tralac Daily News
During a meeting with key exporters on Wednesday night, President Cyril Ramaphosa proposed the establishment of a national logistics crisis committee to urgently address the ailing performance of South Africa’s ports and rail.
Ramaphosa hosted the virtual meeting with executives from key exporting economic sectors such as mining and minerals, the agricultural and forestry sectors and as well as the automotive and freight forwarding industry. The sectors represent South Africa’s largest exporters who are reliant on the country’s road, rail and port infrastructure.
Several meeting participants confirmed to News24 that the president said the logistics crisis is of “catastrophic proportions” and committed to rapid solutions through a new national logistics crisis committee. The committee structure is expected to be detailed at the fifth South Africa Investment Conference in Sandton next week.
The UK Minister for Development and Africa, Rt. Hon. Andrew Mitchell MP, has reaffirmed UK support to Cameroonian trade and infrastructure and discussed the devastating impacts of Cameroon’s conflicts, including the human rights situation, during a two-day visit.
The Minister saw the impacts of British investment in Cameroon, visiting a major road in the commercial capital, Douala, which is receiving £113 million in funding from UK Export Finance to support its expansion. Due to this important UK support, the critical transportation corridor between Douala and Yaounde, and on into central Africa, is being greatly improved, bringing more and quicker trade to more people.
The UK is committed to deepening its partnership with Cameroon to enhance economic prosperity, with leaders from the country invited to attend the UK-African Investment Summit to be held in London in April 2024.
South Africa’s citrus trade with the EU is currently held back by “protectionism”, President Cyril Ramaphosa told a recent bilateral trade forum between South Africa and Belgium, and with it, the aspirations of black citrus farmers whose forebears had been denied economic participation during apartheid.
“As we parcel out land to black people, they begin to get into sectors such as citrus. We have a growing number of black people who are now in citrus cultivation and production, and those people have seen opportunities to start trading with other countries, like Europe,” the South African president said.
Since last season South African oranges are required to be shipped at significantly lower temperatures than before, to assuage the risk of false codling moth entering Europe. South Africa contests both the scientific basis of the ruling as well as its trade fairness and prompted the country to lodge its very first trade dispute at the World Trade Organisation.
Pres Ramaphosa continued: “As they seek to export to your part of the world, there are barriers they have to deal with. Some of them [are] completely new barriers and that keeps them back as they seek to participate in the transformation of the South African economy.”
While South Africa (SA) should expand its agricultural export markets to new frontiers such as India, China, Bangladesh, Saudi Arabia and South Korea, among others, this export drive should not be at the expense of our existing markets. We should actively engage with existing markets to promote further export growth of South African agricultural products. The engagement needs not only focus on the EU and Asia – both crucial regions for our export growth – but also on the rest of the African continent.
The African continent remains the largest export market for South Africa’s agriculture. In record agricultural exports of $12.8-billion in 2022, the continent accounted for 37%. Importantly, this was not an anomaly. It has accounted, on average, for 38% of SA’s agricultural exports by value per annum over the past five years.
The leading markets were Botswana, Namibia, Mozambique, Zimbabwe, Lesotho, Eswatini, Zambia, Angola, Nigeria and Mauritius. Except for Nigeria, these markets are within the Southern African Development Community’s (SADC) Free Trade Area, which has benefited South Africa greatly. Moreover, these markets’ infrastructure and proximity advantage contributes to the concentration of South African agricultural exports to this region.
As we advance this trade relationship with SADC and the rest of the African continent, various industry and government engagements will be needed to keep warm relations.
Hundreds of merchants gathered Friday in Kye Ossi, a Cameroonian town on the border with Gabon and Equatorial Guinea, to protest travel restrictions imposed since an outbreak of the deadly Marburg virus. They say the restrictions are suffocating trade and violate a Central African regional agreement on the free movement of people and goods.
“Business people who leave Cameroon to meet their partners coming from Equatorial Guinea or from Gabon, they would definitely not come, so it affects the economic activities of Kye Ossi,” Cameroonian merchant Kema Godlove said Friday on Cameroon state broadcaster CRTV. “Actually, when borders are locked up, people relocate to different areas while waiting for the borders to be reopened, because when the borders are not open, businesses, everything is almost paralyzed.”
The merchants say by restricting the movement of people, Cameroon, Gabon and Equatorial Guinea are disrespecting a regional agreement among countries of the Central African Economic and Monetary Community, CEMAC.
Ghana: Stakeholders commit to strengthen collaboration to promote intra Africa trade (The Patriotic Vanguard)
Stakeholders from across the public and private sectors pledged to strengthen collaboration with Governments to address infrastructure deficit, ineffective trade facilitation processes, and invest in innovation and technology to promote trade across borders in Africa, to accelerate sustainable development.
This commitment was made at the maiden Africa Sustainable Supply Chain Summit hosted by the International Chamber of Commerce (ICC) in Ghana, in partnership with the United Nations Development Programme (UNDP), and the Africa Investment Group in Accra on 29-30 March 2023.
“Growing competitive African businesses for the One Africa market requires better supply chain governance and more investment by multiple actors including diaspora investors. It requires collaborative approaches to attract innovative and new forms of financing for MSMEs”, said Angela Lusigi, UNDP Resident Representative in Ghana.
Ms. Lusigi called for new partnerships to ensure that supply chains are sustainable and work to facilitate made in Africa, supplied by Africa, and moved by Africa.
Growth across Sub-Saharan Africa remains sluggish, dragged down by uncertainty in the global economy, the underperformance of the continent’s largest economies, high inflation, and a sharp deceleration of investment growth, a World Bank report said Wednesday. In the face of dampened growth prospects and rising debt levels, African governments must sharpen their focus on macroeconomic stability, domestic revenue mobilization, debt reduction, and productive investments to reduce extreme poverty and boost shared prosperity in the medium to long term.
Economic growth in Sub-Saharan Africa is set to slow from 3.6% in 2022 to 3.1% in 2023, according to the latest Africa’s Pulse, the World Bank’s April 2023 economic update for Sub-Saharan Africa. Economic activity in South Africa is set to weaken further in 2023 (0.5% annual growth) as the energy crisis deepens, while the growth recovery in Nigeria for 2023 (2.8%) is still fragile as oil production remains subdued. The real gross domestic product (GDP) growth of the Western and Central Africa subregion is estimated to decline to 3.4% in 2023 from 3.7% in 2022, while that of Eastern and Southern Africa declines to 3.0% in 2023 from 3.5% in 2022.
Prudential Bank Limited (PBL), an indigenous financial institution, has successfully completed its first live Pan-African Payment and Settlement System (PAPSS) transaction to Nigeria. The transaction was initiated in Ghana Cedis on behalf of an individual customer of the bank, which was instantly received by the beneficiary in Nigeria in Naira.
The PAPSS platform serves as an enabler of the African Continental Free Trade Area (AfCFTA) by providing African businesses and individuals with the opportunity to initiate payments in their respective local currencies, with recipients also receiving funds in their local currencies. PAPSS eliminates the over-reliance on foreign currencies with its attendant economic woes.
African countries should innovate, not become dumping ground — AU Official (National Accord Newspaper)
Prof. Olalekan Akinbo of the African Union Development Agency (AUDA-NEPAD) says African countries should create room for innovation in order to avoid becoming a dumping ground for other countries’ innovations. Akinbo told the News Agency of Nigeria (NAN) on Wednesday that it was imperative for African governments to create the enabling policy and environment to support innovations. He urged governments in Africa to deploy innovation into agriculture and move from subsistence to commercial farming, so as to guarantee food sufficiency with surplus for exports.
African economies are in danger of falling further behind their global competitors. Unless ways are found to radically improve trade between nations on the continent and with the world at large, they risk creating the foundations for a destabilising socioeconomic fabric and global crisis. While alarming, we have every reason to be hopeful about the economic prospects of African countries, but only if the right choices are made now.
As the continent prepares for a pending population boom and a rapidly changing global economy, governments and leaders must abandon the old “business-as-usual” approach and embrace different strategies that will yield desirable and prosperous outcomes.
Africa, especially under the auspices of the free trade area objectives, will require a well-defined trade strategy that is symbiotic and functions both domestically and regionally, and one that makes it competitive with its outputs.
The “Falling Long-Term Growth Prospects: Trends, Expectations, and Policies” report recently published by the World Bank offered thought-provoking discussions on the long-term potential output of global growth rates since the Covid-19 pandemic and the Russian invasion of Ukraine.
Economies in the Middle East and North Africa (MENA) are expected to grow at a slower pace in 2023, as double-digit food inflation adds pressure on poorer households and the impact of food insecurity can span generations, according to the World Bank’s latest economic update.
Titled “Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa,” the report forecasts MENA’s GDP will slow to 3.0% in 2023, from 5.8% in 2022. Oil exporters, who benefited from a windfall in 2022, will experience slower growth, but a large gap remains between high-income countries and the rest of the region. Real GDP per capita growth, a better proxy for living standards, is expected to slow down to 1.6% in 2023 from 4.4% in 2022.
Projected financing needs to address severe food insecurity run into billions of dollars annually, but the report makes clear that money alone is not enough. The report suggests policy tools that could help to alleviate food insecurity before it escalates into a full-blown crisis, including targeted cash and in-kind transfers that could be introduced immediately to stem acute food insecurity.
Members took concrete steps towards WTO reform by agreeing on a series of actions to increase transparency and efficiency of the Council for Trade in Goods (CTG) and its subsidiary bodies and to improve the way it functions. At the meeting of the Council on 3-4 April, members translated intensive consultations over the past few months into specific results as a follow-up to the reform mandate agreed at the 12th Ministerial Conference (MC12) in June 2022.
WTO members participating in the negotiations on investment facilitation for development (IFD) agreed to remove the Annex to the Draft Agreement containing pending issues after resolving all of these points. This major achievement towards the objective of finalizing the negotiation text by mid-2023 was announced at a plenary meeting on 5 April, following a two-day negotiating round. Participants also held a dedicated session on needs assessments, which aim at helping developing and least-developed countries (LDCs) self-assess their technical-assistance and capacity-building needs to implement the future IFD Agreement.
Members discussed the Committee’s contribution to implementing the Ministerial Declaration adopted at the 12th Ministerial Conference (MC12) on the WTO response to the COVID-19 pandemic and preparedness for future pandemics.
Members discussed a proposal by the WTO’s African Group on providing developing countries and LDCs with flexibility to pursue policies that promote industrial and digital development and address emerging challenges, such as climate change. Examples include policies that protect infant industries and those that diversify production.
Members expressed their commitment to helping developing countries and LDCs integrate more fully into the global trading system. Some warned against duplicating work undertaken in other WTO forums.
The WTO’s trade projections, set out in the new “Global Trade Outlook and Statistics” report, estimate real global GDP growth at market exchange rates of 2.4% for 2023. Projections for both trade and output growth are below the averages for the past 12 years of 2.6% and 2.7% respectively (see chart).
WTO Director-General Ngozi Okonjo-Iweala said: “Trade continues to be a force for resilience in the global economy, but it will remain under pressure from external factors in 2023.This makes it even more important for governments to avoid trade fragmentation and refrain from introducing obstacles to trade.
BRICS Investment Report (UNCTAD)
Brazil, the Russian Federation, India, China and South Africa (BRICS) now form one of the world’s most important economic blocs, representing more than one quarter of global GDP, and 42 per cent of the world’s population. Significantly, the BRICS have seen their economic influence increase over the past decades, as drivers of global growth, trade and investment.
Foreign investment has played an important role in the growth of BRICS economies since 2001, with annual FDI inflows to the bloc more than quadrupling from 2001 to 2021 and contributing significantly to gross fixed capital formation. The growth in FDI inflows to the BRICS was very strong in the first decade, but has remained relatively flat since 2011, against a global backdrop of negative growth of FDI flows over the decade.
To deal with the challenging global investment environment, and also in response to the need to leverage foreign investment for sustainable development, the BRICS economies continued moving in the general direction of a more open and supportive investment policy environment.
The International Air Transport Association (IATA) released data for February 2023 global air cargo markets showing that air cargo demand rose above pre-pandemic levels.
The global new export orders component of the manufacturing PMI, a leading indicator of cargo demand, continued to increase in February. China’s PMI level surpassed the critical 50-mark indicating that demand for manufactured goods from the world’s largest export economy is growing.
Global goods trade decreased by 1.5% in January; this was a slower rate of decline than the previous month of -3.3%.
African airlines saw cargo volumes decrease by 3.4% in February 2023 compared to February 2022. This was an improvement in performance compared to the previous month (-9.5%). Notably, the Africa to Asia route area experienced significant cargo demand growth in February, up 39.5% year-on-year. Capacity was 4.7% above February 2022 levels.