tralac Daily News
Minister in the Presidency, Mondli Gungubele, has expressed concern at the results of the Gross Domestic Product for quarter two, which show that the GDP decreased by 0.7% after two consecutive quarters of positive growth. “As a country, we have experienced slow growth and rising unemployment. Nonetheless, in the midst of these difficulties, our general public and economy has shown to be strong,” Gungubele said on Tuesday.
“As indicated by Stats SA, manufacturing is the largest industry in KwaZulu-Natal and the damage caused to factories and plants, and disruptions to logistics and supply chains, decreased national manufacturing output by 5.9%. “It was also a heightened period during which the globe experienced slow economic growth. South Africa, like many countries around the world, experienced increases in the prices of food, housing and fuel, which were events beyond the control of government,” the statement issued by the Government Communication and Information System (GCIS) said. Although the GDP contracted, Gungubele noted that there are signs that the economy is on the road to recovery.
Botswana, S/Africa vegetable trade war escalates (WeekendPost)
The looming trade dispute between Botswana and South Africa has escalated with some sections of that country’s government weighing a number of options. South Africa through the Western Cape department has said that it intends to hold talks with role players in private sector within Botswana’s agriculture industry as part of interventions on import bans by Botswana. Initially, it was only the South African private sector which has spoken out about the decision by Botswana and Namibia to close their borders to some of vegetable imports from South Africa.
Daniel Johnson, the spokesperson for Western Cape Provincial Minister for Agriculture, Ivan Meyer, indicated that 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,” he said.
Urging for Namibia and Botswana to reopen their borders to allow the importation of fruits and vegetables, Johnson said 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.”
“Informed by the commodity approach model, the WCDoA has signed agreements with various industries, including the vegetable industry. These agreements aim to ensure private sector participation in developing and advancing the agricultural sector and should be leveraged for our agricultural exporters’ benefit,” said Johnson.
Namibia’s trade deficit up in July (Xinhua)
Namibia’s trade deficit widened to 4.3 billion Namibia dollars (about 288 million U.S. dollars) in July, up from 2.5 billion Namibia dollars recorded in the previous month, according to the country’s latest trade statistics released Tuesday. In the year that ended in July, Namibia maintained an average trade deficit of 3.3 billion Namibia dollars, according to the Namibia Statistics Agency (NSA).
“For July 2022, Namibia’s exports earnings were down by 14.8 percent on a monthly basis, while the imports bill was up by 4.5 percent,” NSA Statistician-General Alex Shimuafeni said, adding that the deficit was reflected mostly in the petroleum oils import bill, followed by copper ores and concentrates, and ores and concentrates of precious metal.
Kenya’s trade deficit for the first six months of the year widened by nearly a quarter on elevated expenditure on fuel and factory supplies from abroad, exerting pressure on the shilling and hurting job opportunities. The trade deficit – the gap between merchandise imports and exports – deepened to Sh814.02 billion from Sh620.82 billion in the prior year amid persistent disruptions in global supply chains that have increased cost of importing goods. The 23.73 percent, or Sh193.2 billion, expansion in the trade gap came at a time importers battled runaway shipping costs amid a shortage of dollars due to a mismatch in supply and demand.
Kenya has over the years struggled to narrow its goods trade deficit partly due to reliance on traditional farm produce exports such as tea, horticulture and coffee which are largely sold raw, fetching relatively lower earnings. Betty Maina, the Industrialisation and Trade Cabinet Secretary, says most farmers export produce raw due higher taxes slapped on semi-processed or processed products in destination markets, largely in Europe. “The biggest challenge around value addition is tariff escalation where when you sell in raw form you get zero tariff but when you process, additional duties emerge,” Ms Maina told the Business Daily.
Sugarcane farmers tell William Ruto to revive taskforce report (Business Daily)
Sugarcane farmers have now called on President-elect William Ruto to prioritise the sub-sector and resuscitate the industry which is the backbone of Western Kenya’s economy. Despite the generation of various recommendations that could jumpstart the sector, they noted that lack of implementation continues to stall the process. Citing the sugar taskforce report and the Sugar Bill, Kenya Association of Sugarcane and Allied Products (KASAP) chairman Charles Atiang’ Atiang’ called on Dr Ruto to urgently convene a stakeholders’ meeting to kick start the initiatives which he noted are gathering dust. “For the sugar industry to realise meaningful changes, we need to develop a legal framework to streamline the industry which is currently on its knees,” he said.
Mr Atiang’ noted that the Sugar Bill 2022 which was sponsored by former Kanduyi MP Wafula Wamunyinyi hangs in the balance after his bid to recapture his seat failed. “Unfortunately, the bill which sought to ensure that farmers get maximum returns from their sweat got stuck at the Senate,” he said. Among others, the bill proposed the establishment of the Kenya Sugar Board to regulate, promote and develop the sugar sub-sector which is currently regulated by the Agriculture and Food Authority (AFA) under the Crops Act.
Global economists upgrade Kenya’s growth outlook after poll (Business Daily)
Global economists have marginally upgraded Kenya’s growth outlook for this year following the peaceful conclusion of a closely-contested presidential vote despite soaring cost of living and mounting public debt stress. A consensus growth outlook from 14 world-leading banks, consultancies and think tanks shows economic activities could expand 5.5 percent this year, a 0.1 percentage-point rise over the month before the General Elections.
“Despite softening from 2021, GDP growth will be amongst the strongest in the region this year following several upward revisions from our panelists,” wrote analysts at Barcelona-based FocusEconomics, who compiled the outlook report between August 16 and 21. “The slowdown [from last year’s] will be partly driven by tighter monetary policy, a weaker shilling and high inflation; all tempering demand. Additionally, extreme weather events and a higher risk of debt distress are key factors to watch.”
New maize shock as Tanzania freezes exports permits for Kenyan traders (The East African)
Tanzania has frozen the issuance of new maize export permits for Kenyan traders in what could worsen the shortage of the product, which has driven prices of flour to historic highs. Several millers and animal feed manufacturers in Kenya told Business Daily the neighbouring country stopped issuing permits last week, tightening the supply of the staple locally. “We have been unable to get maize from Tanzania since last week after the country stopped issuing export permits to traders with the cutting off of stocks from Tanzania expected to push up the cost of flour,” said Ken Nyaga, the chairperson of the United Grain Millers Association.
Tanzania has for the last two years become a key source market for maize to bridge deficits especially after the two countries mended their trade ties with the change of regime last year following the death of former President John Magufuli.
The Kenya Bureau of Standards (Kebs) said the maize coming in through the Namanga border has significantly declined, confirming that imports into the country at that point is originating from Zambia. “We have witnessed a significant decline in maize coming in from Tanzania; on average we are now getting 10 trucks from a high of 80 trucks previously,” a Kebs official at the Namanga border said.
The move leaves Zambia as the only key source market for the produce to bridge the local deficit as most stocks from Uganda— also a key source — is now heading to South Sudan owing to high prices in Juba.
Following the enactment of the African Growth and Opportunity Act (AGOA) some 22 years ago, the American market has been flung open for Uganda’s Micro, Small and Medium Enterprises to take full advantage of. Going by the Ministry of Trade and AGOA country response office statistics, the last three financial years provide a solid case for the extension of the initiative falling under the US Trade Act (legislation) and at the same time give a proper assessment of what is in store for this programme if efforts to get it right are not only consolidated, but harnessed as well.
Over the last three years, most part of which, the country in particular and the globe in general, were under key and lock, resulting from the Covid-19 pandemic and the resultant uncertainties. As other regional countries were finding their feet, Uganda was feeding the US market with her coffee, crafts, vanilla, chocolate, tea, textile and dried fruits—all under the AGOA initiative.
A year before the pandemic (2018/19), thanks to AGOA initiative, Uganda’s exports to US were valued at $1 million (nearly Shs4 billlion). In 2019/2020, the exports grew to $3.4 milion (about Shss13 billion) and by close of 2021, they rose to $5.1million (about Shs20 billlion).With that growth, although still peanut compared to Uganda’s trade with European Union (EU) and the United Kingdom (UK), the signs according to AGOA exporters and government technocrats, seem promising enough to make a case for the renewal of the legislation beyond 2025, about two and a half years away.
Angola deposited, on Monday, in the African Union (AU) headquarters, the letter of adhesion to the Agreement on the Constitution of the African Trade Insurance Agency (ATI) and the instrument of ratification of the African Charter on Statistics.
Affiliation with ATI will allow Angola to attract long-term financing at competitive rates, while Angolan entrepreneurs will more easily benefit from credit insurance, political risk, coverage against insolvency and investment. The African Statistics Charter, which was adopted in February 2009 and entered into force in February 2015, is intended to serve as a policy framework for the development of statistics in Africa, in order to ensure better quality and comparability of the statistics needed to monitor the process of economic and social integration on the continent.
Nigeria pins hopes on port hub role (China Daily)
Nigeria is closing in on its ambitions to get on the global map for shipping services with a deep-sea port that will serve as the main transshipment hub for West Africa. Construction of the Lekki Deep Seaport, in Lagos state, is more than 95 percent complete, and is expected to begin operating as soon as the end of the year. The $1.5 billion port, which is being built with Chinese backing, will be at the heart of the Lagos Free Trade Zone.
Africa’s most populous country now relies on two old ports that are constantly congested and their shallow harbors restrict the type of vessels that can dock there. Those constraints made clear the need for the Lekki Deep Seaport, with financing from China Development Bank. Work got underway in 2017.
As the first deep-sea port in Nigeria, the facility will significantly increase the goods handling capacity of the country and boost its economic development, according to China Harbour Engineering Company, the contractor for the project.
Nigeria To Establish Special Economic Zone For Bitcoin, Crypto (Bitcoin Magazine)
Nigeria is seeking to create the first economic free zone for bitcoin and cryptocurrency in West Africa through the Nigeria Export Processing Zones Authority (NEPZA), per a press release. NEPZA is in discussions with Binance, one of the leading cryptocurrency exchanges, as well as Talent City which specializes in building special economic zones. Our goal is to engender a flourishing virtual free zones to take advantage of a near trillion dollar virtual economy in blockchains and digital economy,” said Adesoji Adesugba, NEPZA’s managing director.
The slow economic recovery from COVID-19 and a delay in carrying out key reforms, including of subsidies, is likely to further strain Tunisia’s public finances and deepen budget and trade deficits, according to the World Bank’s latest Tunisia Economic Monitor.
Issued in French under the title Gérer la crise en temps d’incertitudes (Managing the crisis in times of uncertainty), the report forecasts economic growth of 2.7% in 2022, largely due to the post-COVID recovery of tourism and trade, plus the solid performance of the mining and light manufacturing sectors. This growth rate is slightly lower than earlier World Bank forecasts, a reflection of the impact of the war in Ukraine. As a result, the economy is expected in 2022 to remain well below the pre-pandemic period.
“Just as its economy started to recover from the COVID-19 crisis, Tunisia faced the double challenge of rising commodity prices and the war in Ukraine, which has put huge pressure on global wheat and energy supplies.” said Alexandre Arrobbio, World Bank Country Manager for Tunisia.
The general objective of the AfCFTA include creating a liberalised market for goods and services through successive rounds of negotiations, contribute to the movement of capital and natural persons and facilitate investments by building on the initiatives and developments in the State Parties and the Regional Economic Communities (RECs), lay the foundation for a Continental Customs Union at a later stage; and to promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties.
Lamin Dampha, the permanent secretary at the Ministry of Trade, in an interview explained that the reasons why Gambia is yet to trade under the AfCFTA, saying there are so many unfinished businesses.
“It should have started in January 2020 but unfortunately, because of Covid-19, that could not materialise. Covid-19 has slowed down the negotiation process but everything is kicking up now. Negotiations are ongoing and lots of progress has been registered. The Gambia is among the countries that are actively participating in the negotiation and I have been leading it from 2017 to 2020. We have been contributing a lot in terms of reshaping the rules that are coming out and making sure we have an outcome that is favourable to The Gambia.”
African gold producers grapple with illicit pre-financing networks (Global Trade Review)
Small-scale gold producers in East Africa are dependent on informal or criminal pre-financing structures, with illicit gold likely ending up in international trading markets, researchers warn.
An estimated 20% of the world’s gold in circulation is derived from artisanal and small-scale gold mining (ASGM), but much of this trade has its roots in networks linked to organised crime and political corruption, according to fresh research by Themis, a financial crime intelligence provider.
With legitimate importers and financial institutions often unwilling or unable to provide financial support to ASGM operations, miners are increasingly turning to illicit networks to provide pre-financing to cover machinery and other costs. As a result, gold linked to armed groups, exploitation, corruption or financial crime is likely being refined and re-sold on the international market, with its origins impossible to trace.
‘Beitbridge transformation boon for regional trade’ (The Herald)
The ongoing transformation of the Beitbridge Border Post at a cost of US$300 million will go a long way in cementing Zimbabwe’s position as a vital player in regional and international trade, Minister of Information, Publicity and Broadcasting Services, Monica Mutsvangwa has said.
She commended the Government for automating services and separating traffic which has helped address efficiency challenges that had become perennial at the country’s and SADC’s busiest inland port.
The border is being upgraded in three phases which include, the freight terminal and ICT facilities (Phase 1), bus terminal, and the private motor vehicles and pedestrian terminal which fall under phases 2 and 3 respectively. “Projects like the Beitbridge Border Modernisation we are seeing here is cementing our position as a country in terms of trade facilitation,” said Minister Mutsvangwa.
The organisation’s general manager, Mr Nqobile Ncube said under the current set up they are able to clear 60 percent of commercial cargo arriving at Beitbridge.
China has removed tariffs on 98% of taxable items originating from nine of Africa’s least-developed nations. The new tariff policy, which came into force on September 1, applies to agricultural and mineral imports from the Central African Republic (CAR), Chad, Djibouti, Eritrea, Guinea, Mozambique, Rwanda, Sudan and Togo. Several Asian countries have also been included in the scheme. It follows Chinese President Xi Jinping’s announcement at the China-Africa summit in November 2021 that steps would be taken to increase the import of agricultural products from Africa.
Xi said at the time that the aim was to boost these imports from the continent to $300 (€302 billion) over the next three years, eventually reaching $300 billion a year by 2035. Africa, which still primarily exports raw materials to China, only accounts for a small part of China’s total imports.
The Prime Minister Dr. Edouard Ngirente says the increasing food prices on the African continent should be a wake-up call for African countries to take bold actions by investing in strengthening food systems. The Premier made the call on Tuesday while officially opening the African Green Revolution Forum (AGRF) Summit 2022 which opened in Kigali with the aim of driving agricultural transformation and strengthening food systems on the continent.
“While most countries are recovering from this global shock, our ability to get together more than ever is key in advancing food systems to ensure food security for our people”. “The current high food prices we are experiencing nowadays, makes it difficult for families and communities to meet their own food needs.” “This calls for bold measures to improve our capabilities for sustainable food production and supply to markets. What we do now impacts tomorrow’s results,” Dr. Ngirente said.
“Increasing investment in strategic areas of agricultural value chain such as reduction of post-harvest losses, which are estimated between 30% and 40% of total production in developing countries, use of fertilizers and improved seeds, adoption of smart agriculture as well as de-risking the sector.
The African Development Bank returns as a top-tier partner of the African Green Revolution Forum (AGRF) – Africa’s largest agriculture conference – taking place in Kigali, Rwanda, from 6-9 September 2022.
On Monday, the Bank kicked off its AGRF 2022 activities by co-organizing a pre-forum side event focused on the African Emergency Food Production Facility at the Kigali Convention Center. The Bank’s $1.5 billion Facility is an unprecedented, comprehensive initiative to support smallholder farmers filling a food shortfall of at least 30 million metric tons of food - especially wheat, maize, and soybeans imported from Russia and Ukraine. Bank Vice President for Agriculture, Human and Social Development, Dr. Beth Dunford, will deliver opening remarks at the side event, speaking to how the new Facility will provide 20 million African smallholder farmers with certified seeds, increased access to agricultural fertilizers, as well as help create an enabling environment for investment in building Africa’s food systems.
The government of Rwanda and the AGRF Partners Group are hosting AGRF 2022, organized under the theme, Grow, Nourish, Reward. Bold Actions for Resilient Food Systems.
“Russia’s war in Ukraine, recovery from Covid-19’s economic impacts and the realities of climate change are complicating efforts to build resilient food systems in Africa. Coming to the continent’s premiere forum related to agriculture with solutions – like the Bank’s African Emergency Food Production Facility – affords opportunity to establish new partnerships with a shared vision to feed Africa,” said Dunford.
Delegates attending the opening of the Africa Regional Food Safety conference in Kampala are pushing for formulation of uniform standards for food and agricultural products meant for export in the region and globally. Speaking at the meeting which will be on until the 13th of September, Dr. Bayo Fatunmbi, the Acting World Health Organisation Representative to Uganda said they recently did an assessment of the food safety situation in the country and generated evidence that they will use to evaluate the gaps that can be filled in the country to be able to match with globally acceptable standards.
The meeting gathered delegates from forty nine countries that are members of the World Health Organization and Food and Agriculture organization coordinating Committee for Africa. Speakers expressed concern about aflatoxicin contamination that has been associated with products such as maize, groundnuts and beans from Uganda.
Meanwhile, Uganda is the new coordinator for the regional committee and Ebiru says their bigger aim is to have products from East Africa gain more access to the bigger African Continental Free Trade area.
New funding to help Africa adapt to climate change announced (Engineering News)
New funding, totalling $55-million, to help African countries to adapt to the effects of climate change, was announced by four West European countries at the Africa Adaptation Summit on Tuesday. The summit, being held in Rotterdam in the Netherlands, was organised by the Global Centre on Adaptation (GCA) and was attended by leading figures in governments, businesses and the United Nations. In order of the size of their contributions, the donor countries concerned were the UK, allocating $23-million, Norway, assigning $15-million, France, with $10-million, and Denmark, with $7-million. The GCA expected that this State funding would allow it to mobilise a total of up to $5-billion to fund climate adaptation projects across the continent.
The world cannot decarbonise without Africa’s production of green hydrogen, hydrogen fuel cell company Hypowa CEO and trade association African Hydrogen Partnership SG and cofounder Siegfried Huegemann has said. “It is just not possible,” he said during the second yearly Hydrogen Economy Discussion conference, in Johannesburg, on September 6.
WTO Director-General Ngozi Okonjo-Iweala said the following combination of trade disruptions will continue to cast a pall on the global economic recovery: Russia’s war with Ukraine is fueling an escalating crisis in global energy and food markets. Bottlenecks continue to plague shipping routes and the line of container vessels waiting outside Germany’s North Sea ports has increased in recent weeks. Meanwhile, China’s “Covid Zero” approach to combating pandemic continues to shut down some of the world’s largest cities, ports and manufacturing hubs. And this summer, extreme weather events demonstrated the devastating impact that climate change can have on supply chains in many of the world’s largest economies.
“The outlook is not promising,” Okonjo-Iweala told Bloomberg News in an interview on the sidelines of the Africa Adaptation Summit in Rotterdam. “We are in a risky environment. We are still in multiple crises and exogenous shocks.”
Despite the challenging conditions to enhance the use of technology for many African LDCs, some notable progress is being made across the continent. 2021 was a record year for tech startups in Africa, with nearly 2.15 billion USD in investment capital directed to the sector. This amounts to a 206% increase over 2020 investment figures according to data from the research group Disrupt Africa’s African Tech Startups Funding Report.
FinTech enterprises – financial firms that leverage digital technologies and increase digitalization to provide financial products and services – received nearly half of this injection, with 1.04 billion USD. Moreover, diversification has been the trend in the African tech ecosystem over the past 7 years, with new firms specializing in digital payment systems, crowdfunding, peer-to-peer consumer financing, peer-to-peer business lending and invoice trading entering the market. The African tech startup ecosystem is also growing, as new firms broaden the market to include specialized services notably in FinTech, AgriTech, and HealthTech.
The challenge of financial inclusion and digital financial inclusion even more so, remains a major hurdle to development in African LDCs. This is true for the financial services available in the world’s 46 LDCs, and particularly true for the 33 which are in sub-Saharan Africa. Economic development is almost impossible without financial inclusion, and Africa is lagging behind other continents in terms of financial inclusion. For the continent, financial inclusion is largely synonymous with sending and receiving mobile money, accepting payments, agency banking and remittance payments, among other transactions. There is a need for a well-functioning financial infrastructure in Africa and the LDCs that empowers individuals and businesses to engage more actively in the economy.
For emerging technology firms, careful consideration should also be paid to financial assistance in the form of debt versus equity investments. For small, knowledge-intensive firms to grow, tailored and alternative financing mechanisms are needed, such as venture capital and business angels funding. These innovative funding models are increasingly emerging outside the traditional banking system through the use of Internet platforms or websites to connect businesses in need with investors.
The Speaker of the National Assembly, Nosiviwe Mapisa-Nqakula, has emphasised the need for a collective solution from the Brazil, Russia, India, China and South Africa (BRICS) bloc to mitigate the global food, fuel and financial crisis. “Food security and nutrition of our vulnerable populations are under threat, and legislatures of all BRICS nations, in particular, occupy a unique place to foster cooperation and people-people relations through public diplomacy, where there could be strategic direction of multilateralism and mutual development,” Mapisa-Nqakula said. Mapisa-Nqakula was speaking at the 8th BRICS Parliamentary Forum (BRICS PF) virtual meeting held on Tuesday.
The Speaker commended the 14th BRICS Summit Strategy on Food and Security Cooperation, which is aimed at stabilising global food production and contributing positively to global food security infrastructure.
President Vladimir Putin said on Wednesday he wanted to discuss reopening a U.N.-brokered deal that allows Ukraine to export its grain via the Black Sea after accusing Kyiv and the West of using it to deceive developing countries and Russia.
Putin’s criticism, which alleged that the deal was delivering grain, fertiliser and other foodstuffs to the European Union and Turkey at the expense of poor countries, is likely to raise fears that the pact could unravel if it cannot be successfully renegotiated.
The agreement, facilitated by the United Nations and Turkey in July, created a protected export corridor via the Black Sea for Ukrainian grain after Kyiv lost access to its main export route when Russia attacked Ukraine via land, air and sea. The agreement, designed to help ease global food prices by increasing supplies of grain and oilseeds, has been the only diplomatic breakthrough between Moscow and Kyiv in more than six months of war. Moscow said at the time that one of the main reasons it signed the deal was because it wanted to help developing countries stave off food shortages.
But Putin said on Wednesday that Ukraine and the West were not honouring its terms and that most of the grain was going to the EU, not to poorer countries, something the Russian leader said would have to change if what he called an “unprecedented humanitarian catastrophe” was to be averted.
The European Union and China are questioning each other’s commitment to fighting climate change, following the failure of climate talks by the Group of 20 (G20) last week. At the end of last week’s negotiations in Bali, Indonesia, the 20 governments failed to agree a joint communique on climate change. Diplomatic sources had said some countries, including China, were unhappy with language that had already been agreed and enshrined in past deals. The EU’s climate change chief on Monday accused “the biggest emitter on this planet” – a reference to China – of attempting to backtrack on the Glasgow Climate Pact, which capped two weeks of U.N. negotiations in November.
“Some of the very, very big players on this planet are trying to roll back from what they had agreed in Glasgow,” Frans Timmermans told a meeting in Rotterdam on climate adaptation in Africa. “And some of them, even the biggest emitter on this planet, try and hide behind developing countries in using arguments that I think, at some point, are no longer viable,” said Timmermans, who is executive vice president of the European Commission.
“As a developing country itself, China has always stood by the vast number of developing countries and firmly safeguarded their common interests,” a spokesperson from the Chinese ministry said. The failure by rich nations to deliver promised climate finance has raised tensions in global climate negotiations. The 27-country EU is the biggest provider of climate finance, according to OECD data.