Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Local news

South African transport infrastructure needs to be prioritised, panel states (Engineering News)

Infrastructure in South Africa’s logistics sector needs to be a priority, alongside a regulatory framework that has a “no nonsense” approach to criminality, if the country’s roads, rail and transport industries are to thrive and be considered safe again, says professional body Railway Safety Regulator (RSR) safety permits management departmental head Denis Owaga. Speaking during an RSR and Creamer Media co-hosted webinar this week, he suggested that could be achieved by controlling crime and turning infrastructure development around.

However, this had proven to be a challenge, as the sector was still inundated with unsustainable solutions to issues, political issues driving foreign direct investment (FDI) decisions and a high rate of criminal intent on various routes.

These FDI influences are being addressed, and an amicable solution should be in the works soon, said Road Freight Association CEO Gavin Kelly in response to the same question posed by facilitator Chartered Institute of Logistics and Transport: South Africa president Elvin Harris.

The South African government has made several recommendations to address this challenge within its own borders, and has recommitted to these objectives in the National Development Plan when it was formally published.

However, systemic challenges remained around infrastructure as well, which Agriculture Business Chamber of South Africa chief economist Wandile Sihlobo said was concerning, considering that South Africa exported about half of its agricultural products, valued at just over $12-billion a year.

Namibia inks deal with EU on sustainable raw materials, its exports to EU up 50% (The North Africa Post)

Ahead of the COP27 in Egypt, Namibian and European Union officials say they have reached an agreement for Namibia to export rare earth materials to the EU, as Namibia’s total exports to the EU market have soared by 50%. The EU is interested in developing the mining of minerals like lithium, cobalt and graphite, which are currently mined on a small scale in the country, according to Erasmus Shivolo, a senior official from Namibia’s Ministry of Mines and Energy.

This possible agreement comes at a time when Western nations are seeking sources besides China for these minerals, which are used to make batteries for mobile phones, electric cars and other technology. Shivolo added that the EU is also interested in Namibia’s ambitious plan to become a producer of “green hydrogen,” a clean power source that could be used by industry and to power electric vehicles.

According to EU Ambassador to Namibia Sinikka Antila, both parties are now working on a MoU, which is an outgrowth of an African Union-European Union summit that took place in Brussels last year. The agreement has not yet been signed, but it will be soon, Antila said, adding that both sides “agreed that we will start on building a partnership on sustainable raw materials and the green hydrogen.”

Weakening economy pushes Kenyan banks to brink of fresh crisis (The East African)

Kenyan banks are teetering on the brink of another crisis triggered by the deteriorating economic environment and the persistent Russia-Ukraine military conflict after demonstrating strong recovery from the economic fallout effects of the Covid-19 pandemic. The lenders, who were handed a severe blow by the Covid-19 pandemic, started 2022 on a strong footing, posting double-digit profit growth in the six months to June 30, with majority announcing resumption of dividend payment to shareholders.

The industry lobby Kenya Bankers Association (KBA) said risks in the economy – including skyrocketing inflation, weakening currency, falling forex reserves and falling revenue collections – could filter into the banking sector dampening prospects for the entire year.

The Kenya Revenue Authority has a failed to meet its prorated revenue targets three months into the 2022/2023 fiscal year largely due to the deteriorating business environment and inflationary pressures that have forced consumers to cut on spending.

Nigeria’s rice import falls by 98.4% to 15 metric tonnes in 7 months (Nairametrics)

Nigeria’s rice imports from the Thai Rice Exporters Association (TREA), one of the largest rice exporters in the world, fell by 98.4% to 15 metric tonnes between January and July 2022, as against 957 metric tonnes imported during the corresponding period in 2021. This information is according to data from TREA for January to July 2022, as seen by Nairametrics.

During the review period, Nigeria’s rice imports from the association fell to the lowest level on record, even as rice importers spent less than a million Thai Baht. In the comparable period of 2021, Nigeria spent 15 million Thai Baht and a total of 30 million for the full year. Nigeria’s rice importation has dropped significantly in recent years following measures by the Federal Government to reduce importation and improve local production.

In 2015, the CBN on behalf of the Federal Government placed a ban on 41 imported items (rice included), from accessing foreign exchange from the official window. Also, the government banned the importation of rice through land borders and kept a hefty 70% tariff on imports coming through ports. These actions were taken in a bid to discourage importation and encourage local production.

Meanwhile, there have been reports of rice being smuggled into the country through land borders despite the government’s efforts to clamp down on these illegal importations. In 2021, the Senate Committee on Agriculture noted that about 2 million metric tons of rice are being imported or smuggled into the country.

Export of Nigeria’s fresh produce, vegetables slumps in six years (The Guardian Nigeria)

Compared to other ECOWAS countries, Nigeria’s export of fresh fruits and vegetables has slumped in the last six years, causing huge losses to farmers and the country in terms of revenue. Industry players are worried that as a very small share of the volume of fruit and vegetables produced is exported, the share is decreasing by half, as the production is growing and the level of export reducing. This, stakeholders claimed, is part of the reasons why airlines depart the country without exportable goods, a development that has been linked with loss of foreign exchange for the country.

The Senior Project Manager, COLEACP, Wester Schepers, who gave a graphical illustration of African countries performances, said Nigeria’s export of the commodities dropped since 2016, noting that as at 2019, Niger Republic and Côte d’Ivoire exported most fresh fruits and vegetables from the sub-region.

“In terms of total agro commodities from ECOWAS countries, Côte d’Ivoire contributed 42 per cent, Ghana 18 per cent and Nigeria eight per cent. Others were Senegal seven per cent, Niger six per cent, Burkina Faso six per cent, Benin Republic four per cent and Guinea-Bissau three per cent. Togo two per cent, Guinea two per cent, Mali one per cent and Gambia one.

Government urged to provide infrastructure to aid port operations (The Guardian Nigeria)

The Chief Executive Officer of Lagos Free Zone, Dinesh Rathi, has called on the government at both state and federal levels to support the private sector in creating a port-based ecosystem that encourages the diversity of businesses around it as this would help advance the economic prosperity of not just Nigeria but the entire West-African region. He stressed the need for government to provide road infrastructure and develop barging facilities to help decongest existing and upcoming ports.

Rathi, who made these remarks at the 2023 Ehingbeti Lagos Economic Summit, said: ”There is no reason why cargo that is ultimately consumed in Nigeria should be diverted to Lome or Cotonou. The potential of Nigerian ports and coastline is not fully exploited. Today, Nigerian ports are handling about 1.1 million containers as against ports in Egypt or South Africa, which handle 5 million containers.”

He said with Nigeria already signed on to several trade & investment treaties, such as the Africa Growth Opportunity Act, Lagos stands a real chance of becoming the manufacturing hub of Africa.

“What a cargo owner needs are to be able to take his cargo to the port. We need to utilise the barges as a way of evacuating cargoes. First of all, we need to transport the cargo. If it is by road or barge, it is an investment opportunity because it creates a lot of employment. I see more opportunities than problems. A lot of cargoes meant for Nigeria are being diverted to neighbouring countries like Togo (Lome) because our ports are not efficient”, said Secretary-General of the African Shipowners Association, Mrs Funmilayo Folorunsho

Options for Establishing a Local Content Regulatory Unit for Zambia’s Mining Sector (AfDB)

Mining is a core element of the Zambian formal economy in terms of its contribution to GDP, employment, and export receipts. Both the African Union’s Mining Vision (AMV) and the Southern African Development Community’s (SADC) Regional Mining Vision (RMV) emphasise the importance of realising the mineral extraction and processing linkages, and particularly the mining supply chain linkages, by increasing local content. The SADC RMV recognises the unique mining supply chain opportunity of a relatively large regional market for hard rock mining inputs (larger than the EU market), which could be exploited if member countries recognised regional content in their local content regulations, albeit discounted in relation to national local content value. The size of the Zambian import displacement opportunity is estimated at around $1 billion annually for goods, excluding services, using the AfDB 2017 survey, 2020 international trade data (ITC Trademap) and the S&P mining firm database (LION Model).

African trade and integration

Value addition is key to capitalizing on AfCFTA (Ghana Business News)

Ms Grace Antwi-Asante, the Programme Officer for Capacity Building and Stakeholder Engagement at the National African Continental Free Trade Area (AfCFTA) Coordination Office, has stated value addition is key for exporters to benefit from the AfCFTA agreement.

She said because many countries were trading in the same goods, the market would be competitive hence exporters needed to add value to their products to take advantage of the agreement. According to her, that would also require exporters to brand their products to meet the right specifications to ensure high patronage by buyers on the market.

Ms Antwi-Asante was speaking to participants at a day’s Capacity Enhancement sensitization workshop on the National Export Development Strategy (NEDS) in Sunyani.

UNECA: Intra-regional trade can reduce conflicts in Africa (Africa Renewal)

Ms. Morsy revealed the findings of the UNECA-commissioned study on “Realizing the Triple Nexus and Trade: Towards A New Agenda for Africa,” which demonstrates that trade is relevant in countering fragility and promoting effective transitions from war to peace. She was speaking at the opening of the Inaugural African Union Policy Conference on Promoting the Peace, Security, and Development Nexus, held on 25 - 27 October in Tangier, Morocco.

In his opening address, Moroccan Minister of Foreign Affairs, African Cooperation and Expatriates, Mr. Nasser Bourita, underscored the different strategies to secure peace across the continent as a necessary condition for development.

In a pre-recorded message, Ms. Amina Mohammed, the Deputy Secretary-General of the United Nations, urged participants reflect on practical measures to implement the development, humanitarian, peace-building nexus to deliver peace, security, and sustainable development everywhere in Africa.

“That includes strengthening joint conflict analysis, enhancing conflict prevention mechanisms, ensuring the meaningful participation of women in peace processes, and implementing joint initiatives to support humanitarian and political dialogue and development programmes,” she added.

Rwanda, Ghana launch trade forum to boost AfCFTA deal (Farmers Review Africa)

Rwanda and Ghana have launched a business forum that aims to boost the African Common Market, AfCFTA signed in 2020 in Kigali. Rwanda’s Minister of Trade and Industry, Dr Jean-Chrysostome Ngabitsinze said the business forum aims to capitalize on business opportunities and strengthen public-private partnerships in both countries. Stakeholder business, tourism, education, agriculture and others from both countries are among the guests on the forum. AfCFTA’s goal is to increase trade between these countries and to reduce the costs of exporting goods from one African country to another by 97%.

“The development of the industry in Africa is new, but we need to reform what we are doing so as to realize enough production on the African market. Low production of products is a challenge that is causing currency fluctuation in Africa. Let us go to bring opportunities in the market with more and better products and services,” Ngabitsinze said.

Increased trade and integration are the pathways to socio-economic transformation in Africa (EAC)

Increased intra-regional and inter-continental trade and integration are the pathways to socio-economic transformation and economic prosperity in East Africa and the African continent, Uganda President Yoweri Museveni has said.

On business, President Museveni urged East Africans to develop a culture of producing goods and services for sale with the consciousness of maximizing profits and minimizing costs, adding that this would transform the region from a net importer to a key export of goods and services.

The Head of State said that the region must undergo socio-economic transformation through universal education and full monetization of the economy if it was to make full use of its vast human and natural resources. President Museveni said that the low levels of the Gross Domestic Product in Africa was evidence of the low level of existing resources and urged African intellectuals to come up with local solutions for local problems as opposed to seeking well paying jobs and consultancies.

“Our economics professors should diagnose our problems and recommend solutions. The national market in our countries is not enough and we need to decide whether or not we want to be like Latin America which has lots of resources but is disorganized economically and politically,” said the Head of State.

“Integration is meant to give our business people access to bigger markets within the region and beyond. We are integrating in order to bring prosperity through increased production of goods and services” he added.

SARA pushes for greater regional integration in rail development (Engineering News)

As the Southern African Railway Association (SARA) pushes ahead with the drafting of a regional railway master plan, Namibia State-owned freight utility TransNamib CEO and SARA VP Johny Smith has confirmed the association is engaging with the Development Bank of Southern Africa on the viability of the plan. During the SARA Rail Conference hosted this week, Smith highlighted that a regional railway plan must be customer-centric, focused on proactive services, have solid supply chain principles, promote new technology and encourage partnerships for innovation on energy, communication, intermodal freight movement, equipment handling and maintenance.

He mentioned that a regional rail master plan must question and evaluate alternative energies for the sector, particularly hydrogen. He believed Southern Africa’s railway lines to be 30 years behind on innovation and standards, compared with international railways.

SARA, as the specialised railway wing of the Southern African Development Community countries and with its representation of 15 member countries, hoped that more partnership and action would emanate from the 2022 SARA Rail Conference.

Comesa in regional integration drive (The Herald)

The liberalisation of air services by Comesa member states will strengthen regional connectivity and boost economic growth and development over the region, experts have said. Air transport can connect markets, facilitate tourism and trade, and enable local firms to link with regional and global supply chains, so the more points that are connected to each other, and the more frequent the flights, the more air transport will be doing what it can do.

There have been concerns over the delays by member states to liberalise aviation services due to lack of information regarding the impacts and potential benefits of enacting or implementing such liberalisation. Aviation in Africa is yet to fully realise benefits, as the development and growth of air transport has been hampered by several factors, including political considerations, market fragmentation and restrictive policies, especially relating to bilateral air service agreements.

“If Africans can trade within themselves, the aircraft will be busy,” Mr Adikiny Olwenge said. “We export raw commodities to Europe and buy them back as finished products. The situation could be good if we took the goods to our best African destinations. There are a lot of benefits; regional and continental connectivity, economic development, jobs and social mobility.”

Museveni urges EA court to do more to support regional integration (The East African)

Ugandan President Yoweri Museveni has called on the East African Court of Justice (EACJ) to join in pushing for the dream of full integration of the East African Community by fostering economic transformation of the people. He argued on Friday that an integrated approach to tackling the region’s strategic security and economic woes would make the process faster and that court decisions should focus on this too.

He said universal education was a key pillar that would push the region into social economic transformation. This would enable all children to study free through primary, secondary and technical government schools. The second pillar, he said, is business, which involves learning the culture to produce a good or a service for sale.

East Africa’s economic recovery falters on debt, fiscal deficits (The East African)

The increasing risk of debt distress, widening fiscal and current deficits and limited economic diversification plans in the economies of East Africa, have combined to weaken prospects for growth this year. The African Development Bank forecasts the region’s GDP at four per cent this year, before recovering to 4.7 per cent in 2023, helped by the reopening of the economies after the Covid-19 containment measures. However, countries are yet to achieve their pre-Covid growth levels, according to the bank’s East Africa Regional Economic Outlook 2022 released last week.

According to the report, the projected strong growth is not uniform across the wider eastern African region, with top performers being Ethiopia, Kenya, Rwanda, Seychelles, Tanzania, and Uganda.

EA’s pace of economic recovery from the pandemic faces new threats from rising crude prices and the Russia-Ukraine war that has disrupted global supply chains leading to higher food and energy prices, depreciating currencies, and falling forex reserves.

The economists in the report “Resilience through tough times” show that the region’s GDP has been heavily impacted by political instability in Kenya and Ethiopia, the major economic growth drivers in the region, and reduced agricultural sector growth.

According to the World Bank’s latest Commodity Markets Outlook report released last week the weakening of currencies of most developing economies is driving up food and fuel prices in ways that could deepen the food and energy crises.

More Africans to Access Instant payments, As Africa Fintech Records 81% Growth (KT Press)

Mastercard and Cellulant have launched a new product that will enable millions of Africans to pay globally and shop online with or without a bank account, through a simple and secure payment experience. The partnership with Cellulant plays a role in advancing Mastercard’s worldwide commitment to financial inclusion to bring a total of 1 billion people, and 50 million micro and small businesses into the digital economy by 2025.

The partnership launched on the sidelines of the 2022 Global System for Mobile Communications Association Mobile World Congress (GSMA MWC) meeting in Kigali, will enable customers to pay globally with a Mastercard virtual payment solution linked to the Cellulant wallet, Tingg.

According to the Economy 2021 Outlook conducted by the Mastercard Economics Institute, 20-30% of the COVID-19-related surge in digital commerce will remain a permanent feature of overall retail spending, and shopping through mobile is largely how consumers access these opportunities. Across Sub-Saharan Africa, mobile devices are the primary channel used to connect to the internet. According to GSMA, smartphone connections are expected to reach 678 million in 2025, with a penetration of 65%.

As a result, alternative payment methods driven by mobile payments have increasingly begun to dominate the digital payments landscape. Consequently, consumers increasingly expect access to a broader range of online offers and digital financial services.

“We see the increasing proliferation of Fintech’s as a strategic opportunity to add value by creating more connections, better user experiences, and greater choice for consumers,” Amnah Ajmal, Executive Vice President, Market Development, Eastern Europe, Middle East, and Africa said.

New research shows mobile finance can increase national GDP (UNDP)

New research from Vodafone Group, Vodacom Group, Safaricom, and the United Nations Development Programme (UNDP) indicates that the successful deployment and adoption of mobile financial services is associated with a positive impact on GDP growth in developing markets as it helps businesses to reduce cost, access credit to invest, and to connect with consumers that were previously excluded from financial services.

The analysis was conducted as part of the companies’ Africa.Connected campaign, an initiative to drive sustainable development through collaboration and help close the divides that prevent progress in Africa’s key economic sectors. The findings are part of a new research paper, Digital Finance Platforms to Empower All, the fourth research paper developed and released under the Africa.Connected umbrella.

“Mobile financial services platforms like M-Pesa are vital drivers of financial inclusion in society which can improve individual life chances and enable enterprises to launch and expand, bringing wealth and jobs into developing economies. There remains though barriers both to accessing platforms – including digital literacy and smartphone accessibility – and to developing them – with an un-level regulatory playing field for non-traditional financial services providers in many countries.”

“Financial inclusion is both a pre-condition and a key enabler for meeting many of the UN’s Sustainable Development Goals, including reducing poverty, boosting economic growth, promoting market access and championing investment in key sectors like education, agriculture, and healthcare. But more importantly, it is about putting people at the center, empowering them with more agency over their money and increasing their resilience. Eliminating financial exclusion in Africa, and across the globe, must be a priority if we are to deliver on inclusive, sustainable prosperity for all on a healthy planet.”

A Quarterly Projection Model for the WAEMU (IMF)

Since institutional reform implemented in 2010, the West African Economic and Monetary Union (WAEMU) has experienced a major turning point regarding monetary policy. In particular, the reform has allowed the Central Bank of West African States (BCEAO) to modernize its monetary policy framework, bringing it closer to international best practices. The current institutional environment, characterized by a fixed exchange rate regime with capital controls and implicit targets for the level of international reserves and inflation, allows the BCEAO to pursue its main objective of price stability. At the operational level, meeting the new challenges brough about by the reformed framework requires the enhancement of the BCEAO’s macroeconomic analysis and forecasting systems. Extending the BCEAO’s analytical capacities using modern tools that can help inform the decisions of monetary authorities is a natural desired step. This study presents a semi-structural New-Keynesian quarterly projection model (QPM) for the WAEMU region (QPM-WAEMU) that accounts for the main specific economic characteristics of the regional economy.

Africa: Make the ‘Beautiful Game’ a Track to Greater Trade and Inclusion (allAfrica.com)

The approach of the 2022 FIFA World Cup, beginning 20 November, again illustrates that football is the world’s game - an example of how people from different cultures, backgrounds, and ages can come together for a shared experience.

This year, the world watches in awe as footballing artists including Kylian Mbappé, Lionel Messi, Cristiano Ronaldo, and the rest of the sport’s finest players demonstrate their craft on the global stage. More than five billion people are expected to tune in when the competition kicks off in Qatar. Our hope is that the tournament will help foster global solidarity in a time beset by war, economic instability and other crises.

As a business, football is also about trade. FIFA estimates that the global football economy is worth about USD 200 billion. Much of this value comes from trade in goods and services and the value of intellectual property associated with the ‘beautiful game’. As world football’s governing body, FIFA itself derives 95% of its revenue from the sale of broadcasting and commercial rights related to the FIFA World Cup.

Global rules on trade established under the World Trade Organization (WTO) help make all of this possible. By facilitating this, the WTO is one of international football’s biggest supporters.

Like international trade, football is a vital instrument for progressive economic development, inclusion and equity. A key mechanism for doing this will be to diversify the global networks of suppliers that feed into FIFA merchandising. The aim is to encourage more football-related merchandise to be sourced from the world’s poorest countries and from the millions of small enterprises that make up the backbone of the global economy.

Global economy

Russian Dispute Over Drones Threaten to Escalate World Food Crisis (Inter Press Service)

A war of words between Russia on the one hand, and the US, Britain, France and Germany on the other—specifically on the deployment of drones in Ukraine — has triggered an unintended consequence: a new world food crisis. The Western powers last week asked the UN to verify whether Iranian drones were being used “illegally” in violation of the 2015 Security Council resolution 2231 which endorsed the Joint Comprehensive Plan of Action (JCPOA) on Iran’s disputed nuclear programme.

Russia’s First Deputy Permanent Representative to the UN, Ambassador Dmitry Polyanskiy, insisted last week that drones used in Ukraine were Russian-made — not Iranian. He also warned UN Secretary-General Antonio Guterres and his staff not to engage in any “illegitimate investigation” of drones used in Ukraine.

And Russia pushed back further — and said it will re-consider its cooperation with the UN on the Black Sea Grain Initiative, thereby barring Ukraine grain exports. As expected, Russia pulled out of the deal threatening food security worldwide.

“What we need are more local and regional food and input production to ensure food security,” said Danielle Nierenberg, President Food Tank, whose non-profit organization aims at reforming the food system with the goal of highlighting environmentally, socially, and economically sustainable ways of alleviating hunger, obesity, and poverty.

“The disruption in supplies pushed soaring prices even higher and contributed to a global food crisis. The Black Sea Grain Initiative, brokered by the United Nations and Türkiye, was set up to reintroduce vital food and fertilizer exports from Ukraine to the rest of the world.”

UN chief ‘deeply concerned’ by stalled Black Sea Grain Initiative (UN News)

On Sunday, UN Spokesperson Stéphane Dujarric said, in a statement for the Secretary-General, that Mr. Guterres has decided to delay his departure for the Arab League Summit in Algiers by a day to focus on the issue. Following Russia’s invasion of Ukraine in late February 2022, mountains of grains built up in silos, with ships unable to secure safe passage to and from Ukrainian ports, and land routes were unable to compensate. This contributed to vertiginous rises in the price of staple foods around the world. Combined with increases in the cost of energy, developing countries were pushed to the brink of debt default and increasing numbers of people found themselves on the brink of famine.

The Initiative was due to run out in the second half of November, but there was an option to extend it, if all parties, including Russian and Ukraine, agree.

However, on Saturday Russia announced that it was suspending its involvement in the deal, citing an attack the same day on ships in the Ukrainian port of Sevastopol in the Crimean peninsula, which was annexed by Russia in 2014. The move reportedly took traders by surprise, and raised fears of another steep rise in food prices. Arif Husain, Chief Economist at the World Food Programme (WFP), reportedly warned that Russia’s decision poses a danger to a large number of countries, and should be resolved as soon as possible.

This year’s COP27 matters more than ever, says ICC (ICC)

Ahead of next month’s 27th United Nations Climate Change conference in Sharm El Sheikh, Egypt, the International Chamber of Commerce (ICC) has published an open letter underscoring the importance of a successful COP27 for business. With the future of international climate collaboration at stake, ICC Secretary General John W.H. Denton AO has sent open letter to Environment Ministers and Heads of Delegations.

Every COP matters to global business and we recognise the key role the private sector has in advancing implementation of the Paris Agreement—as an invaluable resource of expertise, but also vital to animating accelerated action and increasing the deployment of resources.

This year’s COP, however, matters more than ever. We certainly appreciate the complexity of the decisions governments are currently facing on several fronts but climate change is not an agenda we can afford to push back on our global schedule. We are on track to more than double global temperatures by the end of this century. This is not what was agreed under the Paris Agreement and it is not what countries reaffirmed at COP26 in Glasgow.

Finalising the Paris Rulebook in Glasgow, including a long-delayed settlement of Article 6 of the Paris Agreement, was an important achievement. If all this is to have meaning, countries at COP27 have to deliver on what is needed to implement the rules effectively, sustain the promise of Glasgow of “keeping 1.5 alive” and most importantly deliver for those most vulnerable to climate change.

Global Investment Trends Monitor, No. 43 (pdf) (UNCTAD)

Climate change investment affected by the energy crisis – Risk of a temporary slowdown


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