Building capacity to help Africa trade better

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Local news

EU warns SA scrap export ban may contravene WTO obligations (Fin24)

The European Union has raised concerns over Minister Ebrahim Patel’s plans to ban the exports of scrap metal as a measure to prevent theft, warning that such “trade distorting measures” may contravene South Africa’s obligations as a member of the World Trade Organisation. The issues were raised in a written comment submitted by the EU to the Department of Trade, Industry and Competition on its policy proposals to curb scrap metal theft in South Africa. The most contentious of the proposed measures is a six-month ban on the exportation of ferrous and non-ferrous waste and scrap metal to curb theft while other regulatory measures are put in place. The EU has, however, argued that South Africa should first put measures in place at a domestic level before contemplating an export ban.

Increased dumping of chicken expected, particularly from Brazil (Moneyweb)

The poultry industry expects to see an increase in dumped imported chicken, particularly from Brazil, within the next few months after receiving a “licence” to continue their dumping from Minister of Trade, Industry and Competition Ebrahim Patel. According to a report by the FairPlay Movement, Rainbow Chicken (owned by JSE-listed RCL Foods) has called for the immediate imposition of anti-dumping duties on bone-in chicken portions from Brazil, Denmark, Ireland, Poland and Spain. The South African Poultry Association (Sapa) says they have reconciled themselves to Patel’s decision to suspend the imposition of anti-dumping duties for 12 months, but it will hurt the industry.

The International Trade Administration Commission (Itac) found evidence of dumping and introduced provisional anti-dumping duties for six months at the end of last year. After receiving submissions and comments from several importers from the affected countries and local stakeholders it recommended the introduction of the duties for a period of at least five years.

However, Patel considered the “current rapid rise” in food prices locally and globally and the impact the imposition of the anti-dumping duty may have on the price of chicken and postponed the imposition of the tariffs by a year.

Sapa CEO Izaak Breytenbach says the minister has wrongly assumed that the tariff increase will lead to increased prices. “We have always argued that an increase in tariffs has never led to an increase in consumer prices.” The main reason is that consumers never benefit from the lower prices. Imports are priced at market or slightly lower prices than the price of local products.

Breytenbach says Sapa expects to see the quantum of the increase in about three months’ time when the South African Revenue Service publishes the latest import statistics. He says the industry will not take any legal action because of the suspension of the tariffs, but still finds it “surprising and disappointing” that the minister decided not to protect the local industry while acknowledging that dumping of bone-in chicken portions is causing producers “material harm”.

Better coordination and collaboration can speed up the process of resolving the ban on vegetable exports (Cape Business News)

Better coordination and collaboration can speed up the process of resolving Botswana and Namibia’s ban on South African vegetable exports. For this reason, the participation of key role players from different spheres of government dealing with market access issues is essential to speedily identify and resolve market access challenges. Botswana and Namibia’s recent unilateral decision to block some fruit and vegetable exports from South Africa is unfortunate and contradicts the existing Southern African Customs Union (SACU) trade agreement. In 2021 the Western Cape’s total vegetable export to the SACU totalled R268 million, with seventy-five per cent of this destined for Namibia and Botswana.

Import tariffs and non-tariff barriers continue to represent critical barriers to South Africa’s agricultural exports. Importantly, they should never become arbitrary or unjustifiable. However, when they do, they pose a discriminatory challenge for an export market, countering the benefits of a duty-free trade formed through customs unions or regional economic regions. While trade diplomacy is facilitated at a national government level with the partner country, leveraging the relationships that the Western Cape Department of Agriculture (WCDoA) has established through its commodity approach model could streamline processes to speed up discussion among role players.

TIASA takes SATMC, ITAC to court as tyre battle intensifies (Engineering News)

The Tyre Importers Association of South Africa (TIASA) has applied to court to compel the International Trade Administration Commission of South Africa (Itac) and the South African Tyre Manufacturers Conference (SATMC) to disclose what it says is “critical information that is being withheld” regarding SATMC’s application for the implementation of anti-dumping duties on imported tyres. The aim is also to challenge the manner in which Itac is conducting the investigation. SATMC, which includes Continental, Bridgestone, Goodyear and Sumitomo, has applied to Itac for the implementation of additional duties of between 8% and 69% on passenger, taxi, bus and truck vehicle tyres imported from China.

Current import duties levied on tyres range from 25% to 30%.

Uganda and Rwanda resume talks to revive bilateral ties (The East African)

Rwanda and Uganda have officially resumed diplomatic talks, a significant step towards reviving relations between the two countries that were at loggerheads for almost three years till the beginning of this year. A delegation of Ugandan officials led by the Foreign Affairs Minister Odongo Jeje Abubakhar held talks with their Rwandan counterparts on Thursday in Kigali.

In a joint statement released after the meeting on Thursday, the countries said the diplomatic and political consultations are a continuation of the commitment of the heads of State to deepen further and strengthen the cordial relations between the two countries. “The ministers exchanged views on regional matters relating to security, trade, investment, and strategic regional projects. “They agreed to review and revive bilateral cooperation in the different areas of interest by convening the next Joint Permanent Commission between Rwanda and Uganda,” the statement reads.

Ismael Buchanan, a Kigali-based political analyst and lecturer of International Relations at the University of Rwanda, says reviving bilateral trade should be a priority. “There has been tremendous progress made in Rwanda and Uganda relations this year. The constant visit by officials is key because there are still issues that need to be addressed, including trade. There is hope, but we are yet to see Ugandan products on Rwanda’s market as we used to,” he said.

IMF board approves $1.3 billion for debt-ridden Zambia in bailout (The East African)

The International Monetary Fund (IMF) has approved a $1.3 billion loan to Zambia to help the debt-ridden country restore fiscal stability. In 2020, battering the Covid-19 pandemic and choking under the weight of loans, Zambia became the first country in Africa to default on foreign debt. According to official government data, the southern African country’s debt totalled $31.74 billion at the end of 2021, of which $17.27 billion was external debt, mostly from two Eurobonds and China.

Africa’s second-largest copper producer has struggled to jumpstart its economy as it grapples with a debt load reaching 120 percent of the GDP. The country had reached a tentative agreement with IMF in December for a $1.3 billion facility, contingent on Zambia taking steps to reduce its debt to levels IMF deemed sustainable. In late July, its creditors led by China and France, pledged to negotiate a restructuring of Zambia’s debts, a move IMF Managing Director Kristalina Georgieva said was “clearing the way” for funding.

Kwara Customs boss to enforce new ECOWAS tariff (The Guardian Nigeria)

Nigeria Customs Service (NCS) Area Controller, Kwara State Command, Aliyu Bello, is set to enforce the reviewed Economic Community of West African State (ECOWAS) Common External Tariff (CET) in the state.

The Federal Government, early this year, approved the implementation of the 2022 fiscal policy measures, comprising Supplementary Protection Measures (SPM) for the implementation of the CET 2022-2026 and Excise Duty of N10 per litre on non-alcoholic beverages, cigarettes and tobacco products from April 1, 2022. A grace period of 90 days was granted to enable the excise factories producing non-alcoholic and beverages to prepare for compliance with the new directives, which elapsed on June 30, 2022. The new price regime commenced on July 1, 2022.

AGI advocates abolition of import tax on raw materials (BusinessGhana)

That the AGI said would help address the depreciation of the Cedi and enhance the industrialisation of the government. The President of AGI, Dr Humphrey Ayim-Darke, who stated this in an interview with the Ghanaian Times on the sidelines of the launch of the African Continental Free Trade Area (AfCFTA) Hub, said the five-per cent tax imposed on imported raw materials and the benchmark discount values were disincentive to local production and was encouraging the importation of finished goods into the country.

According to the AGI President said such a move would be beneficial to the country and help the government to raise more tax revenue. In spite of the increase in freight charges and disruptions in global supply chains occasioned by COVID-pandemic and Russia-Ukraine war, there was increase in importation of finished products into the country, exerting pressure on the cedi.

Mozambique: African Development Bank Vice-President Quaynor meets with government at outset of new country strategy (AfDB)

African Development Bank Vice-President for Private Sector, Infrastructure and Industrialization, Mr. Solomon Quaynor, officially visited Mozambique last week. He met with Mozambican government representatives and members of the private sector. Discussions covered the bank’s country strategy for Mozambique, recent reforms the government has undertaken, and the country’s strategic energy and transport sectors in particular.

Quaynor commended the government for pushing through reforms that are expected to accelerate economic recovery from the impacts of the Covid-19 pandemic and tropical cyclones Idai and Kenneth. He said the government’s reforms align with the bank’s new country strategy, covering the 2022-2027 period, and its initiatives to strengthen the private sector. The bank’s new country strategy prioritizes economic private sector investment and structural transformation of agricultural value-chains.

Under the previous country strategy, which covered the period 2017-2022, Mozambique launched or completed several key projects. They included the Nacala corridor, Temane transmission lines, the Pemba-Lichinga special agro-processing zone and the Drought Recovery and Agriculture Resilience initiative. Discussions also covered transport and logistics infrastructure. Magala said: “Mozambique has a strategic geographic location in the region, making it an ideal route to port access for neighboring landlocked countries including Zimbabwe, Eswatini, Malawi and Zambia. Strategic and innovative investments in improving the major transport systems and port efficiency can transform Mozambique into a major logistics hub.”

Egypt’s investments in Africa up to $10.2 bln; trade volume with Ivory Coast up 178%: Trade minister (Ahram Online)

Samir made the remarks during celebrations of Ivory Coast’s 62nd National Day at the country’s embassy in Cairo on Wednesday. In a speech during the ceremony, Samir conveyed the greetings of Prime Minister Mostafa Madbouly to the Ivorian government and people on the occasion of the country’s National Day, which is celebrated annually on 7 August. Samir said the public and private sectors in Egypt and Ivory Coast have worked in recent years to boost trade and economic relations, leading to the large increase in trade volume in 2021. The minister said that the commodities exchanged between the two countries include electrical machines, paper, plastics, glass, iron, steel, cocoa, wood and fruits.

Egyptian Trade and Industry Minister Ahmed Samir highlighted Egypt’s keenness to enhance investment cooperation with the countries of the African continent, noting that African economic development is one of the most important priorities of the Egyptian state.

Libya Economic Monitor – September 2022 (World Bank)

Libya is struggling to cope with a trifecta of crises, including the civil conflict, the COVID-19 pandemic and most recently, the impact of the Russia-Ukraine crisis. Notwithstanding the tempering of conflict intensity since 2021, the Libyan economy has been battered by the conflict. GDP per capita estimates in 2021 stood at about half of its value in 2010 before the start of the conflict. Since 2020, the population has been hit by multiple waves of the COVID-19 pandemic. In addition, food insecurity has worsened, precipitated by the Russia-Ukraine crisis and the resulting shortages and price increases for staple foods in the domestic market.

Libya’s trade and current account balances rebounded in 2021 and early 2022, thanks to recovering oil exports and receipts. Estimates reveal that Libya’s reserve position remains very comfortable. The official exchange rate remained relatively stable throughout 2021, but depreciation pressures are increasing. The economic outlook is uncertain. It is impossible to forecast economic outcomes with any degree of confidence due to the high uncertainty surrounding political and security developments. However, if Libya manages to maintain or ramp up oil production and exports compared to 2021, or at least avoid extended disruptions, it could benefit from soaring global oil prices, which would translate into strong economic growth, higher fiscal revenues and an inflow of hard currency. This would positively affect the trade, current account, and fiscal balances.

African trade and integration

SADC electronic Certificate of Origin to be launched on 7th September 2022 (SADC)

As part of the ongoing efforts to increase intra-regional trade and aid the regional economic development, the Southern African Development Community (SADC) will launch the SADC electronic Certificate of Origin (e-CoO) in Blantyre, Republic of Malawi, on 7th September 2022 under the theme ‘Enhancing trade facilitation through the SADC Electronic Certificate of Origin’. The official launch will be preceded by a workshop to be held on 6th September 2022, which will draw participants from SADC Member States, customs officials and private sector to deliberate on the significance of improving the SADC intra-regional trade through the smooth movement of quality goods across the borders with the overall objective of aiding the region’s economic development.

The development of the eCoO is one of the milestones of the Trade Facilitation Programme (TFP), which is supported by the European Union and provides for capacity-building and technical assistance in border cooperation by ensuring the implementation of SADC Coordinated Border Management Guidelines and the provisions of the World Trade Organisation (WTO’s) Trade Facilitation Agreement, particularly on improving the efficiency of their operations. The e-CoO, which replaces the manual SADC Certificate of Origin issued by the issuing authority in the country of origin of the goods, will help the trader to apply on-line, trace the application and get the response on the submission digitally, thus infusing efficiency in the process.

1,882 standards in East Africa set for harmonisation (The Citizen)

Some 1,882 standards have been designated for harmonisation in a renewed drive to bolster trade within the East African Community (EAC) bloc. However, the slow speed of harmonisation is said to have been impeding trade among EAC member states. Intra-EAC trade has remained static at 15 percent of the total trade with the rest of the world in recent years, according to official data. Only 31.9 percent of standards that have been designated for harmonisation in the region have been harmonised, some partially. This was revealed yesterday during a regional public and private sector consultative engagement on standards organised by the East African Business Council (EABC).

“They have been harmonised by between 65 and 90 percent,” said Mr Dafa when giving his opening remarks on behalf of EABC hief executive John Bosco Kalisa. He said the harmonisation process was still impeded by several challenges, including NTBs and low adoption. “The importance of standards in trade cannot be overemphasised,” Mr Dafa said. “Where standards have not been harmonised, significant differences have emerged between national standards within the regional economic communities (RECs), thus creating major impediments to trade for producers and traders.”

Digital Journeys: Freeing Foreign Exchange in Africa (IMF)

A big problem for Africa’s economic development is the expense and difficulty of making payments across borders. It is one reason trade among Africa’s 55 countries amounts to only about 15 percent of their total imports and exports. By contrast, an estimated 60 percent of Asian trade takes place within the continent. In the European Union, the proportion is roughly 70 percent.

“When the payments are unlocked, invariably you are unlocking trade between African countries,” says Owusu Banahene, the Ghana country manager for AZA Finance, which handles foreign currency transactions for companies doing business in Africa. Cross-border payments are just one of the many barriers to trade in Africa. Others range from high tariffs and cumbersome border procedures to divergent commercial regulations and congested roads.

Meeting Of African Ministers of Finance, Economy, Development and Environment ahead of COP27 (UNECA)

The world is in the throes of a cumulative crisis – the COVID-19 pandemic, economic decimation and climate change and environmental degradation. When the Ukrainian crisis that is hitting several countries in such diverse sectors as wheat and tourism with full force, is coupled with this, the equation becomes much more complex and innovative approaches are vital. There is consensus that a green pathway which promotes carbon neutral investments, clean jobs and reduced pollution will guarantee sustainability.

The rapid and far-reaching transitions required to stay within the Paris Agreement temperature target require enormous financing. For African countries, already committing between 3-9% of its budgets to finance climate change adaptations, such financing requires significant support from partners at a scale far larger than has been mobilised so far, and through appropriate instruments that are relevant and responsive to the specific needs and circumstances of Africa.

The overall objective of the meeting is to i) ensure coherence of African climate finance positions with needs and ii) prioritise actions that can be led by African countries with targeted support to increase climate finance available for implementation.

Focus switches to COP27 as African leaders gather in Gabon for Africa Climate Week (The Commonwealth)

Speaking at the opening ceremony, which kicked off in Gabon’s capital, Libreville, on 29 August, the Commonwealth Secretary-General noted that climate change is a profound challenge for Africa, where 21 countries are members of the Commonwealth. “Climate change is perhaps the greatest challenge of our time,” the Secretary-General said, adding that it poses an existential threat to small states and is “a threat multiplier which amplifies existing social, political, and economic inequalities.” The high-level event comes just months before the UN Climate Change Conference COP27 is scheduled to take place in Sharm El-Sheikh, Egypt, in November, and brings together ministers, officials from key UN and multilateral agencies and more than 1,000 delegates from 42 African countries.

Noting the urgency for climate action and the importance of the two events being held on African soil, the Commonwealth Secretary-General said: “Africa Climate Week is an important opportunity for us to come together, to work together and to share with, listen to, and learn from one another. “Africa is a central player in the modern Commonwealth, and climate change is a profound challenge for Africa – so climate change in Africa is a central consideration for the Commonwealth.

“Tackling climate change will require the most significant political, social and economic effort that the world has ever seen. It is up to us to set the tone and shape the quality of that effort.

Afreximbank reveals plans for Caribbean Exim Bank as AfriCaribbean Trade and Investment Forum opens (Afreximbank)

The first-ever AfriCaribbean Trade and Investment Forum (ACTIF2022) opened today in Bridgetown, Barbados, with African Export-Import Bank (Afreximbank) announcing that it would work with governments of the Caribbean Community (CARICOM) to set up a Caribbean Exim Bank and that it envisaged committing an investment of US$700 million in the Caribbean. The forum is being held under the theme ‘One People, One Destiny: Uniting and Reimagining Our Future’.

Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank said: “Once these arrangements are concluded and visible, we will also open an office here in the Caribbean. And if we do agree, the Bank will work with governments of the CARICOM to set up a Caribbean Exim Bank as an Afreximbank subsidiary or affiliate,” adding that Afreximbank “envisages committing an investment of US$700 million in the Caribbean as soon as a regional office is opened.”

“We will want to leave here with actionable proposals on how to open air and sea links between the Caribbean and Africa. We would like to leave here with concrete plans to open banking and payment rails, to see joint ventures for industrial projects, to deepen our commercial collaboration in the creative and commercial space, to collectively protect our intellectual properties to share knowledge and invest in climate adaption projects. We must be proud that this is a reunion arising out of a felt need, underpinned by a solid economic, cultural, historical rationale,” added Professor Oramah.

Expanding African-Caribbean Trade (ITC)

The International Trade Centre (ITC) today launched a new report that identifies $1 billion in export potential between Africa and the Caribbean. ITC and the African Export-Import Bank (Afreximbank) also extended their five-year partnership, which will help tackle trade barriers and build business capacity to realize that potential.

ITC’s Expanding African-Caribbean Trade report highlights that partnerships such as this one with Afreximbank are needed to tackle the economic consequences of global crises. The report shows how the two regions have an export potential exceeding $1 billion in sectors ranging from agrifood and healthcare to tourism, fertilizers and automobiles. Unlocking this potential requires stronger relationships between African and Caribbean traders, the removal of trade obstacles such as high tariffs and non-tariff barriers, and greater investment in growth areas. The goods trade between the two regions is negligible and concentrated in just a few sectors including primary minerals and chemicals.

With the right support in place, Africa could boost its annual exports of merchandise to the Caribbean by $171 million by 2026, a 54% increase over 2020 levels. The Caribbean could expand goods exports to Africa by $80 million or 29% – and its exports of services such as travel and transport even more.

Afreximbank tackles banking sector market failure (Sunday Mail)

AfriCaribbean Trade and Investment Forum heralds dawn of new cooperation (African News Magazine)

Egypt’s trade minister urges more inter-Arab cooperation to face economic challenges (Ahram Online)

Egypt’s Trade and Industry Minister Ahmed Samir addressing the opening of the 110th session of the Arab League’s Economic and Social Council, which kicked off at the ministerial level at the Arab League General Secretariat HQ in Cairo on Thursday. The minister made the remarks while addressing the opening of the 110th session of the Arab League’s Economic and Social Council, which kicked off at the ministerial level at the Arab League General Secretariat HQ in Cairo on Thursday.

Earlier this year, Egypt presided over the council’s 109th session, during which one ordinary session was held, and two extraordinary sessions were held at the ministerial level. The 109th session also approved the acceptance of the certificate of origin issued electronically, and also adopted the Transit Transport Agreement between Arab countries.

The Egyptian minister praised the outcomes of the previous session as a reflection of Arab countries’ belief in the importance of establishing a framework for providing adequate facilities and benefits as well as simplifying the procedures that impede the movement of transport across Arab lands. He said that accepting e-certificates of origin was one of the much-needed requirements to facilitate trade to achieve better integration in global markets, while the transit transport deal is expected to reflect positively on the Arab region and its inter-trade.

Global economy

UNCTAD convenes second forum to ramp up fight against illicit trade (UNCTAD)

UNCTAD will host its second Illicit Trade Forum on 6 and 7 September, providing a platform for countries to collaborate on tackling this menace to development. The event to be held in Geneva and online is organized in collaboration with the Transnational Alliance to Combat Illicit Trade (TRACIT).

UNCTAD defines illicit trade as the transaction of any goods that fail to comply with legislative and regulatory frameworks, including in the ways in which they are produced, transported, certified or sold. Examples include trade in endangered species and falsified medicines and illicit financial flows related to drug trafficking, terrorist financing, trade misinvoicing and aggressive tax avoidance. “When trade is fair, rules-based, and strategic – trade is a source of good, a source of development that can help us achieve our Sustainable Development Goals. Illicit trade is the opposite of this. Illicit trade is neither fair, nor legal, nor purposeful,” UNCTAD Secretary-General Rebeca Grynspan said.

How Blockchain is being used to build trust across value chains (Engineering News)

Distributed ledger technologies, such as blockchain, in which immutable copies of ledger entries are shared with all stakeholders, are being used to improve the speed at which members and whole supply chains can react to changes, and the transparency of the entire value chain, as verification can be done at each conversion or value-adding step. Transparency and visibility across a supply chain will boost trust, which will, in turn, increase the speed at which supply chain processes can be completed, says technology analysis organisation Edge of NFT cofounder Dr Eathan Janney.

G-20 ministers at odds at Bali climate action meeting (Asia News Network)

A Group of 20 meeting of environment ministers in Bali concluded on Wednesday without a joint communiqué for a leaders’ summit later in the year, with group chair Indonesia saying some countries had disagreed on the proposed document’s wording. Speaking at a press conference after the one-day gathering, Environment and Forestry Minister Siti Nurbaya Bakar said the meeting chair would be issuing a summary of discussions instead of a joint communiqué as a result of the differing views.

“In the process, the discussion on these commitments has been quite challenging given the various views and implications for the interests of each member country,” Siti told reporters. Commitments discussed at Wednesday’s meeting included efforts to reduce the impact of climate change, the loss of biodiversity and land damage, as well as efforts to reduce pollution and environmental damage.


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