tralac Daily News
President Ramaphosa concludes positive Washington DC visit (The Presidency)
President Cyril Ramaphosa has concluded his official working visit to the United States at the invitation of President Joseph Biden. The two leaders deliberated on a range of critical issues of national, regional and global importance during their bilateral meeting, where trade, investment, global peace and stability, health, as well as climate change and the just energy transition were discussed.
On trade and investment, there was agreement on the need to create a more attractive environment for American companies to invest in South Africa, where an estimated 600 US companies are already doing business in a range of sectors. A joint task force on trade and investment will be established to expand bilateral economic ties. In 2023 South Africa will host the African Growth and Opportunity Act (AGOA) Forum which will map the next phase of Africa-US trade. President Ramaphosa welcomed the United States’ further commitment to improve bilateral trade and investment volumes, which will create much needed jobs and economic growth in South Africa. President Ramaphosa expressed South Africa’s concerns about tariffs levied by the US on South African steel and aluminium products, which South Africa views as unfair and punitive.
South Africa’s farm exports are an economic lifeline – with weak spots (The Conversation)
International trade has been at the core of South Africa’s agricultural progress since the early 2000s. Since 1994, the country has excelled in opening up new markets, as evidenced by several free trade agreements with critical regional and international markets. The country exports roughly half of its produce in value terms. The top exportable products are high value and labour-intensive horticulture produce, a subsector that expanded significantly over the past two decades. Citrus, table grapes and a range of deciduous fruits dominate the export list. This means international trade has become crucial for sustaining farm profitability and job creation in South African agriculture.
Over the past decade, agriculture and agro-processing exports have averaged 11% of the country’s overall exports, up from 9% in the decade before. This shows South Africa’s success in opening export markets, and farmers’ ability to produce high quality products that meet global standards and needs.
Namibia and Botswana continue to enjoy good trade relations under the configuration framework of the Southern African Customs Union (SACU),
It comprises a membership of five countries, namely Botswana, Lesotho, Namibia, South Africa and eSwatini. In recent years, Namibia’s merchandise trade with Botswana has increased, with the overall exports to Botswana amounting to N$8.6 billion in 2021 as compared to the export value of N$7.5 billion recorded in 2020. On the other hand, the value of imports from Botswana stood at N$752 million after recording N$978 million in the previous year. The effect of Covid-19 was observed in 2020’s merchandise trade between the two parties, with 2021 showing some recovery from the pandemic.
Though a remarkable trade relation has been observed in recent years, there is a need to maximise the utilisation of trade capacity to boost trade between the two parties.
Zimbabwe’s GDP to decline by half in 2022: IMF (CGTN Africa)
Zimbabwe’s Gross Domestic Product (GDP) growth is expected to decline by about half of its 2021 levels to around 3.5 percent in 2022, the IMF said after a delegation completed a mission to the Southern African country on Monday. The lender attributed the decline to a slowdown in agricultural and energy outputs owing to erratic rains and rising macroeconomic instability, amidst a recovery in mining and tourism.
The IMF pointed out that uncertainty remains high, and the country’s outlook will depend on the evolution of external shocks, the policy stance, and implementation of inclusive growth-friendly policies.
South Sudan has bought a piece of land in Djibouti for the construction of a harbour in its latest effort to find an alternative to the port of Mombasa which is facing an onslaught from Dar-es-Salaam. South Sudan has bought three acres of land at the port of Djibouti for the construction of a facility that will handle its import and export goods as Juba seeks to cut reliance on Mombasa. The latest development comes just two months after the Chamber of Commerce in South Sudan said it will shift its cargo to the port of Djibouti, which it termed as convenient for the Africa’s youngest State.
Mombasa has been the main route for all consignments destined to the landlocked country with South Sudan importing nearly all of its cargo through the Kenyan port. Mr Chol said they were ready to facilitate and stock goods destined for South Sudan through Djibouti.
The Economic Commission for Africa (ECA) and Standard Bank Group, with the support of the Arab Bank for Economic Development in Africa (BADEA), the Motor Industry Retirement Funds (MIRF) and Copartes Pension Fund and the African Union Commission (AUC), have announced the African Women Impact Fund (AWIF) Initiative’s achievement of its first commitment of USD$60 million. The announcement was made at the inaugural The Global Africa Business Initiative, held from 18 – 19 September during the week of the United Nations General Assembly in New York City.
The existence of gendered stereotypes and racial biases in society have detrimental effects globally. This holds true within the investment space where these prejudices obstruct female entrepreneurship, appointment of women in leadership roles, and empowerment of female fund managers. Of the $69.1 trillion of financial assets under management globally, less than 1.3% are managed by women and people of colour. It is increasingly alarming that only 7% of private equity and venture capital funding is allocated to women-led businesses in emerging markets.
Africa set for fertiliser boom as food crisis remains critical (The East African)
A fertiliser boom is breaking out across Africa as calls for food security gain momentum amidst a widespread continental food crisis. With an estimated 346 million people on the continent negatively impacted by a severe food crisis, according to the Food and Agriculture Organisation (FAO), the use of fertilisers has become more central, even as environmental and green farming activists call for caution. The global production of fertilisers is responsible for around 1.4 percent of annual CO2 emissions, and fertiliser use is a major contributor of non-CO2 greenhouse gas emissions, according to Carbon Brief.
Africa has barely used fertilisers. Only six percent of Africa’s cultivated land is irrigated, and the average fertiliser consumption in sub-Saharan Africa is estimated at 17 kilogrammes of nutrients per hectare of cropland, according to the Alliance for a Green Revolution in Africa (Agra).
The African Development Bank has released a series of toolkits to assist small and medium enterprises in tapping green investment opportunities contained in countries’ Nationally Determined Contributions (NDCs) under the Paris Agreement. The toolkits, released under the Bank’s Private Sector Investment Initiative for NDCs, were launched on the sidelines of Africa Climate Week, which took place in Libreville, Gabon, from 29 August to 2 September.
The package comprises toolkits on climate risk screening and opportunity assessment tool, business carbon footprint tool, and a guidance note on mainstreaming climate and green growth into Bank’s line of credits. They will help strengthen the capacity of financial institutions and small companies to invest in climate action under the NDCS.
“They will help African SMEs and financial institutions to develop and finance climate-informed projects and support the implementation of the Paris Agreement in African countries,” he said. It is estimated that the cost of Africa’s adaptation to climate change will reach as high as $30 billion a year by 2030.
A collaborative energy approach, like that of the European Union (EU), is needed in Southern Africa, says Namibia presidential economic adviser James Mnyupe. At least South Africa and Namibia should put together a case that shows seriousness about decarbonising sub Saharan Africa, says Mnyupe, with the two countries looking to share with the world the burden of building the required pipeline and transmission line infrastructure.
Mnyupe, who was a panel member at the Hydrogen Economy Discussion, says EU-like collaborative regional and continental approaches are needed in the renewable energy and green hydrogen space. Mnyupe says African policy makers need to be aware of the different policy toolboxes needed for African countries playing different roles.
For example, Namibia is poised to be an exporter of green hydrogen, South Africa perhaps a net importer and others playing self-sufficiency roles. “If you look at Morocco, it may export but it has really large industries that it may need to decarbonise, and South Africa might very well be a good example of that as well. “Depending on what type of country you are, you will need to think strategically about the different pieces of legislation and policy that you would want to be championing.
Following are UN Secretary-General António Guterres’ remarks to the Global Africa Business Initiative, “Unstoppable Africa — Africa Leading the World”, in New York today:
Africa is unstoppable. Africa is an essential part of global business and a major investment destination. Africa includes some of the world’s fastest growing economies. And Africa has more — much more — to offer. Every sector of the African economy is growing — from manufacturing to agriculture, from services to finance.
Africa is facing tremendous headwinds and crises not of its own making: from COVID-19 and climate chaos, to the war in Ukraine; from growing inequalities, a cost-of-living crisis, and the reversal of the Sustainable Development Goals; to a global financial system that is rigged against Africa and requires fundamental reform. But we are here together because we know the time has come for action based on a new narrative: highlighting the opportunities for new financing models and technologies; recognizing the emergence of Africa’s creative and cultural industries on the global stage; focusing on climate transition and transforming food systems; and ensuring the full participation of women, young people, and the African diaspora.
The heads of the International Monetary Fund and World Trade Organization on Monday warned about the risk of inaction on climate change and called for broad collective action at a time when threats from extreme weather events are escalating around the world.
“We need to recognize that we live in a more shock-prone world. This is not just a blur and it’s going to go away. And the topic of this week, climate, this crisis is already hitting us like a ton of bricks,” said Kristalina Georgieva, managing director at the IMF, at an event for the opening of Climate Week in New York City.
A heated debate took place in the informal meeting on 14 September, with an urgent call by some WTO members for establishing a work programme dedicated to helping net food-importing developing countries (NFIDCs) and least developed countries (LDCs) deal with food insecurity.
On the table were two proposals submitted by Paraguay (G/AG/W/223) and Egypt (G/AG/W/224), offering initial thoughts on how to structure the process going forward. Members agreed to having an open and flexible format and taking up a set of themes under the framework of the work programme. Some developing members highlighted the importance of examining food insecurity in light of the current situation and considering the policy space needed to build resilience. Some members, however, warned that discussing new flexibilities might entail negotiations that fall within the purview of the ongoing agriculture negotiations.
The world has a long “to do list” to build a safer, healthier and more inclusive world by 2030, and on 19 September global leaders at the United Nations General Assembly (UNGA) called for urgent action to get back on track. Time is running out to achieve the 17 Sustainable Development Goals (SDGs) – the midpoint for implementation is 2023 – and the combined crises of the war in Ukraine, the COVID-19 pandemic and the climate emergency are pushing the goals further out of reach. To turn the tide, UN Secretary-General António Guterres convened a 90-minute “SDG Moment” to kick off the UNGA’s high-level week and spur stronger commitments to ensure the successful implementation of the goals.
UNCTAD chief Rebeca Grynspan joined Mr. Guterres, other UN leaders, heads of state, Goodwill Ambassadors and global activists to highlight transformative solutions to rescue the SDGS. These included a call to reform the global financial system and boost investment in SDG-related sectors, such as health, education and renewable energy. When the goals were adopted in 2015, UNCTAD estimated at $2.5 trillion the SDG investment gap for developing countries. The gap has swelled to an $4.3 trillion abyss in the wake of the pandemic, and the war in Ukraine is expected to further widen it.
BRICS countries – Brazil, the Russian Federation, India, China and South Africa – are increasingly important players in global services markets, despite pandemic-induced setbacks. BRICS countries accounted for 10% of global services exports and 13% of global services imports in 2020. The International Trade Centre report, BRICS Trade in Services Report 2022, finds that BRICS countries can improve competitiveness in services trade by improving domestic policies, developing stronger business networks, leveraging regional transport and logistics initiatives and improving data collection and sharing the information between BRICS regulators.
Egypt announced on Saturday that it will raise transit fees in 2023 for all types of vessels passing through the Suez Canal. According to a statement released by the Suez Canal Authority, transit fees for tankers passing through the canal will rise by 15%. The increase for dry bulk carriers and tourist ships is 10%. The fee hikes will take effect on Jan. 1, 2023.”The increase is inevitable and a necessity in light of the current global inflation rates,” the authority’s chief, Osama Rabiee, said in the statement.
An analyst told CNBC that while the rise in Suez dues won’t have a “massive impact” on trade flows, it will fuel ongoing inflation. ”Oil prices are currently dropping and so if the canal prices itself out against the competition (which is going round Africa) then the Canal Authority would lose out,” said the chairman of Mandarin Shipping, Tim Huxley. Global oil prices have had a choppy year — from skyrocketing to more than $130 per barrel after the Russian-Ukraine war broke out, to tapering to around $80-$90 per barrel in recent weeks.
“The savings of sailing via the Suez Canal are still very large, particularly due to ... very high oil and bunker prices. In addition, the shipping markets are generally seeing high demand and low vessel availability. This also encourages shipowners to send vessels via the fastest routes,” said Niels Rasmussen, chief shipping analyst of shipping association Bimco. Rasmussen said that he does not expect shipowners to turn to alternative routes, such as sailing south of Africa. ”Shipping markets are generally seeing high demand and low vessel availability. This also encourages shipowners to send vessels via the fastest routes,” said Rasmussen.
G7 nations to take tougher line on trade with China (The Associated Press)
The Group of Seven major economies have agreed to take a tougher, more coordinated stance toward China when it comes to trade, Germany’s economy minister said Thursday. After a two-day meeting with fellow G-7 officials, Minister for Economic Affairs and Climate Protection Robert Habeck told reporters that discussions about China were part of an effort to ensure high international trade standards and to prevent Beijing from using its economic might to steamroll other nations. “The naivety toward China is over,” Habeck said, referring to Germany’s own position on China. “The time when one said ‘Trade, no matter what,’ regardless of the social or humanitarian standards, ... is something we shouldn’t allow ourselves anymore.”
He said Germany would work to persuade the European Union to establish “a more robust trade policy toward China and respond as Europeans to the coercive measures that China takes to protect its economy.”