tralac Daily News
To boost productivity in South Africa, four key business factors need urgent and significant attention, namely increasing energy security, increasing government spending on infrastructure projects, ensuring compliance with local procurement policies and using South Africa‘s competitive advantage to the benefit of local businesses, Trade, Industry and Competition Minister Ebrahim Patel has said.
Speaking at the Proudly South Africa Buy Local Summit on March 27, he admitted that, although “energy has become now the central preoccupation of the country”, energy availability is critical to localisation and to drive industrialisation.
The second major obstacle in jobs creation and government contribution to gross domestic product was slow movement in getting major infrastructure projects off the ground – spending on which peaked in 2014.
In this regard, he said a big part of government’s localisation efforts had recently gone into increasing infrastructure spending, which stood to benefit labour-intensive industries such as the steel, construction, chemicals and machinery production companies.
The Namibian Government through the Ministry of Industrialization and Trade, in collaboration with the Economic Commission for Africa (ECA), the Africa Trade Policy Centre, and the United Nations System in Namibia, convened a meeting to validate Namibia’s National Trade Policy.
The Draft National Trade Policy outlines policy measures and strategies that will enable trade in both goods and services to prosper and anchor sustainable economic growth and development of Namibia. Trade in services has become the most dynamic part of global trade in recent years and an option for export diversification in developing countries, including Namibia. Services matter for Namibia’s development as an input into the production of goods, and an avenue for export diversification, and therefore a potent contributor to inclusive growth, employment creation and poverty reduction.
The meeting provided Namibian stakeholders with an opportunity to review and validate the draft national trade policy prepared with the technical support of ECA. The review focused on ensuring that the policy adequately addressed the aspirations of all Namibians in as far as both domestic and international trade in goods and services are concerned.
“The implementation of the Trade Policy is contributing towards the country’s achievement of Sustainable Development Goals including Goal No. 17 – to strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development,” Ms. Ndiitah Nghipondoka-Robiati, Deputy Executive Director, Namibia’s Ministry of Industrialisation and Trade emphasised.
Ms. Olayinka Bandele, Chief of Inclusive Industrialization in ECA Sub-Regional Office Southern Africa, underscored the importance of Namibia’s national Trade Policy which seeks among others to consolidate existing markets for Namibian products, while at the same time pushing for new and enhanced market access to take advantage of the benefits of trade as the engine for sustainable economic growth and development”.
She emphasised that “Trade policies are key in facilitating the flow of goods and services between a country and its trading partners as well as in the domestic market. Consequently, trade is a critical driver of economic growth and development, job creation and can drive improvement in the competitiveness of local industries”.
Kenya, Germany to eliminate non-tariff barriers to boost trade (Capital Business)
Kenya and Germany will prioritize the elimination of non-tariff barriers to boost trade. The move, the two countries said, will reduce the costs of business and ease the movement of goods and services. President William Ruto explained that the removal of the barriers will also enhance investments by German businesses in Kenya.
He made the remarks on Monday when he met President of Germany Dr Frank-Walter Steinmeier at Schloss Bellevue, Berlin.
The President noted that the Government is committed — under its Bottom-Up Economic Transformation Agenda — to supporting small enterprises to blossom. “That is why we have put more than Sh50 Billion in the Hustler Fund to provide affordable credit to millions of Kenyans who depend on the MSME sector for a living.”
The President argued that undergone huge transformation that promises businesses a return on their investment.
He added that Kenya is stable with a vibrant and friendly environment to trade and invest. “We have a robust environment with an open and business-friendly regulatory regime,” he said.
Kenya’s Lamu Port lagging in EA transhipments, KPA data shows (The East African)
When the Lamu Port was inaugurated on May 20, 2021, the idea was to tap business from Horn of Africa importers and relieve Mombasa of congestion in transshipment. Nearly two years later, that hasn’t happened. Official data from the Kenya Ports Authority (KPA) shows that Lamu is handling less than 2,000 twenty feet equivalent units (TEUS), with the Salalah port in Oman the main preferred transshipment port.
Lamu had come in with a suitable depth enabling it to accommodate big container ships, with smaller ships picking cargo from Lamu for onwards transshipment to other ports of the world, including feeding the Mombasa port.
Lamu was one of the flagship infrastructure projects under Kenya’s Vision 2030 and was promoted as part of a proposed transport corridor linking with Garissa, Isiolo, Maralal, Lodwar, Lokichogio and Moyale to form part of the Lamu Port South Sudan Ethiopia Transport (Lapsset) corridor.
A logistics advisory firm GBS Africa notes in its latest January report that foreign direct investment is driving expansion and rehabilitation of existing seaports as well as the rolling out of entirely new facilities. The report warns that ports that shun partnerships with experienced foreign investors will lose out as competition for market share intensifies.
“Lamu Port has potential to accommodate big container ship where small ships can call at the port for onward transshipment to other ports of the East Africa. That would be of beneficial to traders as containers move much faster thus many vessels might avoid the time to get to Salalah Port in Oman which will be of benefit to the new Kenyan second commercial port,” reads the report.
Zim-Ghana bullish AfCTA will boost trade (The Herald)
SIGNIFICANT potential exists for Zimbabwe and Ghana to substantially increase trade between them under the framework of the African Continental Free Trade Area (AfCTA), Zimbabwe’s Ambassador to Ghana Dr Kufa Edward Chinoza has said.
Ambassador Chinoza said this in his opening remarks at the Zimbabwe-Ghana Business Forum, which opened in Accra, Ghana, yesterday and runs until Wednesday.
Zimbabwe and Ghana have both signed and ratified the AfCTA agreement, which is a panacea to resolve some of the challenges faced when trading within the African continent. Despite the good political relations between Accra and Harare, trade has remained minuscule.
“It is my fervent hope that with initiatives such as the AfCTA trade agreement and business linkages through forums such as this, we will see a change in the current trajectory,” Ambassador Chinoza told delegates.
Statistics from the AfCTA show that trade between Zimbabwe and Ghana stood at just over US$3 million in 2022.
Intra-Africa trade remains at low levels, Ambassador Chinoza said, averaging below 18 percent. As policymakers, he said doors were open to further suggestions and recommendations on how “we can support you, the business people, to increase bilateral trade and Intra-Africa trade”.
Nigeria Gains N3.9trn From Port Concessions (Leadership News)
Nigeria’s economy through cargo importers has gained a whopping $8.5billion (N3.9trillion) in the last 17 years through stoppage of long vessels waiting time at the seaports, LEADERSHIP learnt.
Before port concessioning exercise embarked upon by the administration of Ex- president, Olusegun Obasanjo in 2006, LEADERSHIP gathered that foreign shipping firms have slammed congestion surcharge on Nigerian bound cargoes due to long vessel waiting time at Nigerian seaports.
“Nigeria’s port concession programme has been a monumental success. Many African countries send representatives here to understudy our port concession regime and how we were able to substantially increase investment and efficiency within a very short period of time. It shows the can-do spirit of Nigerians.
“The port concession programme reduced the waiting time of vessels coming into our ports from an average of 45 days before 2006 to less than three days at present. It has helped in eliminating the notorious congestion surcharge, hitherto, imposed on our ports by major shipping lines under the aegis of the Europe-West Africa Trade Agreement (EWATA).
“The elimination of the port congestion surcharge has resulted in saving Nigeria’s trading community over US$500 million per annum. If you multiply that by the 17 years of port concession, that amounts to a savings of US$8.5 billion to date. In naira terms, that is a savings of more than N3.9 trillion to the Nigerian economy,” Seaports Terminal Operators Association of Nigeria (STOAN), Princess Vicky Haastrup said.
The Central Bank of Egypt (CBE) has announced that the country’s foreign trade reached about $29.032bn during the first quarter (1Q) of fiscal year (FY) 2022/23, consisting of about $19.067bn in imports and about $9.965bn in exports.
According to the Central Bank’s monthly report, the volume of trade exchange between Egypt and its most important 14 trading partners, accounting for 64.6% of the total trade exchange, amounting to about $18.763bn, of which about $11.681bn were exports and about $7.081bn were imports.
Ministers in charge of trade, customs, finance, economic matters and home/internal affairs from the three regional economic communities (RECs) met virtually today to review progress on the implementation of various activities under the Tripartite Free Trade Area Agreement (TFTA). This was the 9th meeting of the ministers who constitute the Tripartite Sectoral Ministerial Committee (TSMC) of the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and the Southern Africa Development Community (SADC).
The last meeting of the TSMC was in 2019, and since then, progress have been reported especially on the market integration pillar particularly on the exchange of tariff offers and on rules of origin. Negotiations have been concluded on the list Rules of Origin for 90% out of a total 5,387 tariff lines which are already contained in Annex IV of the Agreement and can be applied when the TFTA Agreement enters into force.
The Minister of Trade and Industry of Egypt, Hon. Ahmed Samir who chaired the meeting stressed the need to ensure the ratification of the TFTA was achieved. He said this will enable the agreement to enter into force and support the Member States to overcome the current challenges such as the impact of the COVID-19 and the global economic difficulties.
Currently, 22 Tripartite Member/Partner States have signed the Agreement out of which, 11 which include, Egypt, Uganda, Kenya, South Africa, Rwanda, Burundi, Botswana, Namibia, Eswatini, Zambia and Zimbabwe have ratified it. Only three more ratifications are required for the Agreement to enter into force.
From the 21st to the 27th of November 2023, Côte d’Ivoire will host the 3rd edition of the Intra-African Trade Fair (IATF). The major event is the continent’s premier business forum for private sector actors in Africa. This year is a great opportunity for businesses working in Africa’s cocoa sector as the host country, Côte d’Ivoire, is the largest producer of the commodity in the world.
Côte d’Ivoire produces more than 2 million tonnes of cocoa a year, around 45% of the global production. The expertise of the local chocolate industry will be on full display, making it a unique opportunity for businesses to learn from Ivorian chocolatiers as well as cocoa producers coming from all over the continent.
Commercial exchanges between cocoa producers from different African countries can help the continent increase its processing capacity and add value to its raw materials. Currently, around 80% of Côte d’Ivoire’s national cocoa production is exported to Europe as cocoa beans.
Côte d’Ivoire, which has implemented reforms around the production and exportation of cocoa, recently launched a traceability programme to ensure that the cocoa supply chain is sustainable. This initiative will help Côte d’Ivoire meet international environmental standards.
To increase cross-border trade, partnerships among African and Ivorian producers, governments, traders and chocolatiers will be a key focus of the IATF.
Firms in EAC pause layoffs amid economic optimism among CEOs (The East African)
East African Community (EAC) companies have suspended workforce restructuring, including possible cost cutting through sackings, to await signs of economic turnaround. For the next 12 months, firms are turning their attention to fresh hiring lifted by increased optimism over the economic and financial outlook for the region and businesses.
The revelations are contained in a new survey released last week by consultancy firm PricewaterhouseCoopers (PwC) that shows that some 138 company chiefs in the EAC states are positive about the economic outlook for the region and the general performance of their companies in the short-term and medium-term.
East Africa CEOs indicated they will prioritize upskilling of their workforce (78 percent) in the next 12 months as well as investing in automating processes and systems (75 percent) and deploying technology (64 percent).
“The CEOs will be allocating the bulk of the investments to reinventing their businesses for the future,” the survey said.
According to the Survey PwC, CEOs in East Africa are most concerned about their exposure to rising inflation, macroeconomic volatility, climate change and cyber risk in the next 12 months and five years. In the next 12 months, the majority of CEOs see climate risk impacting their cost profiles and supply chains more than their physical assets.
The CEOs ranked technological disruptors highest (68 percent) with the potential to disrupt the industry in which they operate, followed by changes in regulations (64 percent) and changing customer demands/ preferences (64 percent).
Cemac: Outbound money transfers tripled in 5 years, reaching CFA10,120bn in 2022 (Business in Cameroon)
Outgoing money transfers from Cemac countries to the rest of the world have increased from CFA2,816 billion in 2018 to CFA10,120 billion in 2022, the Central Bank Beac revealed in a recent report on money transfers in the region. This means that in 5 years, the money used in foreign currency by private and public economic agents operating in the CEMAC to purchase goods and services, settle debts, transfer dividends, or make endowments outside the region has more than tripled.
Three activity sectors stood out, accounting for 67% of all authorized outgoing transfers in 2022. These are finance and insurance (26.76%), trade (25.73%), and the oil industry (14.20%). Operators in these sectors mainly used the resources to pay debt compensations on e-money and rapid transfer operations; imports of food, manufactured items, and refined oil products.
While the amount has clearly increased over the years, CEMAC economic agents constantly accuse the new exchange regulations of tightening trade with the outside world, particularly outbound transfers. The regulation in question, adopted in December 2018 and entered into force in March 2019, defines the organization, as well as the conditions and modalities for carrying out exchanges with the outside. It was decided during the extraordinary summit of CEMAC heads of state held in December 2016 in Yaoundé to replenish the community’s forex buffers and ward off a devaluation of the local currency, CFA.
Around 48 million adults, 22 million of them women, in the Southern African Development Community (SADC) Region have been included in the formal financial system over the last decade, Mr Sadwick Mtonakutha, the Director Finance, Investment and Customs Directorate in SADC Secretariat, has said.
This includes the 50% reduction in the cost of outbound remittances from South Africa, with more than 4.4 million adults in the Region benefiting from lower remittance prices; and the introduction of a risk-based approach to anti-money laundering which has led to an increase in access to formal remittances and migrant financial inclusion, especially from South Africa to the rest of the SADC Region. In addition, the SADC mobile money guidelines were adopted by the Committee of Central Bank Governors (CCBG) and Ministers of Finance and Investment, with Malawi and Lesotho now paying interest on mobile money wallets.
Mr Mtonakutha said the Support to Improving the Investment and the Business Environment in the SADC Region (SIBE) Programme, which is supported by the European Union, has also played a huge role in supporting financial inclusion. Key milestones achieved through the SIBE Programme include the review of the SADC strategy on financial inclusion and small and medium enterprise (SME) access to finance for the period 2016 – 2021; identification of priorities and development of timelines for harmonisation of financial inclusion; and the development of policy frameworks and guidelines for consumer protection in line with international best practices.
Brexit and inflation have increased opportunities for fruit and vegetable producers in East Africa, according to Kenyan export consultant Paul Kyalo.
Kyalo’s consultancy business Konza Tropicals supports producers and exporters across East Africa to access international markets, gain certifications, develop their branding, and arrange the necessary export documents.
Brexit has created new opportunities for African producers, according to Kyalo, because many UK importers and retailers are now keen to buy produce from outside Europe in order to keep down costs and avoid red tape.
With supply chain inflation continuing to shape the fresh produce sector, East African producers and suppliers stand to benefit from their “competitive” production and labour costs, Kyalo says. However, he emphasises that airfreight rates continue to be a major challenge and sometimes mean it is more economical for UK importers and retailers to source from closer to home.
U.S. Vice President Kamala Harris arrived in Ghana Sunday night to kick off a three-nation tour of Africa her first visit to the continent since taking office.
The vice president said she was “very excited” about the future of the continent, and “the impact of the future of Africa on the rest of the world, including the United States of America.” Harris held a bilateral meeting with President Nana Akufo Addo in Accra in her first high-profile encounter as she begins the nine-day tour of central African nations.
“The U.S. is strengthening our partnerships across the continent of Africa, and they are guided not by what we can do for Africa, but with Africa and our African partners on this continent,” Harris said at a news conference with the Ghanaian leader after their meeting, lauding his leadership for having made Ghana a “beacon of democracy.”
Harris announced $100 million in new support for Benin, Ghana, Guinea, Cote d’Ivoire, and Togo, to help the nations address security, governance, and development issues in the region. White House officials said Harris’ trip and meetings would focus on democracy, climate change, security, the economy and the impact of Russia’s invasion of Ukraine.
The flurry of official visits follows the U.S.-Africa leaders’ summit in December, where President Biden announced a $55 billion commitment to the continent over the next three years.
Africa’s low trade pattern worrisome (New Era)
A low intra-continental, as well as global trade pattern by African countries, has been attributed to, among others, a lack of adequate infrastructure, climate change, structural problems, and lack of sovereignty or control of production. This is according to CEO of Development Reimagined, Hannah Ryder, who last week noted the African continent accounts for about 6% to 8% of global fossil fuel production, but only 2% of renewable energy production, yet the continent has the world’s largest renewable potential.
“Development reimagined analysis in 2019 before Covid-19 found that on average, just 3% of all products imported by the G20 countries come from Africa. 29 African countries each export less than 1% of Africa’s total exports to the G20 and this includes countries that have significant industrial aspirations, such as Rwanda, Senegal, Sierra Leone and Lesotho across the continent,” Ryder highlighted while addressing delegates during a seminar on promoting the development of Africa’s Industrial Chain and enhancing the added value of Africa products.
Chitendza added: “Reports show that it takes long just to cross from one border in one country to another, but internally within our countries, it’s equally difficult. These are the things that are delaying access to the market and the development of our own local supply chains”. He feels the thinking and know-how of the Chinese should be used to propel partnerships to higher grounds.
The COVID-19 pandemic brushed away any doubt as to the importance of functioning and productive pharmaceutical industries.
Countries across Africa, a continent which struggled to gain equal access to vaccines and that imports the majority of its packaged medicines from abroad, know all too well the importance of a strong domestic pharmaceutical industry and trade.
Total demand for packaged medicines in Africa is worth around $18 billion annually, of which 61% is imported and 36% is locally produced and not traded. Just 3% of demand is met by intra-African trade.
Now, under the newly active African Continental Free Trade Area (AfCFTA) agreement, Africa’s pharmaceutical and medicine trade is about to receive a significant boost — one fueled by intra-African trade, alleviating some of African states’ reliance on outside economies.
With financial, health and climate shocks threatening to reverse two decades of development progress in Africa, experts have called for urgent concessionary financing to help the continent build resilience and boost economic growth.
A mix of shocks including food and fuel impact of the Russia-Ukraine war, climate change impacts, conflict, and tighter global financial conditions have increased Africa’s development financing gap and debt vulnerability, experts concurred during a one-day virtual workshop on Catalysing Access to the IMF Resilience and Sustainability Trust (RST), organized by AfriCatalyst and the Economic Commission for Africa (ECA).
“Despite national and international efforts, an increasing number of countries on the continent continue to struggle with substantial debt burdens and servicing their debt, with some already in debt distress or at high risk of debt distress,” Mr. Elhiraika said, emphasizing that this was impeding resilience-building to future shocks, which is key for sustainable development.
Based on estimates for the years 2017-2019, WTO economists attribute to the TFA an average 5% increase in global agricultural trade, 1.5% in manufacturing trade and 1.17% in total trade. These increases are largely driven by the trade growth in LDCs, where agricultural exports rose by 17%, manufacturing exports by 3.1%, and total exports by 2.4% under the TFA. The estimates further point to a 16-22% increase in agricultural trade between developing members that have made TFA commitments.
These estimates are conservative, as large gains have already been realized, particularly in manufacturing, in anticipation of the Agreement’s entry into force and by developed members making full commitments since the start of the TFA’s entry into force, as noted in previous studies.
The TFA is the first WTO agreement in which developing members and LDC members can determine their own implementation schedules and seek to acquire implementation capacity through the provision of related assistance and support. Developed members were required to implement all provisions of the TFA from its entry into force. As of 22 March 2023, notifications submitted by WTO members indicate that they have committed to implement 76.1% of TFA obligations.
The SPS Committee adopted document G/SPS/67, which lists existing tools and resources to enhance the implementation of the SPS Agreement relating to SPS approval procedures for food, animal and plant products. It also adopted document G/SPS/68, which provides recommendations on SPS approval procedures.
Approval procedures cover any procedure to check and ensure the fulfilment of SPS measures. They can, for example, be used to assess products or categories of products before they are allowed into a market to ensure that imported products comply with SPS requirements of the importing country or to check that the SPS system of an exporting country provides necessary assurances before a product enters a market.
The two documents stemmed from work undertaken by the Working Group on Approval Procedures between November 2020 and March 2023. The Working Group was set up following a recommendation from the Fifth Review of the Operation and Implementation of the SPS Agreement to consider challenges and principles of approval procedures.
The report, Falling Long-Term Growth Prospects: Trends, Expectations, and Policies, offers the first comprehensive assessment of long-term potential output growth rates in the aftermath of the COVID-19 pandemic and the Russian invasion of Ukraine. These rates can be thought of as the global economy’s “speed limit.”
“A lost decade could be in the making for the global economy,” said Indermit Gill, the World Bank’s Chief Economist and Senior Vice President for Development Economics. “The ongoing decline in potential growth has serious implications for the world’s ability to tackle the expanding array of challenges unique to our times—stubborn poverty, diverging incomes, and climate change. But this decline is reversible. The global economy’s speed limit can be raised—through policies that incentivize work, increase productivity, and accelerate investment.”
That would convert an expected slowdown into an acceleration of global potential GDP growth.
The acronym began as a somewhat optimistic term to describe what were the world’s fastest-growing economies at the time. But now the BRICS nations — Brazil, Russia, India, China, South Africa — are setting themselves up as an alternative to existing international financial and political forums.
“The founding myth of the emerging economies has faded,” confirmed Günther Maihold, deputy director of the German Institute for International and Security Affairs, or SWP. “The BRICS countries are experiencing their geopolitical moment.”
What may have started as a marketing ploy to encourage investors has grown into a platform for intergovernmental cooperation similar to the G7. In 2009, the four nations met for their first summit in Russia’s Yekaterinburg. In 2010, South Africa was invited to join the group, adding the “S” to BRICS.