Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Local news

South African GDP declines by 0.7% (SAnews)

After two consecutive quarters of positive growth, the country’s real gross domestic product (GDP) dropped by 0.7%1 in the second quarter of 2022, Statistics South Africa (Stats SA) said on Tuesday. “The devastating floods in KwaZulu-Natal and load shedding contributed to the decline, weakening an already fragile national economy that had just recovered to pre-pandemic levels,” Stats SA explained. According to the national statistical service, manufacturing had the biggest drag on GDP due to flooding, which hurt several industries.

Impressive agriculture export earnings in Q2 2002 despite trade challenges (Farmers Review)

The latest trade data for the second quarter 2022 showed another stellar performance from the agriculture sector with a 5% quarter-on-quarter jump in export earnings to the tune of US$3.4 billion. An indeed impressive performance despite the earlier trade related challenges from the Foot-and-mouth Disease-induced halt in wool exports, to global logistical issues that curtailed citrus volumes. The stellar export earnings and subsequently an agriculture trade surplus was underpinned by robust export demand coupled with strong commodity prices. Maize seems to have made a structural break in export trends with volumes way above the historical levels.

The implication for producers is that higher earnings will help them navigate the current high-cost environment and further make the necessary production expansions and necessary replenishment of equipment and machinery.

South Africa’s New Energy Vehicle Roadmap to be production-led, Patel confirms (Engineering News)

Trade, Industry and Competition Minister Ebrahim Patel insists that South Africa’s New Energy Vehicle (NEV) Roadmap is taking shape amid warnings that, absent urgent government decisions on the future support framework, the domestic automotive manufacturing sector is at serious risk. He has also indicated that the NEV support framework would seek to use and build on the architecture in place under the second phase of the Automotive Production and Development Programme (APDP2) and would be production- rather than consumption-led.

In a presentation to the Presidential Climate Commission, Patel released details of what he described as a roadmap “working document”, which was premised on there being a “compelling” case for South Africa to make the strategic shift to NEVs. That conclusion was reached following a cost-benefit analysis, showing that it would be more advantageous to transition South Africa’s manufacturing focus away from internal combustion engines (ICEs) to NEVs than to seek to capture a larger slice of the remaining ICE markets as international vehicle manufacturers began upscaling their NEV strategies.

Patel also reported that government would opt for a production-led model, rather than the consumption-led strategy advocated by various industry stakeholders, whereby growth in domestic demand, supported by lower tariff barriers, triggered investment. “Our approach is led by a focus on the ‘at-risk export’ markets. “Let’s get production of EVs right, export to those markets where there is both the spending power and the regulatory incentives to encourage consumption. “And then off the back of bringing down the prices through what we have been able to achieve through export runs, sell an increasing quantity in the domestic market and, at an appropriate point, look at incentives that will get motorists to shift to EV consumption.”

DRC now third largest mover of cargo at Mombasa port (The Standard)

The Democratic Republic of Congo (DRC) is now the third largest market for the port of Mombasa with a reported market share of 8.2 per cent, Kenya Ports Authority (KPA) has said. To cement its position, Lignes Maritimes Congolaises - a DRC government-owned shipping line, began operations in June this year, becoming the latest entrant at Kenya’s biggest port. “With the formal admission of the DRC to the East African Community (EAC), more private and public organisations from the Central Africa country are setting up businesses in the country,” KPA noted in an update.

Uganda remains a key trade partner for Kenya with most of its exports and imports passing through Mombasa. Meanwhile, EAC Secretary General Peter Mathuki is set to lead a delegation of the heads of the regional bloc organs and institutions and eminent regional business leaders to the DRC from September 9. A statement from the regional bloc secretariat said the maiden mission to Kinshasa aims at enhancing awareness among DRC government officials on the existing EAC instruments, creating trade synergies and exploring and building business partnerships and immediate linkages for business associations.

China fish imports hit Sh2bn, controls 83pc of market (Business Daily)

The value of fish imported from China grew by 25 per cent to hit a historic high of Sh2 billion last year amid rising disquiet from local traders who have been edged out the market by the cheaper supplies. Data from the State Department of Fisheries seen by the Business Daily shows that Kenya shipped in 14.8 million kilogrammes of the delicacy from China last year, valued at Sh2 billion, up from Sh1.5 billion in the previous period. This has increased China’s market share from 70 per cent in 2020 to 83 per cent, as the Asian nation squeezed out South Korea, Thailand, Tanzania and Uganda from top source markets in the fight for the Kenyan consumer.

China, which is already Kenya’s biggest source of imports for household goods and electronics, is racing to bag a larger share of food exports into the continent including rice and manufactured edible products. In total Kenya imported fish worth Sh2.47 billion last year from the 19 sampled countries, a 10 per cent jump from Sh2.2 billion in 2020, to bridge the growing deficit due to dwindling stocks from major domestic sources such as Lake Victoria. Other source markets were Norway (Sh96 million), Tanzania (Sh92 million), India (Sh78 million) and Uganda (Sh57 million).

A look at new tax incentives to boost revenue collections (The New Times)

Vehicles transporting goods with gross weight exceeding five tonnes but not exceeding 20 tonnes will pay an import duty rate of 10 per cent instead of 25 per cent.

The government projects to spend an estimated Rwf4.6 trillion in the fiscal year 2022/2023, with expenditures expected to rise by Rwf217.8 billion. The government mobilises funds through different means including taxes, loans and grants. Another revenue stream is from non-tax collections such as visa charges, traffic fines and licenses. For this fiscal year, it opted to make some tax policy changes expected to boost revenue collections and support businesses. Incentives to some strategic sectors are expected to promote made in Rwanda products and to boost the economy.

Tighten tax on international trade – Government advised (Myjoyonline)

The Executive Secretary of the African Tax Administration Forum, Logan Wort, is pressing on African governments to tighten tax on international trade and increase investments in digital tax collection systems. According to him, this has become necessary due to the gradual shift in the use of technology over the years, which is partly attributed to the Covid-19 pandemic. Logan Wort spoke to Joy Business after addressing members of the forum at the ongoing annual congress which is seeking to come up with strategies to deal with the revenue shortfalls expected in the implementation of the continental free trade agreement.

“The digital economy in Ghana has exponentially increased over the last decade by about $3 billion annually, but what is the domestic tax take from there? So, you need to invest in the digitalisation of your tax administration, advance policies for taxing multinational enterprises, and bring more of the middle class into the tax net. This is what the conference will seek to do through well-researched documents from experts and analysts who hails from the continent”, he said.

Ghana to improve transparency in timber trade (GhanaToday)

The government has developed a Timber Legality Assurance System to improve transparency, efficiency and legality in the timber trade in European and domestic markets. The system is designed within the Forest Law Enforcement, Governance and Trade (FLEGT) framework which is being implemented by the Government of Ghana and the European Union.

Minister for Lands and Natural Resources, Mr Samuel Abu Jinapor announced that the ministry has also developed a Wood Tracking-Decision Support System (GWT-DSS), an electronic tracking system that tracks and traces timber from source to export. According to him, the GWT-DSS would ensure that any timber that enters the supply chain originates from legal sources.

African trade and integration

Revenue authorities, MoF need to work on revenue losses from AfCFTA (GhanaWeb)

The Commissioner-General of GRA, Rev Dr. Ammishaddai Owusu-Amoah, says Revenue authorities will need to work with Ministries of Finance to fill in the revenue losses expected from the lowering of import duties in the implementation of the AfCFTA.

The parties in the AfCFTA will have to reduce tariffs on “90% of goods that are traded within the continent” and this may result in short-term tariff revenue loss to most African member countries where trade taxes remain a key source of revenue. He said the execution of the AfCFTA would require technical skills, enhanced processes, and the use of technology by cooperating with competent authorities such as the Ministry of Trade, Customs authorities, tax authorities, and other law enforcement agencies involved in detecting various financial and customs-related crimes.

Dr Owusu Amoah was speaking at the opening of the three-day African Tax Administration Forum and African Tax Research Network 7th Annual Congress on the theme: Tax and Revenue Implication of the African Continental Free Trade Agreement.

How the African Continental Free Trade Area (AfCFTA) promises to improve labour mobility, spur wealth creation in Africa: By Margaret Soi, Head of Cross Border Banking, Standard Chartered Bank (African Business)

SADC Chair proposes an industrialization fund (sardc.net)

The SADC Chairperson, President Felix Tshisekedi has proposed a regional fund to support industrialization in SADC Member States and ensure the sustainability of its integration agenda.

Tshisekedi, who is President of the Democratic Republic of Congo (DRC) said this in his welcome message as host of the 42nd Summit of Heads of State and Government of the Southern African Development Community (SADC) held in August. In the official Summit publication that provides an annual review of progress, President Tshisekedi said the time has come for SADC to consider setting up a dedicated fund to support its industrialization agenda. “We encourage our organization to reflect on the need to set up an industrialization fund in order to finance industrialization projects and programmes and get out of dependence on external partners,” he said. “In this way, we will be able to achieve a major economic and technological transformation at national and regional levels towards the deepening of regional integration as advocated by the SADC Industrialization Strategy and Roadmap.”

He said the regional fund would complement resources from other partners including international cooperating partners and private investors, thus allowing the region to take full charge of its developmental trajectory and industrial path.

What hinders use of EAC’s simplified trade regime? (The New Times)

Misinterpretation and low understanding by Customs officials as well as cross-border traders, and corruption, are among major challenges hindering the full utilisation of the East African Community’s Simplified Trade Regime (STR), experts say.

Under the EAC Customs Union, the STR is a special provision aimed specifically at small traders who regularly transact in low value consignments. The legal basis of the STR is rule 14 of the EAC Rules of Origin; particularly paragraph four, which provides for use of a regularly updated and circulated Eligible List of Products (ELP) for ease and simplification of intra-EAC trade.

EAC Secretariat reaffirms commitment to infrastructure development to boost intra-regional trade (EAC)

The East African Community (EAC) Deputy Secretary General in charge of Planning and Infrastructure, Eng. Steven Mlote, has reaffirmed the commitment of the EAC Secretariat to infrastructure development aimed at boosting intra-regional trade and free movement of persons across the Community’s seven (7) Partner States. Eng. Mlote assured a visiting delegation from the Parliament of the United Republic of Tanzania (URT) Parliamentary Committee responsible for Foreign Affairs, Defence and Security of the EAC’s readiness to implement various infrastructure projects coordinated jointly by the Secretariat and Partner States.

The committee led by its Chairperson, Hon Vita Rashid Kawawa, was on a one-day working tour to the EAC Headquarters in Arusha over the weekend.

On his part, Hon. Kawawa the committee’s gratitude for information shared by the EAC Secretariat and requested that the entire URT Parliament should be informed about the ongoing programmes and projects aim to ease transportation in the region. “Infrastructure is a very important enabler in the EAC region in terms of helping to transport farm produce and different goods to the market,” said Kawawa.

Conference of Speakers of Parliaments concludes with a pledge to strengthen continental solidarity (African Union)

The high-level consultation between the Pan-African Parliament (PAP) and Speakers of Regional and National Parliaments has concluded with calls for strengthening links through continental solidarity and support for the implementation of the continent’s flagship development blueprint, the Agenda 2063.

The meeting took place in Midrand, South Africa on the sidelines of the Sitting of the PAP Committees under the African Union (AU) theme of the year 2022 as the year of Nutrition. The 11th conference of heads of African legislatures endorsed Agenda 2063 as a mechanism to an integrated and prosperous Africa driven by its own citizens. Hence the meeting called on the AU Member States to enact enabling legislation for effective implementation and realisation of the Aspirations of Agenda 2063.

In line with this vision, the PAP was encouraged to establish formal frameworks and communication channels to regularly transmit information on AU treaties requiring signatures and ratification. The African Continental Free Trade Area (AfCFTA) was recognised by the Speakers of Parliaments, as a vehicle for continental integration and economic development. In this regard, the African Parliamentary leadership called for ratification of the Protocol to the Treaty establishing the African Economic Community Relating to Free Movement of Persons, Right of Residence and Right of Establishment. The meeting further called upon the removal of Trade Tariffs and other barriers to facilitate and speed up the free movement of goods in order to boost African economies.

West Africa food insecurity demands climate-smart response amid multiple crises (France24)

As crises multiply and the devastating conflict in Ukraine drags on, its global effects are being felt hard in the Sahel and West Africa, a region with more than 38 million people facing acute food insecurity. The war’s impacts risk pushing an additional 7 to 10 million people in the region into food insecurity.

In the face of the crisis, the World Bank is deploying short- and long-term responses to boost food and nutrition security, reduce risks, and strengthen food systems. These actions form part of the institution’s global response to the ongoing food security crisis, with up to $30 billion in existing and new projects in areas spanning agriculture, nutrition, social protection, water, and irrigation. This financing will include efforts to encourage food and fertilizer production, enhance food systems, facilitate greater trade, and support vulnerable households and producers.

“Today, with soaring inflation, unfortunately many people in Africa are struggling to have access to basics such as food products,” says Ousmane Diagana, World Bank Vice President for Western and Central Africa.

Markets in the Sahel and across West and Central Africa are experiencing stark price rises of oil, rice, wheat and other commodities on the international market, and poorer households spend disproportionately more on food than those better off. The price of wheat, a food staple for many households, stood 60% higher at the start of June 2022 compared to January 2021, according to World Bank data. The price of fertilisers too, essential for productive agriculture, has surged since the war and now stands almost three times higher than a year ago. The knock-on effect is expected to reduce food production over the coming years as soaring prices force many farmers to use less fertiliser.

The World Bank is mobilising support for emergency responses in the Sahel and West Africa to help countries at risk of food insecurity respond faster. It is also working with its humanitarian partners to monitor regional food insecurity and draw up Food Security Preparedness Plans.

Africa must fast-track adoption of proven and sustainable solutions to survive food crisis (CNBCAfrica)

African countries now urgently need to fast-track the uptake of agricultural solutions with the greatest potential for immediate impact as well as lasting sustainability at the scale of millions of farmers. The wheat compact under the Technologies for African Agricultural Transformation (TAAT) initiative, supported by the African Development Bank and implemented by CGIAR, has already deployed more than 30 heat tolerant varieties benefitting 1.5 million people.

African Climate Week 2022: In Central Africa, the African Development Bank collaborates with UN agencies to advance climate action (AfDB)

The African Development Bank and several UN agencies - the UN Regional Office for Central Africa, the Educational, Scientific and Cultural Organization (UNESCO) and the UN Office on Drugs and Crime (UNODC) - are joining forces to advance climate action in Central Africa. This region is highly strategic in the fight against climate change as it is home to the Congo Basin rainforest, the second largest tropical forest on the planet and the only remaining net carbon sink on earth.

These organizations expressed their willingness to strengthen their partnership during a meeting on 1 September in Libreville, on the sidelines of the 2022 African Climate Week. The Week was held from 29 August-2 September on the theme: “Roles of the Congo Basin Rainforest, biosphere reserves, and World Heritage Sites in climate change resilience and the implementation of the Sustainable Development Goals in Central Africa.”

Savina Ammassari, Resident Coordinator of the United Nations System in Gabon, said: “The challenges related to the lack of financial resources - which were discussed during this African Climate Week - must be resolved to strengthen actions related to adaptation and mitigation of the effects of climate change.”

European bank to greatly increase its funding for climate change adaptation in Africa (Engineering News)

Africa: Rich nations pledge funds at climate crisis summit (DW)

Wealthy nations said they would spend about $25 billion (€25 billion) by 2025 to boost Africa’s efforts to adapt to climate change, according to officials at a climate summit in Rotterdam, Netherlands, held Monday. The summit was the first ever to bring together leaders from across many governments and institutions, like the World Trade Organization and the International Monetary Fund, to discuss climate adaption techniques for Africa. The amount pledged was billed as the largest ever climate adaptation effort globally.

The African Adaptation Summit takes place just weeks after the Organization for Economic Cooperation and Development (OECD) found that rich countries had failed to deliver on their 2009 promise to spend $100 billion a year by 2020 to help developing countries adapt to global warming.

The OECD said richer nations gave $83.3 billion to poorer nations in 2020, the highest ever sum, but still short of the original amount.

Africa will need between $1.3 and $1.6 trillion this decade to implement itss commitments to Paris climate agreement, an annual cost between $140 and $300 billion, Adesina said.

Enabling Digital and Data Services for Expanded Economic in Africa (IPPmedia)

The white paper is part of the broader collaboration between AUDA-NEPAD and the Vodacom Group on strengthening the digital capabilities of AU Member States for enhanced public service delivery. The paper has come at an opportune time when the continent, recovering from the effects of COVID-19 and other global shocks, is putting in increased efforts to accelerate the implementation of digitalization strategies and policies. The paper provides in-depth analysis of the importance of appropriate free data flows within the context of the Fourth Industrial Revolution (4IR) and beneficiation from digital economies.

More importantly, the paper draws on lessons from other jurisdictions to provide elaborate policy recommendations and guidelines on how SADC Member States and other AU Member States can leverage on the principles of Africa’s regional economic integration frameworks to reduce regulatory barriers in order to create regional digital markets for the operationalization of the African Continental Free Trade Area (AfCFTA).

Energy Chamber Strongly Endorses the Central Africa Business Energy Forum (ZAWYA)

In 2022, it is imperative for Africa to prioritize regional cooperation and collaboration if the continent is to realize its goal of making energy poverty history by 2030. For both producing and non-producing nations, tackling the energy crisis together will not only ensure everyone on the continent has access to electricity but that a new era of socioeconomic growth is ushered in, an era that brings new levels of job creation, industrialization and energy security.

In pursuit of regional cooperation, the African Energy Chamber (AEC) is proud to officially endorse the upcoming Central Africa Business Energy Forum (CABEF), which takes place from September 8 – 9, 2022, in Doula, Cameroon. Under the theme, “Building Oil and Gas Infrastructure to End Energy Poverty in Central Africa by 2030”, this year’s edition of CABEF will unite the Central African sub-region’s energy players and policymakers to discuss the challenges and opportunities within the region’s burgeoning hydrocarbon sector.

Comprising massive oil and gas resources, Central African Economic and Monetary Community (CEMAC) countries have exceptional energy production potential. However, due to aging infrastructure and the low level of investment across the entire oil and gas value chains, energy access rates in the region have remained low and economic growth restricted. In 2022, as CEMAC countries aim to reverse this trend, forums such as CEBAF 2022 will be key, as it represents the best platform where discussions will be held on how to boost investment for optimal oil and gas exploration and production and make energy poverty history once and for all.

IICA to strengthen ties with Africa on innovation, trade and food security in Rwanda (News Ghana)

The Inter-American Institute for Cooperation on Agriculture (IICA) will take a new step in its newly developed work agenda with Africa, during the visit to Rwanda this week by its Director General, Manuel Otero, who will participate in the AGRF Summit, the main African forum to advance the food and agriculture agenda of this continent, which will hold its 12th Annual Summit under the theme “Grow, Nourish, Reward – Bold Actions for Resilient Food Systems”.

In Kigali, the Rwandan capital, Otero will participate, among other activities, in a plenary meeting with ministers and secretaries of Agriculture of Africa together with Indar Weir, the Minister of Agriculture and Food Security of Barbados, and will give a presentation at the discussion panel “South-South Cooperation: Leadership from the Americas and Asia”. He will share this panel with Agnes Kalibata, president of AGRA, the Alliance for a Green Revolution in Africa.

“We are making progress towards deepening the IICA-AGRA relationship and for this reason we are strengthening South-South Cooperation initiatives given the relevance of the African continent and the many opportunities it offers for the agriculture sector in the Americas. At the table that Otero will share with Kalibata in Rwanda, experiences, lessons and ambitions will be presented with a view to promoting development, for which cooperation is paramount”, said Jorge Werthein, Special Advisor to the Director General of IICA.

IICA, together with AGRA -which works to transform African agriculture from a subsistence model to one of solid businesses that improve the livelihoods of farming households- and the African Union Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD) organized the recent “Africa-Americas Ministerial Summit on Agrifood Systems”, which was held in Costa Rica to strengthen bi-regional cooperation, face the challenges of food security and strengthen the role of both continents in productive matters at times where overlapping crises – health, environment and war- pose threats to world food security.

During TICAD8, UNIDO presents its 2022 Industrial Development Report and reflects with its partners on future courses of action for Africa (UNIDO)

The United Nations Industrial Development Organization (UNIDO) presented its Industrial Development Report (IDR) 2022: The future of industrialization in a post-pandemic world at a side event of the Eighth Tokyo International Conference on African Development (TICAD8).

“Working together in global cooperation is of utmost importance to build a more resilient future”, said UNIDO Director General Gerd Müller in his pre-recorded opening statement. “As the global economy recovers from the COVID-19 pandemic, African countries face major challenges related to climate change and soaring food and energy prices. I call for an industrial development that is inclusive and sustainable to build dynamic, innovative and people-centered economies”.

“One of the IDR’s key findings is that countries with stronger industrial capabilities were more resilient to the economic impact”, said Nobuya Haraguchi, Chief of UNIDO’s Industrial Policy Research Unit during his presentation. “The report also identifies three megatrends that are changing the process of industrial development: industrial digitalization and automation; global production rebalancing; and industrial greening”.

UNDP welcomes a new era of investment in Africa as Japan announces additional measures to accelerate recovery and inclusive economic growth (UNDP)

At the conclusion of the 8th Tokyo International Conference on African Development (TICAD 8) hosted in Tunisia, the United Nations Development Programme (UNDP) welcomes a comprehensive package of support from Japan to drive economic growth, digital innovation, green transition and create jobs as the continent grapples with a series of challenges that threaten to undo many of the development gains achieved in recent years. “The impacts of the global food, energy and finance crises are rippling through communities across the globe. These cost-of-living spikes are having a particularly pronounced effect on the Continent of Africa where millions of people now face hunger and famine in regions like the Horn of Africa and the Sahel as climate-change-induced drought takes hold at the same time,” says UNDP Administrator, Achim Steiner.

“At this crucial moment, TICAD8 and its business forum have mobilized fresh development partnerships with the private sector that aim to generate additional investment in some African countries: helping to drive green economic growth defined by new jobs and better livelihoods as well as much-needed measures to tackle a climate crisis that is hitting faster than expected.”

A total of US$30 billion in public and private financial contributions were announced at the high-level meeting, including continuation of a $4 billion investment through Japan’s Green Growth Initiative for Africa to help address climate change on the continent.

Global economy

Investment treaty regime needs reforms to support climate action (UNCTAD)

UNCTAD has launched two issues’ notes dealing with the international investment treaty regime and climate action. A note entitled “International Investment Treaty Regime and Climate Action” provides countries with policy recommendations on reforming the regime to make it more aligned with climate action and other public policy imperatives. And another note entitled “Treaty-based Investor-State Dispute Settlement Cases and Climate Action” takes stock of such cases related to measures or sectors of direct relevance to climate action. “The current international investment agreements (IIAs) regime can constrain states when implementing measures to combat climate change,” the first note says. UNCTAD urges reform of the IIA regime to ensure investment treaties don’t hinder states from achieving a just transition to low-carbon economies.

Integrate trade into climate strategies, DG Okonjo-Iweala says at Africa Adaptation Summit (WTO)

“I feel trade is part of the solution. You might have financing, but if the trade policies don’t align, you may not be able to get the technologies you need for climate adaptation,” DG Okonjo-Iweala said at the event convened by the GCA in preparation for the COP27 climate summit to be held in Egypt in November. “Africa already faces a tremendous amount of costs with respect to adaptation. Through trade, we can increase the return on investment and increase the resources available to African governments for adaptation.”

The Director-General noted that Africa is likely to be the continent most affected by climate change, accounting for 80% of the world’s population that are most at risk, according to the Intergovernmental Panel on Climate Change. Agriculture will be among the sectors most at risk, with some studies estimating that climate impacts could cause crop productivity growth on the African continent to shrink by a third and lead to annual GDP losses of 3.8% by 2060.

Algeria a ‘reliable’ gas supplier: European Union chief Michel (The East African)

Algeria is a “reliable” energy supplier, European Council President Charles Michel said on Monday during a visit to the North African country as Europe scrambles to replace Russian supplies. “Given the international circumstances that we’re all aware of, energy cooperation is obviously essential, and we see Algeria as a reliable, loyal and committed partner in the field of energy cooperation,” Michel said after meeting President Abdelmadjid Tebboune. European officials have been looking to Algeria, Africa’s biggest gas exporter, to fill a shortfall in supplies after Russia’s invasion of Ukraine in February sent prices soaring.

Algiers has seen a string of high-profile visitors in recent months seeking to boost exports. Late last month, French President Emmanuel Macron welcomed moves by Algiers to help “diversify” Europe’s gas supplies.


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