Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News
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Local news

Customs duty decision delays are hampering billions of rands in investment, says advisory (Engineering News)

Consultancy XA Global Trade Advisors says billions of rands in revenue have been lost to the fiscus owing to long overdue customs duty decision-making, while also having more far-reaching implications for industries and trade and investment. If all of the cases that required changes to customs duties had been finalised – and granted – on time, it would have ensured a collection of R1.25-billion by now, cumulatively, for every case that is long overdue.

Some cases have remained unresolved as long as three years, but XA Global founder and CEO Donald MacKay says tariff investigations should take four to six months, as per the rules of the International Trade Administration Commission (Itac) which is South Africa’s authority on goods movement across borders.

MacKay and his team conducted research into delays experienced with customs decisions at Itac and the ministries of Finance and Trade, Competition and Industry, and found that the average days taken for tariff investigations has increased to an average of 320 days since 2015, compared with an average of 191 days between 2009 and 2014.

Reclamation Group says scrap metal prices to stabilise over 18 months even with an export ban (Engineering News)

Recycling company The Reclamation Group says that, on account of the already installed increased consumer capacity and the advent of new melting facilities already in the pipeline, over the next 12 to 18 months, a free-market situation will once again prevail within the borders of South Africa, which could and should drive scrap metal prices back to current levels and perhaps even beyond.

Like most commodities, pricing drivers for scrap metal are determined by the economic principles of supply and demand. Initially, the short-term excess could drive prices lower, but not lower than a level where it is no longer commercially viable to collect scrap metal, as the consuming industry cannot afford for the flow of scrap to dry up, adds The Reclamation Group chairperson Dave Kassel.

Further, the company highlights some of the good proposals set out in the Department of Trade, Industry and Competition’s (DTIC’s) recently proposed scrap metal export ban policy, including that an enhanced registration system and improved monitoring, policing and law enforcement will help to address the theft of and trading in stolen scrap metal.

The proposed policy will also support the supply of scrap metal to local industry at affordable prices, as well as the creation of downstream industrialisation or beneficiation, in line with the objectives of the Steel Master Plan. The policy would also contribute to the rebuilding of the South African economy, the company states.

Miraa exports to Somalia hit Sh1bn in three weeks (Business Daily)

Kenya has exported miraa worth Sh1 billion to Somalia in under a month since the resumption of trade coming as a major reprieve to growers who had been hit hard when Mogadishu imposed a ban in 2019.Head of Miraa Pyrethrum and other Industrial Crops Felix Mutwiri says the country has so far exported 375 tonnes of the stimulant in the last three weeks. Earnings were, however, slowed down by caps on the tonnage that Kenya is allowed to export to Somalia. Previously, Nairobi was allowed to sell 40 tonnes every day but currently can only ship a maximum of 19 tonnes in the same period.

“We have so far exported 375,000 kilogrammes (375 tonnes) since we resumed exports on July 24,” said Mr Mutwiri. The directorate has licensed nearly 48 traders for export of the commodity under the new miraa laws. Anyone who exports the crop without registration and a license is liable to a sentence of up to three years or a fine of up to Sh5 million under the new regulation. The directorate started issuing export licenses to miraa traders in July after bilateral talks between Kenya and Somali presidents resolved a long-standing trade tiff.

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.

Tanzania’s economy grows by 5.4 percent (The Citizen)

Despite the spillover effects of the war in Ukraine and lingering impact of Covid-19, Tanzania’s economy grew by an impressive 5.4 percent in the first quarter of 2022.This puts the country on track to achieving its 2022 growth target of 4.7 percent. Initially, the government had set itself a target of boosting economic output by 5.5 percent.

However, with the Ukraine war, which saw prices of fuel, cooking oil, wheat and fertiliser, among other essential items, rise due to disruptions of supply chains after the US and its allies imposed sanctions on Russia, Tanzania reviewed its GDP growth targets. Finance and Planning minister Mwigulu Nchemba said in Parliament in June that the country has revised its real GDP growth rate for 2022 to 4.7 percent. But latest data by the National Bureau of Statistics (NBS) shows that Tanzania’s quarterly GDP was at Sh34.9 trillion in the period from January to March, an increase from Sh33.1 trillion that was registered during a similar period last year.

Economist Humphrey Moshi said the positive momentum from the key economic activities coupled with government drive to foster investment ensures the achievement of 4.7 percent growth target and even higher.

Zambia pushes for innovation in agriculture to accelerate food security (Farmers Review Africa)

Zambia’s hosting of the 4th Mid Year African Union summit hosted in the capital Lusaka last July dubbed: “Strengthening Resilience in Nutrition and Food Security on the African Continent” has instilled a call innovative technologies and become the pivot for sustained food security. Inspired by resolutions from the Africa’s Heads of States and Governments summits in Equatorial Guinea capital, Malabo since 2003 to date coupled by the African Union meeting’s theme, Zambia wants to bolster production using innovations and become the continent’s food basket.

To address climate change and other shocks, President Hakainde Hichilema urges Africa to encourage innovation in member states and consider signing and ratifying the Africa risk capacity treaty and open up assistance channels in planning, preparing and responding to these shocks in a timely and cost-effective manner and redress food insecurity.

“We need to raise the levels of productivity in agriculture, emphasise on value addition through Agro-processing, accelerate research in agriculture, emphasise on and increase support to rural farmers whose livelihoods mainly depend on agriculture.” he said in his address to delegates while calling for reliable transport connectivity.

Creating Markets in Botswana - A Diamond in the Rough: Toward a New Strategy for Diversification and Private Sector Growth (World Bank)

Diamonds have been at the center of Botswana’s growth miracle for decade - but the urgency to diversify is stronger than ever. Although Botswana’s economy has undergone transformation over the past decades, the shift has been largely into non-tradable services, with limited gains in employment, income equality, and export diversification. In addition, Botswana’s high vulnerability to climate change, which affects all major sectors of the economy, underscores the need to strengthen Botswana’s response to climate factors as a basis for renewed, sustainable growth. A positive growth outlook and steps taken as part of the Coronavirus disease 2019 (COVID-19) crisis response should give the government new impetus to accelerate reforms.

Success in diversifying the economy will depend on the decisive implementation of structural measures to increase private sector participation in nonmineral exports and transformative sectors. The dominant role that the government of Botswana still plays in large parts of the economy, particularly through its footprint as a shareholder in companies in the corporate sector, is a critical constraint that inhibits the entry and success of private sector participants. Gaps in infrastructure, access to finance, and skills are additional key constraints to employment and productivity growth. A coordinated approach to financing entrepreneurship and policies to increase uptake of digital finance can help close the gap. Trade barriers are another key cross-cutting constraint for the private sector, and a greener path for the economy can be unlocked by facilitating improved trade in environmental goods and services (EGS).

Three key recommendations for the energy sector are as follows. The first recommendation is the fast tracking of instruments to facilitate investment in energy infrastructure development, including independent power producer (IPP) licensing, and procurement guidelines and processes. The second recommendation is the enhancement of the institutional capacity and governance model of the Botswana Energy Regulatory Authority (BERA). The third recommendation is the development of credit-enhancement and risk-mitigation strategies and supporting instruments to attract and mobilize private sector investment.

Angola Strengthens Regional Cooperation to foster trade (Energy Capital & Power)

With an agenda to diversify its economy, process more of its raw materials in country and increase trade with its neighbors, Angola has prioritized strengthening regional ties, leveraging global and regional organizations such as the United Nations, the Organization of the Petroleum Exporting Countries, the African Union, the Port Management Association of Eastern and Southern Africa, and the Southern African Development Community (SADC).

The Angolan government seeks to boost refining capacity for crude oil and other associated petrochemicals within Angola to supply an ever-growing SADC market. This it hopes, will not only ensure increased value creation for Angola but will also ensure supply security for Angola and the region as well as help to boost sectors like agriculture and power generation in the region that are dependent on by products like fertilizer and gas.

Nigeria: FG inaugurates committee to ban foreigners from direct trade with farmers (Daily Trust)

The Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, has said the inability to harness the potential of the non-oil sector for meaningful economic growth is why the federal government plans to stop foreigners from direct purchase of farm produce from farmers.

The Federal Executive Council (FEC) had in March approved a memo that would ban foreigners from purchasing farm produce directly from farmers. He said, “The exploitation of farmers by foreigners who come to Nigeria to mop-up agricultural commodities at the farm-gates and in turn offer farmers prices below market value has become a national problem. “The current practice of direct purchases of agricultural commodities at unfair prices by foreigners at our farm-gates poses serious dangers which include: reduction in farmers’ income, declining productivity in the agricultural sector, unemployment and insecurity.” The minister charged the committee to raise the implementation mechanism.

NPA plans new tariff for transshipment, transit cargoes (New Telegraph)

Nigerian Ports Authority (NPA) is planning to come up with a new tariff regime that will encourage transshipment and transit cargoes back to Nigeria. The Managing Director of the authority, Mohammed Bello-Koko, disclosed this in Lagos when the Minister of Transportation, Muazu Sambo, inspected the Lekki Port project.

He stressed that the Authority would procure Vessel Tracking System (VTS) for the Lekki channel and other port locations in the country, stressing that the NPA was in discussions with Lekki Port operators on African Continental Free Trade Agreement (AfCFTA). Bello-Koko added that approval of the minister on the tariff would be sought when concluded, stressing that the operationalisation of the port before the end of 2022 would help Nigeria take full advantages of AfCFTA.

He explained: “We are already in discussion with them on tariff on transit and transshipment cargoes, these kinds of cargoes are sensitive to tariff, it means that it is coming to this port before it gets to final destination. “This discussion is taking place and we would come back to the Honorable Minister of Transportation for necessary approvals that would encourage transit and transshipment cargoes back to Nigeria, this was happening at Tin Can and Apapa on the early days, but before because of the multiple checkpoints on the highway. “If transit cargoes come here, it would be loaded on smaller vessels from the mother vessels and moved to other countries, this would be of economic advantage to Nigeria.”

EU commits to strongly support Nigeria’s reform (WorldStage)

The European Union (EU) has said it was committed to strongly supporting Nigeria’s reform both at the federal and state levels. EU Ambassador to Nigeria and ECOWAS, Ms Samuela Isopi said this on Tuesday in Abuja at the United States Agency for International Development (USAID) State2State inaugural Policy Dialogue Series. The event had as its theme, “Post-State Fiscal Transparency, Accountability, and Sustainability (SFTAS): Incentivising Reforms.”

“At their core, reforms encourage transparency, accountability, fair and efficient distribution of resources and help countries make the most of their human and economic potentials. “For Nigeria, reforms are important in order to capitalise on the country’s many endowments, mineral resources, and human capital, which is especially represented by its young population.

Nigeria to export 99% of goods duty-free to UK from 2023 – High Commission (Businessday)

Develop resilient systems, policies to absorb economic shocks – Prof. Quartey (The Business & Financial Times)

Director of the Institute of Statistical Social and Economic Research (ISSER) at the University of Ghana, Professor Peter Quartey, has urged government to develop resilient systems and policies to absorb some of the economic shocks that are posing difficulties in the country.

He said though the economy will continue to face challenging times for a while, there are prospects ahead depending on how well and smartly government tackles its domestic policies. “We are in challenging times. However, we have to fashion-out resilient systems and policies to absorb some of the shocks. Unfortunately, our economy remains fragile; and therefore we have not been able to accommodate shocks from the global happenings which affect us very well.

African trade and integration

Mene, AfCFTA scribe, urges member-states to domesticate continental trade treaty (Businessday)

African countries have been charged to urgently domesticate the provisions of the African Continental Free Trade Area, (AfCFTA) treaty to fast-track the continent’s economic progress. Secretary-General of the AfCFTA, Wamkele Mene made the call recently in Accra, Ghana at the maiden edition of the Ghana Trade Policy Enlightenment Summit for Foreigners, GaTPES2022. GaTPES2022, which was held under the theme ‘Helping foreign businesses to better navigate the trade policy landscape’, was organised by Ghana’s premier travel company, Standard Travel and Tour, STT.

Mene urged state-parties to the AfCFTA agreement to use its provision to build their economies and transform lives. “The agreement, which is the treaty, needs to be translated into laws; and those laws are then used by the business person in order to do business, and to put money in the pockets of the business person, and to put money in the economy of the country at large,” Mene stated.

AfCFTA post implementation impact on tax revenue mobilisation (The Business & Financial Times)

Experts adopt report recommendations to implement regional industrial policies (UNECA)

Experts from the Economic Commission for Africa (ECA), Sub-Regional Office for Southern Africa (SRO-SA) and the Government of Zambia held a two-day National Action Planning workshop from 10th to 11th August 2022 on the alignment and harmonization of regional and national frameworks on industrialization. The major objective of the event was to develop action plans on promotion and implementation of regional and national industrialization policies for inclusive and sustainable development in Southern Africa.

Tracking gender progress in SADC – as region launches gender and development monitor (SADC)

SADC Member States using the Proportional Representation electoral system combined with quotas have a higher representation of women in Parliament, while those using the First Past The Post system produce the least desirable results. This is one of the key findings of the SADC Gender and Development Monitor 2022 that was launched here in Kinshasa, the Democratic Republic of Congo ahead of the 42nd SADC Summit of Heads of State and Government scheduled for 17-18 August.

According to the SADC Gender and Development Monitor 2022 using official data submitted by member states, Eswatini and Botswana are at the bottom of the SADC regional gender table in 15th and 16th place and have the lowest representation by women in the National Assembly with just 12.2 percent and 11.1 percent respectively.

The SADC Executive Secretary, His Excellency Elias Magosi said gender equality in the region is anchored in the Regional Indicative Strategic Development Plan (RISDP 2020-2030) as well as other regional documents such as the SADC Gender and Development Protocol that was revised and amended in 2016. The SADC Gender and Development Protocol is an instrument for gender equality and women’s empowerment in SADC Member States.

Blinken attaches security, rights to conditions for trade with Africa (The East African)

Washington says it is interested in supporting trade and environmental conservation in the Democratic Republic of Congo and Rwanda, as long as both countries can tie loose ends on security and civil liberties. Last week, US Secretary of State Antony Blinken toured Rwanda and DR Congo, where he raised the matter of the M23 rebels and allegations that Kigali has funded the group to attack civilians and military bases in DR Congo. Kigali denies the charge.

At a joint press briefing last Thursday with Vincent Biruta, Rwanda’s Foreign Minister, Blinken said Washington supports “African-led mediation efforts” that are being led by Kenya and Angola, to bring peace, security, and stability to the eastern Congo. He said the funding of rebel groups should stop.

DR Congo Foreign Trade Minister Jean-Lucien Bussa said the DRC’s decade long exclusion from Agoa was a punishment. Bussa cited more than $623 million in exports to the US, mostly agricultural products, in 2010, compared with just $21 million in 2019 at the height of the ban. “This trade between the DR Congo and the US amounted to about $100 million during the exclusion while Angola trades over $2 billion with the US state, South Africa around $3 billion and Nigeria trades up to $6 billion,” according to the new DR Congo Chamber of Commerce.

US policy to tackle climate change, boost investments (The East African)

The US says its future co-operation with Africa will focus on trade, and investment to reinvigorate its waning influence on the continent, and has also pledged to boost digital initiatives, fight climate change, and deliver Covid-19 vaccines.US Secretary of State Antony Blinken unveiled the strategy last week in South Africa during his five-day tour of sub-Saharan Africa that included earlier visits to DR Congo and Rwanda. Blinken says Africans must choose their partners well as the US competes for influence on the continent with Russia and China.

“It’s a strategy that reflects the region’s complexity – its diversity, its power and influence – and one that focuses on what we will do with African nations and peoples, not for African nations and peoples,” Blinken said.

But during his trip, Blinken downplayed criticism of the US, that it had ignored Africa over the past decade, lacked a coherent policy on how to engage the region, and was instead now keen on the relationship to counter increasing Russian and Chinese influence.

Google backs Kenyan e-logistics company Lori Systems to help bring digital transport management to the African continent (Business Insider Africa)

Lori Systems, the e-logistics company digitising haulage and providing shippers with solutions to efficiently manage their cargo and transporters, is today announcing an investment from Google. This new investment is the third from Google’s $50 Million Africa Investment Fund, which CEO Sundar Pichai announced in October 2021. It comes off the back of the launch of Google’s first product development centre on the continent, in Nairobi, Kenya, the city where Lori Systems first launched.

Named by the Financial Times earlier this year as Africa’s seventh fastest-growing company, Lori Systems has helped thousands of shippers and carriers move over $10B of cargo across the continent since its founding in 2017. A pioneer in e-logistics in Africa, Lori Systems lowers the cost of goods by eliminating pain points along the cargo journey: seamlessly connecting shippers to transportation, providing shippers with solutions to efficiently manage their cargo and transporters, and digitising their entire transport operations from sourcing transportation to documentation and payments.

According to Knight Frank’s Logistics Africa report, 75% of the price of a product in Africa is attributed to logistics (compared to just 6% in the U.S.). On the continent, logistics operators face a host of problems, from fragmented supply and demand markets to inconsistent pricing, paper documentation and little or no access to financing.

Jean-Claude Homawoo, Lori Systems Co-founder & CPO, comments, “In recent years, the global logistics industry has seen much innovation. However, global supply chains are in dire need of modernisation, with technologies yet to reach a critical scale. On the continent, the African Continental Free Trade Area (AfCFTA) is expected to lead to an 81% increase in intra-African trade, providing a $21.9 Billion opportunity in untapped trade potential that the 54 ratifying countries are hoping to capitalise on over the next five years. Logistics is key to unlocking this opportunity.”

Global economy

A World in Crisis Needs Both Trade and Aid (Inter Press Service)

We are in the toughest period the world economy has faced since the creation of the multilateral system more than three-quarters of a century ago. A quadruple shock of COVID, climate change, conflict and cost-of-living has undone years of hard-fought development gains. As financial conditions tighten, even countries that had seemed on track to prosperity and stability now stare into the abyss of debt distress, fragility and uncertainty about the future. Coordinated, multilateral action is necessary to tackle the crises we face. Both aid and trade have key roles to play in reversing the impacts of this quadruple shock and putting the world back on track to achieve the Sustainable Development Goals.

To guide aid and trade towards a better world, policymakers need to pivot in three fundamental ways. First, make trade greener. Second, make trade more inclusive. Third, make trade more connected.

WCO Secretary General highlights Customs contribution at the LLDC Ministerial Transport Conference in Turkmenistan (WCO)

At the invitation of the Government of Turkmenistan and the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), the Secretary General of the World Customs Organization (WCO), Dr. Kunio Mikuriya, participated through video messages at the Ministerial Transport Conference of Landlocked Developing Countries (LLDCs) in Turkmenbashi, Turkmenistan, on 15 and 16 August 2022. He stressed the importance of Customs and the contribution of the WCO in improving border procedures to support transport infrastructures and associated financing for better connectivity at borders for transit.

In his opening speech, Dr. Mikuriya explained the WCO instruments in support of trade facilitation, such as the Revised Kyoto Convention (RKC), and mentioned the importance of political support, as recently demonstrated by Turkmenistan in ratifying the RKC. He also mentioned other WCO tools such as the Transit Guidelines and the related Compendium of best practices that illustrated Members’ good practices. He expressed the WCO’s commitment to providing capacity building support to implement its standards and working with its partners, in line with the current and future international framework to support LLDCs and the Sustainable Development Goals.

Additional U.S. Contribution to the World Food Programme (US Department of State)

We announced today that, through USAID’s continued partnership with the World Food Programme (WFP), the U.S. Government will contribute more than $68 million to support the procurement, transport, and storage of up to 150,000 metric tons of Ukrainian wheat to address acute food insecurity. This sum represents the latest in more than $5.4 billion in humanitarian contributions from the United States this fiscal year. The purchase of 150,000 metric tons of wheat builds on an initial WFP shipment of 23,000 metric tons of Ukrainian wheat and will support the humanitarian response in the Horn of Africa, where a historic drought is pushing millions of people to the brink of starvation.

While the resumption of exports from Ukraine’s Black Sea ports is a positive step in addressing the needs of food insecure countries, these shipments must continue so that the millions of tons of food trapped in the country can reach markets and help feed the world’s most vulnerable.


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