tralac Daily News
The new EU rules for citrus imports from South Africa: Background, applicable legal texts and processes, and the dispute declared by South Africa under the rules of the World Trade Organisation (WTO) (tralac)
Citrus fruits are one of the most important export products for the South African economy. The South African Citrus Growers Association (CGA) estimates that the country exported 158.7 million cartons of oranges in 2021, making it the biggest revenue earner in Africa from orange exports. The European Union (EU) is one of the main destination markets for South African citrus fruits, making up 40% of South African orange exports and 27% of its soft citrus exports.
On 21 June 2022, the EU published a new cold treatment regulation for the importation of the fruits of Citrus sinensis Pers. (oranges/sweet oranges) from South Africa and various other countries, based on its right to protect it territory from a phytosanitary pest commonly known as false codling moth (FCM). The Regulation entered into force on 24 June 2022, and it applies as from 14 July 2022.
The initial reaction of the CGA was to point out that there was a need for such measures to be necessary, justified, proportionate and feasible. On 28 July 2022, however, the South African Department of Trade, Industry and Competition (DTIC) confirmed that the South African government had submitted a Request for Consultations with the EU in terms of the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). Read more.
The Food and Allied Workers Union (Fawu) yesterday slated the decision by Trade, Industry and Competition Minister Ebrahim Patel to suspend to suspend poultry anti-dumping duties for 12 months, saying this would kill jobs and sector. It also called for an urgent meeting with the minister.
The department of trade, industry and competition (DTIC) on Monday granted a reprieve to Brazil, Denmark, Ireland, Poland and Spain by suspending the implementation of anti-dumping duties against them. It did so to grant relief to South African consumers who are battling with the high cost of living including soaring food prices.
Local poultry producers this week threatened to hold back investment in the sector for the duration of the withholding of tariffs.
Namibia trade deficit drops to N$2,5 billion (The Namibian)
Namibia’s export earnings in June 2022 stood at N$8 billion, up 26% on May figures, while the import bill amounted to N$10,5 billion - down by 15,9%.According to the Namibia Statistics Agency’s Namibia Trade Statistics Bulletin for June, this resulted in a trade deficit of N$2,5 billion, which is 59,4% lower than the N$6,1 billion recorded in May 2022. Namibia’s trade composition by partner showed that Botswana emerged as Namibia’s largest market for exports, whereas South Africa maintained her position as the largest source market for the country. The composition of the export basket for the month under review mainly comprised minerals such as precious stones (diamonds) and uranium, while fish remained the only non-mineral commodity in the top five products exported.
“Namibia’s cumulative trade activities continued to increase for the period of January to June 2022 when compared to the same period during 2021,” said the bulletin, signed by statistician general Alex Shimuafeni.
The Walvis Bay Corridor Group (WBCG) embarked on a business development mission to Brazil in July as part of its ongoing efforts to promote Namibia as the preferred and shortest trade route into southern Africa. The mission’s goal was to engage the Brazilian business community, ports, shipping lines, freight forwarders, and industries to explore opportunities Namibia can provide as a supply chain solution for the Brazilian market, Namports Quayside bulletin released this week said. According to the bulletin, the two-week engagements concluded successfully with an information-sharing session in São Paulo, Brazil. The session, titled “Positioning Walvis Bay as Brazil’s Preferred Trade Route,’ highlighted the advantages of using the Ports of Walvis Bay and Lüderitz and thus by extension the Walvis Bay Corridors.
“The promotion of trade, investment, and economic cooperation should continue to be given higher emphasis in this situation. Stronger cooperation in other areas of our economies should be encouraged by the positive bilateral and diplomatic relations between our two nations. Furthermore, I want to reassure you that our two nations have already signed several general framework agreements for cooperation in a variety of fields. These agreements should function as a catalyst for our two nations’ sectors to finalize their sector-specific agreements and memoranda of understanding, further enhancing and elevating the level of cooperation between Brazil and Namibia to greater heights,” said Mbapeua Muvangua, Namibia’s Ambassador to Brazil.
Maize production in some of the sub-Saharan African countries that dominated maize supplies during the 2021/22 marketing year is expected to be lower this coming season. This will bring about some changes in the sub continent’s maize trade in the 2022/23 marketing year, in particular creating complications for Kenya. In the 2021/22 season, Kenya was the largest maize importer in the region. But Kenya has a longstanding policy against genetically engineered maize. This limits the role of South Africa, the sub-continent’s biggest maize producer and exporter, in meeting Kenya’s needs. The expected lower production comes in a season when demand for maize from countries in sub-Saharan Africa that rely heavily on imports is expected to remain strong. It’s estimated that Kenya, for example, will need to import 700,000 tonnes of maize for 2022/23. Kenya’s maize production is expected to be marginally higher, but not enough to meet the country’s needs.
Kenya is typically one of the major maize importing countries in sub-Saharan Africa. The country’s expected 700,000 tonnes of maize imports account for 21% of the region’s expected maize imports of 3.4 million tonnes in 2021/22 season, according to data from the International Grains Council. Other typical maize importing countries include Zimbabwe, Botswana, Mozambique and Namibia. However, in the 2021/22 marketing year, several sub-Saharan African countries such as Zambia, Tanzania, Zimbabwe (an exceptional year from the usual importing position) and South Africa had ample maize harvest. This made it easy for them to meet Kenya’s import needs. Tanzania and Zambia were the leading maize suppliers to Kenya.
China Exempts Rwanda From Export Taxes (Taarifa News)
China will start its zero-tariff to 98% of products from 16 developing countries including Rwanda effective next month, according to China’s Department of Foreign Affairs. Officials say the move is aimed at increasing the number of imports from low developed countries including those in Africa and some Asian countries as well as cementing strong trade ties in future. Wu Deng, China’s Director General, Department of African Affairs, MFA, China said in a Tweet that; “From September 1, (sic), China will increase the scope of products enjoying zero-tariff treatment to 98% for 16 least developed countries including Rwanda, Djibouti and Togo” His tweet added; “The tax free policy will gradually expand to all least developed countries and increase imports from Africa.”
Burundi allows sugar, cement imports to tame black market (The East African)
Burundi is set to open a window for importing sugar and cement to meet a shortfall that has created a black market where prices have shot up. This was revealed through a Cabinet statement released Wednesday following a Council of Ministers meeting in Gitega last week. “There are discrepancies between the reference prices and the actual prices on the market,” the Cabinet said, adding that efforts to enforce official prices have been in vain. State-owned producers have also been seeking a price review, particularly beer maker Brarudi and cement manufacturer Buceco since 2021, for reasons including soaring raw materials and transport costs. “Given the production capacities of these companies, it is not clear that these products will be available even after the price increase,” the Cabinet noted.
Parliament passes One Stop Border Bill (Malawi24)
Members of Parliament on Tuesday passed One Stop Border Bill which seeks to provide a legal framework for implementation of agreements signed between the Republic of Malawi and neighboring countries for operationalization of one stop border posts to facilitate coordinated border control for efficient cross-border movement of people and clearance of good. The legislation will enable Malawi to comply with its obligation under the SADC Protocol on Trade, COMESA Treaty and other regional and international trade facilitation agreements. One-stop borders reduce the number of stops in cross-border trade and other transactions by combining and locating, at a single location, border and control activities between the Republic of Malawi and neighboring countries. Phiri added that the bill aims at streamlining operations of all borders so that clearing of goods and people who are traveling to neighboring countries should be sped up.
Trial sale of commodities through AfCFTA begins (The East African)
Tanzania, Kenya and Rwanda will trial sale livestock, fruits, vegetables and spices in a pilot phase of the Africa Continental Free Trade Area agreement (AfCFTA) and whose findings will be tabled at the AU Summit next year. The regions’ team leader in the AfCFTA negotiations Damas Haule says the countries’ offer also includes fish, medicines, fertiliser, paper and industrial chemicals. Energy products such as cooking gas, bicycle and motorcycle tyres, and machinery for construction and farming have also been included. The three countries were selected in June to start trading under the pilot phase whose final details will be thrashed out before a formal roll-out in the final quarter of this year.
Case Made For Slow Start To Trading Under AfCFTA (News Ghana)
More than a year since the symbolic export under AfCFTA by two of Ghana’s manufacturing companies, no other companies have exported under the continental free trade agreement, with sections of the public questioning why. The Secretary General of the International Chamber of Commerce, Ghana, Emmanuel Doni-Kwame has explained that this is neither a demonstration of a failure of the trade agreement nor a sign of low interest by the private sector. According to the Secretary General of ICC Ghana, intra-Africa trade persists however many traders may be trading under existing different trading agreements such as the ECOWAS Trade Liberalization Scheme (ETLS) and are yet to migrate unto AfCFTA.
Mr. Doni-Kwame also opined that private sector’s lack of activeness in the free market may be as a result of negotiations still ongoing between the party states. He added that, while Ghana may appear ready to trade that may not be the case for all other countries who are at different levels of readiness.
Papss can save continent $5b in payment costs (The East African)
Pan-African Payment and Settlement System (Papss), is a payment method that operates across African borders allowing the transfer of currencies instantly and at low costs. Its chief executive spoke to Bamuturaki Musinguzi about its achievements and prospects.
Over 80 percent of intra-African payments go through Europe or the US, resulting in high transfer and compliance costs. The establishment of the African Continental Free Trade Area (AfCFTA) has added to the need and urgency of providing an enabling continental payment and settlement infrastructure that will support its objectives. Papss was adopted in July 2019 by the African Union Heads of State to support the AfCFTA.
All six central banks of WAMZ (West African Monetary Zone) have been carrying out a pilot live exercise, which began in October 2021, and has been successfully concluded. This paves the way for commercial bank transactions. In the past few months, two more central banks and more than 300 major commercial banks have joined the PAPSS network.
In parallel, we signed strategic partnerships that broaden our reach — such as the Comesa Regional Payment and Settlement System.
The Pan-African Payment and Settlement System (PAPSS) operated by African Export-Import Bank (Afreximbank) in collaboration with the African Continental Free Trade Area (AfCFTA) Secretariat and the African Union (AU), announced today that it has achieved the International Organisation for Standardisation (ISO) 27001 certification for its global operations. Following an external certification audit, by an accredited certification body that was conducted on the 27th of June 2022, PAPSS was recognized as compliant to ISO27001:2013 standard.
Mike Ogbalu III, CEO of PAPSS said: “PAPSS being a Pan-African Payment Market Infrastructure, with its mandate to provide an interoperable, secure and low-cost cross-border payment infrastructure. The main enabler to achieve the above mandate is to build the highest levels of trust assurance with our stakeholders. In addition to that, through the continual improvement approach, this achievement will help in improving PAPSS operational efficiency and compliance with global standards ensuring the protection of company image and reputation.”
The Export-Import Bank (Afreximbank) and the SADC Business Council (SADC BC) have launched the SADC – Africa Trade and Investment Marketplace which aims to promote regional trade, unlock investment opportunities, deepen economic cooperation, and drive sustainable business growth between the SADC region and the rest of Africa. The SADC – Africa Trade and Investment Marketplace will provide the private sector in the SADC region with a platform to foster higher levels of engagement in trade and investment-related matters with the rest of Africa. Afreximbank will provide access to trade and market information through its trade and investment programmes – roadshows, investment conferences, the biennial Intra-African Trade Fair (the next edition being slated for 21-27 November 2023 in Abidjan, Cote d’Ivoire) – as well as digital platforms such as the Trade Information Portal, Trade Regulatory Information Portal and the African Trade Exchange among others, to enable the private sector in SADC to connect with the rest of Africa. Further, Afreximbank will deploy a range of its financing instruments and trade facilitation initiatives to advance intra-African trade and investment under the African Continental Free Trade Agreement (AfCFTA).
Somalia Bids to Join EAC, Museveni Vows to Support It (Chimpreports)
Somalia is bidding to join the East African Community (EAC), and the newly elected Somali President Hassan Sheikh Mohamud is persuading EAC leaders to accept his country’s application.
Speaking at the inaugural Uganda-Somalia Investment and Business Summit at Munyonyo Commonwealth Resort in Kampala on Wednesday, President Mohamud said that Somalia belongs to East Africa, and therefore its application to join the Bloc should not be rejected. In response, Ugandan President, Yoweri Museveni pledged his full support for Somalia to join the East African region Bloc.
Why East African’s financial sector linkage could be stillborn (The East African)
A plan to harmonise the financial sector in the region risks stalling as East Africa’s partner states grapple with economic and political crises. These problems have seen the World Bank-funded stockmarket reforms fall behind schedule by more than six years. The World Bank has been funding the region’s stock market linkage project through a $26.5 million grant. But it now says partner states face financial constraints and could not sustain the operations of an interlinked stock market. The Bank says in its Implementation Completion Report that some partner states are even finding it difficult to finance the implementation of the financial education strategy/financial literacy within their respective countries. “Inadequate budgets remain an important constraint to pursuing the financial integration agenda of the community forward, including the goal of achieving a single market in financial services and implementation of the Monetary Union Protocol,” the bank says, referring to the EAC’s third pillar of integration.
The European Union (EU) has granted a no-cost extension to the Small-Scale Cross Border Trade Initiative (SSCBTI) programme by 31 Months. The Project will now end in December 2024 from the initial deadline of May 2022. Assistant Secretary General for Administration and Finance Dr Dev Haman revealed this in Lusaka during the opening of the third Meeting of the Project Steering Committee for the SSCBTI on 8 August 2022. The programme has had four years of implementation and has made good progress with tangible successes in working to formalize small-scale cross border trade flows in the COMESA-EAC-SADC tripartite region. Therefore, this extension will allow for implementation of the remaining activities that are pending.
Rwanda has reaffirmed its support of regional integration programmes being implemented by the Common Market for Eastern and Southern Africa (COMESA). His Excellency Paul Kagame says his government believes that integrating African countries is a sure way of attaining economic prosperity and development. He said this at State House in Kigali on 2nd August when he met Secretary General Chileshe Mpundu Kapwepwe who was leading a COMESA delegation on a three-day working visit to that country. The President used the occasion to commend COMESA on making positive advancements in enhancing intra-regional trade by developing various trade facilitation Instruments that are being used by the people.
In highlighting the importance of regional programmes, President Kagame reiterated his governments’ willingness to host the next Tripartite Free Trade Area (TFTA) Summit. The last Tripartite FTA Summit was held in June 2015, in Sharm El Sheikh, Egypt when the TFTA was launched.
Central African ministers meeting in Cameroon have agreed to merge two regional blocs in a move to boost trade and growth. The 11-member Economic Community of Central African States (ECCAS) will join with the six-member Economic and Monetary Community of Central Africa (CEMAC). The deal aims to eliminate rivalry that has helped to make central Africa the poorest region among Africa’s economic groups.
Central African economy ministers say they want to foster regional integration, accelerate economic transformation and facilitate development by merging the two economic blocs.
The African Development Bank’s African Economic Outlook report 2022 (AEO) struck a chord with policymakers and other stakeholders during recent seminars in the United States and the United Kingdom. An African Development Bank Group delegation, led by Acting Chief Economist and Vice President Kevin Urama, was in Washington D.C. 20-29 July, and London 1-2 August, to discuss the AEO, a flagship publication of the Bank, with global market players.
The verdict was clear. From the International Monetary Fund to the World Bank, the Centre for Global Development, Brookings Institution, the Atlantic Council, and the University College London this week, speakers agreed that the 2022 AEO provides evidence-based policy options for driving inclusive growth by building climate resilience and a just energy transition in Africa.
Yacob Mulugetta, professor of energy and development policy at the University College London, observed that the AEO captures how low-carbon transitions in Africa will vary from country to country. “What this means is transformational socio-economic opportunities must be at the forefront of the green energy transition. This will require new technologies as well as climate finance…which is additional finance beyond official development assistance,” Mulugetta said at a public seminar for policy stakeholders in the UK on Monday.
A recent webinar hosted by the African Development Bank brought together experts to examine how Africa can become a hub for manufacturing lithium-ion batteries to store energy and electrify the transport fleet. The webinar, which was held on 11th July 2022 under the theme, Leveraging Africa’s green minerals for the energy transition: The role of regional integration and the AfCFTA, is part of a knowledge series organized by the Bank’s African Natural Resources Management and Investment Centre, and the Energy Financial Solutions, Policy Regulations Department.
Dr. Vanessa Ushie, Acting Director of the Bank’s African Natural Resource Management and Investment Centre, emphasised Africa’s potential in her opening remarks: “Given Africa’s competitive advantage due to rich endowments in renewable energy and green mineral resources, many African countries have a unique opportunity to benefit from low-carbon development and a just energy transition pathway appropriate to their national context.”
Following EU’s Dangerous Fossil Gas Push Will Put Africa In Danger: AU (Business Hallmark)
A technical committee of the African Union has sounded warning on the dangerous push for gas supply by the European Union, a situation climate activists say has capacity to put the continent in danger of locking Africa into fossil fuels for decades to come. In the midst of this , African leaders are said to be contemplating a new position that would prioritize natural gas and nuclear over cleaner, cheaper, renewables. Recall the technical committee of the African Union – made up of energy ministers had earlier forwarded an “African Common Position on Energy Access and Transition”. This position reflects essentially fossil gas and nuclear energy, at the expense of renewables, and is proposed for adoption by African Heads of State and was launched at COP27.This development is surfacing on the crest of the European Union’s recent vote in favour of a new rule that will consider fossil gas and nuclear projects “green,” making them eligible for low-cost loans and subsidies, and their scramble for Africa’s energy resources.
Time To Advance with Africa: Seizing Opportunities with A Vital Continent (US Chamber of Commerce and Industry)
Over the course of this year, the U.S. Chamber is elevating its longstanding policy engagement with the continent to capitalize on Africa’s shifts in business, technology, and domestic and global partnerships to seize opportunities with a critical partner on the verge of a major socioeconomic revolution. At each stop around the country, the roadshow will convene public- and private-sector leaders from the government and business community, in partnership with our local network of Chambers, for discussions, engagements, and panels explaining the opportunities for business to expand Africa’s commercial profile domestically, increase U.S. exports and investment, highlight tools to support new market entrants, and grow commercial opportunities.
How America Can Foster an African Boom (Foreign Affairs)
TICAD 8 offers Japan chance to rebuild influence in Africa (African Business)
Japan’s relations with the African continent are again in the spotlight as the eighth Tokyo International Conference on African Development (TICAD 8) in Tunisia nears. In the past, Tokyo largely exercised its influence on the continent through soft power and aid and development, while the private sector and commercial lenders have been more cautious. Yet Tokyo is hoping to give its private sector renewed impetus to invest in Africa and lend to the continent as economic engagement by its great geopolitical rival China drops off at the same time as the twin impacts of Covid-19 and the war in Ukraine hit the global economy.
The number of global powers seeking to play a substantial role in Africa’s political, diplomatic and economic life has steadily increased since the end of the Cold War. Until now, Japan’s role has been overshadowed by China, which has been the biggest source of bilateral project finance since the turn of the millennium, boosted by the provision of cheap loans for projects developed by Chinese contractors to keep them occupied at times of lower domestic demand.
Over 40 high-level ministers and dozens of businesspeople from various African countries visited India in July to attend a key investment meet aimed at boosting commercial relations between the two sides. Addressing the two-day gathering, attended by ministers from countries such as Cameroon, Burkina Faso, Eswatini, Ethiopia, Sudan and Nigeria, India’s Foreign Minister Subrahmanyam Jaishankar highlighted that India’s bilateral trade with Africa “reached $89.5 billion (€86.45 billion) in 2021-2022 compared with $56 billion the previous year.” India’s main exports to Africa are refined petroleum products and pharmaceuticals while Africa primarily exports crude oil, gold, coal and other minerals.
The South Asian nation’s Commerce and Industry Minister Piyush Goyal, meanwhile, stressed New Delhi’s intent to reach a trade pact with Africa. This is because the economic outlook, in the long run, “is going to be promising for both India and Africa, because this is where the markets and opportunities are present,” he said at the conclave.
Frederick J. Kenney Jr., interim Coordinator for the UN at the Joint Coordination Centre for the Black Sea Initiative, said at a regular UN press briefing via video link from Istanbul, Türkiye that the ships contain “over 370,000 metric tons of grain and other food stocks”. “Those vessels had been stranded in the three ports covered by the initiative when the war started”.
The initiative specifically allows for significant volumes of commercial food exports from three key Ukrainian ports in the Black Sea – Odessa, Chernomorsk and Yuzhny. During the agreement signing ceremony in Istanbul, Türkiye, on 22 July, Secretary-General António Guterres called the initiative “a beacon of hope” in a world that desperately needs it. He also announced the establishment of the Joint Coordination Centre to monitor implementation that would be hosted in Istanbul and include representatives from Ukraine, Russia and Türkiye.
Global use of cryptocurrencies has increased exponentially during the COVID-19 pandemic, including in developing countries. UNCTAD has released three policy briefs that delve into these risks and costs, including the threats cryptocurrencies bring to financial stability, domestic resource mobilization and the security of monetary systems.
While these private digital currencies have rewarded some, and facilitate remittances, they are an unstable financial asset that can also bring social risks and costs.
The policy brief entitled “All that glitters is not gold: The high cost of leaving cryptocurrencies unregulated” examines the reasons for the rapid uptake of cryptocurrencies in developing countries, including facilitation of remittances and as a hedge against currency and inflation risks. Recent digital currency shocks in the market suggest that there are private risks to holding crypto, but if the central bank steps in to protect financial stability, then the problem becomes a public one.