Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Intervention urgent to resolve rail, port problems, says Business Leadership South Africa (Engineering News)

Urgent intervention is required to resolve the problems of South Africa’s freight rail system and ports, says Business Leadership South Africa (BLSA) CEO Busi Mavuso, who in this week’s BLSA newsletter describes the coal export slump through Richards Bay Coal Terminal (RBCT) as startling. “The real economic damage to the economy is immeasurable… it’s an appalling situation and one which BLSA is working hard to rectify,” writes Mavuso.

As reported by Mining Weekly on Friday, coal exports processed through RBCT last year nosedived to 50.35-million tons, the lowest since 1993, at a time of very high demand, soaring coal prices and an RBCT export capacity of 91-million tons.

Minerals Council South Africa chief economist Henk Langenhoven calculates that the bulk of the opportunity loss lies with inefficiencies on rail and in the ports.

The gap between what South Africa’s coal mining companies could produce and what they could export last year represents a loss of at least R80-billion, The Economist of London calculates, quoting Stellenbosh University’s Jan Havenga, who adds that the total hit to South African firms from lost exports and the extra costs of going by road will amount to 6% of 2022’s gross domestic product – some R400-billion.

Transnet approaches market for lease of container corridor (Engineering News)

Ports and rail operator Transnet, as part of its partnerships strategy, has decided to engage the market to invest in and grow Transnet Freight Rail’s (TFR’s) containerised freight business, which services the country’s manufacturing sector. To this end, Transnet will issue a request for qualifications (RFQ) to the market to identify parties interested in entering into an operating lease with TFR for the operation and maintenance of the container corridor (the line between Johannesburg and Durban) for a period of 20 years.

The container corridor rail mainline is a fully electrified double-tracked rail line running from Booth, in KwaZulu-Natal, to Union, in Gauteng. While the mainline is 670 km in route length, the double line and various major marshalling yards and enabling rail lines takes the total track length of the corridor to 1 621 km.

EU to invest R5.3bn in SA’s Just and Green Recovery (IOL)

The European Union (EU) will invest €280 million (R5.3 billion) in South Africa’s Just and Green Recovery, it was announced at the official launch of the Team Europe Initiative in Pretoria on Friday.

“As Team Europe, the EU and its member states will invest more than €280 million in grants in South Africa, including €87.75 million from the EU budget, to support policy reforms on green recovery, unlock green investments and build a knowledge-based transition in the framework of the Just and Green Recovery Team Europe Initiative for South Africa launched today (Friday) in Pretoria as part of Global Gateway,” the EU delegation said in a statement.

The EU said the Just and Green Recovery Team Europe Initiative would support South Africa in achieving its national goal to tackle the country’s pressing socio-economic challenges through policy dialogue, facilitating investment, including for public infrastructure and to unlock a sustainable, biodiversity friendly and circular economy and combat climate change.

The more the merrier, says Miano as EAC vets Somalia’s bid to join the bloc (The East African)

Kenya’s Cabinet Secretary for East African Community, Arid and Semi-Arid Lands and Regional Development Rebecca Miano says a bigger East African Community spells opportunity for the region as long as the members are ready to deal with the attendant challenges. Miano says the current jitters around expanding the EAC are misplaced.

If you look at the African Union, the original dream of regional integration is to have a united Africa. Admitting more members in the East African Community is the right thing to do,” she told The EastAfrican in an interview on Thursday.

“Lessons from partner states who have been there before should lead the way. We must mature from the old problems or disputes. Kenya, Uganda and Tanzania, the pioneers, should sort out their outstanding problems to smooth the way for newcomers,” she said. “We think this will make it attractive to new member states. We must lay to rest old problems, enhance communication and leverage technology.”

East African Community inches towards financial integration (African Business)

In December, the East African Legislative Assembly (EALA) passed a bill establishing the East African Financial Services Commission (EAFSC), one of the key steps on the road to achieving regional monetary union. The EAFSC will work to harmonise financial services regulation, including in non-banking financial industries such as insurance, pensions, capital markets and microfinance, while promoting regional integration in the sector.

EALA speaker Martin Ngoga said: “This is one of the legacy bills this House has passed. It’s a bill that touches directly on a pillar of our integration. Therefore, we hope that the remaining step to assent by the Heads of State will not be delayed.”

Progress on regional financial and economic integration, as well as the harmonisation of banking regulations, has been slow since the EAC heads of state agreed to achieve monetary union by 2024, including the introduction of a single currency, when signing the relevant protocol in November 2013.The introduction of a single currency would have profound implications for businesses and banks across the region by reducing transaction costs and cutting banks’ currency trading revenue.

In December, an EAC report into the timetable for the process recommended pushing the deadline back from 2024 to 2031 because all member states were behind schedule, including on implementing the required protocols and achieving the macroeconomic convergence criteria.

ILO urges East African countries to harmonise labour laws (The East African)

The International Labour Organisation is asking East African countries to adopt global labour standards and harmonise laws on migrant labour. This week, the ILO’s East African office gathered government and labour rights experts in Zanzibar to push for a common agenda on adopting labour standards as provided by the global workers’ organisation.

And as countries in the neighbourhood work towards free movement of labour, the ILO says a common policy on migrant labour can help protect the workers as well as ensure only the needed labour is available.

Mr Wellington Chibebe, Director, ILO Country Office for the East African region that includes Tanzania, Burundi, Kenya, Rwanda and Uganda, told an audience that the region must work towards common policy to ensure legal migrant labour is categorised the same way across the region. “There’s a need to formulate and implement coherent, comprehensive, consistent, and transparent policies in line with international labour standards, for better protection of migrant workers,” he said, according to a speech shared with the media.

ECOWAS parliament speaker links dollars for regional trade to inflation, seeks adoption of common currency (WorldStage)

The Speaker of the Parliament of Economic Community of West African States (ECOWAS) Dr. Sidie Tunis has called for more political commitment towards the adoption of the ECOWAS common current, while blaming inflation in the region on the use of United States dollars in trade. Tunis told journalists in Bissau, Guinea Bissau at the on-going parliamentary seminar on Sequencing ECOWAS Monetary Cooperation Towards Single Currency, with the theme: “ECOWAS Common Currency and the Inter Bank Payment System as Promoters of Regional Trade,” that, “We should be able to trade easily with our currency but that is not happening, trading with USD is naturally increasing prices on our commodities.

Dr Sidie Tunis disclosed that lack of Single Currency in the ECOWAS region has impeded viable exports which currently stands at 10%, margin that is very low for a region of 400 million.

He said, “As you are aware, intra-regional trade is relatively low in the ECOWAS region. According to statistics, it represents about 10% of both exports and imports of Member States.

“Several reasons have been put forward to explain these low levels of intra-community trade. Among these, the lack of a single currency among ECOWAS Member countries has been identified as a major obstacle and a factor that aggravates transaction costs. In addition, efficient payment systems are a stimulus for intra-regional trade.

Momentum builds for free movement under AfCFTA (UNECA)

Trade experts, business executives, and advocates of the African Continental Free Trade Area (AfCFTA) from across the continent have expressed concerns about the slow progress on the ratification of the Protocol on the movement of people. The Agreement has, thus far, been signed by fifty-four of the fifty-five African Union (AU) Member States. Forty-four countries have deposited their instrument of ratification, but only four have ratified the Protocol on the movement of people.

In a document released at the end of a three-day Africa Prosperity Dialogue held in Ghana from 26 to 28 January on the theme “AfCFTA: From Ambition to Action - Delivering Prosperity Through Continental Trade,” African countries are called upon to “accelerate the ratification of the Protocol.”

Stop $88bn illegal outflow from Africa – Akufo-Addo urges states (BusinessGhana)

President Nana Addo Dankwa Akufo-Addo has called on African nations to collaborate and institute stringent measures to stem the disturbing annual illicit outflows of $88 billion from the continent. He said stern attention was required to arrest the situation immediately because the phenomenon was depriving Africa of significant resources that could be used to support its development agenda. President Akufo-Addo made the call when he addressed the closing ceremony of the three-day African Prosperity Dialogue (APD).

“We need to pay serious attention to and arrest illicit financial outflows out of the continent, which are estimated at about $88 billion dollars annually, depriving Africa of significant resources that could be used to support our development agenda… We need concrete measures to stop the systemic impoverishment of our continent and theft of its resources,” President Akufo-Addo stressed.

Modernisation, harmonisation of regulatory frameworks critical for universal broadband coverage by 2030 – Ralph Mupita (MyJoyOnline)

Ralph Mupita, The President and CEO of MTN Group, Africa’s telecommunications giant, has called for modernisation and harmonisation of regulatory frameworks to ensure Africa can deliver universal broadband coverage by 2030. He said, “Achieving universal broadband coverage on the continent and building digital solutions for Africa’s progress requires a lot of investment not only in terms of digital infrastructure across regions but modernisation of our policies and frameworks as well as the collective effort of all stakeholders”.

What should be the top priority for Africa in 2023? (Brookings)

Since we launched the previous edition of Foresight Africa in January 2022, our world has changed remarkably. Russia invaded Ukraine – an unanticipated event that roiled the global economy and sent food, fuel, and fertilizer prices sky high. Sanctions on Russia resulted in trade and logistical bottlenecks, which added more pressure on already strained supply chains, writes Aloysius Uche Ordu, Director – Africa Growth Initiative.

Meanwhile, the uneven recovery from the COVID-19 pandemic continued to feature in headlines across Africa and elsewhere. The combination of fragility in parts of the African continent and adverse weather conditions dampened economic growth in the region in 2022. With these external and internal headwinds, it is easy to be pessimistic about Africa’s prospects. Yet, time and time again Africa has proved resilient. We must be conscious of the danger of a single story – especially as many African countries will continue to fare well, despite the odds. Indeed, even though the region is unlikely to be fully out of the woods in 2023, the Economist Intelligence Unit forecasts overall growth of 3.2 percent. Medium-sized economies, such as Senegal, Côte d’Ivoire, the Democratic Republic of Congo, and Kenya, will drive much of this growth – with predicted growth rates of 5 to 7 percent in the year ahead. On the other hand, the region’s economic powerhouses (South Africa, Nigeria, and Egypt) are expected to record slower growth.

A decade of progress is under threat as overall African governance flatlines, the 2022 Ibrahim Index of African Governance finds (Mo Ibrahim Foundation)

The 2022 Ibrahim Index of African Governance (IIAG), launched by the Mo Ibrahim Foundation, highlights that African governance has flatlined since 2019, reflecting a series of disruptions caused by a combination of the COVID-19 pandemic, increased insecurity, and widespread democratic backsliding, posing a serious threat to several years of progress on the continent. Commenting on the data, Mo Ibrahim, Founder and Chair of the Mo Ibrahim Foundation, said: “The 2022 Ibrahim Index of African Governance highlights that African governance has flatlined since 2019. Unless we quickly address this concerning trend, the years of progress we have witnessed could be lost, and Africa will be unable to reach in due time the SDGs or Agenda 2063.

Our continent is uniquely exposed to the converging impacts of climate change, more recently Covid-19, and now the indirect impact of Russia-Ukraine war. Governments must address all at once ongoing lack of prospects for our growing youth, worsening food insecurity, lack of access to energy for almost half the continent’s population, heavier debt burden, growing domestic unrest. Coups are back, and democratic backsliding spreading. These are challenging times. More than ever, commitment to strengthen governance must be renewed, unless we lose all progress achieved”

Dakar 2 Summit: Development partners to commit $30 billion to boost food production in Africa (AfDB)

The second Africa food summit in Senegal ended on Friday, with development partners agreeing to commit $30 billion to back the continent’s resolve to boost agricultural productivity and become a breadbasket for the world. Among the development partners are the African Development Bank which plans to contribute $10 billion over five years, and the Islamic Development Bank, which intends to provide $5 billion.

The Dakar 2 Summit—under the theme ‘Feed Africa: food sovereignty and resilience’—adopted a Declaration on the implementation of the Summit’s resolution, to be submitted to the African Union.

More African Nations Are Expected To Tap The G20's Debt Restructuring Plan (Bloomberg)

More African countries are expected to join Chad, Zambia, Ethiopia and Ghana in seeking to restructure debts under the Group-of-20 nations’ so-called Common Framework, the head of a United Nations panel said.

“One could argue there are four or five countries there that are certainly at risk of falling into that debt trap,” Antonio Pedro, the executive secretary of the UN Economic Commission for Africa, said in an interview by phone from Addis Ababa, Ethiopia’s capital. He declined to identify them.

Global supply chain challenges will not affect energy transition progress in 2023 — Report (Nairametrics)

Strategic research provider, Bloomberg New Energy Finance (BloombergNEF), has said that global supply chain challenges will not affect the energy transition progress in 2023. This was stated in BloombergNEF’s Energy Transition Investment Trends (ETIT) which was released recently. The report said that the signs are good for 2023 and beyond, noting that policymakers are now shifting their attention away from vision and goals, and looking toward execution and delivery. The report said:

“Growing policy support and the increasing competitiveness of clean energy technologies continue to underpin a rapid acceleration in the energy transition. While supply chain disruption and inflation have posed challenges, they do not appear to have put a meaningful dent in the speed of the energy transition.”

The report stated that annual global investment in energy transition technologies has exceeded $1 trillion for the first time, hitting a new record level of $1.11 trillion in 2022 and recording a 31% yearly gain. It also said developing economies still need to unlock a lot of ambitious goals in renewables.

UN Report Calls for “SDG Push” to Lift Millions of Africans out of Poverty (IISD)

The African Union Commission (AUC), the UN Economic Commission for Africa (ECA), the African Development Bank (AfDB), and the UN Development Programme (UNDP) issued a report assessing Africa’s progress towards the SDGs and related goals of Agenda 2063 in light of the COVID-19 pandemic and the war in Ukraine. The report finds that without “an SDG push,” by 2030, at least 492 million people will be left in extreme poverty, and at least 350 million by 2050.

Only slight improvement has been registered on SDG 17. Noting decreases in Official Development Assistance (ODA) and Foreign Direct Investment (FDI) inflows, the report recommends that Africa foster its domestic resource mobilization and savings and boost its information and communication technology (ICT), to accelerate implementation of the SDGs and Agenda 2063.

The report assesses the impacts of the COVID-19 pandemic on selected SDG indicators under four scenarios: no COVID; a COVID baseline; a High Damage scenario; and an SDG Push scenario. As an illustration, the pandemic pushed 23.6 million Africans into extreme poverty in 2021, compared to the no-COVID scenario. The report estimates that by 2030, at least 492 million people will remain in extreme poverty, and at least 350 million people by 2050. However, if countries adopt and implement policies to “push” the SDGs, the number of people in extreme poverty would drop from 489 million in 2021 to 442.4 million in 2030, and to 159.7 million in 2050.

The report further describes how the impacts of the war in Ukraine are threatening food security and economic stability in Africa, triggering social unrest in some countries. It recommends that the region, inter alia: build resilient economic systems to reduce the over-reliance on food imports by transforming agricultural productivity through modernization; and make significant investments to promote equitable and affordable access to energy to sustain economic transformation.

Arab Africa Trade Bridges (AATB) Program Hosts Series of Bilateral Trade Business to Business (B2B) Meetings in Casablanca, Morocco (African Business)

The Arab-Africa Trade Bridges (AATB) Program, a multi-donor, multi-country, and multi-organizations program organized the 3rd Arab African Buyers/Sellers Meeting on Agri-food and Derivative Products in Morocco. The two-day event brought together leading agricultural and food industry professionals from across the Arab and African regions.

Emphasizing the enormous agricultural market potential of the Arab and African regions, the event provided participating organizations with the opportunity to establish and forge commercial relationships and promote cooperation with partners from both regions.

Eng. Hani Salem Sonbol, CEO of ITFC and AATB Secretary General, during his opening remarks, said: “The AATB Program is more than ever committed to promoting trade and economic development between Arab and African countries through its various interventions.

Belarus to discuss development of hub in Africa to trade its products (Belarusian Telegraph Agency)

Belarus will discuss the possibility of establishing a hub in Africa to trade its products. The issue will be talked over during the upcoming state visit of the Belarusian president to Zimbabwe, Charge d’Affaires of Belarus to Zimbabwe Dmitry Sakun told the media.

Speaking about the logistics of delivery of goods to such distant countries as Zimbabwe, the diplomat said that there have always been logistical difficulties, and especially recently these costs have increased significantly. Nevertheless, many European and American manufacturers successfully supply their equipment to African countries. Dmitry Sakun is confident that Belarus can do the same.

As for the price of the goods taking into account all costs related to logistics, Dmitry Sakun said that it is always possible to find some options with the local partners to work out the logistics solutions.

Ukraine food trade in trouble as war decimates production and exports efforts slump (FoodIngredientsFirst)

The number of ships departing Ukrainian ports through the Black Sea Grain Initiative food corridor has fallen to less than three a day, on average, the lowest in months. The war-torn country accuses Russia of artificially blocking the grain corridor via delayed ship inspection.

This is not the first nor the second time that the food corridors have been paralyzed due to inspection delays, as inspections are carried out by authorities from Ukraine, Russia, Turkey and the UN.

Flora Dewar, director of trade and logistics at Coceral, the European association of trade in cereals, oilseeds, rice, pulses, olive oil, oils and fats, animal feed and agro supply, tells FoodIngredientsFirst that the delays in transit are reported to be 60 days on average.

After a deal was brokered to extend the initiative and allow maritime transit of food, in November, inspection delays had ships stuck up to 15 days awaiting inspection. One month earlier, up to 165 ships were stuck. Ukraine also condemned Russia for delaying checks and using food as a tool of war at the time.

During January, grain exports through the corridor have been 2.4 million metric tons, considerably less than the 4 million metric tons exported in September and October.

Earlier this year, the EU and the FAO announced a partnership to provide US$15.5 million to ensure and support Ukrainian food systems impacted by the ongoing war. Ukraine has managed to export 30 million metric tons of grains and oilseeds in the 2022/2023 season through the food corridors and alternative land routes toward the EU.


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