tralac Daily News
UK and Kenya hold first-ever Economic Partnership Agreement Council to secure jobs and increase trade (GOV.UK)
On Tuesday 21 March, Kenyan Cabinet Secretary for Investments, Trade and Industry, Moses Kuria, met UK Minister for International Trade Nigel Huddleston in London at the first-ever UK-Kenya Economic Partnership Council Meeting.
Both parties agreed to accelerate work to remove barriers affecting bilateral trade and investment, working with our respective public and private sectors, and discussed the good progress made on the £3.5 billion of green investment deals which UK Prime Minister Rishi Sunak and President William Ruto agreed to fast track at COP27.
The Economic Partnership Council meets once every two years as part of the UK-Kenya Economic Partnership Agreement (EPA), which came into force in March 2021.
The agreement ensures that all companies operating in Kenya, including British businesses, can continue to benefit from duty-free access to the UK market - saving exporters over KES 1.5bn (£10m) every year in duties on products such as green beans and cut flowers.
Kenya: African Development Bank approves $30 million Trade & SME Finance Facility for Family Bank Limited (AfDB)
The Board of Directors of the African Development Bank Group has approved a $30 million Trade & SME Finance Facility for Family bank Limited (FBL) in Kenya. The facility is expected to boost intra-Africa trade, promote regional integration and contribute to the reduction of the trade & SME finance gap in the East African nation.
The Facility is expected to boost intra-Africa trade, promote regional integration, and contribute to the reduction of the trade & SME finance gap in Kenya, by mobilizing significant financial resources for SMEs and local enterprises. This will enhance and deepen value chains, and diversify productive capacity, ultimately stimulating growth in Kenya.
The Bank will provide up to $10 million to support FBL’s short-term trade finance activities of SME’s and local corporates, an up to $10 million Transaction Guarantee facility to support confirmation of trade finance transactions of FBL and up to $10 million targeted Line of Credit to support medium-term financing for SMEs in the health, renewable energy, and
Kenya tea exporters ride on weak shilling, mint fortune at auction (The East African)
While importers in the East African region have been struggling with a dollar shortage that has pushed up the cost of basic commodities, Kenya’s tea exporters have been among the beneficiaries of the country’s a weak shilling, earning more than $1.32 billion (KSh171.7 billion) from the commodity.
The Tea Board of Kenya (TBK) said the country reported an increase in shipments to $1.07 billion (KSh139.21 billon) last year. And due to a weak shilling, the average price of the leaves at the Mombasa tea auction jumped 18.6 percent to an average of $2.49 (KSh324) per kilogram last year.
Increase in export earnings was attributed to depreciation of the Kenya Shilling against the dollar as well as improved prices.
IMF says Somalia to qualify for full debt relief by year end (The East African)
Somalia will be eligible for full debt relief from the International Monetary Fund (IMF) and other multilateral lenders by the end of this year as reforms to boost revenue collection and fiscal transparency begin to bear fruit, the lender has said. Somalia reached the decision point for IMF debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative in March 2020, which saw its debt stock reduce to $3.7 billion from the $5.2 billion it had accumulated by December 2018.
The full debt relief will reduce Somalia’s debt to $557 million, about 10 percent of its gross domestic product, allowing it headroom to address multiple shocks affecting its economic growth and development.
Although it is already in debt distress, the Horn of African nation cannot yet access full debt relief from the IMF until it shows commitment to structural reforms that will ensure “public resources are used effectively and to the benefit of all the Somali people, and efforts to promote stronger economic growth that will lead to more jobs”.
Despite Weaker Naira, Nigeria’s Foreign Trade Surplus Rises By 162% (Leadership News)
Nigeria recorded significant improvement in foreign trade in 2022 with export earnings outweighing import bills by N1.2 trillion, resulting in foreign trade surplus of 162 per cent, despite the weaker value of the Naira during the year. data released by the National Bureau of Statistics (NBS) has shown that minerals export was the major item that pushed Nigeria goods trade surplus to N1.2 trillion in 2022 as export bills (N26.8 trillion) outweighed import earnings (N25.6 trillion) for the first time since the pre-COVID year (N2.23 trillion in 2019).
Nevertheless, the NBS noted that the surplus in 2022 represents an improvement of over 162 percent compared to the 2021 goods trade deficit of N1.94 trillion.
The dollar is no more relevant in trade between India and Tanzania (Business Insider Africa)
Tanzania and India are able to conduct business using their respective currencies, the Tanzanian shilling and the Indian rupee, thanks to a bilateral trade settlement agreement. According to data from the Indian High Commission in Dar es Salaam, the value of trade between the two countries was $4.5 billion (roughly Sh10.4 trillion) in the year ending March 2022. India is one of Tanzania’s largest trading partners.
According to Binaya Pradhan, the Indian High Commissioner to Tanzania, between April 2021 and March 2022, India’s exports to Tanzania totaled $2.3 billion (or about Sh5.3 trillion), while its imports from the East African country were estimated to be $2.2 billion (about Sh5.1 trillion).
Zambia, DRC prepare for battery electric vehicle value chain (New Business Ethiopia)
Zambia and Democratic Congo (DRC), among the top African countries with huge mineral resources, are set to develop battery electric vehicle value chain opening special economic zones.
This is indicated by Mr. Antonio Pedro, Acting Executive Secretary of the United Nations Economic Commission for Africa (UNECA) who opened African economy misters’ meetings in Addis Ababa, Ethiopia this morning.
“This value chain, with the creation of the special economic zone, could unlock a market worth $7.7 trillion by 2025 and $46 trillion by 2050. The Secretary-General has called for a review of the Global Financial Architecture and for a SDG Stimulus of at least $500 billion per year in financing for sustainable development,” Antonio said, mentioning that carbon credit markets could bring in a whopping $82 billion for Africa.
Intra-Africa Trade: Equatorial Guinea and Cameroon ink a new oil deal (Garowe Online)
Equatorial Guinea president Teodoro Obiang Nguema Mbasogo and his Cameroon counterpart Paul Biya, have signed a bilateral treaty that would see the two West African countries cooperate on cross-border oil and gas development and monetization. The agreement was signed during the heads of state summit of the Economic and Monetary Community of Central Africa (CEMAC) countries held in Cameroon last week and is set to bring with it new opportunities for oilfield development and regional energy security.
The African Energy Chamber (AEC), expressed that the agreement will unlock a new era of cooperation, with the agreement serving as a blueprint for other African countries looking at strengthening knowledge sharing, skills and technology transfer, infrastructure development, and local content, all on the back of cross-border oil and gas maximization.
President Ruto wants EAC treaty amended to reflect current status (The East African)
Kenyan President William Ruto wants the treaty establishing the East African Community (EAC) amended to reflect current status of the bloc including its membership.
Speaker of the East African Legislative Assembly (EALA) Mr Joseph Nkakirutimana says the bloc must adapt to the needs of new members including language needs as well as openness to admit new members without restrictions used more than 24 years ago.
When it was formed in 1999, the EAC was recreating the collapsed bloc in 1977 where Kenya, Uganda and Tanzania were members. It later expanded to include Rwanda as well as Burundi in 2007 and later South Sudan in 2016 before the Democratic Republic of Congo (DRC) joined last year.
“Somalia is likely to join after an assessment is completed. There is also a possibility that Ethiopia and Sudan could join the EAC,” the president said at state house, Nairobi.
ECA calls for Africa’s economic growth to be inclusive to reduce widespread poverty (UNECA)
While the world was still fighting the COVID-19 pandemic, the war in Ukraine broke out in early 2022. The impact of the two shocks has been exacerbated by the higher frequency and intensity of natural disasters. The UN Economic Commission for Africa’s Deputy Executive Secretary and Chief Economist Hanan Morsi said that the three overlapping crises have pushed more Africans into extreme poverty and resulted in increased inequalities and vulnerabilities on the continent.
“Today, 546 million people are still living in poverty, which is an increase of 74 per cent since 1990”, stressed Morsi. “Global shocks have ripple effects on the poor in Africa through inflation, which, in 2022, stood at 12.3 per cent, which was much higher than the world average of 6.7 per cent”.
According to recent research, the 10 African countries with the highest levels of poverty in Africa are Burundi, Somalia, Madagascar, South Sudan, the Central African Republic, Malawi, the Democratic Republic of the Congo, Guinea-Bissau, Mozambique and Zambia, in each of which between 60 per cent and 82 per cent of the population is poor
COM2023 calls on member States to harness AfCFTA for Economic Resilience and Inclusion (UNECA)
Panelists at a High-level round-table discussion at the 55th Session of the Conference of African Ministers of Finance, Planning and Economic Development formulated recommendations on how the African Continental Free Trade Area can be leveraged to foster economic resilience, inclusion and recovery.
Chaired by the Director of the ECA Regional Integration and Trade Division, Stephen Karingi, the session, which focused on harnessing the AfCFTA for economic resilience and inclusion made recommendations on how the AfCFTA can be leveraged to foster recovery and transformation in Africa, while also reducing inequality and vulnerability.
Focusing on the potential for the AfCFTA in reducing vulnerabilities, Ms. Treasure Maphanga, Chief Operating Officer, AeTrade Group, Rwanda, told the panel that her organization is a social Enterprise working with the AfCFTA Secretariat to accompany them in the implementation of the agreement. “AeTrade Group has set up a trading platform working with women in businesses and promoting trade”, said Ms. Treasure Maphanga. “What is missing is to set goals, such as how many jobs we are going to create. We need an approach of identifying SMEs, especially women and youth-led who are more vulnerable.”
Africa’s logistics will deliver results as free trade agreement kicks in (WEF)
African logistics have struggled to cater to the country’s growing population and dynamic private sector for far too long. New research suggests that is about to change — and the benefits for the continent’s wider economy could be transformative.
That shift is thanks to the African Continental Free Trade Area (AfCFTA) agreement, which introduces frictionless trade between its African signatories. Signed in February 2021 and now coming into force, AfCFTA is a catalyst for rapid investment and expansion of the continent’s nascent logistics sector, according to a report by the World Economic Forum: AfCFTA: A New Era for Global Business and Investment in Africa.
Improving energy access key to meeting development goals in Africa (UNCTAD)
Although access to energy has increased in sub-Saharan Africa in recent years, it remains low, as more than 50% of the region’s population still lacks access to electricity.
This low access to energy has implications on health, education, poverty reduction and sustainable development, says an UNCTAD report entitled ”Commodities at a glance: Special issue on access to energy in sub-Saharan Africa”, published on 21 March.
“Access to a reliable and quality energy supply is vital to the economic development of any country,” the report says. “It drives industrialization, boosts productivity and economic growth, spurs human development, and is crucial to achieve almost all of the United Nations Sustainable Development Goals (SDGs).”
Why food is the new focus for China’s ties with Africa (South China Morning Post)
China is importing more food products such as avocados, cashews, sesame seeds and chilli peppers from Africa, as agriculture emerges as the new focus of Beijing’s engagement with the continent.
In the first two months of this year, Shanghai ports handled more than 40,000 tonnes of African agricultural products worth more than US$100 million, according to Shanghai Customs.
By March 3, a total of 1,845 tonnes of African sesame had been imported through Shanghai’s Waigaoqiao Port – 4.3 times more than in the same period last year, official data showed.
Africa produces about 65 per cent of the world’s sesame, and Chinese officials say African countries including Mali, Togo, Mozambique, Niger, Tanzania, Ethiopia and Uganda account for 90 per cent of China’s imports of the product.
Development of trade exchanges between Russia and Africa to be facilitated by transition to national currencies (TV BRICS)
The State Duma (Russian parliament) in Moscow on 19-20 March holds the II International Russia-Africa Parliamentary Conference aimed at strengthening and developing Russia’s relations with the states of the African continent. Russian President Vladimir Putin addressed the plenary session. He noted that the partnership between Russia and Africa has gained additional dynamics in recent years.
“We are ready to shape the global agenda together, work together to strengthen fair and equitable interstate relations, improve mechanisms of mutually beneficial economic cooperation,” said the head of state.
A more energetic transition to national currencies in financial payments and the establishment of new transport and logistics chains will contribute to the development of reciprocal exchanges. According to the Russian leader, additional opportunities are offered by the process of establishment of the African continental free trade zone, which began in 2021 and is expected to become a continental market with a combined GDP of more than $3 trillion.
Africa and Global Economic Trends – February 2023 (AfDB)
Economic growth in advanced countries continued with a positive growth trajectory in 2022, following strong post covid-19 recovery programs in 2021. However, on a quarterly basis, lower growth rates were recorded in the third and fourth quarter of 2022 compared to the preceding quarter for all the selected economies.
Emerging economies recorded stronger growth, compared to the advanced economies, in the third and fourth quarters of 2022 except in Russia where the economy contracted in the second and third quarters of 2022.
All African countries recorded successive economic growth, of varying magnitudes, on a quarterly basis in 2022, despite incidents of economic contraction in Burkina Faso and Equatorial Guinea during the first and second quarter respectively. Comparing the third quarter of 2022 with the corresponding period of 2021, nine African countries recorded higher economic growth rates, whereas growth was weaker in 15 countries over the same period. Cabo Verde, Seychelles, Rwanda, Uganda and Mauritius were among the countries with the highest quarterly GDP growth rates in the third quarter of 2022, with the rates ranging between 17.1 percent in Cabo Verde and 7.4 percent in Mauritius.
Remarks at the 2023 Oxford Center for the Study of African Economies Conference by Abebe Aemro Selassie (IMF)
As we gather here, the [African] region is facing a brutal financing squeeze. To be sure, this is not unique to African countries. But this region is the one that can least afford the implications of this squeeze, given Africa’s much-higher level of poverty and remaining development gaps. Africa is where I think much of the incremental global demand for investment and consumption will happen in the coming years—if only because the region is where all incremental global population growth is set to happen. A process well in-train.
Trade Perspectives by DDG Zhang (WTO)
International trade offers LDCs a proven route towards sustainable development. It can contribute significantly to building more resilient economies and lifting millions out of poverty in LDCs. This is why trade is a key pillar of the Doha Programme of Action, which maps out commitments between LDCs and their development partners in 2022-31.
Commitments to help LDCs reap the benefits of trade – including better quality jobs, stronger economic growth and increased productivity – are timely. LDCs’ share of global trade has stagnated at less than 1% in recent years. The Doha Programme of Action sets the ambitious target of doubling agriculture sectors. The facilities will also support women-owned businesses.
Declining coal prices reflect a reshaping of global energy trade (World Bank Blog)
Coal prices have been retreating from their highs in 2022 but they remain well above the 2017-2021 average. Global coal consumption levels reached an all-time high in 2022, led by India and China. On the supply side, increased exports by countries such as South Africa and Colombia—whose combined share in total European imports has been 35% since August 2022—have partially offset the reduction of Russian exports to Europe. Prices are expected to be lower in 2023 (on average) compared to 2022 but remain high by historical standards. Possible supply redirection from the ongoing Russian invasion of Ukraine and a faster-than-expected pace of China’s reopening could impact the outlook of falling prices.
Reduced Russian coal exports to Europe were balanced by increases from Colombia and South Africa. Exports from South Africa to Europe experienced an almost six-fold increase, while exports from the U.S. have remained broadly stable in 2022 (although some were redirected to Europe). Russian exports, which increased overall, have been redirected to China and India, following the EU ban of Russian coal in 2022Q3. Indonesian exports rose 14% in 2022 and reached an all-time high despite two temporary export bans.
Solving the water and sanitation crisis: How technology and innovation can help (UNCTAD)
This year’s World Water Day on 23 March focuses on accelerating change to solve the water and sanitation crisis. About 2 billion people lack safe drinking water, according to UN-Water, and about 5.4 billion don’t have access to safely managed sanitation services. A recent UNCTAD report emphasizes the role of science, technology and innovation (STI) in tackling this crisis.
It says frontier technologies such as artificial intelligence, big data and Internet of Things help in monitoring water and sanitation infrastructure and accelerate progress towards UN Sustainable Development Goal (SDG) 6 on “clean water and sanitation for all”.