Local

ICYMI: South Africa: Ministers are invisible bottleneck in customs duties decisions (The Africa Report)

Companies seeking either relief on customs duties in the absence of local suppliers, or their imposition to protect local industry, face an “opaque” process with no clear timetable or information requirements, MacKay says. MacKay’s company XA Global Trade Advisors has published its first Open Cases Report on the issue. South Africa collects around 55b rand (US$3.3bn) a year in customs duties, and more than 5% of that is tied up in the “cost of indecision,” the report says. The state misses out on collecting R1.25bn in duties that would have been received if higher duties were agreed to and implemented on time, while a further $2bn is collected in duties for goods which are not made locally.

Agri leaders pleading while restrictions pile up (Food for Mzansi)

It’s been a week of “banning” shocks for Mzansi’s farming sector. While most agri leaders have contended with a ban on cattle movement to stop foot-and-mouth disease in its tracks, a ban on vegetable exports to Namibia and Botswana have them pleading for intervention. Citing the protection of their own production, the neighbouring countries took a unilateral decision to block South African veggie crops such as peppers, tomatoes, cabbage, beetroot, and potatoes from crossing their borders. Agri SA now says that it has written to agriculture, land reform and rural development minister Thoko Didiza to request her urgent intervention. “With the jobs and revenue at stake, government must immediately respond to this unjustified action in violation of the Southern Africa Customs Union Agreement,” the organisation says. It adds that the sudden measures are even more severe considering that farmers have done nothing wrong. Also, Botswana only plans to relook the restrictions in two years’ time, when they might expand the list of banned commodities.

Forum aims to revive domestic aviation (New Era)

The Namibia Airports Company (NAC) says it is determined to champion the narrative, lead the charge toward the transformation of the Namibian aviation industry and position it as a driver for a thriving domestic economy. Last week, NAC board chairperson Leake Hangala said the national airport operator is engaging government to see how they can improve the country’s airports infrastructure. This engagement includes looking at the aprons and taxiways at Hosea Kutako International Airport and Ondangwa airport, respectively, as well as building new terminal buildings at Katima Mulilo and Rundu airports.

Hangala made these remarks last week during the launch of the Namibia Aviation and Connectivity Forum. The forum is slated for 16 to 18 November 2022 and is in the follow-up of this event that a white paper and subsequent structural and policy reforms will be generated.

‘Value-addition to steer export earnings’ (Chronicle)

The re-opening of the Cold Storage Company (CSC)-Boustead Beef, should energise exportation of value-added beef and leather products, which will enhance the country’s foreign currency earnings, ZimTrade chief executive officer, Mr Allan Majuru, has said.

Under the National Development Strategy (NDS1-2021-2025), Zimbabwe is focused on expanding its domestic industrial output in which value addition and beneficiation are a game-changer in delivering export-led economic growth.

“If you look at the beef and leather value chain, and look at NDS1, the target is to grow output from around 50 000 tons of beef to around 110 000 tons by 2025. That is where we need to go,” he said. Despite the historic barriers such as Foot and Mouth Disease (FMD) that hit the sector in recent years and the illegal Western sanctions, which crippled beef exports in the past, Mr Majuru said CSC rebound was good news for the economy. “We, are glad now that it (CSC) is now operating again. If you look at the beef and leather value chain globally, it hovers above US$100 billion plus and that’s a lot of money,” he said.

Weakening shilling pushes up Kenya’s debt by $4.1b (The East African)

Kenya’s depreciating currency cost the country nearly half a trillion shillings on the external public debt burden alone, eroding the government’s efforts to pay external lenders. The shilling, which continues to present a challenge to the economy mainly in servicing of external debts and importation of goods by businesses, devalued by 9.3 per cent from 107.85 units by end of June 2021 to 117.83 by June 30 this year. A new report by the National Treasury shows that while Kenya’s external debt stock – in dollar terms – reduced by five per cent from $37.1 billion to $35.3 billion in the year to June 2022, in Kenyan shilling terms it increased by Ksh156 billion ($1.3 billion), to Ksh4.16 trillion ($34.7 billion).”The increase in the public debt is attributed to external loan disbursements, exchange rate fluctuation and the uptake of domestic debt during the period,” Treasury stated in the 2021/22 last quarterly budget and economic review report. The increase in the external debt burden was despite the government’s spending to service loans from other countries, multilateral lenders and foreign commercial banks.

Taxes spoil the party for miraa exporters (Business Daily)

Miraa traders may appear to be making a fortune based on the overall export earnings since the opening of the Somalia market. However, numerous taxes and commission that they pay have dampened their earnings. They are paying a commission of $4.5 (Sh635) for every kilogramme of miraa that is exported to Somalia. The money is collected by brokers at the Jomo Kenyatta International Airport before they are allowed to export. The exporters are also paying $5 (Sh595) as airfreight and handling charges once the consignment is delivered to Mogadishu.

Nyambene Miraa Trade Association (Nyamita) Chairman Kimathi Munjuri said these deductions are chewing a significant portion of their profits. “With all these deductions, the landing cost of miraa per kilogramme is $23 (Sh2737) while we sell the same at $25 (Sh2,975) as the best price meaning that we make a profit of Sh238 per kilogramme,” said Mr Munjuri.

Two link roads connecting Kenya to South Sudan to cost Sh22.6bn (Business Daily)

Two link roads connecting Kenya and South Sudan will cost at least Sh22.6 billion as the roads agency seeks to open up the northern corridor. The Kenya National Highway Authority (KeNHA) says in documents seeking approval from the National Environment Management Authority (Nema) that the first link road, the 142-kilometre from Morpus to Lokichar will cost Sh16 billion. The section stretching from Lesseru to Kitale, a distance of 55 kilometres will cost Sh6.6 billion.

“It’s one corridor but with different lots each with a specific length. It will be built at Sh22.6 billion but the actual cost will depend on the bidders in the tender process. Engineers just give a rough estimate,” Samwel Kumba, KeNHA deputy director of corporate communication said.

Potatoes: What higher import costs mean for consumers (Food for Mzansi)

Farmers have been battling to get good prices for their potatoes due to potato dumping from Belgium, Germany, and the Netherlands. Thabile Nkunjana, an agricultural economist at the National Agricultural Marketing Council, unpacks:

South Africa’s imports of frozen potato chips from the three countries increased by 88.6% between 2020 and 2021 to reach 29 635 tons. Moreover, in the first five months of 2022, the imports from the three countries grew by 114% compared to the corresponding period in 2021. This sharp rise in imports can be attributed to the expiration of anti-dumping tariffs in the first quarter of 2021 which coincided with high potato harvest in the European countries. In the roughly 30 000 tons imported in 2021, Belgium accounted for 67%, Netherlands (17%), and Germany (10%).

Economic recovery: Focus on homegrown solutions, reduce E-levy – GNCCI (The Business & Financial Times)

Any form of support from the International Monetary Fund (IMF) will only provide temporary relief to the current economic challenges, the Ghana National Chamber of Commerce and Industry (GNCCI) has said – urging government to focus on homegrown solutions while reducing the highly controversial electronic levy.

Government is seeking a balance of payment support from the Bretton Woods institution to deal with its mounting economic crisis. However, GNCCI believes that the Fund’s assistance will not provide a permanent solution – just like previous 16 times that the country has sought its support. Rather, it is urging government to be more inward in its approach to overcoming the current economic challenges by focusing more on home-grown solutions: such as value addition, production of goods, optimising local content policies and revenue mobilisation.

---

African trade and integration

SADC leaders criticise US law seeking to punish African countries that trade with Russia (News24)

The Southern African Development Community (SADC) says the United States’ plan to implement measures to punish African countries that trade with Russia was in bad taste.The US House of Representatives passed the Countering Malign Russian Activities in Africa Act on 27 April by a huge, bipartisan 419-9 majority. The act is awaiting the approval of the Senate, after which US President Joe Biden will sign it into law.The law seeks to sanction African countries that trade with Russia amid the war in Ukraine.

One major highlight is that African countries should not buy oil from Russia, because, according to the US, money generated from oil exports funds the war.But because Russia is a global superpower in food security, African countries are allowed to buy grain from it as long as it’s not stolen from Ukraine.

SADC Reaffirms Support for Regional Peace, Sustainable Development (Business Post Nigeria)

Besides pursuing concrete investment projects and running a joint business with local partners, the United Kingdom now plans to considerably cut taxes from around 99 per cent of goods imported from Africa. At least, after its historic UK-Africa Investment Summit held in January 2020, the UK has increased its support for business on the continent, a step that aims at strengthening aspects of the planned economic cooperation with Africa. Monitoring developments and random research after the summit, we have noticed different priorities – all of which are supporting and strengthening economic partnerships in a number of countries on the continent. The significance of these is to help unlock opportunity, spread prosperity and thus transform lives in Africa.

New vision for development in East Africa will build crisis resilience (EconoTimes)

Facing resurgent conflict, fuel inflation and food shortages, the heads of state of the East African Community (EAC) rallied around a new vision of regional development at their latest summit in Tanzania in late July. Leaders agreed on the importance of unlocking the vast economic potential of its Common Market, stretching from the Indian Ocean to the Atlantic following the Democratic Republic of the Congo (DRC)’s recent accession to the bloc, by ramping up intraregional trade and foreign investment.

This revolutionised Common Market will complement the EAC’s traditional growth model, based on the extraction and export of its raw materials, with a diversified regional economy driven by strong homegrown industries. This more autonomous economy, founded on thriving transport, agriculture and renewable energy sectors, will help build the region’s resilience to external shocks while creating local jobs and fuelling East Africa’s green transition.

Paired with improved regional transport connectivity, a boom in agricultural production would help protect the region from food shortages and inflation triggered by the war in Ukraine and climate change-linked drought.

Building Member States Institutional Capacity to Eliminate Trade Barriers (COMESA)

Four Member States of COMESA have received capacity building support to their institutional frameworks for elimination of Non-Tariff Barriers (NTBs) on Common goods, in compliance with the requisite COMESA Regulations. The regulations define the roles and responsibilities of the NTBs institutions to deliver on the intended objective to eliminate barriers across COMESA region and increase intra-COMESA trade.

Madagascar is the latest Member State to receive training to support the development of a National Strategy for Elimination of Non-Tariff Barriers (NTBs). Similar trainings have been conducted in Zambia, Zimbabwe and Malawi while Egypt and Tunisia are the next in line.

The trainings follow an earlier decision by the COMESA Council of Ministers to the COMESA Secretariat to provide technical support to Member States to implement national NTBs elimination programmes which are premised on sound national NTBs elimination strategies. COMESA Regulations for the Elimination of NTBs provide legally constituted tools for reporting, monitoring and addressing NTBs, the institutional arrangements to manage the NTBs elimination process as well as procedures followed to tackle situations that create NTBs.

Survey announcement: Formulation of the African Development Bank Group’s new Ten-Year Strategy (AfDB)

The African Development Bank Group has launched preparations for a new Ten-Year Strategy (TYS 2023-2032), which will supersede its current TYS (2013-2022). The next TYS is expected to provide a vision for how the Bank plans to build on its significant achievements over the last decade to accelerate Africa’s inclusive, green and resilient growth and development. As part of the formulation of its new Ten-Year Strategy, the Bank is conducting external consultations to ensure that the specific needs and expectations of its clients are well understood and captured. The consultations will also provide an opportunity for stakeholders to offer a variety of perspectives to shape the Bank’s strategy to transform Africa. The consultations will also offer opportunities to deepen existing partnerships and establish new ones, as the continent faces an unprecedented set of challenges in the coming decade.

Afreximbank, Ecobank Togo, and BIA Togo finance the construction of the Adétikopé Industrial Platform (Afreximbank)

The African Export-Import Bank (Afreximbank) as Lead Manager, the Togolese subsidiary of the Ecobank Group and BIA Togo, Attijariwafa Bank Group, have signed a credit agreement with Plateform Industrial Adétikopé SAS (PIA) for the construction of the infrastructure of the Adétikopé Industrial Platform which covers a total area of 400 hectares. This agreement, worth a total of 145 million euros (more than CFAF 95 billion), is part of the support for the socio-economic development of Togo through the implementation of the new government roadmap 2021-2025.

The objective of the new government roadmap 2021-2025 is to make Togo a modern state with a sustainable and inclusive economic growth. Creating more than 35,000 direct and indirect jobs, the Industrial Platform of Adétikopé aims to promote attractiveness and attract investors to develop industrial and multi-sectorial activities, including the processing of agricultural products (cotton, soybeans, cashew nuts, etc.) and local mining. The project in its phase 1, houses an industrial zone; a logistics zone; a commercial & residential center; and a world-class infrastructure. It will also develop in phase 2, agricultural processing industries (cashew, pineapple, corn, mango, sesame) and modern infrastructure.

“Afreximbank considers the industrial platform as an initiative in line with its objectives of promoting and facilitating the development of African industrialization and exports. This project represents Afreximbank’s fourth project in the Industrial Parks space with the Arise Group (two projects in Gabon and one in Benin), a collaboration that today represents solutions totalling approximately €257 million,” said Oluranti Doherty – Director of Export Development, Afreximbank.

Latest US strategy highlights Africa’s place in the new world order (The Mail & Guardian)

Under the harsh, uncompromising glare of superpower realpolitik, the African continent is apparently only significant for three reasons. These are helpfully outlined, in a blue highlights box, in the front of the US’s shiny new “Strategy Toward Sub-Saharan Africa”, which was released this week by Secretary of State Antony Blinken. First, Africa’s people: Africans will be 25% of the world’s population by 2050. In other words, they are the future workforce of a world where the populations of so many countries are ageing fast.

Second, Africa’s geography: The continent is home to 30% of the world’s critical minerals and its second-largest rainforest. There can be no sustainable future without access to those minerals, many of which are crucial to renewable energy technologies. Similarly, the health of the planet depends on the Congo rainforest remaining undeveloped. Third, African countries are the largest voting bloc in the UN, accounting for about 28% of the vote.

---

Global economy

UN chief ends Europe trip with visit to ‘vessels of hope’ (UN News)

Completing his trip to Europe on Saturday, UN chief António Guterres oversaw the departure of two ships involved in the Black Sea Grain Initiative, a UN-brokered operation to bring urgently needed hunger relief to the Horn of Africa.

In a press conference with Minister Akar, the Secretary-General thanked the government of Türkiye for their pivotal role in the Black Sea Grain Initiative. The collaborative work of the teams sitting around the table at the JCC embodies what we can achieve with political will, top operational expertise, and collective effort, Mr. Guterres told journalists. He described the ships that he had just seen in the Marmara Sea and Istanbul is only the more visible part of the solution. The other part of this package deal, he said, is the unimpeded access to the global markets of Russian food and fertilizer, which are not subject to sanctions. 

“Without fertilizer in 2022, there may not be enough food in 2023,” said Mr. Guterres. “Getting more food and fertilizer out of Ukraine and Russia is critical to further calm commodity markets and lower prices for consumers.”

What would BRICS expansion mean for emerging markets? (Atalayar)

As emerging markets recover from the COVID-19 pandemic and face financial headwinds due to interest rate hikes in the US, the BRICS group – Brazil, Russia, India, China and South Africa – is looking to expand its membership to tackle shared challenges.

At the 14th BRICS Summit held in July, China, Russia and India discussed the potential entry of Egypt, Saudi Arabia and Turkey, which are reportedly preparing applications.

Reflective of the potential that enhanced unity and trade among emerging markets can facilitate economic growth, calls for the expansion of the BRICS began in 2013 and received renewed impetus when China was president of the grouping in 2017. However, these initiatives have failed to gain traction.

Critics argue that this current push for BRICS expansion is driven by China’s intent to gain a larger footprint in the global economy, as it is once again president of the grouping. Whereas Russia and South Africa support expansion, Brazil and India have shown little enthusiasm.

Nevertheless, the urgency of solving global challenges of food security and climate change may outweigh such concerns and encourage cohesion among prospective BRICS members.

UN, global orgs call for increased Cotton Made in Africa investments (just-style.com)

The cotton conference, which was organised by the World Trade Organization (WTO) and UN Conference on Trade and Development (UNCTAD) in July urged donors to create partnerships and make investments that will move Africa’s cotton sector forward.

The organisations at the conference announced a “Call for Action” on cotton that recognises the challenges hampering cotton-producing LDCs to compete. The Call for Action commits signatories to continue seeking solutions for the Cotton-4 countries to improve their competitiveness, achieve higher yields and greener production, and add value both to fibre and by-products.

At the call for action signing ceremony, which took place during the conference, she welcomed Afreximbank’s pledge and said: “Cotton is more than a commodity. It’s more than just transforming fibre into apparel or home textiles. Cotton is a way of life and a road to sustainable development.”

“It is a way to address broader development concerns to promote decent jobs and environmentally friendly, sustainable, and fairly priced products.”