tralac Daily News
The Department of Trade, Industry and Competition (the dtic) has relaunched the Agro-Processing Support Scheme (APSS) in order to increase the uptake of the incentive programme, which is aimed at stimulating investment by South African agro-processing enterprises. According to the Chief Director of Strategic Partnership and Customer Care at the dtic, Ms Tsepiso Makgothi, the amendment of the APSS was the result of an engagement with various stakeholders and businesses where it became apparent that some companies did not have the minimum R1 million investment that was required, while others were of the view that the APSS guidelines were too onerous.
“Agro-processing remains a key priority economic sector as per the Industrial Policy Action Plan (IPAP). A key characteristic of agro-processing is its strong upstream and downstream linkages. Although other incentive programmes for the manufacturing sector have been effective in achieving their intended objectives, a dedicated incentive scheme has greater potential in creating an enabling environment for small and medium businesses in the agro-processing industry to participate meaningfully in the mainstream economy,” says Makgothi.
SA eyes green hydrogen opportunities (SAnews)
President Cyril Ramaphosa says South Africa’s intention is to become a world leader in green hydrogen. “We are determined to make full use of our substantial endowments to meet the challenges of climate change and to achieve a just transition that benefits all our people,” the President said. President Ramaphosa was delivering a keynote address at the opening of the inaugural South Africa Green Hydrogen Summit, held in Cape Town, on Tuesday. The summit showcases the country’s offering as a large-scale, low cost, world-class green hydrogen production hub and total value chain investment destination.
It builds on the opportunities identified during the Sustainable Infrastructure Development Symposium South Africa (SIDSSA) of 2021. The country looks forward to welcoming more of the firms in the green hydrogen value chain and associated technologies into the market.
UK Foreign Secretary James Cleverly announced this week that the UK and South Africa were establishing a new Partnership on Minerals for Future Clean Energy Technologies to promote increased responsible exploration, production and processing of minerals in South Africa and Southern Africa. Countries in the Southern African region are among the world’s leading producers of vital minerals used in clean technology, including platinum group metals and iridium for hydrogen production and vanadium and manganese for battery storage. This partnership will use the UK’s expertise as the home to leading global mining houses and as a financial services centre for metals to bolster sustainable and responsible production, said Cleverly.
UK PM Rishi Sunak, meanwhile, commented that the next phase of the UK-South Africa Infrastructure Partnership would support South Africa’s economic growth through major infrastructure developments and offering increased access to UK companies to projects worth up to £5.37-billion over the next three years.
UK, Nigeria Trade Volume Hits £5.5bn (Leadership)
The United Kingdom has announced that total trade in goods and services (exports plus imports) between it and Nigeria currently stands at £5.5billion as both sides confirmed their shared interest in pursuing a potential Enhanced Trade and Investment Partnership at the eighth and final UK-Nigeria Economic Development Forum (EDF).
A statement issued on Monday by Press Officer of the UK Deputy High Commission in Lagos, Ndidiamaka Eze, said that of this £5.5 billion total UK exports to Nigeria amounted to £3.3 billion in the four quarters to the end of Q2 2022; while total UK imports from Nigeria amounted to £2.2 billion in the four quarters to the end of Q2 2022.
The agreement in the EDF Memorandum of Understanding (MoU) came to a close on Monday, and the UK and Nigeria agreed that the Enhanced Trade and Investment Partnership will offer an alternative high-profile mechanism to progress bilateral economic issues of mutual strategic importance, under which both sides will continue to work together to resolve market access issues and enhance economic cooperation. The EDF, which held in Abuja on Monday was launched by the former UK Prime Minister, Theresa May and President Muhammadu Buhari in August 2018 and held bi-annually; serving as a platform to address market access barriers, respond to opportunities and challenges of doing business and boost bilateral trade and investment in our two countries.
Kenya to create food export hubs (Xinhua)
The Kenyan government signed an agreement on Monday with an agro-processing and food distribution firm Twiga Foods, to help create small manufacturing parks for food crops to help expand the reach of the Kenyan food products to the Eastern Africa regional market. Kenya’s President William Ruto, who witnessed the signing of the agreement in Nairobi, the capital of Kenya, said the company would work towards creating regional delivery hubs for food exports to the Democratic Republic of the Congo (DRC) and across the Central African region following DRC’s entry into the East African Community (EAC).
Ruto who also witnessed the launching of a regional food distribution center located at the Tatu City Industrial Park in Ruiru, Kiambu County on the outskirts of Nairobi, said the objective of financing the establishment of an efficient retail network was to oversee the reduction in the cost of foodstuffs.
Reprieve for Rwanda as China cancels $7.1 million debt (The East African)
China has offered Rwanda a $7.1 million debt relief or 50 million RMB Yuan on a loan used to build the 6.36-kilometre Masaka-Kabuga road under the Kigali urban road upgrading project. According to a statement issued by Rwanda, the move is part of the Chinese government’s decision to cancel the outstanding interest-free loan in accordance with the agreement on economic and technical cooperation between the two countries.
China says the debt cancellation is part of the economic package announced by President Xi Jinping at the 8th Ministerial Conference of the Forum on China-Africa Cooperation. “China hopes, by offering this financial support, to make a contribution to Rwanda’s all-round transformation and recovery from the malign impact of the Covid-19 pandemic. In the future, China will work with Rwanda for deeper practical cooperation in various fields under the Belt and Road Initiative framework to deliver more benefits to the two peoples,” Wang said in a statement.
Somalia’s economy rebounded with GDP growth of 2.9 percent in 2021, up from a contraction of 0.3 percent in 2020 and 0.5 percent higher than last year’s forecast of 2.4 percent. This, despite significant shocks and factors that muted economic recovery, including delayed elections, drought, supply chain bottlenecks from COVID-19 closures, and increased insecurity.
The latest Somalia Economic Update (SEU) report has a special focus on social protection which is seen to have a key role in addressing the widespread poverty and inequality across the country. Given the enormous, untapped potential for improving the human capital of its citizens, Somalia needs to invest in an integrated, shock-responsive, and human capital-oriented social protection system, which protects citizens against risks along the life cycle and promotes inclusive policies.
The report also notes that as Somalia transitions out of fragility, it needs to gradually transition from humanitarian aid to development approaches. A convergence of humanitarian interventions and national social safety net systems, with a shared, if not common, understanding and approach to monitoring and evaluation, policy support, institution building, and operational alignment in areas such as targeting and eligibility, benefit levels, and data exchange, are highly encouraged. This is because in a limited fiscal space context like in Somalia the alignment of the humanitarian safety net with national systems is critical to addressing chronic poverty and building sustainable resilience.
Joint Statement on the Africa Industrialization Week (African Union)
The Africa Industrialization Day is being celebrated this year in a completely uncertain global landscape owing to the prolonged effects of the COVID-19 pandemic, the pressing challenges posed by climate change and the Russia-Ukraine conflict that have disrupted the global supply chains with huge consequences globally and more fundamentally on African economies.
These circumstances have once again revealed the extreme fragility of African economies against external shocks and reinforced the need for structural changes necessary for the acceleration of productive transformation through a determined shift towards sustainable and resilient industrialization in the years and decades ahead.
As the Africa Industrialization Day provides the opportunity to take stock of the progress made during the year on the drive towards industrialization, it also provides, this year, a policy dialogue platform to firmly recommit to accelerating structural transformation. Africa is widely seen as a future investment and development frontier given its extraordinary economic potential. This year’s theme: “Industrializing Africa: renewed commitment towards Inclusive and Sustainable Industrialization and Economic Diversification” allows us to reflect on the need for accelerating industrialization in Africa as a means to strengthen its ability to navigate a changing geopolitical landscape where nearshoring appears to be an effective response to potential disruption of global supply chains.
As Agriculture is an economic opportunity enhancer, it must therefore remain a priority investment area for accelerated Africa’s industrialization in the perspective of reducing continental exposure to external future shocks.
Investing in strategic value chains such as the cotton and apparels industry as well as the pharmaceutical industry is critical to improving Africa’s resilience to future health and pandemics.
The disruption of global supply chains also opens a window of opportunity to harness a strategic commodity-oriented industrialization in a climate friendly manner. Africa has the huge potential of embracing this shift through targeted investments in commodity value chains including in the framework of the Africa’s Mining Vision that sets actionable priorities for Africa’s mining sector that can become a key enabler of a diversified, vibrant and globally competitive industrial African economy. Accelerating productive transformation in this strategic sector requires a strategic shift from the traditional extraction and export of commodities to massive investments in productive transformation and industrialization in Africa. This need and can be done if there is a renewed commitment by all parties, public and private to transform African commodities as a means to widen continental economic opportunities through innovation and jobs creation.
The Common Market for Eastern and Southern Africa (COMESA) has made major strides in simplifying administrative processes under the Free Trade Area to deepen intra-regional trade which stood at US$90bn as of 2020. This is a reduction from the 2019 figure of $123.4bn due to COVID-19.
COMESA Secretary General Chileshe Kapwepwe said this during the opening of the 43rd COMESA Intergovernmental Committee meeting in Lusaka on Tuesday 29 November 2022. In the coming year 2023, she said, the Secretariat will be rolling out further innovations on electronic exchanges of documents related to the import and export function as the region strengthens the COMESA digital FTA.
She said the Secretariat has implemented various policies and instruments including the Simplified Trade Regime (STR), trade facilitation and human mobility border specific action plans to increase formal small-scale cross border trade and ensure increased income for small scale traders, most of whom are women.
Also earmarked for 2023 is the construction of border markets supported by the European Union (EU) at selected borders in target Member States to provide convenient trading spaces for small scale cross border traders This notwithstanding, she noted that the region has faced obstacles on free movement of people and services and urged Member States to domesticate the instruments related to these programmes.
Internet access is pivotal to Africa’s economic and social transformation making it vital for governments to invest in digital technologies, the United Nations Economic Commission for Africa, Acting Executive Secretary, Antonio Pedro, has urged “Digitalisation is key to achieving the SDGs and Agenda 2063 and achieving that requires the contribution of all stakeholders,” said Mr. Pedro, speaking at a High-Level Leaders Session on Universal, Affordable and Meaningful Connectivity, at the opening of the Internet Governance Forum 2022 in Addis Ababa, Ethiopia.
Mr. Pedro underscored the importance of partnerships and collaboration in boosting digital connectivity in Africa which is on the path of economic transformation with the operationalisation of the Africa Continental Free Trade Area (AfCFTA).
The UN official said the African Union Commissions’ Digital Transformation Strategy was an excellent framework for prioritizing digital infrastructure and accessibility as a prerequisite to achieving digital transformation and prosperity in line with Agenda 2063. Already the ECA is promoting broadband expansion efforts across member states which will have substantial impact on regional cooperation and integration in Africa.
The African Financial Alliance on Climate Change (AFAC) unveiled a new vision for 2030 during the global climate summit (COP27), prioritizing mobilizing capital and tools to meet the Paris Agreement goal.
The new blueprint mainly focused on aligning financial flows with achieving greenhouse gas emissions and climate-resilient development by 2030. It proposed improvement in areas such as leadership awareness, access to data, climate risk regulation, climate risk management, and green finance.
The strategy also identified three critical challenges that need to be overcome: a lack of available data to assess financial risk, inadequate internal capacity at national central banks to create a level playing field for the private and public sectors, and the need to regularize and harmonize with international standards and practices.
The 11th Commission-to-Commission meeting between the European Union and the African Union was co-chaired by President Ursula von der Leyen and Chairperson Moussa Faki Mahamat. 20 EU Commissioners, the AU Commission Deputy Chairperson and 5 AU Commissioners participated, which is another demonstration of the strength of our partnership.
In a series of working sessions, the two Commissions discussed the urgent issues facing both continents, and took stock of progress made in implementing the February Summit commitments in four key areas: Enhancing connectivity through economic integration: Digital, Energy, Transport, value chains and implementation of the African Continental Free Trade Area; Boosting human development: Health, Education (including TVET), Science, Technology, Innovation, Migration and Mobility; Building resilience for people through sustainable Food systems, tackling Climate and Environmental crises, and Humanitarian action; and Peace, Security and Governance.
Both Commissions agreed to establish a high-level dialogue on economic integration with a view to strengthen trade relations and sustainable investment between the two Continents in furtherance of the development of regional value chains and industrialisation of Africa. The Commissions agreed to launch the first meeting of this high-level dialogue in 2023. The two Commissions also welcomed the work done by the AfCFTA Secretariat, as well as the outcome of a diagnostic study on regional value chains, co-financed by the EU and the African Union Commission and presented to the recent African Union Summit on Industrialisation, Economic Diversification and the AfCFTA. It identifies almost 100 value chains with real potential and highlights the most promising ones such as infant food, automotives, pharmaceuticals and apparel of cotton. Both Commissions agreed to take this work further. The two Commissions also discussed around raw materials and agreed that there is scope for further development and collaboration in order to increase local added value for these strategic value chains.
UNCTAD in its flagship “Review of Maritime Transport 2022” has called for increased investment in maritime supply chains. Ports, shipping fleets and hinterland connections need to be better prepared for future global crises, climate change and the transition to low-carbon energy. The supply chain crisis of the last two years has shown that a mismatch between demand and supply of maritime logistics capacity leads to surges in freight rates, congestion, and critical interruptions to global value chains.
“If there is one thing we have learned from the crisis of the last two years it is that ports and shipping greatly matter for a well-functioning global economy,” said Shamika N. Sirimanne, director of UNCTAD’s technology and logistics division. “Higher freight rates have led to surging consumer prices, especially for the most vulnerable. Interrupted supply chains led to lay-offs and food insecurity.”
UNCTAD calls on countries to carefully assess potential changes in shipping demand, develop and upgrade port infrastructure and hinterland connections while involving the private sector. They should also bolster port connectivity, expand storage and warehousing space and capabilities, minimize labour and equipment shortages.
The Council heard 45 trade concerns on maintained or newly introduced measures by 24 WTO members, which included nine new issues. A wide range of measures was raised, including tariffs and tariff rate quotas (TRQs), import/export bans and restrictions, technical barriers to trade, sanitary and phytosanitary measures, subsidies, local content requirements, alleged discriminatory domestic taxation, domestic certification and administrative procedures, and countervailing and anti-dumping duties.
These concerns encompass a wide range of sectors (agricultural, information technology, fisheries, forestry and food products), as well as specific products, such as air conditioners, apples and pears, onions and potatoes, cheese, pulses, cosmetics, sugar, stainless steel, mobile phones, plain copier paper and tyres.
The downturn in the goods barometer is consistent with the WTO’s trade forecast of 5 October, which predicted merchandise trade volume growth of 3.5% in 2022 and 1.0% in 2023 due to several related shocks including the war in Ukraine, high energy prices, and monetary tightening in major economies. Merchandise trade posted a 4.7% year‐on‐year increase in the second quarter after growing 4.8% in the first quarter. For the forecast to be realised, trade growth would have to average around 2.4% year-on-year in the second half of 2022.
The barometer index was weighed down by negative readings in sub-indices representing export orders (91.7), air freight (93.3) and electronic components (91.0). Together, these suggest cooling business sentiment and weaker global import demand. The container shipping (99.3) and raw materials (97.6) indices finished only slightly below trend but have lost momentum. The main exception is the automotive products index (103.8), which rose above trend due to stronger vehicle sales in the United States and increased exports from Japan as supply conditions improved and as the yen continued to depreciate.
Stéphane Dujarric reiterated that the UN welcomed the donation of 260,000 metric tonnes of fertilizer which has been stored in European ports and warehouses, “which will serve to alleviate humanitarian needs and prevent catastrophic crop loss in Africa, where it is currently planting season.” The first shipment of 20,000 tonnes left the Netherlands on a World Food Programme (WFP-chartered vessel, MV Greenwich on Tuesday, and is due to dock in Mozambique, when it will then be transported to landlocked Malawi.
“It will be the first of a series of shipments of fertilizer destined for a number of other countries on the African continent in the coming months”, added Mr. Dujarric.
WFP said in a statement issued earlier in the month, when the deal stemming from an agreement in July, alongside the successful Black Sea Grain Initiative, was first announced, that the world urgently needed “concerted efforts” to solve the global food supply crunch, which has been exacerbated by Russia’s invasion of Ukraine. The two countries are key food and fertilizer exporters to developing world markets, and WFP said that smallholder farmers have been particularly hard hit by rising costs, inflation and supply chain blockages. “We cannot allow global fertilizer accessibility problems to become a global food shortage”, said WFP. “Reconnecting fertilizer markets is critical.”
Latest monthly agri-food trade report: August (European Commission)
Both EU agri-food exports and imports increased in August 2022, leading to the highest point for EU monthly trade flows in 2022 at €35 billion. EU’s trade balance has also reached its highest value of the year that same month at €5.6 billion. The value of EU exports increased by 6% and imports by 3% compared to July 2022. These are the main finding of the latest monthly agri-food trade report published today by the European Commission.
The biggest export values in August were for cereal preparations (€1.7 billion), wheat (€ 1.6 billion) and wine (€1.4 billion). Large shares of EU wheat exports are going to the Middle East/North Africa (MENA) region and to sub-Saharan Africa. In August only, 2 million tons of wheat reached the MENA region (48% of total EU wheat exports) and 1.5 million tons arrived in sub-Saharan Africa (34% of total EU wheat exports).
Trade and international trade cooperation as a tool for LDCs to adapt to climate change (Trade for Development News)
Climate change is one of the major threats to our societies, ecosystems and economies. Increasingly complex social and political challenges will arise as populations are forced to migrate from areas affected by climate change, such as through rising sea levels or droughts. A billion people who currently live no more than ten metres above sea level will be impacted. Human health is also expected to deteriorate since climate change affects the social and environmental determinants of health, such as clean air and water, and secure food and shelter. Vulnerable populations in developing countries, particularly least developed countries (LDCs) and Small Island Developing States (SIDS), will be the most severely hit. UNICEF reports that devastating floods have hit at least 27.7 million children in 27 countries around the world, with the number of children affected by flooding in Chad, Gambia, Pakistan and north-eastern Bangladesh being the largest in over 30 years.
Climate change also impacts trade. Extreme weather events can reduce productivity, increase costs and supply chain disruptions in the short term and alter countries’ comparative advantages and specialization in long term. The WTO World Trade Report 2022 finds that a rise of 1°C has been found to reduce the annual growth of developing countries’ exports by between 2.0 and 5.7 percentage points.
The list of 46 LDCs – home to about 1.1 billion people – is responsible for less than 1% of historical anthropogenic greenhouse gas emissions. While LDCs have the smallest environmental footprints, they are among the most vulnerable to climate change due to their greater exposure to sea-level rise, desertification, fires, floods and droughts. LDCs typically have lower levels of adaptive capacities to overcome such challenges.
Climate change is a multi-sectoral threat for LDCs that poses challenges to agriculture and tourism. Trade infrastructure – such as port facilities, roads, railways, airports and bridges – is dangerously at risk of damage from the consequences of climate change, including rising sea levels and the increased occurrence of extreme weather events. This threatens to further weaken LDCs’ ability to trade competitively. And it is not just the physical climatic disruptions that pose challenges to the most vulnerable countries: governments across the world are considering various mitigation strategies, policies and other measures to combat climate change. Yet, such measures, if not well designed, could additionally hinder LDCs’ trade competitiveness. Responding to the growing climate crisis effectively and building resilience is – together with climate change mitigation – a critical sustainable development strategy. Trade coupled with efficient trade policies can support the sustainability and the resilience of supply chains and ensure climate adaptation and just transition in several ways.
“With the right policies in place, digital technology can give an unprecedented boost to sustainable development, particularly for the poorest countries,” said UN Secretary-General António Guterres in a press release. “This calls for more connectivity; and less digital fragmentation. More bridges across digital divides; and fewer barriers. Greater autonomy for ordinary people; less abuse and disinformation.”
The 17th Internet Governance Forum, which kicked off on Monday and runs through Friday, is the first held in Africa in 11 years. It puts a spotlight on the least connected region, with 60 per cent of the population lacking Internet access.
Globally, more men use the Internet at 62 per cent, compared with 57 per cent of women. And in nearly all countries where data are available, rates of Internet use are higher for those with more education. Addressing these digital divides or “digital poverty” is at the top of the Forum’s agenda.
While digital technologies transform lives and livelihood for the better, increased use of Internet has also paved the way for the proliferation of misinformation, disinformation and hate speech, the regular occurrence of data breaches, and an increase in cybercrimes.
This year’s theme, “Resilient Internet for a Shared Sustainable and Common Future”, calls for collective actions and a shared responsibility to connect all people and safeguard human rights; avoid Internet fragmentation; govern data and protect privacy; enable safety, security and accountability; and address advanced digital technologies.
“The Internet is the platform that will accelerate progress towards the SDGs. Our collective task here in Addis Ababa is to unleash the power and potential of a resilient Internet for our shared sustainable and common future,” said Li Junhua, United Nations Under-Secretary-General for Economic and Social Affairs.
To support the production of data for the most urgent policy needs, IMF staff, in close cooperation with the Financial Stability Board (FSB) Secretariat and the Inter-Agency Group on Economic and Financial Statistics (IAG), and in consultation with participating economies, have developed a high-level workplan for a new Data Gaps Initiative (DGI). The Data Gaps Initiative will build on the close collaboration among the participating economies and international organizations established during Phase 2 of the Data Gaps Initiative (DGI-2), and explicit support from the G20. The recommendations are expected to be implemented within five years after the launch. As with previous phases, implementation will be monitored and published on the DGI Website beginning in 2023.