Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Top African Coal Port’s Snags Are No Match for European Demand (Bloomberg)

South Africa’s state-owned rail company Transnet last year delivered the smallest amount of coal in three decades from mines to the continent’s biggest export facility for the fuel at Richards Bay, but shipments to Europe surged.

The overall slump in deliveries was mainly caused by a labor strike and a train derailment, followed by violence that prolonged recovery efforts and interrupted service for weeks on the line connecting collieries in Mpumalanga province to Richards Bay Coal Terminal.

Despite lower volumes arriving at RBCT, where they’re loaded onto vessels, Europe’s demand for the dirtiest fossil fuel in the wake of Russia’s invasion of Ukraine drew more than 14.3 million tons of coal from the facility — an increase of more than 520% from the previous year. 

Freight bottlenecks, geopolitical conflicts hampering mining sectors (SAnews)

Mineral Resources and Energy Minister, Gwede Mantashe, says the country has to urgently prioritise the resolution of challenges facing freight and railways operations if the mining industry is to capitalise on the current minerals boom. The Minister made the call while delivering the opening address at the 2023 Investing in Africa Mining Indaba in Cape Town on Monday. Addressing delegates, he said 2022 had been a grim year for the mining industry.

“International factors included soaring energy prices due to the ongoing geopolitical dynamics, whereas domestic factors included the ongoing power supply disruptions (load shedding) and the logistical bottlenecks on our railways and ports.” Mantashe said the soaring of global energy prices negatively impacted the industry’s operational costs.

SONA 2023 to reflect on progress made (SAnews)

President Cyril Ramaphosa is due to deliver the 2023 State of the Nation Address (SONA) before a joint sitting of the National Assembly and National Council of Provinces on Thursday.

The address will also reflect on successes made by the administration since the last SONA in 2022. Over this period, the sixth administration made headway in pressing areas that impact daily life.

November 2022 marked two years since President Ramaphosa announced the establishment of Operation Vulindlela to drive a far-reaching economic reform agenda for the country to shift its economic growth trajectory and enable investment and job creation.

Egypt and Nigeria have decided on some trade agreements (Business Insider Africa)

The procedure got underway in 2019 when the FCCPC and the ECA started talking about improving competition laws and policies between their respective organizations. The FCCPC and ECA signed the Memorandum of Understanding on January 31, 2023, at the headquarters of the Egyptian Competition Authority in Cairo, Egypt, considering that both nations are a part of the largest economies in Africa and the commonality of both agencies’ objectives and mandates. “In this regard, the FCCPC and ECA have solidified their engagements in a Memorandum of Understanding.” A statement by both parties reads in parts.

The statement further notes that the agreement recognizes critical issues that aim to advance both agencies’ engagements through coordinated research, capacity building, and information and experience sharing to ensure consumers and businesses receive the protection and advantages that come naturally with the increased economic growth this engagement fosters.

Nigeria in 2023: Bridging the productivity gap and building economic resilience (Brookings)

The last seven years (2015–2021) have been tough for Nigerians. During this period, GDP growth averaged 1.1 percent as the country experienced two economic recessions. Unemployment and underemployment rates increased to an all-time high of 56.1 percent in 2020, pushing 133 million Nigerians into multidimensional poverty, according to the latest data from the National Bureau of Statistics. Likewise, economic growth has not been inclusive, and Nigeria’s economy faced key challenges of lower productivity, and the weak expansion of sectors with high employment elasticity.

Another key feature of Nigeria’s economy in the last seven years has been the shift of economic activity towards agriculture and a slowdown of the manufacturing sector. As a share of GDP, agriculture expanded from 23 percent in 2015 to 26 percent in 2021, while manufacturing declined from 9.5 percent to 9 percent respectively. During this period, non-oil exports as a share of non-oil GDP averaged 1.3 percent while manufactured goods as a share of total exports remained low at 5.2 percent in 2021. Part of the problem facing the economy is the neglect of the manufacturing sector. Essentially, Nigeria is not producing enough, for both local consumption and export. The consequences of having a weak manufacturing base for a country with such a large population are evident in its foreign exchange shortages, limited number of jobs created to accommodate workforce entrants, and an import bill that can hardly be met (nor sustained) by current export earnings.

At the top of the productivity ladder is the tradable services sector, which has the potential to improve incomes and raise overall productivity. The challenge with this sector, however, is its inability to accommodate labor in large numbers. Nevertheless, the sector is important, given Nigeria’s young population who are increasingly driving technological revolution across various sectors on the African continent. To leverage the full potential of this sector, the government will need to design and implement national skills programs aimed at upskilling young Nigerians, to ensure many more embrace digital skills and capabilities.

At the middle of the productivity ladder sits manufacturing. The sector has a much higher productivity level than agriculture and can accommodate, in large numbers, the kind of labor that is abundant in the country.

Tanzania is speeding up its efforts to establish stronger trade ties within Africa (Business Insider Africa)

The Tanzanian minister of Investment and Trade, Dr. Ashatu Kijaji, disclosed this information in an exclusive interview with The Citizen, a Tanzanian news agency. “We have yet to identify the products. We have only recently begun discussions with members of the business community in order for them to tell us which products they want to trade under the AfCFTA arrangement,” the minister stated.

She reaffirmed her belief that starting in July of this year, Tanzania will permit the commerce of 10 items. The first engagement meeting between the public and private sectors took place last week, and the minister promised that subsequent follow-up meetings between both sectors would ensue.

Alongside these seven other countries, Ghana, Kenya, Cameroon, Rwanda, Egypt, Mauritius, and Tunisia, Tanzania was selected as one of the countries to pilot “the AfCFTA Initiative on Guided Trade Trial.” This initiative was launched in 2022, and about 100 traders from Ghana, Cameroon, Kenya, Egypt, Mauritius, and Rwanda are currently trading under the AfCFTA program whose trading started officially on January 1 last year. This information is courtesy of The Citizen which got its hands on official government documents.

Mining countries being helped to build critical mineral supply chains (Engineering News)

The United States of America wants to support mineral producing countries to build enabling environments for investment throughout the critical minerals supply chain and not just focusing on extraction alone. This was stated by US Under Secretary of State for economic growth, energy and environment Jose W Fernandez in his address to the Investing in African Mining Indaba

Refining, battery production and recycling, in addition to simply extraction, is the approach being adopted by the Mineral Security Partnership (MSP) of which the US is part – along with Australia, Canada, Finland, France, Germany, Japan, Korea, Sweden, the UK, the European Union and now also Italy, the latest country to join.

Demand for critical minerals, which are essential for clean energy and other technologies, is expected to expand significantly in the coming decades.

MSP members view transparent, open, predictable, secure, and sustainable supply chains for critical minerals as being vital to the successful deployment of these technologies at the speed and scale necessary to combat climate change effectively.

Expensive skies: EAC cited for high levies at its airports (The East African)

South Sudan’s Juba International Airport has the heaviest costs for travellers and transporters, showing just how pricing can be a barrier to movement in the East African region. A study on air transport ranks the Juba airport as the fourth most expensive in Africa in terms of passenger charges, just below Niamey, Monrovia and Bissau airports. The study, released in January and titled ‘‘Air Transport Services Liberalisation in the East African Community, Focus on Drivers and Regulations’’, was carried out by the East African Business Council (EABC), TradeMark Africa (TMA) and the government of the Netherlands.

EABC chief executive John Kalisa attributes the costs to the lack of well-developed infrastructure and qualified personnel to control the airspace.

“The major factors constraining the growth of air transport in EAC especially in South Sudan, is poor infrastructure and insecurity. The airport lacks cold rooms for storage of cargo making, among other facilities,” said Kalisa. The cost of transporting cargo by air is high in Burundi compared to other EAC states as the country does not have its own cargo aircraft, making access to markets expensive and limited.

Irony of $30b mobilised for agribusiness as 282m Africans starve (The East African)

The war in Ukraine has roundly been blamed for the food shortages being witnessed in the world, and especially Africa. Energy, fertiliser and food costs have risen by between 40 percent and 300 percent since Russia invaded Ukraine in February 2022.According to data from the African Development Bank, Africa imports more than 100 million tonnes of food annually, valued at about $75 billion, and the continent now finds itself in a lurch, as 30 million tonnes of the imports come from the warring Russia and Ukraine.

Some of the most affected African countries are Egypt and Sudan. Egypt is the largest wheat importer in the world, and in 2022 it bought $8 billion worth of the grain.

The ever-increasing prices continue to exacerbate an already strained food supply chain, causing more hunger pangs across the globe. Food insecurity on the continent is further worsened by climate change, which is costing the continent $7 billion-$15 billion annually.

Wide-ranging reforms will aid Africa’s sustainable recovery, says ECA’s Antonio Pedro (UNECA)

African countries should institute wide ranging fiscal reforms to expedite sustainable recovery from multiple crises which have hindered industrialization and economic diversification, the Economic Commission for Africa’s (ECA) Acting Executive Secretary, Antonio Pedro, has urged. “Ensuring a sustainable recovery, which protects populations and economies from the shocks of future pandemics and other crises, will require a range of reforms and initiatives at both the national and international levels,” said Mr. Pedro in his remarks at the 2023 Coordination Segment of the Economic and Social Council (ECOSOC) on 2 February in New York City.

“For African countries, appropriate policy choices through fiscal reforms as well as building coherent and effective frameworks for mobilizing domestic revenue are needed,” Mr. Pedro said, calling for a reprioritisation of public expenditure to invest in more growth-enhancing projects.

World Bank roots for Africa trade deal (The Star)

Free trade among African countries poses great potential in drawing more foreign direct investments and increasing benefits, according to World Bank. To attain this, it says trade agreements like the African Continental Free Trade Agreement (AfCFTA) need to be fast-tracked since trade between African borders still faces restrictive constrains which limit growth.

“According to our new research on trade integration, it is noted that borders between African countries rank among the most restrictive in the world, one reason why there is relatively little intra-continental trade and investment,” the lender says.

The global lender maintains that trade and investment have been the primary drivers of growth for developing economies, lifting hundreds of people out of poverty, hence the need for governments to focus on easing intra-trade across the continent.

Allocution de S.E. Moussa Faki Mahamat, President de la Commission de l’Union africaine au 2ème Réunion de Dakar Sur Le Financement Des Infrastructures (AU)

Remarks by World Bank Group President David Malpass at the High-Level Summit on Financing Africa’s Infrastructure Development

I want to highlight a disconnect between your huge investment and infrastructure needs and the too little too late inflow of capital. One of the biggest challenges is in Sub-Saharan Africa. It is home to 60 percent of the world’s extreme poor and has a high population growth rate, but the current investment rate is not enough even to maintain capital stocks, much less increase them. We need a holistic approach to expanding infrastructure through private capital facilitation, which includes both mobilization and working at the upstream level to improve the environment for private capital enabling.

African youth entrepreneurs launch continental youth business council (The Point)

The AfYBC was officially launched at the East African Community (EAC) Headquarters in Arusha, Tanzania, on the sidelines of the 2022 YouLead Summit during its 6th edition. The YouLead summit is one of Africa’s most diverse youth events.

While launching the AfYBC, African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals (ETTIM), Amb. Albert Muchanga, urged young African entrepreneurs to use innovation to their advantage and leverage partnerships to create smart solutions for the continent’s most pressing development challenges.

“Today, you will also be launching the Afrikan Youth Business Council – a continental apex body for youth-led private sector entities, institutions and associations in Africa, advocating for a youth-friendly business policy environment, aimed at making AfCFTA Promises to African youth reality.

I understand and acknowledge the challenging macroeconomic environment that Africa and the world find themselves in at the moment. This should be the ultimate goal of the African Youth Business Council.

‘Act decisively before it is too late’, Guterres warns countries, laying out his priorities for 2023 (UN News)

Addressing the General Assembly in New York, he appealed for urgent action now to achieve peace, economic rights and development, climate action, respect for diversity, and inclusive societies – both today and for generations to come.

The international community has an obligation to act, he continued, as “this is not a time for tinkering” but, rather, “a time for transformation.”

With poverty and hunger rising, developing countries drowning in debt, and social safety nets frayed, among other signs, the Secretary-General called for “radical transformation” of the global financial architecture. This will require new commitment and resolve, including to address the appalling inequalities and injustices exposed by the COVID-19 pandemic and the response to the global crisis.

New determination will also be needed to ensure developing countries have a greater voice in global financial institutions, and that vulnerable nations, including middle-income countries, can have access to debt relief and restructuring. Multilateral Development Banks in particular, must change their business model and leverage their funds to attract more private capital that can be invested to help developing countries achieve the Sustainable Development Goals (SDGs) before the 2030 deadline.

“Without fundamental reforms, the richest countries and individuals will continue to pile up wealth, leaving crumbs for the communities and countries of the Global South,” he cautioned.

Debt relief under the heavily indebted poor countries initiative HIPC (IMF)


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