Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Local news

Transport Forum highlights need for multimodal logistics to remain competitive (Engineering News)

Freight, logistics and transport industry experts have called for the restoration of South Africa’s roads network, the restoration and development of the rail network and efficient ports and border posts, arguing that the country can only remain competitive if its logistics networks and supply chains function coherently in concert. South Africa is a major exporting developing nation, with diverse exports and remains classified as a high middle-income country, said Gordon Institute of Business Science Business School research economist Dr Roelof Botha at the Transport Forum conference, in Johannesburg, on December 1.

South Africa is developing a platform on which to measure and monitor its complete logistics network across all six modalities of road, rail, air, sea, pipelines and conveyor belts.

Industry organisation the South African Association of Freight Forwarders (SAAFF) CEO Dr Juanita Maree detailed the work being done to create such a system, which would help to provide transparency for users of South Africa’s logistics network and help to improve services, as well as provide data and evidence for transport and infrastructure development policy-makers. However, she emphasised that, while a digital solution was part of the broader solution that was needed, without the infrastructure of road, rail, air and seaports and pipelines, digitalisation would not help, and there was a need to bring in much more physical infrastructure in Africa.

Downstream industry calls for scrapping of import tariffs on steel (Engineering News)

South Africa’s steel industry has experienced considerable headwinds over the past few years; however, the biggest challenge that must be dealt with is the import duties that have been implemented to protect primary producers, but that has adversely impacted on the downstream industry, various speakers noted during a discussion hosted by steel products producer Duferco Steel Processing, in Gauteng, on November 30. The participants stated that, with over six years of protection in the form of import tariffs on steel products, prices have not improved and only primary steel producer ArcelorMittal South Africa (AMSA) has benefitted, to the detriment of the downstream steel industry.

Duferco MD Ludovico Sanges posited that the high prices the local steel industry had to pay for its primary product was costing the country in terms of jobs, exports and ensuring it had the capacity to build much-needed infrastructure. As a result of the protective tariffs introduced on hot rolled coil (HRC) to protect AMSA, South Africa’s only primary steel producer, Duferco says it could no longer compete on the domestic market and was now competing successfully on the international market using imported HRC steel.

President Ruto: Kenya to help South Sudan move goods from Mombasa with ease (Capital News)

Kenya will facilitate cost effective movement of goods from the port of Mombasa to South Sudan. President William Ruto said South Sudan traders can choose to clear their goods from the port of Mombasa, Nairobi or Naivasha. The President was speaking in Juba after a bilateral meeting with President Salva Kiir at his office on Saturday. Dr Ruto said Kenya was keen to make it easier for goods to reach South Sudan. “Traders from South Sudan can choose the most convenient point to pick their goods with no restrictions,” said Dr Ruto.

PM lays out plan for export trade (The New Times)

The government is set to establish an electronic commerce (e-commerce) policy and its implementation strategies to boost technology use in business. The development was revealed by Prime Minister, Edouard Ngirente, on December 2 while presenting to Parliament, both Chambers, Government’s achievements on trade with a focus on export promotion. Ngirente added that in line with promoting e-commerce, there has been the establishment of an ‘E-commerce Centre’ which helps small and medium enterprises (SMEs) to promote their activities in Rwanda.

State to appeal court ruling stopping GMO importation (Business Daily)

The Ministry of Agriculture is appealing the decision by the court to stop the importation of genetically modified products, arguing it will hurt the country’s food security. Agriculture Principal Secretary Harry Kimtai said the Attorney General and the National Biosafety Authority — the regulators of the biotechnology crops — are appealing the decision. Mr Kimtai says the government’s appeal will be backed by science that led to the lifting of the ban last month.

“The Ministry of Agriculture and the National Biosafety is appealing against that decision. The matter was heard from one party and now we expect the court to listen from the side of the government and make a competent decision,” said Mr Kimtai.

Rwanda expects GMO responsibility as African scientists back Kenya policy (The East African)

Rwanda says it is counting on Kenya to be a responsible member of the region by ensuring transparent information is shared with neighbouring EAC countries on all genetically modified (GM) seeds and food products imported. Kigali’s sentiments must have come as a relief to the Kenyan government, coming on the back of recent support by a scientific lobby of African scientists who this week said genetically modified organisms (GMOs) are safe for human consumption and the environment. There is public debate in Kenya after the government in September lifted a ban on GMO foods and seeds, prompting a suit that resulted in a temporary court order stopping importation. Now Rwandan authorities have jumped into the fray, saying they want Kenya to abide by international laws such as the Cartagena Protocol to ensure others are not harmed by its actions on GMOs.

The Rwanda Inspectorate, Competition and Consumer Protection Authority (RICA) said it expects Nairobi to keep the imported products within its borders.

UAE seeks to expand bilateral trade with Kenya (Capital FM Kenya)

The United Arab Emirates (UAE) is looking to explore new avenues to strengthen ties with Kenya including expanding bilateral trade between the Arabian Nation and President William Ruto’s administration. Dr. Khalifa Al Rayssi, Charge d’affaires of the UAE Embassy in Kenya, said Thursday during the celebration of the 51st National Day of the Union, that the UAE is looking to diversify its economy away from petroleum products in order to tap more into the Kenyan market, which he described as an important commercial hub for Africa and getaway to other economies and markets in the region. To achieve this, Al Rayssi said the goodwill from the current regime will be critical even as UAE seeks to boost its investments in agriculture and technology.

“UAE had strong relations with the previous government and we still have the same strong relations even with the new government and we are aiming to even strengthen these relations,” he said. His remarks come four months after the two nations-initiated talks on United Arab Emirates-Kenya Comprehensive Economic Partnership Agreement (UAEK-CEPA) to increase the volume of trade in goods and services and investment when former President Uhuru Kenyatta was still in power.

Deepening Nigeria’s Non-oil Exports (This Day)

Non-oil exports can transform the structure of the Nigerian economy, support its diversification and help address its perennial forex challenges, writes Obinna Chima Nigeria’s third quarter 2022 Gross Domestic Product (GDP) figures which showed that the non-oil sector dominated economic performance by contributing 94.34 per cent to the nation’s GDP, while the oil sector contributed 5.66 per cent in the preceding quarter is something to cheer about as it underscored the increasing importance of the non-oil sector. The development showed that the federal government’s drive for economic diversification from the oil to the non-oil sectors, given the volatile nature of crude oil prices is yielding the desired results.

African trade and integration 

Africa’s AfCFTA free trade agreement takes baby steps (DW)

It’s been a long time coming, but several African nations have started trading a trickle of goods under the African Continental Free Trade Area (AfCFTA) agreement.

Kenya has shipped locally-made car and truck batteries as well as a consignment of Kenyan-grown tea to Ghana in the past months. Rwanda has also exported processed coffee beans to the West African nation. “It’s a positive move,” said Nixon Paloma, Group Finance Officer at Associated Battery Manufacturers. The firm is one of only two companies in Kenya taking part in a pilot project called the Guided Trade Initiative.

Illegal Customs Checkpoints Frustrating Transborder Trade – Shippers (Leadership)

Trading amongst African countries has been very low due to many obstacles hindering transborder trade facilitation in the continent. Obstacles such as proliferation of multiple checkpoints, poor infrastructure, and technology, among others, are threatening transborder trade. However, in Nigeria, the proliferation of checkpoints by the Nigeria Customs Service (NCS) along the land borders, especially Seme and Idiroko borders, are frustrating successful implementation of the Africa Continental Free Trade Agreement (AfCFTA), which Nigeria was a signatory. While other African countries have made trading easier, seamless and are currently benefitting from the potentials inherent in the agreement, Nigeria has made intra-Africa trading cumbersome and inconvenient and currently at the short end of the benefits in AfCFTA. According to maritime experts, Benin Republic has only two checkpoints along its border route to Togo while three checkpoints exist between Togo and Ghana border. But in Nigeria, an average of 100 checkpoints exist on both sides of Nigeria-Benin Republic border.

This, however, hampers cross-border trade and export as business owners undergo a lot of inconveniences to make Nigeria a transit point to other countries.

EAC member states not ready yet for single currency rollout (The East African)

East African Community member states will have to wait longer for a monetary union. A taskforce to look into the matter has proposed to delay the implementation of the East African Monetary Union (EAMU) until 2031 from initial date of 2024, saying it is too soon considering members have not attained all requirements.

The proposed delay is an indictment on the members’ commitment to achieve EAMU, a key pillar of integration. The EAMU is the third pillar of the EAC, others being the Customs Union and the Common Markets Protocol. The region, under EAMU, is expected to adopt a single currency by 2024. “We have a roadmap that was supposed to be implemented between 2013, when the Monetary Union protocol was signed, and 2024. But we did not manage to implement most of the activities in that roadmap,” said Dr Pantaleo Kessy, Principal Economist, EAC Secretariat.

S. Sudan fails to pull its weight in EAC amid missed deadlines (The East African)

Six years since South Sudan was admitted to the East African Community, domestic problems, including weak institutions, have eaten into its will to integrate, leaving neighbours feeling the burden. South Sudan gained independence from Sudan in 2011 but plunged into a civil war three years later. Today, even at relative peace, it has been constantly on the brink of war. By joining the EAC, leaders argued back in 2016 that the country could tap into regional support, including the safety of neighbours with whom it could trade and improve lives. Instead, it has been a humanitarian burden, needing food aid and refuge for its fleeing citizens. The country has failed to implement the Customs Union and the Common Market protocols, two of the basic pillars of the EAC. In fact, more than 18 months since he was appointed, the South Sudan minister in charge of EAC Affairs Deng Alor Kuol is yet to set foot in Arusha, the EAC headquarters where the council meets regularly to make decisions.

Nigeria, others to unlock $26bn on lower trade finance cost (Businessday)

Nigeria, Cote d’Ivoire, Ghana, and Senegal could earn up to $26 billion from lowering costs and increasing the availability of trade finance, a new report released by the International Finance Corporation (IFC) and the World Trade Organisation (WTO).

The report, Trade Finance in West Africa examined the major barriers to trade finance in the four largest economies in the region. The four countries face a trade finance shortage of up to $14 billion every year despite seeing increased trade flows over the years, especially during the COVID-19 pandemic.

“Global trade finance gaps increased during the pandemic. Supply chain pressures, inflation, and the war in Ukraine have only exacerbated the problem,” said Makhtar Diop, managing director, IFC. “This study couldn’t be timelier. There is enormous potential for an economic boost in West Africa by harnessing intra-Africa trade, but we will need coordinated action from the government. The private sector, and the multilateral to build the capacity of local lenders and improve access to SMEs.”

ECOWAS to Invest in Reducing Barriers to Trade in West Africa (This Day)

The Economic Community of West African States (ECOWAS) is poised to remove roadblocks of regional integration by investing time and resources on reducing tariff and non-tariff barriers in West Africa. Speaking at the opening of the 89th Ordinary Session of the ECOWAS Council of Ministers in Abuja, President of the ECOWAS Commission, Omar Touray, said in order to diagnose the state of the region, four strategic objectives have been identified, noting that these would be the focus of “our management in the next four years. We call this the Commissions 4 by 4 (4 x 4) comprising specific deliverables or results to be realised within our mandate.”

Touray said one of the objectives was to deepen regional integration, adding that: “Here, we intend to invest time and resources on reducing tariff and non-tariff barriers in our community and improve the business environment for our private sector; fully operationalise the regional payment system to reduce difficulty of transactions in local currencies and over-reliance on international currencies (the US dollars/euros); and introduce ECOWAS visa at the first instance for diplomatic and service passports.”

Touray also said another of the strategic objective is good governance, including good corporate governance to build confidence in the private sector, stressing that: “We will be focusing on building a stronger regime against anti-constitutional changes of government and supporting our Member States to deepen democracy.

IGAD validates its AfCFTA Implementation Strategy (UNECA)

The Agreement establishing the African Continental Free Trade Area (AfCFTA) signed in Kigali, Rwanda, on 21st March 2018 is a key milestone in Africa’s integration agenda. Almost all (seven out of eight) of the IGAD Partner States signed the Agreement establishing the AfCFTA. Djibouti, Ethiopia, Kenya, and Uganda have ratified the Agreement while Somalia has committed to ratifying the Agreement in the coming months. Additionally, the Partner States are developing national AfCFTA implementation strategies at different stages.

Harnessing the full benefits of the AfCFTA starts with its domestication, ratification, and full implementation by member States. For African countries, this entails developing national and regional AfCFTA implementation strategies tailored to existing national, regional and continental policy frameworks.

In this context, IGAD has developed its Implementation Strategy to identify opportunities, gaps, and steps required to take full advantage of continental and global markets resulting from the AfCFTA-induced opportunities. The IGAD AfCFTA strategy will recommend concrete actions that Member States should undertake to best leverage the opportunities arising under the AfCFTA and address related challenges.

Cemac: Agricultural export prices fell 4.9% in Q3 2022 (Business in Cameroon)

The prices of agricultural products exported by Cemac countries dropped 4.9% between July and September 2022. Over the previous quarter, the decline was 3.5%, according to official data from the Bank of Central African States. “This trend is explained by the improved prospects for the resumption of production following the destocking of certain products stocked after exports from Indonesia and Russia were suspended,” the Beac points out in its latest report on the commodity price index. By product, the most significant price declines were observed for palm oil (-39.0%), rubber (-21.3%), and cotton (-21.0%). On the other hand, according to the same source, “an increase was recorded in the price of sugar (+5.6%), and to a lesser extent tobacco (0.6%) and coffee (0.3%)”.

Blended finance helps alleviate Africa’s infrastructure shortfall (BusinessLIVE)

Development finance institutions (DFIs) are turning to blended finance, which has been identified as key to bridging Sub-Saharan Africa’s infrastructure gap. Sub-Saharan Africa has a widening $100bn annual infrastructure funding gap, particularly for ventures of 10 years or more, with local commercial banks often lacking capacity for long tenures. Ninety percent of projects on the continent are failing due to inadequate risk allocation and feasibility studies.

Diaspora’s remittances, investment and expertise vital for Africa’s future growth, say participants at African Development Bank Forum (AfDB)

Hundreds of academics and leaders of international institutions from around the world came together for an African Development Bank Forum on ways to harness the skills, wealth and dynamism of Africa’s 160-million-strong diaspora to its growth and development. The hybrid event took place against the difficult geopolitical backdrop of high global economic imbalances slowing direct investment into the continent as well as accelerating shifts in the job market. As a result, experts believe the $95.6 billion that Africans abroad remitted to the continent and their skills and expertise have assumed greater importance to Africa’s prospects.

These were key takeaways from the Thursday plenary of the two-day meeting titled, Development without Borders: Leveraging the African Diaspora for Inclusive Growth and Sustainable Development in Africa. The African Development Bank hosted it in partnership with the African Union Commission, the International Organisation for Migration, and the African Continental Free Trade Area secretariat.

CSW67: African countries agree on common position to harness technology and innovation for empowerment of women and girls (UNECA)

Building inclusive innovation and technology ecosystems must be at the heart of efforts to leverage the potential of innovation and technology to support the economic, social, and political development of women and girls in Africa. These were some of the key issues highlighted at the 67th pre-Commission on the Status of Women in Africa (Pre-CSW67) Ministerial consultations convened by the African Union Commission in partnership with UN Women, ECA, ITU, and UNDP from 29 November to 1 December 2022. Consultations heard that technology and innovation have proved a positive disruptor in Africa, accelerating progress in terms of financial inclusion, creating new jobs, improving access to healthcare, providing information on agricultural practices, and opening virtual spaces for citizens to engage on governance concerns.

Dr. Maxime Houinato, UN Women Regional Director for East and Southern Africa, said: “CSW 67 provides an opportunity for Africa to influence the global discourse on digital cooperation, to ensure that technology and innovation can accelerate economic growth, while fairly distributing the benefits to African women and girls as well as reshaping sociocultural norms to create a more equal and just world for them.”

‘Africa can achieve more if it will speak with one voice’ (IPS Journal)

As geographical neighbours, Europe and Africa have a long trade history. The EU is Africa’s most important source of imports, accounting for 26 per cent of all imports followed by China (16 per cent) and intra-African trade (15 per cent). The US and the UK are also important trade partners but much less significant sources of imports into African countries. The EU is also Africa’s most important destination for exports.

Regarding the composition of trade, the EU’s imports from Africa are made up mainly of fossil fuels (40.7 per cent) and other primary commodities (ores, metals and pearls, precious stones and non-monetary gold) as well as food items (15.7 per cent). This means that EU imports are highly concentrated on low value-added products, a reflection of Africa’s poor industrial base which has not changed for decades. In contrast, Africa’s imports from the EU are strongly dominated by manufactured goods. It is clear that Africa’s trade relationship with Europe is highly asymmetrical

What are some issues which stand in the way of a stronger trade relationship between Africa and Europe?

Global economy

Members take stock of sustainability discussions, signal priorities for concrete action (WTO)

Launched in November 2020, TESSD seeks to advance members’ discussions at the intersection of trade and environment and complement the work of the WTO Committee on Trade and Environment. Participating members, of which there are now 74 representing around 85% of world trade, subsequently issued a Ministerial Statement agreeing to endeavour towards concrete actions and a work plan to guide efforts in 2022.

“These Trade and Environmental Sustainability Structured Discussions are a trailblazer at the WTO,” DG Okonjo-Iweala said at the event’s opening session. “You are searching for practical solutions and concrete actions to catalyse the trade and environment agenda. You are breaking down silos and cooperating across traditional structures and fields of expertise to find solutions to global problems.”

Members put trade facilitation support in sharper focus, aim to close gaps in next 2 years (WTO)

“Five years into implementation of the Agreement, the global implementation rate for commitments stands at 74%. This is positive,” DG Okonjo-Iweala said in her opening remarks at the Committee on Trade Facilitation’s dedicated session on technical assistance capacity building, held the same week as the committee’s regular meeting. “However, a breakdown of that figure shows that the rate for developing members and least-developed countries (LDCs) is about 66% and LDCs lag behind significantly at 37%,” she continued. “Landlocked developing countries (LLDCs) also have a lower rate of implementing commitments, at 54%,” she said.

UK extends duty free trade status LDCs (IPPMedia)

Resident UK High Commissioner David Concar yesterday challenged the private sector to revisit their quality controls for export products to benefit from a developing countries trading scheme taking off early next year. 

Addressing a news conference on the sidelines of the second UK-Tanzania Business Forum in Dar es Salaam, the envoy said the scheme offers enormous export trade opportunities for Tanzanians. Crafted in line with the Conservative government’s new international development strategy, the scheme contributes to developing countries’ integration into the global economy, creating stronger trade and investment partners for the future, and strengthening supply chains, he stated.

 “The scheme facilitates the growth of free and fair trade with developing countries including Tanzania, boosting the economy and supporting jobs in those countries, as well as in ours,” he explained.

Kenya, Africa lag behind in fertiliser use (The Standard)

Poorly functioning value chains and lack of reliable data are some of the hindrances to Kenya and the rest of Africa achieving best practices in fertiliser use. According to newly published data gathered over the last seven years by the International Fertiliser Development Centre (IFDC) Kenya and African Union Commission (AUC), fertiliser consumption is increasing in Africa but at a slower rate. “Data from 31 African member states shows that the average fertiliser consumption was about 15.5kg (kilogrammes) of nutrients per hectare (ha) as of 2018, up from about 12.8kg per ha in 2015,” said the biennial review report on the implementation of the Malabo Declaration on accelerated agricultural transformation.


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