News
tralac Daily News
Trade, Industry and Competition on Defence Export Council mission to seek export opportunities in Middle East for South African Companies (South African Government)
The Chief Executive Officer of the South African Aerospace Maritime Defence Export Council (SAAMDEC), Mr Sandile Ndlovu will embark on a mission to seek export opportunities in the Middle East for the South African manufacturing companies operating in the aerospace, maritime and defence industries. Ndlovu will be one of the businesspeople whose companies will be participating in the International Defence Exhibition and Conference (IDEX) that will take place in Abu Dhabi, United Arab Emirates, from 20-24 February 2023.
Ndlovu is confident that the South African companies will stand out from the rest of the exhibitors at the international trade show, which is the premier event in the Middle East and North Africa (MENA) region showcasing the latest technologies in land, sea and air sectors of defence.
“Following the disruption of Covid-19, the trade show provides us with an opportunity to showcase our products again to the global market, particularly the Middle East, which has proven to be a fast-growing and lucrative export market for the SA products. The region is the biggest in terms of destination of our export products because countries there always want to have the best equipment due to the volatility that characterises the region, and the fact that they can afford them,” says Ndlovu.
Nigeria: 2022 Article IV Consultation (IMF)
Economic recovery continued to broaden in 2022. Higher oil prices are yet to deliver tangible benefits amid contraction of oil production and costly fuel subsidies. Elevated inflation and lingering external sector pressures, if left unaddressed, may exacerbate macroeconomic instability. This could impact growth, food security and ultimately social cohesion given extreme inequality and high poverty. The upcoming elections provide an opportunity for the new administration to advance structural reforms and offer a more prosperous future.
Sierra Leone FM Says Infrastructure Key for Africa’s Free Trade (ENA)
Physical infrastructure has remained a major bottleneck in accelerating the implementation of the African free trade opportunities, Sierra Leone Foreign Minister Professor David Francis said. Speaking to ENA, the minister commended Ethiopia for its endeavors on physical integration to integrate the African continent via Ethiopian Airlines.
Noting that infrastructural development is vital to accelerate the African free trade area, the minister noted that Ethiopia has come a long way to build physical infrastructure that would facilitate regional linkage.
Namibian businesses urged to tap into DRC market (NewEra)
As the implementation of the African Free Trade Agreement gains traction, Namibian businesses have been encouraged to expedite the exploitation of the potentially massive market of the Democratic Republic of Congo (DRC) which has a population of about 130 million people.
That country’s ambassador to Namibia, Anastas Kaboba Kasongo Wa Kimba, has specifically called on businesses from both countries to strongly consider the establishment of joint production or manufacturing facilities, particularly in the sphere of agro-processing.
Namibian officials decided to prioritise first the development of the Lubumbashi site to promote and trade in Namibian goods and services with the southern side of the DRC. “This is an advantage for Namibians because it is like Namibia will be expanding its territory into one of the biggest markets, the DRC. This presents a real opportunity to stimulate growth, reduce poverty and expand economic inclusion and for job creation on both sides,” said Wa Kimba. The ambassador explained the anticipated development will eventually include wet and dry warehouses, financial services, fuel depots, a petrol station, immigration and tax offices as well as ample accommodation and space for relaxation and entertainment.
Namibia currently exports products such as salt, fish, beef and mining chemicals to the DRC. In turn, some of that country’s main exports include a wide range of rare and valuable minerals, including oil, as well as timber and a host of agricultural products.
“The DRC government is really pushing to make the African Free Trade Agreement a reality. The DRC has a multitude of agri-products that can be exported to Namibia and we need to really promote business relationships between the two countries,” said Wa Kimba. The DRC ambassador also hailed Namibia’s President Hage Geingob as the visionary who initiated (as then trade minister) the establishment of a Namibian business estate in the DRC. Wa Kimba added that the establishment of a permanent home for Namibia businesses in the DRC can only strengthen the bilateral relationship between the two countries. “I encourage Namibian businesses to consider as many products as possible for the growing DRC market, as we need to reinforce and accelerate business ties between the two countries,” said Wa Kemba.
Operations of Gambia’s National Platform on Cross-Border Cooperation & Free Movement & Migration launched (The Point)
The launch of the CBC-FMM will no doubt kick-start robust implementation in The Gambia and between The Gambia and its neighbouring states of the ECOWAS Cross-Border Cooperation Support Programme (ECBCSP) 2021-2025.
The ECBCSP is a regional programme that was developed via a decision of the Authority of Heads of State and Government taken in Niamey on 12th January 2006 at its 29th Ordinary Session. The programme is a multi-sectoral development programme that works with border communities, National and Local Authorities and Civil Society to ensure social cohesion, regional construction and sustainable development.
The programme promotes regional peace and security, manages migration and free movement and supports Joint Socio-Economic Development Initiatives and local community development projects that empowers community citizens, strengthens cooperation, integration and development across borders.
Bill to protect consumer rights in the offing (BusinessGhana)
The government is rigorously working to pass a comprehensive Consumer Protection Bill to bolster consumer protection regime in Ghana, the caretake Minister of Trade and Industry, Samuel Jinapor, has told Parliament.
The overarching object of the bill is to protect, secure and defend the rights of consumers through a structured institutional mechanism and legal framework that will ensure that consumers play a significant role in keeping erring businesses in check.
When assented to by the President, the Act will see to the establishment of a state agency with the sole responsibility to enforce those consumer protection rights. The agency would also promote competition and ensure regional integration through digital trade and e-commerce, the minister said.
Presenting a policy statement on consumer protection in Parliament yesterday, Mr Jinapor said, “with the coming into force of the African Continental Free Trade Area (AfCFTA), and Ghana as host of the AfCFTA Secretariat, consumer protection law is more important now than ever”.
Horticulture to boost agric economy (The Herald)
The horticulture sub-sector has potential to contribute to a robust agricultural sector through import substitution, food security, exports, employment creation and raising household incomes, Lands, Agriculture, Fisheries, Water and Rural Development Minister, Dr Anxious Masuka, has said.
Export earnings from horticulture will more than double to US$143 million from the US$64 million realised last year after the Government implemented policies that have revived the horticultural space.
Last year, the Government launched a US$30 million Horticulture Export Revolving Fund (HERF) to enhance the sector’s contribution to national export earnings and economic growth.
Morocco, UK discuss ways to enhance bilateral trade (The North Africa Post)
Visiting British Minister of State for Business and Trade Nigel Huddleston discussed with a number of Moroccan officials ways of enhancing trade between the two countries, particularly through the proposed maritime link between Morocco and the United Kingdom. “Morocco is the UK’s fourth largest trading partner in Africa and this is an opportunity to further grow the £2.7bn trading relationship between our two Kingdoms, particularly in areas like healthcare, agriculture, clean growth, and education,” said Huddleston.
Strengthening trade in renewable energy, particularly green hydrogen, was the focus of talks with Minister of Energy Transition and Sustainable Development Leila Benali. The talks were an opportunity to examine the various topics of common interest, including energy transition, sustainable development and the environment.
Ministers of Foreign Affairs and heads of delegations from the Member States of the African Union (AU) converged on 15 February 2023 at the headquarters of the AU in Addis Ababa, Ethiopia, for the official opening of the 42nd Ordinary Session of the Executive Council.
the worrying progression of terrorism, the return of non-constitutional changes, declining growth, constantly deteriorating climatic conditions among other challenges are issues which the continent is bent to consistently deal with until they are completely eradicated. “Despite this unfavorable context, Africa is showing remarkable signs of resilience and the African Union, in its various components, has maintained its operational dynamic in the implementation of programs and decisions”. Taking into account the combined impacts of the various crises that have recently shaken the whole world the Chairperson said that the African Union is determined to give priority to health and nutrition issues. “While mitigating the effects induced by the urgency of meeting the needs of the populations, the Union is part of the search for long-term solutions aimed at setting up structures and capacities for food and medicine production. It is in this logic that the operationalization of Africa CDC is nearing completion while the African Medicines Agency, AMA, has begun its own with already the choice of its headquarters,” said Mr. Moussa Faki Mahamat.
Mr. Antonio Pedro, Acting Executive Secretary, United Nations Economic Commission for Africa (ECA) on his part stressed that, at the ECA, “We believe that the African Continental Free Trade Area (AfCFTA) can be a catalyst to stimulate recovery, accelerate trade and industrialization, and build resilience into the African economy. The AfCFTA continental market provides the economy of scale to invest in manufacturing, leading to increased intra-Africa trade, thereby bringing supply chains closer to home and injecting a degree of self-sufficiency in essential products such as medicines, food and fertilizers. He said, this will help provide more opportunities for women and the youth, it will reduce inequality and poverty, and will also improves inclusion. “Indeed, our member States agreed to establish the AfCFTA in the first place precisely because they saw these opportunities and had the determination to seize them. The progress in the AfCFTA represents an extraordinary feat of diplomacy and statesmanship and deserves commendation and provide good reasons for hope” concluded Mr. Pedro.
African leaders have pledged to take immediate action to integrate the recommendations from the newly released Africa’s Macro-Economic Performance and Outlook report into their national development plans.
Zambian President Hakainde Hichilema said the study, conducted by the African Development Bank Group, provided an impetus for the continent’s leaders to forge ahead with needed reforms. His remarks were read on his behalf by Zambia’s Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, during an event to present the report at the 36th African Union Summit in Addis Ababa.
“The findings of this important report, therefore, provide us with a set of concrete policies that we must urgently implement to sustain the recovery and build resilience in Zambia, and on the continent more generally,” President Hichilema stressed. He observed that although Zambia was not spared from global shocks, the country’s economy has shown resilience.
The African Development Bank Group released the inaugural Africa's Macroeconomic Performance and Outlook report on January 19. It has since attracted significant interest among decision-makers in Africa and globally.
The biannual report offers policymakers, global investors, researchers, and other development partners, up-to-date, evidence-based assessments of the continent’s recent macroeconomic performance. It also provides a short-to-medium-term outlook.
African Union Commission Chairperson Moussa Faki Mahamat told participants: “Knowledge is power. The report, to be published twice a year, is a wealth of knowledge - with deep insight into what is going on in Africa in the macroeconomic sphere. It identifies challenges and opportunities for the good of our continent.... If governments, the private sector, and other stakeholders adopt the report, they will be better placed to make informed decisions.”
The report calls for timely structural reforms to enhance government-enabled private-sector industrialization in key areas.
Should Somalia fast-track its membership to the EAC? (The Africa Report)
Somalia’s geographical location and its citizen’s inherent entrepreneurial spirit to explore new markets have contributed to the country’s desire to join the EAC. Efforts to join the regional block started years back but stalled after the fall of the central government in 1991. Is Somalia any closer to being granted membership and if so, should it really pursue it?
The current renewed interest to join the EAC was initiated after the election of Hassan Sheikh Mohamud in May 2022. The bid for Somalia’s membership received a boost on 25 January 2023, after a verification team comprising experts from EAC partner states visited Mogadishu to assess its readiness to join the community. The team met with different government institutions and private organisations.
East African Community secures US$1.4 MIllion for feasibility study of key road project (EAC)
The East African Community (EAC) has secured US$1.4 million for a feasibility study on a key section of the Northern Transport Corridor linking the Republic of Kenya and the Republic of Uganda. The EAC Deputy Secretary General in charge of Planning and Infrastructure, Eng. Steven Mlote, disclosed that the funding from the African Development Bank would be used to conduct feasibility studies on the 256 km multinational Kisumu-Kisian-Busia/Kakira – Malaba-Busitema-Busia expressway project.
Speaking during the opening session, the Chairperson of the Meeting who is also Burundi’s Minister for Infrastructure, Equipment and Social Housing, Captain Dieudonne Dukundane, emphasised the importance of introducing performance indicators in the TCM report in future as a way of assessing progress in the implementation of the directives of the sectoral council.
Dakar Financing Summit: African Development Bank is lead financier of PIDA infrastructure projects (AfDB)
The African Development Bank has provided over 50% of financing secured by infrastructure projects under the Programme for Infrastructure Development in Africa (PIDA), making it the lead financier of this strategic pan-African initiative.
Over 17 flagship infrastructure projects were showcased at the Dakar Financing Summit 2 (DFS2) which concluded on 3 February in the Senegalese capital. Under PIDA, the bank is primarily supporting energy and transport projects.
PIDA is a blueprint for infrastructure development to increase Africa’s competitiveness and economic integration. Its Priority Action Plan 2, adopted in 2021 by the AU Assembly of Heads of State and Government, comprises 69 ICT, water, energy and transport projects that are to be fast-tracked to roll-out.
Key Ways to Amplify the Development of Africa’s Gas Markets (Energy Capital & Power)
A new report released by the International Gas Union (IGU) highlights the key principles that Africa needs to adopt to supercharge the development of gas markets.
The IGU recommends that African countries prioritize environmental sustainability and energy decarbonization in project planning and deployment to ensure gas projects will remain relevant for decades to come as carbon emissions reduction becomes more of a priority for global governments. With the energy transition taking center stage, there is a need for Africa to ensure gas projects align with the just energy transition agenda; guarantee environmental sustainability; and are compatible with the goals of the Paris Agreement.
Africa is, however, progressing in this regard, with countries focusing on emissions reductions through various measures such as policy enactments aimed at reducing and curbing gas flaring. Africa is also prioritizing sustainability by developing gas in the form of liquefied natural gas (LNG), with a lion’s share of the continent’s new discoveries including Greater Tortue Ahmeyim (GTA), BirAllah, Coral Sul, Brulpadda and Luiperd, Mozambique LNG, Venus and Graff being monetized as LNG.
US, China Compete for Africa’s Rare Earth Minerals (VOA)
South Africa hosted the world’s biggest mining investment conference this week, with industry experts in attendance saying the U.S. and China are in a race for the critical minerals — such as cobalt and lithium — that will likely power the projected transition to clean energy.
African countries like the Democratic Republic of Congo have some of the largest deposits of these resources, but China currently dominates the supply chain as well as their refinement and the U.S. wants to reduce its reliance on the Asian giant.
In his remarks at the mining conference in Cape Town this week, U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez hinted at this saying, “I don’t need to remind you of what happens when the supply chain breaks down or when we depend on a single supplier. We lived it during the COVID pandemic, and this is a vulnerability that we need to solve together.”
The silver lining amid muted global trade (Allianz)
After resilient performance in the first half of 2022, global trade deteriorated in the second half of the year and is likely to remain muted in 2023. Despite disruptive events in H1 2022 (start of the war in Ukraine, long lockdowns in China etc.), global trade of goods grew by +4.1% y/y during that period (see Figure 9). However, weakening global demand amid sustained inflation, the long replacement cycles of durable goods and depleted excess savings have reversed the trend. From a supply and manufacturing perspective, while the situation differs from one sector to another, corporates generally show no signs of increasing stocks in the short-term. In fact, an inventory glut is visible, and particularly destructive for retailers. With most of these factors set to persist in 2023, trade growth is likely to remain muted this year.
We are revising slightly on the upside our forecast for global trade growth in volume in 2023, from +0.7% to +0.9%. Our updated global trade model points to a quarterly profile of slight q/q contractions in global trade of goods and services in Q4 2022, Q1 and Q2 2023, before a moderate recovery in Q3 and somewhat of a firming up in Q4 (see Figure 12). Global trade of goods and services in 2024 is also slightly revised on the upside, expected to grow by +3.9% in volume terms (instead of +3.6% previously expected). We still expect price effects to be negative in 2023 (resulting in a yearly contraction of global trade in value terms) in the current context of a normalization in supply chains and the price of trade.
For inventory management and supply chains, lessons have been learnt from the Covid-19 and post-Covid shortages. Oversupply is likely to prevail in 2023. Destocking amidst the early stages of the Covid-19 crisis in 2020 and ensuing capacity mismatches and supply-chain disruptions into 2021-2022 have pushed more companies to adopt the just-in-case model of inventory management (instead of just-in-time). As a result, after more than a year of supply-chain disruptions illustrated by shortages of critical goods, extended transportation delays and costs of inputs shooting up, our in-house indicators tracking the global supply-demand balance suggest a situation of oversupply since Q4 2022 (see Figure 13). Our indicator measuring production shortfall reached the lowest level since 2011 in the US, and the lowest since early-2020 in the Eurozone. Ample supply and some stabilization in supply chains are likely to prevail this year on the back of weakening demand, replenished inventories, increased capex and normalizing shipping conditions (higher capacity, easing port congestion and sinking spot freight rates).
Key statistics and trends in international trade 2022 (UNCTAD)
Trade trends during the last three years have been greatly influenced by the COVID-19 pandemic. During 2020, the economic disruptions brought about by COVID-19 resulted in a decline of international trade in goods and services. However, as global demand resumed, international trade strongly rebounded in 2021 and further increased during 2022. Overall, the value of global trade is expected to be about 25 per cent higher in 2022 than it was in 2019.
A substantial part of the increase in the value of trade during the last two years can be explained by rising commodity prices and more recently by general inflation.
Trade volumes grew to a smaller extent. Even so, the steady increase in the volume of international trade since early 2021 indicates a robust global demand for traded goods.
South Africa to benefit from expansion of Brics – Brand SA (Engineering News)
Brand South Africa (SA) says that, as South Africa assumes chairship of the Brazil, Russia, India, China and South Africa (Brics) bloc of countries this year, it stands to benefit from a proposed enlargement of the bloc, enabling the country to extend its global influence and strengthen trade ties with a range of “powerful” emerging market economies. Brics will continue pushing for equitable representation in international decision-making and supporting post-Covid-19 global economic recovery.
Jinping announced during the fourteenth Brics summit held virtually in late June 2022 that Iran and Argentina submitted applications to join the bloc.
As Brics chairperson this year, Ramaphosa would oversee the expansion of the bloc should it welcome new members.
These announcements were followed by media reports that Indonesia, Egypt, Saudi Arabia, the United Arab Emirates, Nigeria, Kazakhstan, Senegal and Thailand were also interested in joining Brics.
Keys to climate action: How developing countries could drive global success and local prosperity (Brookings)
A new narrative needs to capture the interwoven nature of the world’s climate and economic development challenges, anchored in the evolving and diverse perspectives of developing countries themselves.
An updated portrayal begins with the stark reality of climate change’s devastating consequences already hindering economic development around the world. It underscores the need for urgent investments in adaptation, resilience, and nature to avoid development setbacks while paying heed to the world’s narrow window for climate action. It requires empathy for many developing countries’ profound energy conundrum: a tension between the need to expand access for people who need it most while facing pressures to pursue low-carbon opportunities, often in the face of local political and financing headwinds. It implies practical urgency in tackling the broken threads of the international financing system for climate and development.
To set a more robust global path to net-zero emissions by 2050, the world needs to pay greater attention to the needs of emerging markets and developing economies (EMDEs), even when holding aside the special case of China. Over the coming several decades, no part of the world will play a greater role in both experiencing and affecting global climate change outcomes than EMDEs themselves. They need greater international support to tackle growth-enhancing sustainable development strategies.
With their growing leverage, developing countries have new opportunities to lean forward with a unified “ask” in global climate and development negotiations. The broader prize and aspiration amount to a full-fledged re-conception of models for sustainable development and of international cooperation. Falling short by losing sight of the big picture or wrangling excessively over details will dim the prospects for prosperity around the world. Rising to the occasion, however, can help usher in a new era of prosperity for all.
E-commerce negotiations enter final lap, Kyrgyz Republic joins initiative (WTO)
Ambassador Hung Seng Tan of Singapore, co-convenor of the initiative and chair for the 2023 plenary meetings, reiterated the initiative’s commitment to establishing a set of high-standard rules for governing the digital economy, with the participation of as many WTO members as possible. These rules will build on existing WTO agreements, he said. “I want to remind all of us of this because we are now entering the final lap. And I hope that we can keep this objective in mind as we accelerate and intensify our negotiations this year,” he added.
Ambassador Tan encouraged participating members to exercise flexibility in the negotiations and to find landing zones. He said: “This means that all of us must come prepared and equipped with the necessary mandate to negotiate substantively.”
Plastics Dialogue participants prepare ground for achieving outcomes at MC13 (WTO)
A number of co-coordinators and facilitators, including Australia, Ecuador, China, the United Kingdom and Colombia, said the plastics talks have come a long way since its inception in 2020, including issuing a landmark Ministerial Statement in 2021. Because of its clear targets and the high level of consensus among members, the Dialogue can set a good example for other initiatives that aim to leverage trade to address environmental challenges, they said.
How to navigate the unpredictable landscape of world trade (The European Sting)
Trade growth outpaced global growth in gross domestic product (GDP) for three decades before the COVID-19 pandemic disrupted supply chains worldwide. As the pandemic’s effects subsided, the conflict in Ukraine and its repercussions replaced it as a drag on trade growth. Alongside these acute disruptions, the global trade environment has become less friendly overall.
Trade tensions have been rising even before the pandemic, and a new economic nationalism has begun to counter the decades of globalization that followed the end of the Cold War and the opening of China to the world. As a result, through 2031, trade will grow at only 2.3% versus the 2.5% growth forecast for GDP, according to Boston Consulting Group’s Global Trade Model.
Economies are still adjusting to the economic and geopolitical shakeups of the past three years but the challenges affecting global trade are here to stay. How can companies that depend on global supply chains manage today’s uncertainties and prepare for future risks?
India ranks 47th in OECD’s services trade restrictiveness index (Mint)
Reflecting presence of huge market barriers in the country, India stood at 47th position in Services Trade Restrictiveness Index (STRI) conducted by the Organisation for Economic Cooperation and Development (OECD) for the year 2022. However, there was an improvement from last year’s ranking by one position.
Due to Russia-Ukraine war, Russia slipped to 48th position in the index. The report highlighted the privatisation of Air India, elimination of pricing guidelines for transfers of shares between residents and non residents, and restriction of foreign participation in certain services sectors.
The STRI indices takes into consideration the government policies in several sectors that define the ease of trading in those sectors and industries. Based on these factors, STRI indices assign value to countries between zero and one. As per the index, zero shows least restriction and one shows no restriction. The database also records details based on a Most Favoured Nation basis.
