exchange rates. Higher oil prices have dampened the effects of floods on lower oil production and sustained international reserves in the face of a rising import bill. The sharp rise in global food prices risks is exacerbating the dire humanitarian situation in South Sudan, where 70 percent of the population suffers from acute food insecurity, at a time when aid budgets are being cut.
African trade and integration news
Competition from new East Africa ports boon for importers (The East African)
Competition between old and upcoming ports on the eastern African coast could signal better alternatives for importers who have struggled with inefficiency. A new report by logistics consultancy firm GBS Africa says that while veterans at the job such as the Port of Mombasa in Kenya and Dar es Salaam in Tanzania could face rough challenges from newcomers, it could be good news for importers as they may be spoiled for choices.
The report notes that the port of Dar es Salaam offers faster and more cost-effective trade and transport solutions than Mombasa, citing that the port of Dar es Salaam is benefitting from ongoing expansion and investments.
The competition among ports has already started yielding fruits since both Kenya and Tanzania have tapped foreign investors to expand related facilities such as the northern corridor expansion as well as the refurbishment of berths in Mombasa.
“This emerging diversity creates a highly lucrative trade corridor to inland markets and population centres while attracting fresh investments into associated sectors,” the report indicated, citing the expansion of other ports, including in Somalia.
EU-SACU Poultry Safeguard Measure Arbitration (SACU)
In a historic milestone, in its final Report delivered on the 3rd August 2022, the Arbitration Panel’s Ruling on the dispute between the European Union (EU) and the Southern African Customs Union (SACU) Member States, secures a landmark victory for the SACU poultry industry. The dispute was initiated by the EU under the Economic Partnership Agreement (EPA) between the EU and the SADC EPA States (EU-SADC EPA) and relates to a bilateral safeguard measure imposed by SACU on frozen bone-in chicken cuts imports from the EU, in 2018. The EU had challenged the legal basis and compliance of the measure with the EU-SADC EPA on a number of grounds.
Dismissing the majority of the EU’s claims, in particular those pertaining to the geographical scope of the measure, the requirement for an investigation, the adequacy of the information provided to the EU as well as the request for a refund of the duties already paid, the Arbitration Panel confirmed that the EU-SADC EPA provides for a safeguard regime that departs from that under WTO rules, emphasising the developmental character of the EU-SADC-EPA.
Vodacom decries Africa’s restrictive digital economy policies (ITWeb)
Africa’s restrictive policies and practices continue to hinder the growth of the digital economy, along with the related socio-economic benefits across the continent. This is one of the biggest takeaways from a white paper published yesterday by Vodacom Group in partnership with AUDA-NEPAD, titled “Enabling policy frameworks for digital and data services for expanded economic growth and development – a focus on the SADC region”. The paper highlights that one of the keys to unlocking Africa’s digital economic growth, and resulting digital financial inclusion, is to create an enabling regulatory environment that supports the secure flow of data between jurisdictions.
“An enabling regulatory environment for digital, cloud and data services that ensures appropriate free flow of data between jurisdictions should be a priority for any country which has its development as a viable digital economy as a key objective,” says Stephen Chege, chief officer for external affairs at Vodacom Group. “The importance of free data flows within the context of the fourth industrial revolution and its unique economic value cannot be overemphasised. The enablement of secure and easily facilitated cross-border data flows is a strong predictor for African Union (AU) member states to successfully compete in the global economy and thrive in a post-COVID-19 world.”
ECOWAS Commission holds a retreat for its Interdepartmental Trade Facilitation Committee (ECOWAS)
The Directorate of Trade of the Commission of the Economic Community of West African States (ECOWAS) organised a Retreat for the ECOWAS Interdepartmental Trade Facilitation Committee (IDTFC) in Lagos, Nigeria from August 1 – 3, 2022. The 3-day retreat provided a platform for Directorates and Agencies of the ECOWAS Commission to review guiding documents on regional trade currently in drafting stage, such as the Regional Trade & Transport Facilitation Strategy (RTTFS), framework for elimination of Non-Tariff Barriers (NTBs), the Common Trade Policy (CTP), and the Trade and Investment Development Strategy.
Mr. SOFOLA highlighted the recent efforts facilitated by the Commission such as the adoption of the Supplementary Act on ECOWAS Community Transit and the establishment the ECOWAS Regional Trade Facilitation Committee (RTFC). The RTFC provides advisory recommendations to the ECOWAS Commission regarding the implementation of all instruments associated with the simplification of export, import, and transit inside and outside the region. Before declaring the meeting open, he assured members of the IDTFC that their comments and inputs will be incorporated in the draft documents prior to presentation to the Member States for consideration and adoption.
Funding secured for new dry bulk port set to boost West African trade (Global Trade Review)
A trio of commercial banks has agreed to lend €90mn towards a new dry bulk port in Côte d’Ivoire, as the West African country works to modernise its ageing trade infrastructure and grow export volumes. Rand Merchant Bank (RMB) and Standard Bank are acting as mandated lead arrangers (MLA) on the 10-year senior debt financing, while local media reports indicate Stanbic is the other lender to be involved in the deal. The funding supports the development of a multi-purpose bulk terminal in San Pedro, which is the second largest port in Côte d’Ivoire, behind Abidjan.
New EU rules risk Africa farm exports (Business Daily)
As developing countries look into ways to address food security, the agricultural sector plays a critical role in supplying food and export earnings. But this might be further affected if the leaders in these countries do not take the newly established European Union (EU) regulations seriously. The measures the European Commission unveiled seek to increase the contribution of EU trade agreements in safeguarding the climate, environment, and labour rights worldwide. It is part of the EU’s efforts to make trade greener, fairer and more sustainable. The European Green Deal is focusing on the EU climate strategy to reach net zero emissions by 2050. It is a roadmap for a socioecological transition to a low-carbon future and it provides building blocks for a green economic strategy in Europe. But what does this mean for the developing world? The changes will also have far-reaching implications in export countries like Kenya. Currently, Africa’s exports of agricultural produce to the EU and agri-food make up 16 percent of EU-Africa trade and are worth €5 billion ($19.6 billion).
In its latest economic data, the Kenya National Bureau of Statistics reported that horticulture profits increased from Sh150.2 billion in 2020 to Sh158.1 billion ($1.39 billion) in 2021. However, the upward trajectory is now under threat unless Kenya creates widespread awareness and builds the capacity to implement the rules.
African officials lay out goals ahead of the U.N. climate summit (PBS News Hour)
African officials outlined their priorities for the upcoming U.N. climate summit, including a push to make heavily polluting rich nations compensate poor countries for the environmental damage done to them. The continent will also focus on how countries can adapt to global warming and how the continent can best halt further climate-related disasters. Africa has seen debilitating droughts in the east and Horn of Africa and deadly cyclones in the south.
Other key areas for discussion include moving from high-carbon energy sources like oil and gas to renewables, and “carbon credit” schemes, where foreign governments and companies pay for tree planting in exchange for producing greenhouse gases.
Energy Minister says regional integration ideal for sustainable energy for all (Malawi24)
Malawi’s Minister of Energy Ibrahim Matola has stressed the need to have regional integration in the energy sector so as to achieve sustainable energy for all as articulated in the UN’s Sustainable Development Goals (SDGs). Minister Matola was speaking this on Wednesday 3rd August, 2022 at the 4th Tanzania Energy Congress which is currently underway in Dar-Es-Salam, United Republic of Tanzania. The minister told delegates during a session titled; “Improving Africa’s Economy Through Energy Sector Market Development Expansion,” that African countries need to work together to easily achieve SDGs 7 that advocates for sustainable energy for all.
“As a starting point, we need to review archaic laws and policies in order to improve Africa’s Economy through energy sector market development expansion. Currently, we have regional projects that Malawi has and plans to develop with its neighbors,” he said.
China to Deepen Africa Ties Over Next Decade With Focus on Trade (Bloomberg)
China will deepen its ties with Africa over the next decade by focusing on trade and is unlikely to be dislodged by US and European Union attempts to re-engage with the continent, the Economist Intelligence Unit said. The Asian country is likely to keep investing in Africa’s natural resources and may look to the continent as a source of food, boosting its expenditure on agriculture, the EIU said in a report released Thursday. Asia may see Africa’s youthful population as a source of labor for its manufacturing companies and as a market for its consumer goods, the research organization said.
China, G7 and Africa’s infrastructure challenge (The Nation Newspaper)
In the next few months, Africa’s most populous country and also her largest economy, Nigeria will get her first deepest sea port, the Lekki Deep Seaport. When fully operational, as expected before the end of the year, the port would generate estimated 170,000 jobs and rake in revenues of about $201 billion to central and state governments through royalties, taxes and duties. The 17 meter draught sea port constructed by one of the world biggest maritime engineering firm, China Harbour Engineering Corporation (CHEC) would reposition Nigeria as key maritime hub of the west and central African regions.
The Lekki Deep Seaport is a major artery in the network of infrastructure connectivity that is at the heart of China’s Belt and Road Initiative, (BRI), a framework of International Cooperation that also includes policy coordination, unimpeded trade, financial integration and deepening people to people contacts.
Accelerating Trade and Investment between India & Africa (APO)
A developing entrepreneurial relationship has surfaced in the past several years as a result of the substantial historical, commercial, and cultural ties between Africa and India. This has opened up a huge opportunity to capitalize on the innovative capacity of entrepreneurs in both regions to collaborate and solve urgent problems that affect both regions, thereby boosting trade and investment. This was the theme of the 2nd India - Africa Entrepreneurship & Investment Summit held at the Sarova Panafric Hotel in Nairobi, Kenya.
Due to its huge economic potential, the fintech sector has seen significant interest from notable investors and players in both Africa and India over the past few years. This is especially true in Africa, where the issue of financial inclusion still persists and much innovation and technology is required to guarantee that more Africans have access to financial services that can drive economic growth.
Global economy news
One of the world’s biggest shipping firms says there’s no telling when the bottlenecks disrupting global trade will ease up (Business Insider Africa)
One of the world’s biggest shipping and logistics companies, AP Moller-Maersk, said it doesn’t know when the supply chain bottlenecks that are disrupting global freight trade will end. “On the supply side, supplier delivery times remain lengthy, and it is still uncertain when capacity constraints including landside bottlenecks in trucking and warehousing will abate, the report said. The COVID pandemic and the war in Ukraine, among other global events in recent years, have stretched supply chains, leading to shortages of some goods, log-jams at ports, and surging prices for many products. Demand for goods increased during the COVID-19 pandemic, at a time when ports and factories were shuttered or limited, left freight firms dealing with a backlog of goods. More recently the war in Ukraine and growing consumer concerns around inflation have both weakened demand for shipping containers, Maersk said.
China to Lagos container shipping cost grows 203.22% in 2021 – UNCTAD (Businessday)
The cost of shipping a container from Shanghai Port in China to Lagos Port reached a record high of $8,102 per twenty equivalent units (TEU) of container in July 2021 from $2,672 per TEU in the same period in 2020, according to the United Nations Conference on Trade and Development (UNCTAD). This represents about 203.22 percent increase in freight rate, which according to UNCTAD also affected other trade routes and was due to the disruption in the global supply chain caused by the outbreak of the Covid-19 pandemic. The disruption, UNCTAD said, also resulted in global container shortages, port congestion, and delays at ports. UNCTAD in its latest report titled the ‘Review of Maritime Transport 2021,’ said the fluctuations in freight rates experienced in 2021, reflect changes in lockdown policies and varying speeds of recovery, as well as the impact of shortages of both containers and ships as well as congestion in key ports.
“These surges are likely to be amplified in most of the low- and middle-income countries of the Arab region, especially those suffering from conflicts or economic or financial crises which have had major impacts on patterns of production and consumption – and on maritime freight rates,” UNCTAD stated in the report.
Global impact of war in Ukraine: Energy crisis (UNCTAD)
Disruptions to the global energy market are putting Governments worldwide under enormous pressure. Rising energy prices are accelerating the cost-of-living crisis and sustaining the vicious cycle of constrained household budgets; increasing food and energy poverty; and increasing social unrest. In this context, safeguarding countries’ commitments to the Paris Agreement and the 2030 Agenda for Sustainable Development will require significant efforts from all involved stakeholders. Policies that address the short-term emergency while ensuring countries’ climate-related and other sustainable development commitments must be pursued. Such policies are available to both developed and developing countries, although the mix varies depending on geography, income level and commodity status.
Climate Explainer: CCDRs (World Bank)
Climate change is profoundly connected to development and human wellbeing. Unchecked, climate impacts could push 132 million people into poverty over the next 10 years. Climate change also interacts with other social, economic, and environmental pressures – as is now evident from repeated and more frequent extreme natural events and disasters - compounding risks that can increase vulnerability, exacerbate grievances, and deepen pre-existing fragility. And despite having contributed the least to global greenhouse (GHG) emissions, developing countries are especially vulnerable to the adverse impacts of climate change.
But not only does climate change pose a serious threat to sustainable development, now and in the future, the converse also applies: countries can achieve good development outcomes, including by reducing poverty and boosting sustainable growth, while taking action on climate. Achieving this, though, requires a clear understanding of which interventions will have the highest impact, what they will cost, what are the tough policy choices that may be needed; and that’s what these CCDRs will aim to provide.
BRICS-led bank plans US dollar bond to downplay Russia ties (Devex)
The New Development Bank is in “active” talks with investors about issuing a new U.S. dollar bond before the end of the year — a move aimed at shoring up its image in financial markets following a Fitch Ratings downgrade of the institution last month over its links to Russia, Devex has learned.
The bank is preparing an investor roadshow for later this year in which it will make clear that the new bond will be used to fund projects in all its member states except Russia, NDB Chief Financial Officer Leslie Maasdorp told Devex. NDB’s founding members include Brazil, Russia, India, China, and South Africa, known collectively as the BRICS economies.
The Shanghai-based lender put all its operations in Russia on hold in March, just after the invasion of Ukraine and the imposition of a slew of Western sanctions on Moscow. For the upcoming bond, this means the financing it raises will not be used for Russian investments. “The bank is presently in active dialogue with our investor base to explore the feasibility of a benchmark-size U.S. dollar bond offering in the final quarter of 2022,” Maasdorp said.