tralac Daily News
The South African Ambassador to France, Mr Tebogo Seokolo says the South African businesspeople will need copious amounts of perseverance and resilience if their ambitions of breaking into the French market were to be realised. Seokolo was speaking after visiting the South African National Pavillion that has been set up by the Department of Trade, Industry and Competition (the dtic) for 26 companies to exhibit their products in the biennial Sial Paris Food Products Exhibition that opened its doors today.
After visiting all the companies’ exhibition stands and interacting with the SA businesspeole, Seokolo expressed his happiness at the SA pavillion, the composition of the business delegation and the quality of products that they companies are displaying in France.
KRA to collect extra Sh3bn from beer, juice, water taxes (Business Daily)
The Kenya Revenue Authority raised taxes on a range of excisable goods like beer, bottled water and juice by 6.3 percent from this month in line with average price growth for the financial year ended June 2022. But the KRA maintains that the increments will not significantly hurt consumption. “It may look little because when you look at the spectrum of taxes that we collect, it comes from various sources which contribute little by little to make the trillions [of shillings] that we collect,” Maurice Oray, KRA’s Deputy Commissioner for corporate policy, told the Business Daily.
Government officials of both countries Kenya and Tanzania have been asked to work towards removing barriers to trade between their countries. The call was made by the two leaders this Monday, 10th October 2022, at a joint press briefing in Dar es Salaam, where they were holding bilateral talks.
President William Ruto and President Samia Suluhu Hassan have agreed on working formula that will eradicate trade barriers between Kenya and Tanzania. In her speech, the Tanzanian Head of State acknowledged that 68 trade barriers were identified and 54 non-tariff barriers were eliminated, but 14 barriers still exist.
Kampala could soon dislodge Nairobi from its status as the financial capital of eastern Africa if Uganda continues with measures that have seen it rise to become the regions’ most developed financial sector. This is according to the sixth edition of the 2022 Absa Africa Financial Markets Index (pdf) released by the Official Monetary and Financial Institutions Forum(OMFIF), a London-based banking think tank and Absa Bank, one of Africa’s leading banks.
The country trounced all regional peers this year to emerge as the region’s leader in terms of growth of foreign exchange markets, macroeconomic opportunities, and enforceability of standard master agreements—three of what the report calls “pillars” of capital markets growth.
Kenya has been leading the region, with a score of 65 in 2020, 58 last year but dropped further to 47 this year, partly due to this year’s general election economic uncertainties.
The Ugandan economy grew at 4.6% this year, faster than had been predicted, with the World Bank citing an uptick in business activity after the economy reopened last January after a two-year closure over the covid-19 pandemic.
“On the supply side, services, and industry were the main drivers of economic growth. There was also strong recovery in wholesale and retail trade, real estate, and education, with industry rebounding through construction and manufacturing,” the World Bank says. It anticipates the rate of economic growth could rise to over 6% in the medium-term.
Tanzania clears trucks ferrying goods to Kenya after delay (Business Daily)
Trucks ferrying goods to Kenya from Tanzania, which had been stuck at the Namanga border last week have been cleared, just days after President William Ruto’s visit to the neighbouring country. An official at the customs office said the snarl-up on the Tanzanian side had been caused by a lack of proper documentation by truckers entering Kenya. Almost 1,000 trucks had been marooned at the border for nearly a week in what customs officials attributed to noncompliance on export permit.
In August, Tanzania introduced an export permit for all persons trading in maize and other grain within its territory.
“The delays that we witnessed in the last week have now been sorted out with the traffic now flowing normally in both directions,” said the customs office at the Namanga One Stop Border Post. The new measure by the Tanzanian authorities made it mandatory for importers and exporters of grain to register with the Business Registrations and Licensing Agency (BRELA) and obtain a trading permit for conducting exports.
Finance minister recommends more taxes to reduce Nigeria’s debt burden (The Guardian Nigeria)
The Minister of Finance, Budget and National Planning, Zainab Ahmed on Tuesday insisted that only the collection of more taxes and effective blocking of revenue leakages were realistic measures that would drastically cut borrowings and reduce the nation’s high debt burden. Ahmed stated this at a workshop on tax expenditure organised by the ECOWAS Commission under the Context of the Implementation of the Support Programme for Tax Transition in West Africa (PATF) in Abuja.
She said: “If we have more taxes and redirect the taxes to the right fiscal sectors of our economy, we will reduce our debt burden. It is not as if the debt is beyond what the government can handle. If you look at the ratio of the debt to the Gross Domestic Product (GDP), I think the government is doing well. “The debt is not something that cannot surmounted. The programme today is to block leakages where the taxes are being diverted. So if we block leakages, and if it is transparent, Nigeria will borrow less and we will have more money to finance other sectors”.
Survey reveals ‘huge support’ for AfCFTA (Engineering News)
The results of the third yearly Africa CEO Trade Survey, run by the Pan-African Private Sector Trade and Investment Committee (Paftrac) and African Business magazine have shown “huge support” for the African Continental Free Trade Area (AfCFTA) and the potential benefits that it could bring, says Paftrac chairperson Professor Patrick Utomi. “The results of our survey are clear. Business leaders are generally optimistic that the free trade area will benefit both their own companies and African economies more generally,” he says.
The Africa CEO Trade Survey results were discussed at a recent trade policy webinar by a panel including the AfCFTA secretariat, Google, Africa Business Council and the International Islamic Trade Finance Corporation. AfCFTA secretariat secretary general office senior adviser Cynthia Gnassingbe-Essonam said during the webinar that the Africa CEO Trade Survey reports constitute “a blueprint for the implementation of the AfCFTA, as it provides real on-the-ground information as to what are the constraints to the private sector to fully take advantage of the AfCFTA.”
New initiative to boosts intra-Africa trade (IPPmedia)
According to the 2021 Economic Development in Africa Report, lack of trust is being revealed as the main reason causing low intra-African trade when compared with intra-European trade. Intra-African trade is currently low at 14.4 percent of total African exports compared to 69 percent for Intra Europe trade. “The fact that many individuals and entities are unable to prove that they are who they claim to be, or unable to provide the necessary credentials to allow them access to goods and services,” says a report.
Smart Africa alliance comprises 32 African countries, international organisations and global private sector players tasked with Africa’s digital agenda. With a vision to create a single digital market in Africa by 2030, the Smart Africa Alliance brings together Heads of State who seek to accelerate the digitalization of the continent and create a common market.
SATA is expected to establish institutional ownership and accountability combined with a trust framework based on standards and trust assurance mechanisms to facilitate cross-border interactions such as e-payments.
The largest reserves of cobalt, diamonds, platinum and uranium in the world are in Africa. It holds 65 percent of the world’s arable land and 10 percent of the planet’s internal renewable fresh water source. In addition to its natural endowments, Africa has the youngest population in the world; around 60 percent of the continent’s population is currently below 25 years of age.
Although, African industry is underperforming in terms of quality employment creation and total factors productivity. The African continent has not advanced to satisfactory industrialization levels. To reverse this situation, the attainment of inclusive and sustainable industrialization and economic diversification in Africa is a priority item on the development agenda.
Africa’s drive for industrialization will benefit from an innovative policy mix that combines the focus on traditional manufacturing with a forward-looking focus on new and emerging high-sophisticated opportunities. This will yield certainly significant economic progress across Africa, particularly with the new Africa Industrial Revolution Strategy (AIRS) framework associated with the fully integrated African market under the AfCFTA.
Debt hampers women’s economic potential (The Herald)
Zimbabwe, like many countries in Africa and across the world is constrained by high public indebtedness, a situation experts say requires immediate practical solutions to resolve given its widespread negative impact, including the strain on women’s ability to realise their full potential in the economy.
Upcoming entrepreneurs and other marginalised women, especially in rural areas, have mainly been at the receiving end of the debt overhang, which the Second Republic inherited and whose resolution it has made one of its top priorities. For the fairer sex, high public debt constraints push many into unpaid and care work.
Experts say the effect of debt contraction and repayment leaves women in invidious situations as debt obligations result in significant revenues having to be channeled towards debt servicing, reducing allocations that can be made available for social service delivery and infrastructure that directly benefit women.
Another challenge that results from high public debt situations for women is the impediments this creates to access to finance for women-led start-up businesses while more efforts are put towards taking care of families by women and girls, with some dropping out of school.
“We borrow to commercialise agriculture and modernise it with new technologies, but how many women say in remote rural areas benefit directly from this, can they access that same technology,” she asked at the just-ended debt conference in Bulawayo hosted by the African Forum and Network on Debt and Development (AFRODAD).
The African Development Bank Group’s Affirmative Finance Action for Women in Africa (AFAWA) initiative is launching its second call for proposals for the Women Entrepreneurship Enablers program, targeting women’s business associations, incubators, accelerators, women-led cooperatives, and civil society organizations that promote the development of women entrepreneurs on the continent.
The program supports projects that enhance the viability and sustainability of formal women-led small and medium-sized enterprises (SMEs) and enables them to access financing opportunities to grow their businesses.
“Entrepreneurship enablers play an important role in bolstering the skills of women to establish ‘bankable’ SMEs. However, the enablers themselves often face challenges, such as viable long-term growth plans and lack of financing, which reduce their reach, impact, and sustainability,” said Esther Dassanou, AFAWA’s Manager.
IFC backs food supply chain strengthening initiative in West, Central Africa (Engineering News)
The International Finance Corporation (IFC), Swiss bank BIC-BRED (Suisse) and Swiss commodity trading group Agro Companies International (ACI) have partnered to help finance the importation of grain into Côte d’Ivoire, Cameroon, Ghana and other African countries. The partners aim to boost food security in West and Central Africa amid a growing global food crisis. The IFC has agreed to invest $20-million through a risk participation agreement, in a $60-million trade finance facility arranged by BIC-BRED, for ACI.
Africa is highly dependent on imported wheat and other grains, with 44% of the continent’s wheat have been sourced from Russia and Ukraine in 2020. Russia’s invasion of Ukraine has led to wheat supply chain disruptions and highlighted the urgent need for grain trade financing to ensure food security in Africa.
The African Union Commission in partnership with the International Federation of Red Cross and Red Crescent Societies (IFRC), the Food and Agriculture Organization of the United Nations (FAO) and the African Development Bank (AfDB) co-convened the high- level conference to advocate for political, humanitarian and financials support as long-term needs and durable solutions to the persistent food insecurity on the continent. The High-Level Food Security and Nutrition Conference convened on 10th October 2022, which brought together over 300 delegates at the African Union Headquarters in Addis Ababa, highlighted the importance of collaboration and cooperation in fast-tracking efforts to mobilize the political, humanitarian, and financial support to respond to the various shocks currently affecting the continent’s agriculture and food systems.
The high-level delegates and African Minsters of Agriculture declared their commitment to support sustainable food security, transforming food systems, and building a viable, commercial, and productive agricultural ecosystem in Africa. They expressed their determination to channel more investment and resources to agriculture and committed to building stronger partnerships within and outside Africa towards new commitments that will contribute to comprehensive responses to the prevailing food insecurity and malnutrition crises in many parts of the continent.
Stakeholders to host the 7th Annual circular economy conference (Kenya News Agency)
Sustainable Inclusive Business Kenya (SIB-K), a knowledge centre under the Kenya Private Sector Alliance (KEPSA), will partner with TheRockGroup (TRG) and the European Union to co-host the 7th Annual Circular Economy Conference to take place on 26th October 2022 in Nairobi. The conference, which will happen ahead of COP27, 2022 United Nations Climate Change Conference, will bring together governments, private sector players, bilateral partners, civil societies, academia, and individuals from across Africa and internationally, to provide an understanding of key ingredients in a successful roadmap to a circular economy.
A circular economy aims to change the paradigm of the take-make-waste model by reducing the environmental impact, keeping resources in use, and increasing efficiency at all stages of the product economy. To achieve this, public-private-community partnerships are key, as they enable the merging of insights around industry and people’s needs and policy developments. Africa has an opportunity to transform its economy into a circular, sustainable and ethical business environment and create jobs, boost MSMEs, and improve gender equality. Governments, civil society, the private sector, and other institutions play a crucial enabling role in shaping and supporting this transition.
Africa will never again be caught flat-footed at the outset of another health pandemic, African Development Bank Group President Dr. Akinwumi Adesina stressed on Monday at the World Health Summit in Berlin. Adesina—who was a panelist in a session of the summit titled “Game Changer: a new lens on investment in health and well-being”—deplored the adverse situation that African countries found themselves in at the very end of the global queue for vaccines when Covid-19 ravaged populations over its rapid global spread.
This situation, Adesina said, had prompted the African Development Bank to take innovative steps to address both the impact of the pandemic in Africa and healthcare financing for the region more holistically.
Adesina said the bank was investing $3 billion in the pharmaceutical industry and had set up the African Pharmaceutical Technology Foundation, which would deal with intellectual property rights and access to proprietary technology to allow Africa to manufacture its drugs and build its own ecosystem for capacity in this area.
The chair of the Services Council, Ambassador Kemvichet Long of Cambodia, said he has started consulting with WTO members on taking work forward and encouraged them to talk to each other to come up with proposals. Members also raised various concerns about measures affecting trade in services at the Council meeting.
Malawi, on behalf of the WTO LDC Group, highlighted that implementation of the services waiver was one of the priorities from the MC12 Outcome Document. Ministers' instructions to the Council included exploring improvements in LDC services export data, reviewing information about suppliers and consumers of LDC services in preference-granting members and learning which best practices can facilitate the use of preferences.
Small is beautiful for services exports (Trade for Development News)
Services play a crucial role in contemporary economies. The share of least developed countries (LDCs) in which the services sector was the main engine of economic growth more than doubled from 38% in 1995 to 77% in 2019. Globally, services generated about two thirds of economic output in 2019 and created most jobs. Small and medium-sized enterprises (SMEs) in a few key sectors are at the heart of this services-led economic transformation.
Most services enterprises are small, with nine out of ten of them having fewer than 100 employees. Entry costs are generally lower than in other sectors. Compared with manufacturing, it is easier to be small and export in services. Where small services firms are competitive and export, they contribute to development and economic transformation.
In more recent times, the way of organizing production is the international supply chain, and technologies are digital. A set of four services, which the International Trade Centre (ITC) calls ‘connected services’, are at the centre of these contemporary economic trends. They are transport and logistics, financial services, information and communication technologies, and business and professional services.
These four connected services are critical to supply chains, in which services now provide a greater share of value – a process known as ‘servicification.’ They are also frontrunners in using digital technologies, which enable services once viewed as local to be offered across borders. They provide the ingredients all firms need to prosper – efficient payment solutions and innovative financing, reliable digital and physical connectivity, and cutting-edge business expertise.
The workshop responded to the high interest of members in building the capacity and expertise of the Committee on Market Access on matters related to the Harmonized System and in better understanding the interlinkages between the work undertaken by the WCO and the WTO on this issue.
The Chair of the Committee, Kenya Uehara of Japan, underlined that the Harmonized System plays a key role in facilitating cross-border trade by providing a universal language for the coding and classification of goods. The HS is currently used by 211 economies and over 98% of the merchandise trade is classified in terms of the HS. Changes to its nomenclature can have an impact on the rights and obligations of WTO members, particularly with regard to their tariff commitments.
The Technical Barriers to Trade (TBT) Agreement Transparency Champions Programme was formally launched on 10-14 October with an in-person course in Geneva. This pilot initiative aims to scale up the application of, and benefits from, transparency in regulation, and foster champions for transparency. The first cohort includes 26 officials from African countries with responsibilities for TBT transparency procedures.
In his opening remarks at the launch of the course, Deputy Director-General Xiangchen Zhang said: “Transparency is a fundamental principle of the WTO and a cornerstone of the Technical Barriers to Trade Agreement.” Transparency plays a key role in helping public and private stakeholders get timely information on regulatory developments, such as those relating to environmental protection, food labelling, and Covid-19 among many others, he added.
The IMF’s World Economic Outlook released last week forecasts that global economic growth will slow from 3.2 percent this year to 2.7 percent next year. The 2022 projection was unchanged from the last estimate, in July, but next year’s was cut by 0.2 percentage point. The global deceleration will be broad-based, and the 2023 projection is less than half of last year’s 6 percent expansion. Countries accounting for about a third of the global economy are estimated to have a two-quarter contraction in real gross domestic product this year or next. The outlook is also fraught with uncertainty. We estimate there is a one-in-four probability global growth will fall below 2 percent next year and that there is a likelihood of 10 percent to 15 percent that it will drop below 1 percent.
United Nations Secretary General Antonio Guterres on Wednesday said the international financial system is “morally bankrupt” as it favours the rich countries, and he expected India’s involvement in reforming it. The developing countries received “very little from the financial instruments of recovery” as they tried to recover from the COVID-19 pandemic, and some of them are facing debt distress, he observed.
Speaking at an event at the Indian Institute of Technology Bombay, he said India’s upcoming presidency of the G20 grouping will be an opportunity to bring the values and vision of the developing world to the top table of the global economy. “The international financial system is morally bankrupt. It was devised by the rich to serve the interests of the rich.
Participants heard a report of the Facilitator of the Discussion Group on “Possible definitions” of terms used in the agreement (such as “investment”, “investor of another member” and “juridical person”) and heard the co-coordinators’ report about their consultations over the past two days with groups of members in different configurations. These consultations touched upon various issues, including responsible business conduct, the definition of “authorization” for an investment, home state measures, and supplier-development programmes.
Climate finance committed by major multilateral development banks (MDBs) rose in 2021 with over $19 billion committed to climate change adaptation finance, according to the Joint Report on Multilateral Development Banks’ Climate Finance, published on Friday. The report tracks the progress of MDBs in relation to their climate finance targets such as those announced at COP21 and the greater ambition pledged for the post-2020 period.
The report finds that total financing commitment by MDBs to low-income and middle income economies in 2021 of $50.666 billion, surpassed the annual expectations of $50 billion set in 2019 at the UN Secretary General’s Climate Action Summit in New York. Of the $50.666 billion of climate finance committed to low-income and middle-income economies, $47.24 billion was from the MDBs’ own account and $3.426 billion from external resources that were channelled through the banks. Mitigation finance committed to low- and middle-income economies totalled $33.055 billion, or 65%, while adaptation finance totalled $17.611 billion, or 35%. The report also records a notable increase in adaptation finance to over $19 billion in 2021, again beating expectations.
ANALYSIS: Mining the numbers behind the rise in commodity stocks (Daily Maverick)
Global steel industry body expects 2.3% contraction in demand this year (Engineering News)
Global industry organisation the World Steel Association (worldsteel) forecasts that steel demand will contract by 2.3% this year to reach 1.80-billion tonnes. It adds that steel demand will, however, recover in 2023, growing by 1% to 1.81-billion tonnes.
Annual Meetings 2022: Development in Crisis (World Bank)
Increased poverty. Food shortages. Energy shocks. Debt crises. Climate change. Inflation. War. “A series of harsh events and unprecedented macroeconomic policies are combining to throw development into crisis,” World Bank President David Malpass said in a speech ahead of the meetings at Stanford University. “The human consequence of these overlapping crises is catastrophic.”
At the Annual Meetings Plenary session on Friday, Malpass said the World Bank Group and other Bretton Woods Institutions should consider their roles and capital structure, and evolve to better address climate change and global public goods.