tralac Daily News
The International Monetary Fund (IMF) believes that South Africa’s implementation of structural reforms, combined with fiscal consolidation, could help boost private investment, employment and growth.
IMF officials held a series of meetings with South Africa this month as part of their routine economic surveillance function, as prescribed in the IMF’s Articles of Agreement.
The IMF said restoring energy security will require attracting private sector participation in the electricity market and addressing Eskom’s operational and financial deficiencies.
“Similarly, stronger-than-expected private sector participation in the energy sector could improve the growth outlook,” National Treasury said in a statement following the meetings.
The IMF noted that the country’s large external asset position, diversified economy, sophisticated financial system, and flexible exchange rate regime are sources of strength, supported by the Reserve Bank’s pro-active monetary policy, have kept inflation expectations anchored.
In addition, the IMF recognised steps taken to improve third-party access to the country’s ports and freight network.
“Nevertheless, [the IMF highlighted] various downside risks to South Africa’s economic outlook, including external risks that could emanate from a deeper and more protracted global slowdown, further weakening of commodity prices and a shift in global investors’ sentiment away from emerging markets.”
Uganda: Export earnings grow by 38.9% (Monitor)
Export earnings grew by 38.9 percent in January compared to the same period last year, largely due to higher returns from commodities such as maize, coffee, tea and tobacco.
According to the Ministry of Finance performance of the economy report, released at the weekend, during January 2022, earnings from maize exports stood at $6.76m but grew to $35.01m in January 2023 due to “easing of non-tariff barriers in Kenya and the opening of the Uganda-Rwanda border”.
Similarly, earnings from coffee increased by 13.1 percent due to growth in exports to meet the reduced supply from major exporting countries such as Brazil and Vietnam.
Exports of the textile-clothing sector have increased by 16.69% in dinars to TND 1,698.08 million and by 13.93% in euros (€509.9 million) during the first two months of 2023, compared to the first two months of 2022.
However, according to the latest issue of the CETTEX Economic Letter, these exports have decreased by 8.85% in volume.
As for the imports of the textile-clothing sector, they posted, during the same period, a growth of 2.26% in dinar reaching TND 1,128.27 million and a decrease of 0.15% in Euro (€338.8 million) and 7.07% in volume.
For the first two months of 2023, the trade balance saw a progression of 18.6 points compared to the two months of 2022 (150.5% against 131.9%).
The Mozambican Association of small scale importers, known as “mukheristas’, has decided to suspend trips to South Africa to prevent possible violence against Mozambican trucks during the current protests. According to the president of the association, Sudekar Novela, quoted by the Maputo daily “Noticias’, the action aims to safeguard the physical integrity of operators in the sector and avoid possible damage caused by the looting of goods.
In recent days, the price of fresh products in Zimpeto has fluctuated as a result, on the one hand, of the flooding of crops in the production fields and, on the other, of rising acquisition costs in South Africa.
Kibirizi port sees record cargo boom (Daily News)
KIBIRIZI port in Kigoma Region is witnessing record cargo volumes after undergoing major facelift as trade between Tanzania and land-linked DR Congo, Burundi and Zambia keeps mushrooming.
The refurbished terminal, located some 20 kilometres from the major Kigoma Port, handled 103,188 metric tonnes of cargo in 2021/2022 financial year, which is 193 per cent of the target.
Kibirizi is the second largest port in Kigoma Region after the port of Kigoma, which is the general cargo terminal. The other port is Ujiji.
“Kibirizi port is popular for handling modern vessels with the capacity of 30 tonnes, which transport various goods for commercial and domestic uses heading to neighbouring countries of DR Congo and Burundi,” Lake Tanganyika Ports Manager Mr Edward Mabula told the ‘Daily News’.
Mr Mabula said TPA is looking to attract more cargo and customers at Kibirizi port and has been waging campaigns, including visiting potential customers to use the Central Corridor which is cost effective.
Kenya closes porous routes on Uganda border over smuggling (The East African)
Over the weekend, Nairobi closed the Kenya-Uganda border in Busia District, which includes 57 kilometres of porous borders and over 200 illegal routes stretching from Lake Victoria in Majanji to River Malaba in Buteba Sub-County.
Subsequently, the usually busy border outpost of Sofia and Marachi, which thrived on illicit trade across the two borders, remains deserted as Kenya maintained a huge security presence to curtail illegal border movement.
Kenya’s Busia County Commissioner Ruto Kipchumba explained why they had deployed a multi-sectoral team of security personnel along all the porous border routes.
“The deployment is meant to curtail illicit activities of smuggling which were causing huge revenue losses to the Kenyan government and putting the lives of their nationals at risk due to consumption of substandard goods that were being smuggled into the country,” he said.
Local Content Bill suffers another setback (New Vision)
Parliament has deferred debate on the National Local Content Bill, 2022, pending harmonization between the bill’s sponsor, Patrick Oshabe, Attorney General (AG) Kiryowa Kiwanuka, and the finance committee.
On March 1, 2023, Speaker Anita Among told the House that the President had returned the Bill for reconsideration.
“One of the issues the Attorney General raised is that the drafting is not compliant with basic standards of drafting and that he was not consulted. We do not want him to come here and frustrate the member,” Leader of the Opposition Mathias Mpuuga said.
The committee scrutinized clause 4 of the bill on preferential treatment to Ugandan goods, works, and services, which the president said is contrary to the East African Community Protocol on the free movement of goods and services and the East African Monetary Union.
“When the local content laws are being harmonized, only existing laws can be harmonized.” If Uganda has no existing law at the time of harmonization, it will have to recognize the local content laws for other jurisdictions, but cannot introduce a local content law at that time,” reads the committee report.
Kenya expects to finish talks for a trade and investment deal with the United States by the end of this year and to sign the agreement by April 2024, Trade Minister Moses Kuria said. Kenya is one of the United States’ top trading partners in Africa and has been a major beneficiary of the Africa Growth and Opportunity Act (AGOA), a preferential trade programme that will expire in 2025.
The deal would not address tariffs but would complement AGOA and cushion the blow for Kenya if the programme is not extended, Kuria told Reuters in an interview in London on Wednesday after meeting British trade officials.
“It is full steam ahead for both the Kenyan and U.S. sides,” Kuria said. “By the close of this year, we will have finalised the actual negotiations to pave way for a signing probably by April next year.”
The Kenya National Chamber of Commerce and Industry (KNCCI), a trade lobby, on Wednesday launched a mobile app dubbed iSOKO to boost women-owned businesses in East Africa. Richard Ngatia, president of KNCCI, told journalists in Nairobi, the capital of Kenya, that the digital platform will help women entrepreneurs connect with potential buyers, allowing them to reach a wider audience and sell their products more easily.
“This app will have a significant impact on the lives of women traders, by increasing their income, improving their bargaining power, and promoting their economic independence,” Ngatia said.
King Phillippe and Queen Mathilde of Belgium are in the country for a five-day visit, their first state to an African country since 1979.
Belgium ambassador to South Africa Paul Jansen said: “The state visit is a reflection of the strength of the relationship that exists between Belgium and South Africa.
Belgium is listed as the fifth-largest exporter and third-largest European Union importer of goods to and from South Africa.
Chemical products, machinery and minerals are among the chief exports of Belgium to South Africa. The country’s imports from South Africa include precious stones, transport equipment and chemical products.
“South Africa is an attractive investment destination for Belgian companies and an alluring business and leisure tourism destination,” Jansen said, noting that South Africa is the largest economy on the African continent with significant growth potential. “It is no surprise that several Belgian companies have recently made significant South African investments and are in partnership with South African companies in sectors as diverse as food processing and mining.”
Nigeria’s trade relationship with China takes an $80 million dip (Business Insider Africa)
The Chinese Chamber of Commerce delegation to the Executive Secretary of the Nigerian Investment Promotion Commission was led by Wang Yingqi, Minister and Counselor for Economic and Commercial Affairs at the Embassy of the People’s Republic of China. He noted that the trade record was $219 million in 2022 and $300 million in 2021.
“Nigeria and China have maintained a long-standing trade relationship which is why the visit was important to sought ways of improving bilateral relations as trade value alone in last year according to our statistics the total investment from China’s companies to Nigeria is around $219m and in the past year, the figure is also around $300m.”
He added that the Chinese government has invested in the Lekki Free Trade Zone as a result of the Public Private Partnership with the federal government and the Lagos State Government.
UK Trade Commissioner: Morocco is gateway to Africa & key business partner (The North Africa Post)
UK trade commissioner for Africa John Humphrey has described Morocco “a gateway to Africa and a key business partner for the United Kingdom”.
Commenting his meeting held Tuesday in London with Moroccan Ambassador to the UK Hakim Hajoui, John Humphrey said, in his twitter account, that talks with the Moroccan ambassador focused on ways of strengthening further the £2.9 billion trading relationship, specifically in education, technology and innovation.
Following its exit from the European Union, UK signed with Morocco and several other countries trade agreements to ensure continuity of trade exchanges, services, and economic cooperation ties.
To promote UK and Moroccan trade, UK export finance agency (UKEF) had announced in 2022 a £4 billion funding for overseas buyers of UK goods and services to strengthen the trade relationship between the UK and Morocco.
TZ, India trade volume notches using own currencies (Daily News)
TRADE volume between Tanzania and India stands at 4.5billion US dollars (about10.4tri/-) by early March this year as the two countries agreed to use their own currencies while doing trade. This was said by the Indian High Commissioner to Tanzania Binaya Pradhan, who noted the two trading partners would be using own currencies in trading.
“Tanzania and India will use their own currencies in transactions, which is part of a bilateral trade settlement arrangement,” revealed the envoy, at a business symposium held here on Saturday evening.
“The move will boost bilateral trade between Tanzania and India as we envision potential growth of our trade,” he explained.
Uganda ready to trade under AfCFTA Guided Trade Initiative (The New Times)
Ugandan officials have confirmed that they too are ready to follow in the footpath of their East African Community (EAC) counterparts, Kenya and Rwanda, and start trading under the AfCFTA Guided Trade Initiative which was officially launched in October 2022.
The initiative launched in July 2022, sought to test the environmental, legal and trade policy basis for intra-African trade in a pilot phase that involved eight countries namely, Cameroon, Egypt, Ghana, Kenya, Mauritius, Tunisia, Tanzania and Rwanda.
During a meeting in Kampala, Uganda, on Tuesday, March 21, the East Africa Business Council (EABC) Vice Chairperson, Simon Kaheru, said: “As Ugandan private sector we are ready to trade under the AfCFTA Guided Trade Initiative and follow our counterparts from Rwanda and Kenya who have already started trading through the agreement.”
The secretary of State for Trade, Amadeu Leitão Nunes, Monday in Luanda reiterated Angola’s engagement in the implementation of the African Continental Free Trade Area (ACFTA).
Speaking at the opening of the 9th Meeting of the Dispute Settlement Body of the ACFTA, he stressed that the process of its implementation is challenging, especially for those states with greater vulnerabilities in terms of internal structures.
Regarding the meeting, he stressed that the Protocol on Dispute Settlement, a mechanism established by Article 20 of the Framework Agreement, appears as a fundamental instrument to ensure the necessary legal security and predictability.
Amadeu Leitão Nunes added that these are essential aspects for the decision-making of economic operators and investors, in relation to the use of a given market.
The Institute of Directors Nigeria (IoD) says strict adherence to corporate governance is necessary for the country to enjoy the benefits that the Africa Continental Free Trade Area (AfCFTA) has to offer.
The president of IoD, Ije Jidenma made this promise at a press conference in Lagos where she announced a year-long lineup of events and activities to mark its 40th anniversary which would be flagged off by a courtesy visit to President Muhammadu Buhari on March 16, 2023.
“With the coming of African Continental Free Trade Area’s agreement, Nigeria needs good directors to be able to navigate the terrain at the continental level,” Jidenma explained.
Speaking at a four-day TMC/ECOSHAM meeting on the validation of the draft ECOWAS standards relating to three regional value chains (mango, cassava and information and communication technologies), Hassan Gaye, DPS Ministry of Trade said: “It is therefore necessary for ECOWAS Commission and its member states to make available to our enterprises and conformity assessment bodies, national and regional standards in order to promote technology transfer, improve the production systems and the competitiveness of our enterprises.”
The development of global value chains, DPS Gaye said, has become a dominant component to promote trade and investment. “The benefits of developing value chains are significant and can be measured in terms of productivity improvements, job creation and poverty reduction.”
“This regional dynamic initiated by ECOWAS Commission must be supported with innovative policies to strengthen the activities of our local production units in order to transform them into medium-sized enterprises as means to bridge the gap between them and multinational companies established in the region.”
Mohamed Ibn Chambas, the African Union High Representative for Silencing the Guns campaign, has emphasized the vital role of good governance in achieving sustainable development and transformation across Africa.
Speaking at the 2023 Adebayo Adedeji Lecture on the theme of “Governance, Social Contract, and Economic Development in Africa: Looking Back, Projecting into the future” during the ECA Conference of Ministers in Addis Ababa, Ethiopia, Mr. Chambas stated that without good governance, development in Africa is dead on arrival.”
Mr. Chambas highlighted the significance of transparent, accountable, and responsive governments in Africa that play a crucial role in unlocking the continent’s potential for investment and sustainable growth. He emphasized the importance of social contracts between governments and citizens, which is vital for fostering trust and promoting social cohesion. Collaboration between governments, civil society organizations and the private sector is also crucial to achieving the common goal of good governance.
A united Africa is our best chance to weather the storms and create a prosperous Africa for the future, he said, calling for the facilitation of the free movement of persons, goods and services in accompanying the pan-African initiative of the African Continental Free Trade Area (AfCFTA).
Africa should deploy innovative resource mobilization and accelerate economic recovery from multiple crises which have eroded two decades of development gains and increased poverty, Ministers of Finance have urged.
In a Ministerial Statement adopted at the 55th session of the Conference of African Ministers of Finance, Planning and Economic Development, in Addis Ababa, Ethiopia, ministers reiterated the urgency of transforming Africa’s economies and driving industrialization. They underscored the need to expedite economic recovery in Africa which is likely to miss many of the Sustainable Development Goals (SDGs).
Noting that the COVID-19 pandemic, the war in Ukraine and climate change will hinder Africa’s efforts to achieve the SDGs and Agenda 2063, the Ministers said the triple crises have disrupted food and energy markets, exacerbated food insecurity and caused high inflation rates which have pushed millions of Africans into poverty and economic hardship.
The Ministers, therefore, acknowledged the need to stimulate economic recovery and to protect vulnerable populations against soaring inflation – which was forecast to reach 12.4 per cent in Africa in 2023. Rising interest rates, and the tightening of monetary policy by central banks to combat inflation have contributed to the worsening of the already limited fiscal space, the Ministers statement said.
Proposals Made For Establishing A Joint Russia-African Bank (Russia Briefing News)
Burkina Faso, in West Africa, a member of the African Continental Free Trade Area (AfCFTA), has suggested creating a joint bank with Russia to facilitate financial transactions between the two countries and promote trade, according to Ousmane Bougouma, the speaker of the countries Transitional Legislative Assembly stated on Wednesday (March 22).
“I think that when it comes to strengthening cooperation with Russia in key areas of the economy, it is very important that we explore the possibility of creating a joint bank between Russia and Africa with a branch in Burkina Faso,” he said.
The establishment of a joint financial institution will pave the way for broader cooperation between Russia and the West African country, Bougouma said, adding that it would be “useful” for mutual trade and investment.
Egypt Becomes A Member Of The BRICS New Development Bank (Silk Road Briefing)
In a sure-fire move that can be expected to usher in Egypt as a full member of the BRICS grouping, Cairo has taken an equity position within the New Development Bank (NDB). Previous equity was divided equally among the initial members: Brazil, Russia, India, China, and South Africa. It makes Egypt the first new member of the proposed expanded BRICS+ along with Bangladesh and the UAE.
The NBD approved Egypt’s accession in December 2021, while in September 2021 a similar decision was made regarding the United Arab Emirates (UAE), Uruguay and Bangladesh. With the exception of Uruguay, they all became members of the bank this month after jumping through the necessary hoops.
Global trade was worth a record $32 trillion in 2022, but amid deteriorating economic conditions and rising uncertainties, growth turned negative in the last half of the year and is set to stagnate in the first half of 2023. The silver lining was the strong performance of trade in “green goods”, whose growth held strong throughout the year, says UNCTAD’s latest Global Trade Update, published on 23 March.
Green goods, also called “environmentally friendly goods”, refer to products that are designed to use fewer resources or emit less pollution than their traditional counterparts.
Defying the downward trend, trade in such goods grew by about 4% in the second half of the year. Their combined value hit a record $1.9 trillion in 2022, adding more than $100 billion compared to 2021.
DG Okonjo-Iweala emphasized the importance of trade finance for boosting trade growth in Africa. “Trade finance is the lifeblood of trade. Access to trade finance is key to a firm’s competitiveness in international markets,” she said.
She pointed out the significant shortfall in financing for small traders in Africa. According to the African Development Bank’s trade finance survey, the continent rejects about USD 80 billion worth of requests for trade finance annually.
DG Okonjo-Iweala outlined the key findings of the WTO-IFC joint study on trade finance gaps in the four largest economies of the Economic Community of West African States (ECOWAS) — Côte d’Ivoire, Ghana, Nigeria and Senegal - issued in 2022. This revealed that if ECOWAS countries raised the share of trade supported by trade finance to the average African level of 40%, they could gain an extra 8% in trade flows annually. In ten years, this would total USD 140 billion in additional trade.
The President of the UN Economic and Social Council (ECOSOC) convened the eighth meeting of the UN Development Cooperation Forum (DCF), kicking off this year’s SDG financing discussions. The Forum focused on fostering high-impact development in the areas of climate resilience, social protection, and digital transformation while leaving no one behind.
Held under the theme, ‘Prioritizing the Lives and Livelihoods of the Most Vulnerable Through Risk-informed Development Cooperation,’ the Forum met in the ECOSOC Chamber at UN Headquarters in New York, US, from 14-15 March 2023. Recognizing that more than 1.2 billion people are living in
The United Kingdom has adopted a new Developing Countries Trading Scheme (DCTS) which comprises three different regimes – one for least developed countries (LDCs), one for non-LDC economically vulnerable low-income and lower-middle-income countries, and one for other low-income and lower-middle-income countries. Compared to the previous scheme, which largely mirrored the European Union’s, the DCTS makes it easier for an LDC to accede to the intermediary “Enhanced Preferences” scheme when it graduates. For most countries, graduation from the LDC category will have little impact on trade with the United Kingdom, and less impact than it might have had under the previous regime. Impacts will be greater for countries whose main exports are not covered by Enhanced Preferences, such as certain agricultural products, or whose exporters are unable to comply with the more stringent rules of origin than those applied to LDCs.