Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Local news

Government Publishes Policy Proposals on Measures to Address Scrap Metal Theft (the dtic)

Government today published draft proposals to address widespread theft of copper cable and other forms of metal from public infrastructure that has crippled power supplies, left trains unable to operate and damaged public facilities in many parts of the country. The proposals have been developed following consultations by the Departments of Trade, Industry and Competition (the dtic), Police, National Treasury, Mineral Resources and Energy, Public Enterprises (including state owned enterprises), and Transport and was published in the Government Gazette today by Minister Ebrahim Patel.

The draft measures propose a six-month export prohibition on scrap and waste metal, including copper cable, together with a permit system for export of specified semi-processed metal products. This is the first of three envisaged phases, with further actions proposed in future that include a new, enhanced registration system for scrap buyers and sellers to improve monitoring, policing and law-enforcement, limitations on the ports and (potentially) border posts to be used for trade in scrap metal, and changes to the legislation to make it more difficult for stolen copper and metal to be traded.

“A disaster”: South African citrus fruit trapped in European ports (Fresh Fruit Portal)

After South Africa filed a complaint with the World Trade Organization (WTO) last month when the EU introduced new phytosanitary requirements, the trade dispute between the two parties continues. The measures came into force in July when ships carrying hundreds of containers full of South African fruit bound for Europe were already at sea and now, tonnes of oranges are rotting in containers stuck in European ports and could be wasted, according to a report by Euro news.

The new rules, which came at the height of the orange season, caught producers off guard. Some 3.2 million cartons of citrus fruit worth about €35 million were left with papers that were invalid on arrival.

In its WTO complaint, South Africa argues that the EU’s requirements are “not based on science”, “discriminatory” and excessive. Moreover, “it will add costs. And right now, that’s what no producer in the world can afford,” added Hannes de Waal, who runs the almost century-old Sundays River Citrus farm in South Africa’s southeast. On the other hand, the EU has expressed confidence that its measures are “WTO compatible”. A European Commission spokesperson said that the objective of the phytosanitary criteria is to protect the EU “from the potentially significant impact on agriculture and the environment, should this pest become established.” The dispute is now in the hands of the WTO. The parties have 60 days to negotiate a solution. Failing that, the complainant can request arbitration by a panel.

Kenya’s new vehicle exports rise 55 percent in half-year (Business Daily)

New vehicle dealers exported 137 units to the regional market in the half year ended June, marking a 55.6 percent jump from the 88 units they delivered to neighbouring countries the year before. Data from the Kenya Motor Industry Association (KMI) shows that the dealers, including Scania East Africa, Isuzu East Africa, and Inchcape Kenya exported their respective vehicle brands to Tanzania and Uganda.

The export market is limited due to differences in rules on vehicle age restrictions, with Kenya having one of the strictest laws that cap vehicle imports at a maximum of eight years from the date of manufacture. Kenyan companies, which have invested the most in local vehicle assembly, say harmonization of rules and incentives touching on the automotive sector could unlock more demand from the region. Kenyan firms currently hold small market shares in the neighbouring countries as measured by the exports they make against total sales.

“Looking at opportunities within the East African Community (EAC) region, the full implementation of the 25 percent duty on imported vehicles as per the EAC’s Common External Tariff (CET) would unlock tremendous benefits for the auto industry in the region,” Isuzu East Africa said recently.

Poor tax policy erodes Kenya’s investor attractiveness – survey (The Star, Kenya)

A rigid tax regulation environment in Kenya has seen Africa’s CEOs and leaders’ investor confidence in the country drop three positions in a year. According to the latest survey by Deloitte, commissioned by Africa CEO Forum, Kenya is ranked fifth with 23 per cent on Investment Attractiveness Index. This is a drop in rank from last year when the country was ranked second in the continent with an index of 6.9 per cent. “Market access and business environment are among the main criteria when choosing a site for investment,” the survey noted.

The tax change in the country’s betting, telecommunication, alcohol and corporate tax has skyrocketed in the past three financial years. Generally, in the continent, the survey notes that this year 78 per cent of the private sector leaders and CEOs are confident in the economic investor trends of African markets.

Kenyan farmers have a new market for avocado: China (The East African)

This week, Nairobi flagged off its first ever consignment of fresh avocados to China, cementing its place as the continent’s leading exporter of the fruit and the sixth largest globally. And it could be a jackpot for local farmers who had initially failed to meet the tough conditions set by Beijing.

“The net effect of accessing the Chinese market is that our avocado farmers will have more money in their pocket and increase employment in the agricultural sector,” said David Osiany, chief administrative secretary in Kenya’s Ministry of Industrialisation, Trade and Enterprise Development. At an estimated market value of $15.15 billion in 2022 according to Statista, avocado exports could transform the Kenyan economy.

EU tightens checks on fresh produce imports (Business Daily)

Europe has lowered the level of detection for chemical residues and pests on Kenya’s produce in a move that will raise the level of checks on exports of fresh produce. Exporters are now worried that a lack of compliance to the required Minimum Residue Level (MRL) by farmers will lead to frequent interception of the produce in the wake of increased checks. Europe, Kenya’s largest market for fresh produce has lowered the level to a bare minimum of LOD — level of detection — meaning that any hazard found whether high or low will be treated the same.

“These guides provide a clear explanation of what needs to be done in order to ensure that exported produce is in compliance with EU phytosanitary requirements,” said the EU in the new guidelines.

Kenya eyes US companies dumping China in Biden deal (Business Daily)

Kenya is vying to become the manufacturing hub for American companies seeking to relocate or diversify out of China in fresh trade talks Washington opened with Nairobi in July. Industrialisation and Trade Cabinet Secretary Betty Maina said Nairobi will be negotiating a deal that will lay ground for a manufacturing base for the US firms with a key focus on tech factories. “With all the changes globally, the US firms are looking at identifying new production bases for their products. They are diversifying out of their traditional production places in the Far East, particularly China,” Ms Maina told the Business Daily. “This gives us an opportunity as a country to attract these new investments. That is why it [proposed deal] is called trade and investment partnership that is informed by the need for US firms to diversify their production bases and for us to find new products [for export].”

US manufacturers operating in China are escalating decade-long plans to relocate production after being rattled by strict Covid-19 lockdowns in April and May, which further disrupted supply chains and bit into their profits.

Trade-offs for Uganda’s ‘Middle-Income’ status (Monitor)

After years of trying to attain the Middle Income status, Uganda, according to President Yoweri Museveni, has finally made it into the coveted bracket irrespective of tough economic times. In his 2022 State of the Nation Address, Mr Museveni, noted that despite locust invasion, the rising waters of the lakes, the floating islands, the landslides, the terrorist bombs, the Covid-19 pandemic and now the rising commodity prices largely caused by the Russian invasion of Ukraine, the country still managed to find its way into the middle income status. Currently, he says the economy is standing at $45.7 billion (Shs176 trillion) by the exchange rate method and at $131.6 billion (Shs507 trillion) by the Purchasing Power Parity (PPP) method. This, according to Mr Museveni means the GDP per capita is $1,046 (about Shs4 milion) which is slightly beyond the entrance points for the lower middle-income status of $1,036 (about Shs3.9 milion). Following some years of eluding the country, President Museveni disclosed: “We have passed that figure. Congratulations!”

The President was also quick to add: “However, to be declared a middle-income country, you should sustain this for two to three consecutive years. I am confident that we shall over perform in achieving that.”

Singapore, Rwanda, Kenya’s electronic single window hold lessons for Nigeria (Businessday)

While the Federal Government of Nigeria has for years been nursing the idea of introducing the electronic single window platform for cargo clearing at the ports, shippers in East African countries and Singapore are reaping the benefits of such a facility. The single window is a facility that allows parties involved in trade and transport to lodge information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements. Kenya, Tanzania, Uganda, and Rwanda have fully embraced the Electronic Single Window System, according to a report by Trade Mark East Africa. They started with their heads of government coming together to usher in the system in one voice. The introduction of a single window, which ensures the East African countries align their Customs clearance systems to the new electronic platform, has made cargo clearance faster and more efficient.

National Agriculture Investment Plans at core deliberations in Dakar (IPPMedia)

The African Union Development Agency- NEPAD and African Union Commission convened in Dakar, Senegal, a three-day meeting to discuss the implementation of the National Agriculture Investment Plans and the progress therefor.

The main objective of the consultative meeting was to establish status of the NAIPs and RAIPs implementation in member states including linkages to the National development Plans and in the process identify lessons, challenges and opportunities that might have accelerated or delayed the implementation of the NAIPs and RAIPs.

Speaking during the opening ceremony, the CEO of the African Union Development Agency-NEPAD, Mrs Nardos Bekele-Thomas indicated that the meeting created an opportunity to engage all AU Member States and work towards strengthened financing and multi-stakeholder coordination on the Comprehensive Africa Agriculture Development Programme (CAADP) and said that it will also build on the outcomes and commitments of 2021 such as the UNFSS, COP26 and the N4G Summit.

The critical role of the NAIPs in the agriculture transformation agenda of the continent was brought to the fore once again at the Ordinary Session of the AU Assembly in Malabo, Equatorial Guinea where the Heads of State and Government adopted a Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods and later referred to as the “Malabo Declaration”. The Malabo Declaration highlights seven commitments as indicators for progress and impact on the 10-year vision and goals of Africa Accelerated Agricultural Growth and Transformation (3AGT) agenda.

African trade and integration

AfCFTA records significant progress – Wamkele Mene (Ghana Business News)

The African Continental Free Trade Area (AfCFTA) agreement has made significant progress in the last few years, thanks to the commitment of the continent’s heads of state, Mr Wamkele Mene, Secretary-General of the AfCFTA Secretariat, has said. Speaking at a meeting with media managers, Mr Mene said the Secretariat had been able to make significant progress in trade rules, especially the rules of origin, which are key to measuring the movement of goods across borders.

“We have now been able to negotiate almost 90 per cent of the rules of origin. So, 5,000 products that we have in Africa we now have agreement close to 90 per cent. It is a remarkable achievement,” adding that every single item has to be negotiated. “We’ve produced all the certified documents to trade with and it is now up to the member states to cooperate diligently with the process to make sure that trade is fully exploited,” the Secretary General noted.

Strong regional value chains imperative for Africa’s economic resilience (Chronicle)

AS the world economy navigates through negative impacts of the on-going Russia-Ukraine war and its interplay with the Covid-19 pandemic, there is growing debate on rethinking global supply chain strategies with focus on strengthening resilience building mechanisms, especially for Africa, in order to cushion local economies and save jobs. The widescale Covid-19 lockdown measures experienced in the last two years and the Russia-Ukraine crisis so far this year, have clearly exposed the fragility of the globally interconnected economic system, putting on spotlight the need to bolster resilience building against future shocks, according to The Economist Magazine, June 2022.

For the African continent, which is largely dependent on supply chains linked mainly to the global north, the prevailing global disruptions pose a serious threat to many economies within the region.

Full agenda for the 42nd SADC Summit: Accelerating the industrialization drive (sardc)

The Democratic Republic of Congo will host the annual SADC Summit this month when southern African leaders will discuss regional integration and sustainable development. The theme for the 42nd Summit of Heads of State and Government is “Promoting industrialization through, agro-processing, mineral beneficiation, and regional value chains for inclusive and resilient economic growth.”

The theme continues the trajectory of the previous nine summits, building towards the integration goals of the Southern African Development Community (SADC), and resonates well with the vision of the Summit that conceived the industrialization drive, held in Victoria Falls, Zimbabwe in 2014 with a focus on economic transformation “through beneficiation and value addition”. This article is the first of a series to unpack some of the key issues expected to be considered by the 42nd SADC Summit on 17-18 August in Kinshasha.

‘Sadc cannot progress without industrialisation’ (Chronicle)

SOUTHERN African Development Community (Sadc) executive secretary, Mr Elias Magosi, has called for enhanced positive exploitation of key value chains such as agro-processing and mineral beneficiation, stressing that “the region cannot progress without industrialisation”. As the bloc focuses on development of key infrastructural projects that drive regional integration as outlined in the Regional Indicative Strategic Development Plan (RISDP) 2020-2030, Mr Magosi says robust industrialisation must take centre stage if the region is to achieve desired economic integration. Speaking during a courtesy call on him by the African Development Bank (AfDB) Group senior vice president, Ms Bajabulile Swazi Tshabalala, on the sidelines of the recent meeting of the Committee of Ministers of Finance and Investment and Peer Review Panel, held in Lilongwe, Malawi, Mr Magosi said infrastructure development and industrialisation were key components towards Sadc regional integration.

Support for manufacturing of leather, medical and pharmaceutical products gets a boost in the SADC region

EU trade relations with Southern African Development Community (SADC) (European Commission)

The 2022 West Africa Development Outlook Proposes Increased Sub-Regional Trade and Structural Transformation (EBID)

The ECOWAS Bank for Investment and Development (EBID) has officially released the 2022 edition of the West Africa Development Outlook (WADO), which takes stock of socio-economic developments of the previous year and presents a macroeconomic outlook for the year 2022. The WADO discusses the socio-economic challenges of the times and postulates policy interventions that could help ease these challenges.

The 2022 WADO, which is themed, “Navigating Global Shocks through Structural Transformation and Trade”, discusses how the ECOWAS sub-region can mitigate the recent price escalation by increasing local production capacities, improving intra-regional trade and embarking on a deliberate structural transformation agenda. It also discusses the causes of the recent price hikes as being structural and the need for cautious monetary policy interventions.

Africa must strive to improve digital infrastructure – President Chakwera (Ghana Business News)

Dr. Lazarus Chakwera, President of the Republic of Malawi has noted that the vision for a “digital Africa” can only be realized if African Governments invest in indigenous solutions and workforce to drive the agenda of transformation. “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,” President Chakwere stated at the 11th African Internet Governance Forum (AfIGF 2022) in Lilongwe, Malawi. The forum which was on the theme: “Digital Inclusion and Trust in Africa,” was organized by the government of Malawi in collaboration with the African Union Commission (AUC) and the United Nations Economic Commission for Africa (UNECA).

Dr. Amani Abou-Zeid, African Union Commissioner for Infrastructure and Energy said “since 2020, digital technologies have proven to be the lifeline that made our communications easy, our work going and businesses functioning.

Fintech, other knowledge-intensive services could drive Africa’s prosperity, boost inclusion (Africa Renewal)

The UNCTAD report touts Opay, a Nigerian point of sale platform and mobile payment service company, which raised $400 million in 2021 and currently boasts 160 million users, including millions in the huge unbanked population. Despite such progress, hurdles remain in the way. The report lists “restricted access to finance, poor integration in regional and global markets, and a limited skills base.” As well, the fintech sector is not developed enough to support production.

AfDB to deliver climate-adapted wheat, other seeds to 20m African farmers (BusinessAmLive)

The African Development Bank (AfDB) says it is set to deliver climate-adapted, certified wheat and other staple crops seeds to 20 million farmers in Nigeria and other African countries.

The initiative, which includes the delivery of seeds and increased access to fertilisers, would be done through the bank’s African Emergency Food Production Facility as part of activities to tackle the food crisis in African countries. Akinwumi Adesina, president of the multilateral finance development institution, stated this in a recent document titled “Averting an African Food Crisis: The African Food Production Facility”.

Speaking on AfDB’s plan towards addressing the challenge, Adesina said the bank in May established a $1.5 billion African Emergency Food Production Facility and in less than 60 days, it put into action $1.13 billion-worth of programmes under the facility across 24 African countries.

Fact Sheet: U.S. Strategy Toward Sub-Saharan Africa (The White House)

Sub-Saharan Africa plays a critical role in advancing global priorities to the benefit of Africans and Americans. It has one of the world’s fastest growing populations, largest free trade areas, most diverse ecosystems, and one of the largest regional voting groups in the United Nations (UN). It is impossible to meet today’s defining challenges without African contributions and leadership. The region will factor prominently in efforts to: end the COVID-19 pandemic; tackle the climate crisis; reverse the global tide of democratic backsliding; address global food insecurity; promote gender equity and equality; strengthen an open and stable international system; shape the rules of the world on vital issues like trade, cyber, and emerging technologies; and confront the threat of terrorism, conflict, and transnational crime.

Building on the Biden-Harris Administration’s actions and commitments to deepen our engagement and partnerships in Africa during the past year, the strategy articulates our new vision for a 21st Century U.S.-African Partnership.

The new U.S. Strategy Toward Sub-Saharan Africa represents a reframing of Africa’s importance to U.S. national security interests. We will pursue four main objectives in sub-Saharan Africa:

Vital Partners, Shared Priorities: The Biden Administration’s Sub-Saharan Africa Strategy (United States Department of State)

Speech by Antony J. Blinken, Secretary Of State: Future Africa, delivered in Pretoria, South Africa, on August 8, 2022

The United States and the Republic of South Africa (United States Department of State)

China to overtake the EU as Africa’s biggest trade partner by 2030 (The Africa Report)

Asia sees Africa’s youthful population as a source of labour for its manufacturing companies and a market for its consumer goods. Although trade should be reciprocal, the continent’s trade deficit is large as it continues to import significantly more than it exports.

In recent years, the West’s already fragile reputation in Africa has worsened. The only western institution still properly active seems to be the IMF, while China on the other hand has, broadly speaking, kept up its commercial operations. Question marks are also being raised in Africa over the motives behind the re-engagement of the EU and the US … [raising] memories of past commitments and are viewed merely as a desire to counter Chinese influence rather than work with African business partners. Western engagement in Africa is not changing very much as times are changing, with the exception of more dynamic markets such as New York City that are funding startups on the continent, although the EU and US want to ensure that China does not continue to become more powerful there.

The EIU said: “Question marks are also being raised in Africa over the motives behind the re-engagement of the EU and the US … [raising] memories of past commitments and are viewed merely as a desire to counter Chinese influence rather than work with African business partners.”

As Abou El Houda, Managing Partner of Houda Law Firm in Senegal and Côte d’Ivoire told Mining Review Africa: “The challenge for Africa is in establishing where its interests converge with China’s, where they diverge, and how areas of convergence can be shaped to advance African development priorities.” Although this recent plan to increase trade with Africa by China seems to imply that the move away from an over-reliance is not happening, many governments on the continent are now more aware of the so-called ‘Chinese debt trap’ that countries like Zambia and Angola fell into post-Covid, and as such are able to better pick and choose which trade/financial flows with China works for them.

Global economy

Fostering the digital economy in small island developing states (UNCTAD)

UNCTAD has launched a new project to strengthen the capacities of 38 small island developing states (SIDS) in Africa, the Caribbean and Asia and the Pacific to adopt trade policies that develop the digital economy and enhance crisis responses. Digital technologies and e-commerce have immense potential to support the participation of SIDS in international and regional markets. They can also help build resilience and promote stronger recovery from disasters. But the digital economy is in its early stages of development in SIDS, whose common challenges to digital transformation include limited access to affordable infrastructure. And the COVID-19 pandemic has reinforced pre-existing bottlenecks in SIDS’ e-commerce ecosystem.

Importance of building evidence for gender-sensitive trade policies (Trade for Development News)

Inclusive programming has been central to the EIF’s Aid for Trade interventions in least developed countries (LDCs). This emerged from a recognition that the gains from trade are amplified when they generate opportunities for women and youth and enable micro, small and medium-sized enterprises (MSMEs) to integrate into global trade.

The OECD-WTO monitoring and evaluation (M&E) exercise has noted that mainstreaming gender into national strategies is a continuous process. This reflects our ongoing work which has been to partner with governments in LDCs to formulate and implement gender-sensitive trade policies and regulations, as well as to improve the collection of gender-disaggregated trade data.

The best policies are evidence-based, but they can be challenging to formulate in contexts where data do not exist.


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