Building capacity to help Africa trade better

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OECD report calls for caution (SAnews)

South Africa faces the threat of reversing social gains if it does not adequately address potential future shocks. This is if the country does not address challenges in health, infrastructure and education. This warning was fired by the Organisation for Economic Co-operation and Development (OECD) while presenting the country’s 2022 economic survey.

Addressing a virtual media briefing on Thursday, OECD Acting Chief Economist, Álvaro Pereira, said these were long term and structural challenges that need to be addressed. He said: “If not tackled adequately, they could threaten the social gains achieved so far. And this will require improving considerably the efficiency of public spending through better public procurement and the management of public funds.” In the medium to long term, he says, tax revenue mobilisation will be critical, saying lifting tax revenues will be necessary to restore the sustainability of public finances and to finance growth in housing reforms.

Beyond this, Pereira said the country faces a long-term challenge of low productivity.

South Africa urged to consider its contribution to the global battery value chain (Engineering News)

Batteries are fast becoming the core of modern energy systems and more sustainable economies, underpinning the implementation of smart grids and minigrids, while fostering the rollout of renewable energy and e-mobility, and yet, South Africa’s involvement in the battery value chain remains limited. Trade and Industrial Policy Strategies chief economist Gaylor Montmasson-Clair questions whether South Africa will be an importer of batteries only, or if it will manage to become a part of the value chain.

Can Namibia turn oil into prosperity? (GIS)

The recent discovery of large reserves of crude oil off the coast of Namibia has fueled speculation about the fate of the sparsely populated country, whose economy has been largely dominated by mining, agriculture, fishing and tourism.

Namibia and South Africa are two of the world’s most unequal societies in terms of income and wealth distribution, with Gini index scores of 59.1 and 63, respectively. Together with Zambia, they place three members of the Southern Africa Development Community (SADC) among the four most unequal countries globally.

The oil discovery thus cements Namibia’s place among those resource-rich countries in the region, which has a history of conflict over assets like minerals, oil and gas. It has led to talk about whether oil exploration could help Namibia double its gross domestic product (GDP) by 2040. And it could shape not only the country’s own development but also benefit the SADC as a whole, with successful exploration and management of oil revenue in Namibia delivering value to other jurisdictions in the region.

End of fuel subsidy to increase food prices – Tegemeo Institute (The Star)

Food prices are expected to increase in October if the fuel subsidy comes to an end as recommended by the International Monetary Fund (IMF). Timothy Njagi, a senior researcher from Tegemeo Institute has said if the Government adapts the IMF recommendation to end fuel subsidy by October this year, the move is likely to push the cost of food up.” Between now and October, prices of food, especially maize, are likely to stabilise due to the little harvest from the South Rift. But the key determinant of the cost of food will be fuel. The end of the subsidy will have a ripple effect,” he said.

IMF report stated that the authorities intend to continue gradually realigning domestic to global fuel prices in FY2022/23 so as to eliminate the fuel subsidy by October 2022.

While speaking to the Star on Wednesday during an interview, Njagi said the IMF recommended that the Government puts to an end the fuel subsidy as of October 1, 2022, because it was not sustainable.

“The move will affect many things including the cost of processing food and electricity and if this goes up, you can expect food prices to continue increasing,” said Njagi. “But if the Government manages to get funds to maintain the subsidy this will prevent the prices from going up,” he said.

Uganda pushes for internet cuts to promote digital financial services (The East African)

The Ugandan government is pushing for lower internet costs to promote the usage of digital financial services across the country in a bid to increase financial inclusion for vulnerable groups. According to the Ministry of ICT and National Guidance, the country will, by the end of this year, reduce the cost of data it provides through the national backbone infrastructure fibre by more than half from $70 per Mbps per second to $30.This, the ministry says, will support the growth in ICT innovations, digital financial services, communication, e-government services among others.

“We are talking about purely government internet. Once we cut down the cost at which government is selling to services providers, then they will automatically also reduce the cost that the end user will be paying and we think this will help in our efforts to digitise our economy,” Mr Chris Baryomunsi, the Minister for ICT and National Guidance, told The East African on Wednesday.

The government has completed a $75 million National Data Transmission Backbone Infrastructure and e-Government Infrastructure Project.

Substandard Goods: SON Seeks Better Collaboration To Shield Local Infant Industries (Leadership)

The Standards Organisation of Nigeria (SON) has advocated the need for improved collaboration between the agency and the players in the Nigeria manufacturing sector so as to redefine the process of production of goods to meet acceptable standards in the country. According to SON, only the manufacturers play according to the set standards to support the fight against substandard goods that Nigerian goods can compete favourable at the international market and stand the test of time.

The director General SON, Malam Farouk Salim, gave the assertion on Tuesday at the 51st annual general meeting in Lagos organised by the Manufacturers Association of Nigeria (MAN) with the theme, Standards: An imperative for competitive manufacturing in a continental and Global Market.

He explained that the agency will continue to ensure that local manufacturers are protected against importation and influx of fake and substandard goods in the country. SON asserted that it is determined to assist businesses and local manufacturers to become competitive and successful through it’s various standardisation and quality assurance efforts.

On his part, the national president of MAN, Engr Mansur Ahmed, assured that, the manufacturers will continuously collaborate with SON and ensure that any of its members that doesn’t sustain with the set standards is brought to book. Engr Ahmed implored the local infant industries to adhere strictly to the standards so as to give their products a face in the African Continental Free Trade Agreement AfCFTA.

Nigeria seeking extra $410bn for energy transition plan including gas (Engineering News)

Nigeria needs at least $10-billion in additional funding per year to reach net zero by 2060 in a plan that would involve gas as a transition fuel, officials said while launching the nation’s energy transition plan on Wednesday. The effort aims also to expand power access to all of Nigeria’s 200 million citizens by 2030, a move officials said was essential to ensure a fair transition for developing nations.

Nigeria: Stakeholders endorse African Development Bank country strategy, urge greater engagement with Diaspora (AfDB)

Representatives of Nigeria’s Diaspora, national networks, and youth and women groups have hailed the African Development Bank for supporting transformational projects in the country and across Africa. The African Development Bank forum, which took place in early August, is part of the institution’s ongoing mid-term review of its country strategy for Nigeria. Over two days, more than 200 participants received updates on the bank’s work in Nigeria. They discussed projects in agriculture, on the digital economy, the creative industry, trade and private enterprise.

Opening the forum, the African Development Bank’s Director General for Nigeria, Mr. Lamin Barrow, expressed hope that the interactive forum would allow for frank exchanges on the bank activities, projects and programs in Nigeria. Barrow stressed the bank’s commitment to participation by women, youth, the diaspora and other key groups in processes that inform the institution’s initiatives in its regional member countries. “Stakeholder groups play key roles in driving innovation and entrepreneurship to unlock opportunities in various sectors, including agri-business, industry and the digital economy,” he said.

African trade and integration

Existential priorities for the African Continental Free Trade Area (UNECA)

This book aims to guide and assist implementation of the African Continental Free Trade Area (AfCFTA) over the next 10 years. Each chapter considers a key area, raises issues for attention and points to possible ways forward. The introduction highlights the progress as of the end of 2021 in operationalizing and implementing the AfCFTA, while identifying the developmental challenges and existential threats ahead. The systems approach requires actions at the national, regional, continental and global levels. It involves continuous learning as a pivotal tenet of socioeconomic transformation and improvement. Lessons learned are continuously brought to bear on policy formulation and implementation. The Book has three parts. Part one has five framing chapters: Africa in the world, the architecture for Africa’s regional integration, two publics, economic integration, and from ratification to implementation. Part two covers energy costs, textiles and clothing, women and youth in trade, and the free movement of people. Part three considers digitalization, technology and innovation, and public health as critical areas during the next 10 years.

GITFiC to launch book on AfCFTA (News Ghana)

The Ghana International Trade and Finance Conference (GITFiC) will on September 20, 2022 launch its book on the African Continental Free Trade Area (AfCFTA) in Accra, Ghana. The Book: “Actualising the African Economic Vision-A Practical Handbook on the AfCFTA” has been on the drawing board for almost a year

“The manuscript has been reviewed by several authorities including the African Union. After an extensive peer review by the AU, the book has earned a two-minute video endorsement with a strong advocacy for Africa’s Educational Structures to embrace the book and same for every person wanting to do business on the African Continent going forward.

EABC calls for the removal of restrictions to boost trade in services in the EAC (EABC)

Mr. John Bosco Kalisa, EABC CEO has called for the finalization of regulations on Mutual Recognition of Academic and Professional Qualifications and a roadmap for the removal of restrictions to boost trade in services in the EAC bloc. Under the Common Market Protocol, EAC Partner States made commitments to liberalise seven priority service sectors, as follows: Business, Communications, Distribution, Education, Financial, Tourism and Travel and Transport.

Speaking at the Virtual Launch of the EABC Barometer on Trade in Services in the EAC, Mr. Kalisa elaborated that legally all restrictions in the liberalised seven service sector that were maintained by EAC Partner States in their schedule of commitment should have been removed by December 2015.

Mr. Kalisa said “The EABC Barometer shows a very positive trend, as EAC Partner States have committed to liberalise 92 new sub-sectors under the revised schedule of progressive commitment.” This lays the foundation to build an integrated EAC services market and will result into commercially meaning-full trade of services in the EAC bloc once implementation commences, Mr. Kalisa explained

The new sub-sectors added are in key sectors like business services (37); transport services (36) and financial sector (10), which are all critical as key sectors in their own right and as intermediate inputs in the manufacture of goods and production of other services.

Report: East African Single Currency Unlikely to Be Introduced by 2024 (Bitcoin News)

There are growing doubts about the regional economic bloc known as the East African Community’s ability to successfully launch a single currency by 2024, a report has said. One of the reasons for this is member states’ delays in meeting targets as set out in the roadmap.

Central banks from an African economic union, the East African Community (EAC) are reportedly unsure if plans to introduce a single currency for the region by the year 2024 will be realized. The central banks cite some member states’ failure to meet targets as set out in the roadmap as one of the reasons why the single currency is unlikely to take off as planned. As per a report in the East African, members of the six-nation East African Community hope that the envisaged common currency will help reduce the costs associated with converting currencies. There are also hopes the single currency, whose attainment is one of the EAC’s priorities for the period between 2022 and 2026, will eliminate the exchange rate volatility that comes with cross-border trading.

Meanwhile, in a communique reportedly released on August 22, the EAC confirmed that delays and other challenges meant the regional bloc cannot have a single currency by 2024 as planned.

East Africa’s manufacturers hit by costs and imports (Financial Times)

Many countries globally have pursued economic development through manufacturing and exports. In east Africa, for example, Kenya, Ethiopia and Rwanda have all sought to emulate approaches taken by South Korea or Mexico. However, manufacturing has recently gone backwards in many African countries, as local producers such as Osembo face being overwhelmed by rising costs, infrastructure problems that hamper logistics, high energy prices, unreliable power grids, tax and customs burdens, as well as cheap Chinese imports.

In Kenya — despite the country’s reputation as a freewheeling business environment — manufacturing has struggled to sustain a transformative rate of growth. As a sector, its share of GDP almost halved from a peak of 13 per cent in 2007 to 7 per cent in 2021, according to the World Bank.

Osembo cites high import taxes on supplies, customs bureaucracy and supply chain disruption among reasons to move manufacturing to Asia: “I am such a big believer in development, but also from a practical perspective, I need to be able to plug in the global supply chains.”

Rajan Shah, chair of the Kenya Association of Manufacturers and of Capwell Industries, a food processor, says that “low competitiveness, regulatory burden, and then tax unpredictability are probably the three major challenges”. He says corporate taxes and levies raise manufacturing costs by about 45 per cent. “If you compare that with other developed economies, that’s probably where they are — but, in a developing economy, where we are still building a middle-income class, it’s high.”

SADC steps up efforts to advance the Network of Double Tax Avoidance Agreements (DTAA) between Member States (SADC)

The Southern African Development Community (SADC) Secretariat has stepped up activities to facilitate negotiations of Double Tax Avoidance Agreements (DTAA) between Member States as part of the efforts to increase the network of DTAA and foster an aligned tax treaty policy across Member States. This will take into account developments both at regional and international levels, in particular, those related to Base Erosion and Profit Shifting (BEPS) issues. SADC Ministers of Finance and Investment approved the revised SADC Model on Double Taxation Avoidance Agreement and its Commentary at their meeting in Johannesburg, South Africa, in July 2018.To date, there are 59 DTAAs in force among SADC Member States.

Stakeholders Consult on Implementing the Regional Customs Guarantee Scheme in Zambia (COMESA)

A national consultative meeting on the implementation of the COMESA Regional Customs Transit Guarantee (RCTG) Scheme was conducted with key stakeholders in Zambia on Thursday 25 August 2022. The one-day session updated the stakeholders on the status of implementation and operations of the RCTG in the region and discussed issues and concerns raised about the Scheme in Zambia. The RCTG is a customs transit regime designed to facilitate the movement of goods under customs seals in the COMESA region and to provide the required customs security and guarantee in the transit countries.

COMESA Acting Secretary General Amb. Kipyego Cheluget who opened the meeting stressed the importance of having a common Customs Transit Bond Guarantee for Zambia and the region at large. “We have spent years discussing issues and concerns in implementation of the RCTG. The ten-year experience in the North and Central Corridor countries should give you comfort that SMEs are also beneficiaries of this scheme,” he said and called on importers, exporters, transporters, Clearing and Forwarding Agencies (CFA) to embrace the RCTG as it offers assured security for goods in transit.

He appealed for thorough discussion of the issues and concerns and objectively come up with a win-win proposal on how the RCTG Bond should be issued in the North-South Corridor countries.

Agricultural Development: Nigeria MP blames migration in ECOWAS states on food insufficiency (WorldStage)

A member of the Economic Community of West African State (ECOWAS) Parliament, Hon. Olujimi Biodun Christine has blamed migration in the sub-region on food insufficiency. Sen. Olujimi said if there was enough food in the sub-region the menace of migration would be greatly addressed.

“When you don’t have enough to eat, your family does not have enough to eat, they there is a problem, you need to migrate. But if there food sufficiency in West Africa we won’t have to be a part of this great migration that we all undertake.”

The MP speaking further called on ECOWAS states to empower women and youths to be more involved in Agriculture as a way of addressing food insecurity. She feels by so doing interests in white collar jobs will be drastically reduced and unemployment addressed.

She said, “I believe the youths and women are key to getting these things done. We need to encourage them, we need to give farm implements, we need to ensure that they are not going to use their physical strength to do it, we need to make sure that when they do it they get result and they are able to export and make the required foreign exchange which will spur them on to do better and greater things.

Free movement in West Africa: the culture of mobility still matters despite challenges (The Conversation)

ECOWAS is widely considered the most integrated of the eight regional economic communities on the continent. But it has failed when it comes to enabling the free movement of people. Its free movement protocols have never been fully implemented. At the same time, the original aim to improve mobility appears to be changing to one of control over mobility.

formal free movement is undermined by several regional and national hindrances. These include weak ECOWAS institutions, divergent national interests among individual member states and infrastructural challenges like accessing ID cards, as well as external influence from the European Union.

These implementation problems however work in convergence with a practice of everyday mobility across borders. Understanding the complexities of movement is key to better understanding and supporting mobility that speaks to the regional realities.

‘Africa’s COP’ is unique opportunity for continent to take determined stand - African leaders urged (Myjoyonline)

Experts and analysts say a just transition that supports Africa’s efforts to address the climate emergency must be the focus of a united African perspective. The experts advise that COP 27, also known as ‘Africa’s COP’, is an exceptional opportunity for the continent to take a determined stand and force the rest of the world to fully address its concerns and back up previous and future commitments with actual action. They made this recommendation ahead of the next Conference of the Parties in Egypt (COP 27). The African Risk Capacity Group, a specialised agency of the African Union established to assist African governments to improve their capacities to better plan, prepare, and respond to extreme weather events and natural disasters, made the call at the recently held virtual seminar to facilitate effective dialogues on COP27.

Experts urged world leaders and negotiators to reach an agreement on a delivery mechanism for the USD 100 billion that richer nations had offered to help poorer countries deal with climate change.

Tech partnerships can realise Africa’s economic potential (Ventureburn)

Africa stands on the cusp of a tech explosion with several nations having achieved sustained growth in internet-driven GDP (iGDP) – in many cases doubling from 1.5% to more than 3% since 2012. As the digital transformation continues to make stride across Africa, it is clearing the way and opening vast swathes of potential for its nations, businesses, and citizens. Some experts put the economic growth in Africa at $180 billion, and if trends continue it could rise to $712 billion by 2025. The flow of trade into and out of the continent is integral to this growth, and as the African Continental Free Trade Area’s (AfCFTA) effects begin to be increasingly felt, the amount of trade among African nations is set to double.

According to the UN Conference on Trade and Development, Africa currently accounts for 2.9% of the world production, and 2.6% of world trade. Intra-Africa trade stands at 15.4%. If the ease of regional and international trade improves, this figure could be significantly higher. For this potential to be realised, however, it is critical for governments to work together with businesses, in private-public partnerships (PPPs).

The work the Nigerien government has conducted in conjunction with the country’s private sector stands as a testament to this. As a landlocked country, it depends on its neighbour’s infrastructure to import and export goods, which can lead to prohibitive costs.

Deployed over four years, Single Window included the roll-out of a state-of-the-art Port Community System, created specifically for Niger as a landlocked nation. With one single platform through which all stakeholders – international and domestic traders, banks, and various administrative government departments – have access, Niger’s import/export processes have been streamlined and sped up. The platform digitises the approval of licenses and permits for imported/exported regulated products and provides payment platform for trade documents.

Japan-led conference aims to reignite Africa’s recovery (The Japan Times)

The worsening effects of climate change, the socioeconomic fallout from the COVID-19 pandemic and the food security crises exacerbated by the Ukraine war are just some of the challenges facing African countries. To discuss solutions to these and other pressing issues, dozens of African leaders — as well as representatives of international organizations, donor countries, private companies and civil society — are expected to come together on Aug. 27 and 28 in Tunisia for the eighth iteration of the Tokyo International Conference on African Development.

Japan’s approach to development assistance focuses on Africans charting their own path forward in partnership with the international community, with observers saying that Tokyo seeks to differentiate its economic cooperation with the continent from that of China, which has long surpassed Japan as a business investor.

According to the Japan International Cooperation Agency, there are several unique points guiding Tokyo’s engagement with the continent. These include respect for Africa’s ownership, the promotion of self-help programs, a focus on people and human security, and the use of Japan’s experience and know-how.

“We believe the lessons of Japanese modernization can be of help to African countries today, so that they can create their own development policies and strategies while keeping their cultures and traditions,” JICA Vice President Ryuichi Kato said in an interview with The Diplomat.

Japan’s approach is mainly geared toward accelerating inclusive economic growth through innovation and private-sector engagement, deepening regional integration, ensuring debt sustainability and supporting quality education and infrastructure projects.

Why Japan is changing its approach to Africa from aid to FDI (Quartz)

The 8th Tokyo International Conference on African Development to shore up Japanese-Africa economic cooperation (AfDB)

Global economy 

Black Sea initiative Joint Coordination Center announces new route to export grain (ThePrint)

A new route to export grain under the Black Sea Initiative has been established from three Ukrainian ports, the Joint Coordination Center in Istanbul announced in a statement on Thursday. “The Joint Coordination Center (JCC) announced today a new route for merchant vessels going in and departing from the three Ukrainian ports of Odesa, Chornomorsk and Pivdennyi/Yuzhny under the Black Sea Grain Initiative,” the statement said, reported Sputnik. The new route is expected to be more efficient for the vessels to export the grain and will come into effect from August 26, the statement added.

The grain deal signed between Russia and Ukraine with the United Nations and Turkey has paved the way for the export of 22 million Ukrainian grains which remained stuck in three Black Sea Ports, becoming a “beacon of hope” for millions of starving people across the globe.

Millions of people in the world’s poorer nations that face an imminent danger of starvation breathed a sigh of relief on hearing the news that these desperately needed quantities of grain will reach the market and grain prices may become affordable once again.

10th Summit of OACPS Heads of State and Government to take place in Luanda, Angola (ACP)

The Organisation of African, Caribbean and Pacific States (OACPS), in collaboration with the Government of the Republic of Angola will host the 10th Summit of OACPS Heads of State and Government in Luanda, Angola from 6-10 December 2022.

Themed, “3 Continents, 3 Oceans, 1 Common Destiny: Building a resilient and sustainable OACPS”, the 10th Summit marks the first live meeting of OACPS Heads of State since the coming-into-force of the revised Georgetown Agreement in April 2020, the change in leadership at the Secretariat and the outbreak of the COVID-19 pandemic.

The Summit will be preceded by a Business Forum, which will address issues related to trade among Member States OACPS and key partners; a Women’s Forum on the Blue economy; and a Youth Forum which will focus on the importance of Road Safety. A new addition in the lead up to the Summit, the Diaspora Forum, will facilitate an exchange on key topics for the sustainable development of the 79 Member States of the OACPS.

EU to urge big polluters to toughen climate pledges by COP27 summit (Reuters)

The European Union will urge the world’s biggest economies to improve their targets to fight climate change ahead of this year’s U.N. climate summit and warn that states’ current efforts fall short, according to a draft document seen by Reuters. Despite a raft of new emissions-cutting commitments countries announced at last year’s COP26 climate summit, “global climate action remains insufficient”, the EU said in a draft of its negotiations mandate for the COP27 summit in Sharm El Sheikh, Egypt, in November.

The draft, which faces weeks of negotiations and could change before EU countries approve it in October, said polluters must revise their targets if the world is to stop global warming spiralling beyond 1.5 degrees Celsius.

But the talks on how to curb emissions, and fund those efforts, face the tough context of an energy crisis that is exhausting state budgets and prompting some countries to burn more coal.


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