Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Local news

UK trade and investment with South Africa is growing, in both directions (Engineering News)

The UK Department of International Trade (DIT) on Wednesday released its latest “Factsheet” (actually a 17-page document) on bilateral UK-South Africa trade and investment. The Factsheet covered the four quarters ending at the conclusion of the second quarter of this year (Q2 2022) – or, on other words, Q3 2021, Q4 2021, Q1 2022 and Q2 2022. As it was a British document, all values were naturally given in pounds sterling.

To sum up, in the period under review, total bilateral UK-South African trade in goods and services came to £10.7-billion. This was 6.3% higher than in the equivalent four quarter period up to the end of Q2 2021. South Africa was the UK’s 27th biggest trading partner and accounted for 0.7% of total British trade. The UK DIT ranked South Africa, in terms of gross domestic product, as the world’s 35th biggest economy in 2021.

UK exports to South Africa during these four quarters had a value of £3.8-billion, which was 9.3% above the figure for the equivalent period in 2020-2021.

Of the UK’s exports to South Africa in the four quarters under review, 57.3% were in the form of services, worth £2.2-billion (which was 16.3% higher than during the previous equivalent period), while 42.7% were goods, with a value of £1.6-billion (a rise of 1.2%). Of British imports from South Africa, 87.4% were in the form of goods (worth £6-billion, and an increase of 3.6% over the equivalent 2020-2021 period) and 12.6% (or £871-million) in the form of services (but representing an increase of 12.8%).

pdf South Africa Trade and Investment Factsheet, November 2022 (657 KB)

Consultancy calls for removal of import duties on french fries (Engineering News)

International trade consultant XA Global Trade Advisors has called on government to conduct an urgent review of the impact of import duties on the increasing cost of food and to remove newly imposed duties on imported french fries. This call comes on the back of the International Trade Administration Commission’s (Itac’s) recent imposition of provisional duties on frozen fries imported or originating from Belgium, Germany and the Netherlands. XA Global Trade Advisors CEO Donald MacKay, speaking during a media briefing on November 2, said this was self-initiated by Itac, rather than being in response to local industry calling for it.

The provisional duties imposed are as high as 190% for some countries.

“We cannot continue to impose duty upon duty on food and expect it not to harm consumers. The duties on fries specifically have increased the price of fries by 88%, from R16/kg in 2021 to R30/kg in 2022. “Duties are not in the public interest. They are just another form of tax that consumers have to bear and have the concerning consequence of increasing the cost of food in an already tightly squeezed consumer market. The time has come to take a hard look at our trade policy and to weigh up its impact on the rising cost of living,” he emphasised.

Kenya’s new trade minister to crack down on local manufacturers repackaging imported goods (Garowe Online)

The newly appointed Kenya’s Trade and Investments Cabinet Secretary Moses Kuria plans to crack down o local manufacturers who are importing goods into the country and repackaging them, then selling them as locally produced items.

“We know that some players in the industry are asking to reduce taxes or support the ease of doing business in the country, then they go ahead to abuse our policies by repackaging imported goods to look like locally manufactured goods,” said Kuria. Mr. Kuria pointed out that it is important to support the local manufacturing sector since it contributes to tax revenue growth, and job creation increases exports, and supports various value chains.

“Our manufacturers need to increase their focus on enhancing value addition and by doing so, we shall be able to be a more self-reliant nation, source raw materials locally as well as competitively produce goods and services for the local and global market.”

“Our aim is to ensure that local enterprises have the same competitive advantage as multinationals operating in Kenya. We shall be setting up export hubs in all 47 counties, this means that we should have linkages from the bottom of the pyramid all the way to the top,” said Kuria.

Kenya to fall short of Comesa sugar import quota on biting global crisis (Business Daily)

Kenya will fall short of meeting its sugar import quota from the Common Market for Eastern and Southern Africa (Comesa) due to an acute shortage of the commodity in the world market, a move that will further subject local consumers to high prices. Kenya was allocated a quota of 180,000 tonnes of sugar by the Comesa secretariat, which it has to import this year from the member states. However, Kenya has imported 48 percent of the total allocation with only two months to the end of the year.

Head of the Sugar Directorate Wilice Audi says Kenya might not get all the required sugar by end of December because of a tight supply of the commodity at the global market.

He said the shortage may have an impact on consumers given that local factories are grappling with a shortage of cane. The price of the sweetener has so far hit a high of Sh312 for a two-kilo packet from Sh230 in June.

Adapting trade to climate change for competitive green growth in Tanzania (The Citizen)

The current national five-year development plan 2021/22-2025/26 prioritizes the development of trade in the pursuit of Tanzania’s mid-term development objectives of realizing competitiveness for industrialization and sustained human development. The plan has set an operational target of increasing exports to 28 percent of GDP and the share of exports in world markets to 0.15 percent.

Yet, the realization of Tanzania’s trade potential is currently circumscribed by concerns over climate change. Research suggests that climate change affects trade by disrupting distribution and supply chains and raising trade costs. The effects of trade on climate need not all be negative. Indeed, recent studies have shown that trade can build value chains that lead to more efficient use of resources and access to effective low-carbon technologies.

Therefore, in the presence of sound environmental policies, lower barriers (e.g., by removing tariffs and non-tariff barriers on climate-friendly products and services), and well-functioning institutions, international trade can be a powerful climate change mitigation and adaptation.

Gambia’s productivity increasing ahead of AfCFTA participation (Gambia Times)

In an interview with the Minister of Agriculture in his Banjul office, Dr. Demba Sabally explained that his ministry’s focus is increasing productivity while trade with the rest of the continent is the responsibility of the trade ministry. He added that his ministry is working on vegetable gardens and the ministry’s roots project has already rehabilitated six previously started gardens by the NEMA project, saying they would build 30 other new gardens.

Minister Sabally continued that the government under the Ministry of Agriculture is also building multimillion dalasi agrology centres in Farrafenni and Wassu that would enable the farmers to bring their products to the centres, saying it would have a bank, market and a cold store. The minister further explained that The Gambia is part of a lot of international protocols and also part of a lot of trade agreements and trade deals while stating that the market would be competitive soon.

“Very soon the market will be competitive and products will come to the country from every part of the continent duty-free and Gambia can also export. That’s why part of the goal is to develop our agro-business into a department that will train our people on value addition.”

African trade and integration 

Statement By Amb. Albert Muchanga, African Union Commissioner, Economic Development, Trade, Tourism, Industry and Minerals at the Meeting of the Senior Official of Ministries in charge of Industry and Economic Diversification (AU)

The results of the processes of industrialization and economic diversification in Africa show that our efforts in leveraging these since from the time our countries attained independence show that we have not generated the outcomes we want. In a majority of our countries, the share of manufacturing in the gross domestic product, as well as employment from the manufacturing sector are very low. The same is with the share of manufacturing in the export baskets of most of our countries. As a result, our economies face, among others, low productivity, low rates of economic growth, progressive decline in Africa’s share of global trade, continued heavy reliance on external borrowing and aid to finance our development, periodic debt crises and continued poverty.

Against this background, productive transformation, an issue that will come up in your deliberations, becomes a key task for all our countries. And this productive transformation is business unusual. LET ME STRESS: BUSINESS UNUSUAL. We have, in this connection, to differentiate our new efforts with those of the past by being more innovative.

Positioning African MSMEs to tap into benefits of AfCFTA (New Telegraph)

The African Continental Free Trade Area (AfCFTA) is a continental treaty that seeks to, among other things, eliminate tariff and non-tariff barriers that have hindered intracontinental trade and the movement of people and goods for centuries on the continent. It further seeks to liberalise trade in services and progressively promote investments, intellectual property rights, and competition policies and foster cooperation on all trade-related areas. As per trade analysts, the AfCFTA will be a game-changer for the continent’s people and their businesses as it will be the largest single market in the world that will combine about 1.3 billion people.

The AfCFTA recognizes the fact that Micro, small and medium- sized enterprises (MSMEs), informal traders, and youth and women business operators play a crucial role in African trade. For Africa MSMEs, the AfCFTA means, an opportunity to conquer new markets, expand their customer base, grow their revenues, and increase their brand visibility. This will translate into more jobs, increased national revenues, and improved living standards in the country. Since the African government signed and ratified the agreement, the ball is in the court for individuals to tap in the opportunities that the agreement encompasses.

At the national levels, government efforts to create awareness of the AfCFTA can be seen in most African countries through the ministry of trade, UNDP awareness campaigns, and active engagements to draft the AfCFTA national strategic plans, as well as the Ministry of international relations websites and webinars that are updating the residents on the AfCFTA current affairs. As we wait for some countries to release their national AfCFTA implementation strategy and action plan, here are some of the observations: The scanty provision of vital services to the MSMEs continues to encumber the processes of business development in Africa.

Digitalised customs could boost intra-African trade, tax officials say (The New Times)

Digitalising the customs operations has potential to boost intra-Africa trade and ensure effective revenue collection, tax authorities have observed. At a high level customs digitalisation forum taking place in Kigali, delegates said that for the Africa Continental Free Trade Area (AfCFTA) to succeed, countries need to integrate ICT in their customs administration.

The forum, being held from Thursday, November 3-4 under the theme “Leveraging on ICT to Boost Intra-African Trade,” has been attended by customs and excise officials from 30 countries from Eastern and Southern Africa and across the world.

Though all countries in the Eastern and Southern Africa region have digitalised their customs services, according to the World Customs Organisation (WCO), only a few of them have advanced systems. These are South Africa, Mauritius, Kenya and Rwanda. However, there remain challenges that hamper digitalisation of customs operations in Africa.

“The main challenges have been low trade volumes as a result of different non-tariff barriers and the low level of technology in eastern and southern Africa caused by low budget funding,” said Larry Liza, the director of WCO Eastern and Southern Africa.

“If countries digitised customs, they would improve the efficiency of their operations and tax payers’ and importers’ compliance,” said Jean-Louis Kaliningondo, the Deputy Commissioner General of the Rwanda Revenue Authority.

Africa is open for business, continent’s leaders tell investors as Africa Investment Forum kicks off (AfDB)

African leaders on Wednesday laid out the continent’s vast potential and invited global investors to seize investment opportunities. Speaking during the 2022 Africa Investment Forum Market Days being held in Abidjan, Cote d’Ivoire’s economic capital, the leaders vowed to continue working to strengthen the economic resilience of their countries against external shocks.

President of Cote d’Ivoire Alassane Ouattara expressed the hope that Market Days 2022 would break the $100 billion threshold in investment interest. Vice President Tiemoko Meyliet Koné delivered his remarks. Ouattara acknowledged the wave of threats African countries continue to face, including the Covid-19 pandemic, the war in Ukraine and the impacts of climate change. The Market Days 2022 theme, Building Economic Resilience Through Sustainable Investments, reflects these realities.

‘Immediately following the challenges of the pandemic, African countries are once again facing external shocks because of the war in Ukraine, with heavy economic, financial and social consequences,’ Ouattara said. The current crisis makes us even more vulnerable to food insecurity, Ouattara said.

EALA MPs call for usage of local currencies across EAC (The New Times)

Mnyaa Habib Mohamed is still inconvenienced by the same challenge he faced three years ago: he cannot buy or pay for goods and services using local currencies in the East African Community (EAC) member countries. This MP from Tanzania is a member of the East African legislative Assembly (EALA) – the Parliament of the EAC. Tanzania is one of the seven EAC Member States, along with Burundi, Democratic Republic of Congo, Kenya, Rwanda, South Sudan, and Uganda.

He shared his frustration on Wednesday, November 2, in Kigali, during an EALA session that was debating on the Report of its Committee on Legal, Rules and Privileges on the East African Community Surveillance, Compliance and Enforcement Commission Bill, 2022. This is one of the four institutions expected to carry out much of the preparatory work for the creation of the EAC Monetary Union.

African Development Bank calls for closer linkage of peace, security and development efforts (AfDB)

The African Union held its first Political Conference in Tangier, Morocco, with delegates calling for accelerated partnerships between the various actors to respond more efficiently to Africa’s challenges.

“If ever there was a time to reaffirm the strategic nature of the link between security and development, it is now,” Bank’s Vice President for Finance and Director of Financial Services, Hassatou Diop N’Sele stressed. She noted that due to the Covid-19 pandemic, Africa’s GDP in 2020 recorded its largest decline in twenty years. She added: “We have lost $165 billion and over 30 million jobs. More than 26 million people have fallen into extreme poverty and more than 250 million have been affected by conflict.”

“And now, as we begin a painful recovery, we face a food crisis: grain and energy prices have skyrocketed, while the lack of fertilizer threatens the balance of our food systems,” She noted.

CLIMATE CRISIS OP-ED: COP27 is an opportunity for Africa to leapfrog fossil-fuel-based development (Daily Maverick)

While COP27 should indeed look to build Africa’s climate resilience, it must not be short-sighted in ignoring opportunities for inclusive and sustainable economic development on the continent. Africa’s population will double by 2050, reaching 2.5 billion, with one billion of those people living in urban areas. If the needs of this growing population are met by fossil-fuel exploitation and unsustainable food systems, the world will not achieve the 2°C temperature goal of the Paris Agreement, let alone the 1.5°C target required by science. However, the continent is uniquely positioned to turn physical and socioeconomic challenges into opportunities by “leapfrogging” fossil-fuel-based economic development. This would help overcome Africa’s socioeconomic challenges, while simultaneously building resilience to physical and transition risks associated with climate change.

Catalysing climate finance pledged by developed countries to developing countries is critical, especially considering that only $20-billion of the promised $100-billion climate funding reaches African countries annually. It is, therefore, in the best interest of both Africa and the world’s Net Zero agenda for developed countries to follow through on these climate finance pledges.

Beyond this, COP27 should drive climate action, through both mitigation and adaptation, as an investment opportunity and source of socioeconomic development across Africa.

Burkina Faso to be excluded from U.S.-Africa trade deal - White House (Africanews)

The United States will exclude Burkina Faso from the trade agreement linking the world’s leading power to African countries, the White House announced Wednesday (November 2). The White House justified the decision by the lack of progress toward a return to democracy, after the two military coups in the country since early 2022.

“I have made this decision because I have determined that the government of Burkina Faso has not established, or made continued progress toward establishing, respect for the rule of law and political pluralism,” which are necessary elements of the African Growth Opportunities Act (Agoa) program, U.S. President Joe Biden said in a letter sent to the U.S. Congress. The exclusion of the West African country will be effective as of January 1 next year, the letter said.

In a statement, U.S. Trade Ambassador Katherine Tai stressed the need for “Burkina Faso to make the necessary decisions to meet the terms of the agreement and the return of democracy. “I will provide Burkina Faso with a clear roadmap to reintegrate into the program and our administration will work with them to make that happen,” Tai said.

India should leverage southern Africa’s rare earth minerals: Exim Bank (Business Standard)

Development finance institutions from India and the African Development Bank should work closely with the governments of the southern Africa countries to understand the needs of these commercial Rare Earth Elements (REE) development attempts and support the companies to develop the value chain from end to end, the report said. India needs to form strategic alliances with southern African countries where critical rare earth minerals are produced, as the world looks to the continent to fulfil the ever-increasing demand for them, a report by India Exim Bank has suggested.

Indian Exim Bank Inks Pact With Southern Africa’s Leading Bank to Boost India-Africa Trade (Adda247)

Export-Import Bank of India (India Exim Bank) has concluded a Master Risk Participation Agreement for supporting trade transactions with FirstRand Bank (FRB) Limited. The agreement was signed in Johannesburg on the sidelines of the India – Southern Africa Regional Conclave.

frica has positioned itself as a key partner in the global arena, a global investment and trading hub, a US$ 2.2 trillion market and a population base of over 1 billion, Africa offers a great market potential . With a largest arable landmass in the world, housing 30% of global minerals reserves, and 8% of the world’s oil reserves , the continent offers promising long-term sustainable growth prospects which would be further enhanced by deeper integration of Africa into the global economy. In fact, in the coming years, Africa is to benefit from strong fundamentals including a young and growing population, the world’s fastest urbanization rate, and accelerating technological change . The continent’s young population with a growing labour force is a highly valuable asset in an ageing world. By 2034, Africa is expected to have the world’s largest working-age population of 1.1 billion. Urbanisation is a common feature of most economies in Africa, according to estimates, an addition of 187 million Africans are expected to live in cities. This urban expansion is contributing to rapid growth in consumption by households and businesses. Further, penetration of smart phones is expected be more than 50% in 2020 from only 2% in 2010.

With a view to significantly enhance India’s trade with Africa, the Government of India (GOI) launched an integrated programme ‘Focus Africa’ from the year 2002-03. The main objective of the programme is to increase interactions between the two regions by identifying the areas of bilateral trade and investment. The ‘Focus Africa’ programme has been extended to cover the entire African continent.

Global economy

UNCTAD sets out actions to support least developed countries in the global low-carbon transition (UNCTAD)

As nations convene for the 27th UN Climate Conference (COP27), the UN Conference on Trade and Development (UNCTAD) has set out the actions needed to ensure global efforts towards a low-carbon future don’t leave least developed countries (LDCs) behind. UNCTAD’s Least Developed Countries Report 2022 published on 3 November says LDCs are the “litmus test” against which history will judge how effectively efforts to make the low-carbon transition consider development needs and countries’ different obligations and capacities to fight climate change.

The world’s 46 LDCs, home to about 1.1 billion people, have contributed minimally to CO2 emissions. In 2019 they accounted for less than 4% of total world greenhouse gas emissions. Yet over the last 50 years, 69% of worldwide deaths caused by climate-related disasters occurred in LDCs. “LDCs disproportionately bear the burden of climate change impacts,” UNCTAD Secretary-General Rebeca Grynspan said. “The international community must consider their development needs and fully support them to ensure a just, balanced and sustainable low-carbon transition.”

WTO marks 75th anniversary of the General Agreement on Tariffs and Trade (WTO)

DDG González said that the GATT’s durability owes much to the fact that it is underpinned by simple principles, such as non-discrimination, gradual reform through successive rounds of negotiations, and flexibility in the form of exceptions allowing members space for domestic policies. She underlined that the 75th anniversary should be a reminder that the GATT is a tool for international cooperation which is now all-the-more needed in view of the multiple crises affecting the world.

In her introductory remarks, WTO Director-General, Dr. Ngozi Okonjo-Iweala, recognised the incontrovertible role of global trade in driving prosperity around the world and in lifting over a billion people out of poverty since the establishment of the GATT. She said the multilateral trading system is “a jewel worth polishing” and that “the success at the 12th Ministerial Conference was just the start of the reforms that need to be made”.


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