Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Local news

Rebuilding economy tops leaders’ conference agenda (SAnews)

Finance Minister Enoch Godongwana says the country’s economy faces an urgent need to rebuild infrastructure, finance the just energy transition and improve growth prospects. The Minister was delivering a keynote address at the Government Employees Pension Fund (GEPF) Annual Thought Leadership Conference 2022 at the Cape Town International Conference Centre on Thursday.

He explained that the Russia-Ukraine conflict is manifesting through a threefold crisis: access to food, energy and finance. Speaking on the domestic economic outlook and the impact of the geopolitical landscape on South Africa’s economy, he said the conflict is a powerful example of how economies are integrated.

“The conflict has created a new set of multi-dimensional risks to our economic outlook and to fiscal and monetary policy,” the Minister said, adding that it has also exacerbated the supply chain bottlenecks that emerged during the COVID-19 pandemic.

“We have already seen the impact of these developments on the latest GDP numbers. This has had a major impact on the cost of our debt, as well as that of our imports. Just last week, our external account turned negative for the first time in a long while.

“While commodity prices have begun to fall, the price of coal, one of our largest exports, continues to rise,” Godongwana said. “We have also learnt that this rapid change comes with a number of risks, but it also comes with opportunities; opportunities to improve how we do things, as well as opportunities to prepare ourselves better for the changes that lie ahead,” he said.

SA puts trade on top of agenda for Ramaphosa’s meeting with Biden (Daily Maverick)

Trade, rather than the war in Ukraine, is likely to top the agenda of President Cyril Ramaphosa’s meeting with US President Joe Biden at the White House on Friday. That, at least, is how Pretoria sees it. However, Pretoria came a little closer this week to condemning Russia for its invasion of Ukraine, perhaps in preparation for the meeting with Biden. But winning Biden’s support for a further extension of the Africa Growth and Opportunity Act (Agoa), which gives South African exports duty-free and quota-free access to the lucrative US market, will certainly be a higher priority for Pretoria. International Relations and Cooperation Minister Naledi Pandor noted in Washington this week that Agoa is due to expire in 2025 and that Pretoria hopes that it will be extended beyond that date. Agoa has boosted South African exports to the US, especially in value-added goods, such as cars, as she pointed out.

Devil in detail of South Africa’s $8.5bn climate funding (Engineering News)

A proposal by wealthy nations to mobilise $8.5-billion for South Africa to help reduce its dependence on coal has proved more complex than anticipated, which has stalled its implementation. The money was offered to South Africa at United Nations climate talks in Glasgow last year under a deal that was seen as a possible blueprint for helping other coal-reliant developing countries transition to using cleaner energy. Details of the types of financing that will be made available and the terms and conditions attached to it are still being hashed out, along with South Africa‘s investment plans, said Barbara Creecy, the nation’s environment minister.

Energy security critical for economic reconstruction and recovery (Devdiscourse)

Mineral Resource and Energy Deputy Minister, Dr Nobuhle Nkabane, says energy security is critical for economic reconstruction and recovery, particularly for a developing economy. “We are implementing the Integrated Resource Plan (IRP) 2019 and driving required policy reforms to increase investment and ascertain energy security of supply,” Nkabane said. Addressing a media briefing in Cape Town on the forthcoming Southern Africa Oil and Gas Conference to be held on Friday and Saturday, Nkabane said hydrocarbons, including oil and gas, will remain part of the global energy mix, including South Africa’s energy mix, into the foreseeable future.

Nkabane said in retrospection within the energy space, the department has been placing emphasis on the development of indigenous oil and gas resources to reduce major dependencies on the imports of petroleum products, which contributes towards worsening South Africa’s economic status on the balance of payment.

Eradicating Barriers to Export Business in Nigeria (This Day)

Among many factors identified as impediments to successful export of Nigerian goods at a recent conference, two challenges stood out, which include making product acceptable in the international market and eliminating bureaucracies and protocols at the ports. Chinedu Eze writes that government and its agencies must review and enforce smoother process to export of potentially multi-billion dollars Nigerian goods Last week, stakeholders from aviation, trade and transport sectors of the nation’s economy, brainstormed at the 2022 edition of the Chinet Aviation and Cargo conference held in Lagos and brought to the fore many challenges impeding export trade in Nigeria. From not meeting international standardisation, inefficient regulation, corruption to hiccups in cargo freighting from the nation’s airports, the expose at the conference made it obvious that for many reasons, it is Nigeria that is holding itself down from taking advantage of the huge market, whereas Nigerian farm produce and other products from Nigeria are in high demand from different parts of the world.

‘How weak structure, productive capacities worsen Nigeria’s vulnerability’ (The Guardian Nigeria)

The United Nations Conference on Trade and Development (UNCTAD), Centre for the Study of the Economies of Africa (CSEA) and renowned economists and development experts yesterday, in Abuja, said Nigeria’s economy calls for serious concerns unless urgent actions are taken.

“Nigeria is an extractive sector-driven economy, where oil and natural gas account for more than 80 per cent of the country’s exports. This structural economic rigidity poses inherent labour market challenges and offers little flexibility to absorb job seekers in the national economy. “This is because extractive sectors by their nature are capital intensive and generate a relatively small proportion of employment. “The Nigerian economy, which is dependent on natural capital and the export of raw or unprocessed commodities, is subject to the vagaries of external shocks- be they economic, political or health related. Due to the impact of the COVID19 pandemic, Nigeria’s economy is expected to face the most severe recession in decades: GDP dropped by nearly four percent in 2020 and the recovery for 2021 and 2022 remains sluggish.

Senegal seeks to cash in on global dash for gas (African Business)

President Macky Sall of Senegal has become a popular figure on the international stage. His country’ gas reserves, from which exports are due to start in the next couple of years, are now the target of intense interest by European leaders desperate to find alternatives to Russian gas following Russia’s invasion of Ukraine in February 2022.

When German Chancellor Olaf Scholz visited Senegal in May, he said securing LNG supply from the country was “a matter worth pursuing intensively”. The UK is already heavily involved in the offshore sector, where BP is the operator for the gas export projects. The EU’ energy commissioner dropped into Dakar earlier in the year.

Sall, for his part, has been playing up Europe as a destination for LNG, noting that Senegal’s position at the western extremity of Africa puts it just a few days’ shipping time from European markets, while also suggesting there would be competition from Asian buyers.

African trade and integration

Tough negotiations still lie ahead for Africa Continental Free Trade Area (IOL)

Tough negotiations are happening behind the scenes between African governments to hammer out differences in their localisation and industrial protection policies in respect of the aims of the Africa Continental Free Trade Area (AfCFTA), which seeks to liberalise trade between the countries.

This was according to Trudi Hartzenberg, an executive director of the Tralac Law Centre, who spoke about the imminent commencement of inter-continental trade at the Eastern Cape Export Symposium yesterday.

She said the problem was that almost every country had its own industrial protection and localisation policies, including Special Economic Zones, but in the context of the proposed liberalised trading regimes of the AfCFTA some countries might argue that these concessions unfairly pitted the industries and companies of some countries against their counterparts in other African countries.

Dr Clive Vinti, an associate at XA International Trade Advisers, said the South African government needed to specify more clearly what it meant by its localisation policies, such as did it pertain to products being made locally, or locally sourced raw materials being used in product manufacture, or percentages of raw materials used.

Africa looks to assist youth, women in economy (The Herald)

As a trade conference focusing on women and youth drew to a close in Tanzania on Wednesday, African leaders have discussed recommendations to enhance the roles of women and youth in Africa’s economic integration agenda. Among the topics discussed during the African Continental Free Trade Area Conference on Women and Youth in Trade held in Dar es Salaam are the removal of all nontariff barriers, massive investment in human resources and easy access to loans to help increase participation of youth and women in intra-Africa trade.

“When our people approach regional or international markets, there are a number of nontariff barriers such as permits, licenses and so on. If the whole of Africa is working to remove the nontariff barriers, then business is going to grow,” President Hassan said.

Monique Nsanzabaganwa, deputy chairperson of the African Union Commission, expressed the need for having supportive policies in place that will bolster trade within Africa by tapping into the great human resource potential of innovative youth on the continent.

East Africa’s bloc launches trade policy to boost integration (Xinhua)

The Intergovernmental Authority on Development (IGAD), an East Africa bloc, on Thursday launched a trade policy in order to boost regional integration. Fatuma Adan, head of Mission for Kenya at IGAD, told journalists in Nairobi, the capital of Kenya that the IGAD trade policy is designed to create an open and unified regional economic space that will boost intra-IGAD trade by creating the necessary environment and removing obstacles to trade for goods and services.

Adan said the IGAD trade policy will provide a mechanism for expanding intra-regional exports of both consumer goods and capital goods through the development of regional value chains.

Adan said that the trade policy will coordinate policies and regulatory trade framework to ensure that measures undertaken across IGAD member states are not contradictory, adding that the policy will also enhance regional integration by assisting its members in the domestication and implementation of the African Continental Free Trade Area (AfCFTA).

Mixed progress in SADC development plan (The Herald)

There has been varying progress in implementing the Regional Indicative Strategic Development Plan (RISDP) during the 2020-2022 period, with more scope to be done. Consultant, Dr Manasa Dzirikure, made this observation when he made an assessment at the start of a regional hybrid dialogue on the implementation of the SADC RISDP 2020-2030, which began in Johannesburg, South Africa on Tuesday. His assessment focused on five result areas in terms of quantifiable execution of activities planned in the health and agricultural sectors, and the cross-cutting issues of climate change and actions supportive of women and youth.

He said progress was exemplified by an 85 percent implementation of planned regional activities by the SADC Secretariat during 2020/2021, against a low budget utilisation rate of 58 percent.

He noted that the SADC Secretariat had implemented the Regional Agricultural Policy (RAP) for improved production, productivity and competitiveness; improved regional and international trade and access to markets of agricultural products; and improved private and public sector engagement and investment in the agricultural value-chains, among others.

Produce high quality goods, local industries urged (Chronicle)

LOCAL industries have been urged to take full advantage of the African Continental Free Trade Area (AfCFTA) and the Common Market for Eastern and Southern Africa (COMESA) agreements that avail a wider market and upgrade their products to be competitive.

Speaking at the inaugural Trade Tariff Conference in Bulawayo on Wednesday, Competition Tariffs Commission (CTC) assistant director Mr Isaac Tausha said the signing of the AfCFTA is an opportunity for the local industries to access a wider market and also access affordable raw material. “There is a need for the players to upgrade product quality and also adjust the cost of doing business so that we produce affordable products that can compete in the international market,” said Mr Tausha.

COMESA Research Forum: Call for comprehensive research on pharmaceuticals (COMESA)

There is need to undertake comprehensive research on pharmaceuticals production and trade flows in the COMESA region to determine trade and competitiveness opportunities in the pharmaceutical industry. This was one of the recommendations from the four-day 9th COMESA Annual Research Forum that closed today in Cairo, Egypt. The forum which attracted eminent scholars, researchers, academics, regional and international experts from the public and private sector, stressed the need to strengthen mobilization of resources to promote science, technology and innovation activities. This is intended to build resilience in line with the theme of the forum: “Enhancing Business Competitiveness and Resilience to Boost Intra-COMESA Trade”.

Eight research papers based on emerging topical issues in economics, trade and regional integration at continental and global level were presented for review.

They included a study on the trade implications of the cross-border data transfer laws/policies in the COMESA region. Conducted by the Mr. Adam Willie from Zimbabwe titled ‘Cross Border Data Exchange under the COMESA Digital Free Trade Area (DFTA): Implications on Intra-Regional Trade’. Another study presented was on the status of digitalization in the COMESA region which investigated the effect of digitalization on Intra-COMESA trade over a period 2011 to 2020. 

Mombasa-Kampala is most frequently used route for cargo (Monitor)

The Mombasa- Kampala route is the most frequently used in East Africa, accounting for 734 trips according to a new survey by Trade Mark East Africa. Presenting a paper on regional trade and transport study on September 1 during the sixth high level economic growth forum, Impact and Results Director at TradeMark East Africa, Ms Catherine Nanzigu said the study aimed at analysing traffic flow for commodities along the major trade corridors by different modes of travel in Eastern Africa.

Explaining to the participants the purpose of the Origin Destination (OD) study, Ms Nanzigu said the aim was to sample from the full freight traffic collected under the traffic census to paint an accurate picture of freight flows.

Digital transformation set to supercharge economic growth in East African community (Technext)

Now that Kenya’s Supreme Court has confirmed William Ruto’s victory in the country’s recent, close-run presidential race and the new President has just taken office, the ball can start rolling again on important intra-African trade talks. At the top of the agenda is fully integrating the 90-million-strong Democratic Republic of the Congo (DRC) into the East African Community (EAC), which it joined in late March.

The DRC is the largest country in sub-Saharan Africa and possesses huge mineral wealth, yet its population remains among the world’s poorest. It is therefore hoped that the DRC’s EAC membership will not only establish new trading routes between the East African bloc’s member nations but also unlock opportunities for foreign investment and sustainable development in the DRC and across the region.

To deliver on these ambitions, Kenya and the DRC will need to deepen their already-strong ties. A robust DRC-Kenya partnership could rapidly accelerate the digital revolution, which would supercharge economic growth in both countries and improve the quality of life for their citizens.

Kenya rattled as Britain rejects new EAC tariffs (The Citizen)

UK has demanded that Kenya abide by the provisions of an Economic Partnership Agreement (EPA) signed between the two nations. The new levy affects a tax band of products that also includes iron and steel, edible oils, furniture, leather products, and fresh-cut flowers. The UK has demanded that its exports to Kenya be exempted from the newly raised East African Community (EAC) tax charges that took effect on July 1, posing a big dilemma for Nairobi, which is bound by the regional bloc’s decisions. Trade Principal Secretary Johnson Weru said the UK demands that Kenya abide by the provisions of an Economic Partnership Agreement (EPA) signed between the two nations—a request that, if granted could trigger similar demands from other nations.

In a deal struck on May 5, 2022, by the Partner States of the EAC, the Common External Tariff (CET) for imports entering the bloc has been raised by up to 35 per cent from July 1.The levy is imposed on imported finished products from non-member States in a strategy to stimulate local industry and production. Mr Weru said the UK had sought assurance “that the EAC-CET 2022 will not apply to them on the basis of the standstill provisions of the Kenya-UK EPA, which entered into force prior to the amendment. This presents a challenge to the implementation of the new CET to ongoing trade agreements.”

Maritime experts advocate new tech for cleaner shipping in Africa (Vanguard)

Speaking at the 7th Lagos International Maritime Week, LIMW, held in Lagos, the French Ambassador to Nigeria, Mme Emmanuelle Blatmann, who was represented by Laurence Monmayrant, Consul-General of France in Lagos, said that profound mutations are also taking place in the maritime industry for the better. She explained that, more than the energy crisis, there had been repeated major natural disasters which must trigger the change for the shipping industry as a big energy consumer.

Also speaking, Otunba Kunle Folarin, Chairman, Nigerian Port Consultative Council, said that the immediate concerns that needed to be addressed were issues in the maritime and shipping environment, particularly in Marine Technology and Machinery.

Morocco, Nigeria, ECOWAS Sign Gas Pipeline Agreement (Morocco World News)

Morocco’s National Agency for Mines and Hydrocarbons (ONHYM), Nigeria’s National Petroleum Company Limited (NNPC), and the Economic Community of Western African States (ECOWAS) signed a Memorandum of Understanding (MoU) for the Morocco-Nigeria gas pipeline project in Rabat today. Speaking at the signing ceremony, ONHYM Director General Amina Benkhadra highlighted the Morocco-Nigeria gas pipeline’s potential to boost regional economic integration and reinforce sustainable development in the west African region. “Energy is essential to all economic development, and gas is the backbone of the energy transition,” Benkhadra said, emphasizing Africa’s “significant resource that could be used to accelerate the pace of economic and social development.”

She noted that the Morocco-Nigeria gas pipeline, which seeks to provide energy for over 11 African countries, aims to contribute to the development of key sectors, including food security, infrastructure, mining, renewable energy, and human development.

How Africa Can Escape Chronic Food Insecurity Amid Climate Change (IMF Blog)

Climate change is intensifying food insecurity across sub-Saharan Africa, where Russia’s war in Ukraine and the pandemic are also adding to food shortages and high prices.

Climate events, which destroy crops and disrupt food transport, are disproportionately common in the region. One-third of the world’s droughts occur in sub-Saharan Africa, and Ethiopia and Kenya are enduring one of the worst in at least four decades. Countries such as Chad are also being severely impacted by torrential rains and floods.

The resulting rise in poverty and other human costs are compounded by cascading macroeconomic effects, including slower economic growth. A new IMF policy paper examines how fiscal and financial policies and reforms such as technology transfer can reduce this damage and help countries adapt.

Critical Element of Trade in Safe Agro-Food Commodities in East Africa (Farmers Review Africa)

Increased intra-African trade in agricultural commodities and services can help reduce Africa’s annual food import bill, currently over US$80 billion, by local sourcing of import substitutes while at the same time expanding agricultural exports from a base of about US$60 billion per year.

Representatives drawn from governments, the private sector, civil society, academia, regional bodies and agricultural value chain associations from East Africa met for a three-day training workshop, from 29-31 August 2022, on Food Safety and Coordination on Border Regulations towards improving the safe trade of agro-food commodities in the region.

Gujadhur further stated that food safety is at the heart of FAO’s work, supporting the achievement of Better Production, Better Nutrition, a Better Environment, and a Better Life, leaving no one behind. “Food safety is a shared responsibility. There is no better time than this for the Eastern African region to harness efforts to improve food safety, promote cross-border food trade, and benefit from opportunities arising from the Africa Continental Free Trade Agreement (AfCFTA). Zero hunger will not be achieved without food safety, as if it is not safe, it is not food”.

Africa: Intra-regional trade is under computed due to econometric and methodological errors (Brookings) (Ecofin)

The overall contribution of intraregional trades to Africa’s exports is far higher than estimates because of “econometric and methodological errors,” U.S. think tank Brookings indicates in a recent working paper. According to the paper, intraregional trade accounts for 22 to 25% of the continent’s overall exports, well above the 16% announced by several studies.

In the working paper titled “The economic significance of intra-African trade: Getting the narrative right,” Brookings notably considered the usually high informal cross-border trades on the continent. “While informal cross-border trade is a global phenomenon, studies tend to concur that it is much more widespread on the African continent than in other regions.

The high prevalence of informal cross-border trade -which is by definition intra-regional since it concerns exclusively goods traded by neighboring countries- is mainly noticeable in small landlocked countries and some subregions of the continent.

Signing of High-Profile Agreements and MoUs Herald Conclusion of ACTIF2022 (Afreximbank)

The three-day AfriCaribbean Trade and Investment Forum 2022 (ACTIF2022) hosted in Bridgetown, Barbados, ended on a high note with the signing of a total of 14 agreements and memorandums of understanding (MoUs) aimed at deepening economic ties between Africa and the Caribbean. The agreements, expected to form the foundation for strengthened bilateral relationships, trade and investment ties,

A Trade and Investment Agreement signed between Afreximbank and the Central Bank of Barbados (CBB) will see the deployment of a $250-million Trade and Investment Finance Promotion Programme aimed at mobilizing trade and investment between Africa and the Caribbean in collaboration with CBB and local banks in Barbados.

Other agreements signed include a US$150-million Revolving Import Finance Facility Agreement between Afreximbank and MRS Oil & Gas for the importation of refined products, exportation of crude oil, as well as crude oil vs refined products swaps, and pre-delivery of petroleum against crude allocations

The Forum also witnessed the signing of an MoU Establishing the Africa Caribbean Business Council. Entered into by Afreximbank, the Africa Business Council and the Caribbean Private Sector Organisation, the MoU is aimed at private sector cooperation and joint action pursuant to the deepening of business, trade, investment and people relations among the private sector and people of CARICOM and the African Union.

Global economy

G-7 trade ministers pledge to boost supply chain resiliency (Kyodo News Plus)

Trade ministers from the Group of Seven advanced economies agreed Thursday to bolster supply chain resiliency for vital products, including critical minerals, amid Russia’s ongoing war in Ukraine. The ministers from Britain, Canada, France, Germany, Italy, Japan and the United States, plus the European Union, said in a statement after their meeting in Germany that recent crises have drawn attention to “systemic vulnerabilities to chronic risks and acute supply chains shocks” that hamper economic growth and security.

“We, the G-7 Trade Ministers, underline that diversifying trade and expanding trading relations on a mutually beneficial basis is key to ensuring well-functioning supply chains and to improving the resilience and sustainability of our economies.”

Japanese Economy, Trade and Industry Minister Yasutoshi Nishimura told reporters after the meeting that strengthening supply chain resiliency needs the involvement of emerging and developing economies, suggesting it will be necessary to expand cooperation beyond the existing G-7 framework.

Meanwhile, the ministers expressed concerns over some trade practices such as intellectual property theft, market-distorting actions of state-owned enterprises, and harmful industrial subsidies, among others.

Least developed countries want fund to cover damage from global warming (Africanews)

Developing countries across the world are demanding that compensation for damage caused by global warming be high on the agenda of the UN World Climate Conference (COP27), a statement from the group said Wednesday in Dakar. At the same time, two senior government officials from Senegal and the Democratic Republic of Congo (DRC) participating in the conference jointly refused to allow their countries to give up future oil and gas exploitation under pressure from industrialised countries in the name of the fight against global warming.

Ministers and experts from the Least Developed Countries (LDC) Group, about 45 mainly African and Asian countries, met this week in the Senegalese capital to adopt a common position for COP27. Another meeting of African ministers is scheduled for Thursday, which US climate envoy John Kerry is expected to attend.

Various speakers stressed the small share of their countries in global greenhouse gas emissions and the disproportionate toll they are paying.

The final declaration of the meeting expresses “the crucial importance of setting up a financing mechanism to deal with loss and damage”.

Kerry Urges Rich-poor Unity On Climate Effort Ahead Of UN Talks (Barron’s)

US climate envoy John Kerry on Thursday urged African countries to help overcome divisions between rich and poor nations at the upcoming UN COP27 talks. Meeting African environment ministers, Kerry acknowledged the historic role of wealthy countries in stoking climate change but said tackling today’s emissions was a global problem.

Kerry pointed to the worsening impact from climate change on Africa. “(The) climate crisis here in Africa is more acute than it is in some other parts of the world,” Kerry said. “This year has seen devastating floods in South Africa, Mozambique and Uganda that just killed hundreds and displaced tens of thousands. “Meanwhile, the Horn of Africa is in its fourth year of drought, with more than 18 million suffering from food insecurity as a consequence.”

On Wednesday, a bloc of the world’s poorest countries said they would urge COP27 to push ahead with another envisioned area of climate finance -- a fund to compensate vulnerable nations for damage such as floods and rising seas. Ministers and experts from the 46-nation Least Developed Countries (LDC) bloc, also meeting in Dakar, said setting up a funding mechanism for the proposed fund was of “crucial importance.”

Nigeria Drops to Africa’s 4th Largest Oil Producer, OPEC Reports (Voice of America)

Nigeria is facing a record reduction in oil production, oil cartel OPEC reports, dropping from the first largest producer in Africa to the fourth, behind Angola, Algeria and Libya. The Organization of Petroleum Exporting Countries monthly oil market report for August showed that Nigeria’s production stood at 980,000 barrels a day, a decline of more than 100,000 barrels per day compared to July.

For decades, Nigeria has been Africa’s largest oil producer. But in recent years, theft and sabotage at production sites have hampered output. Oil was once Nigeria’s biggest earner and contributor to national GDP, but the latest data shows information and communications technology and trade contributed more during the second quarter this year.


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