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Joint Efforts Are Critical in Pulling SA Out of Its Economic Challenges (the dtic)
“As much as government and big business industry players have a role to play in contributing to the creation of jobs and growth of the economy, ordinary South Africans can make a serious mark if they utilise their drive and skills to grow successful businesses. The government is interested in seeing not only the emergence of more business operators, but ensuring that they grow in leaps and bounds to greater heights. Job creation can only be realised through the growth of SMMEs, as government we are duty bound to pay particular attention in providing necessary support, both financial and non-financial,” pledged Gina.
The Deputy Minister of Trade, Industry and Competition, Ms Nomalungelo Gina says government needs all key players, including ordinary South Africans to deal with challenges of unemployment, poverty and inequality. She was addressing small business operators who attended the business imbizo at the Sisizakele Special School at Bhambanana in Jozini, KwaZulu-Natal.
Uganda in dilemma on scrapping 10pc duty on sugar imports (The East African)
Uganda’s government finds itself in a dilemma over whether to scrap the 10 percent duty remission on imported industrial sugar.
Patrick Ocailap, deputy secretary to Uganda’s Treasury and Deputy Permanent Secretary in the country’s ministry of finance, told The EastAfrican that withdrawal of the privilege can be compensated through local production of industrial sugar which plays into the push for import substitution, creation of jobs and industrial linkages.
So far, the Uganda Sugar Manufactures Association (USMA) says it had negotiated for a delay in the withdrawal at least until the next fiscal year, according to USMA Secretary-General Wilberforce Mubiru.
Soft drinks manufacturers are the key users of industrial sugar. They complain that the price for locally produced industrial sugar ($1,015 per tonne) is already a disadvantage compared with that of imported sugar at $900 per tonne.
New taxes: Government has no intention to kill businesses - Deputy Trade Minister (MyJoyOnline.com)
Deputy Minister for Trade and Industry Michael Okyere says government will continue to engage businesses over their grievances relating to the new tax measures introduced by the government.
The Ghana Union of Trader’s Association (GUTA) and the Ghana National Chamber of Commerce and Industry (GNCCI) argue that the revenue measures are counterproductive hence the need for government to reverse them.
Speaking to Joy News’ Blessed Sogah on the sidelines of the African Continental Free Trade Area (AfCTA) Business Forum in Cape Town – South Africa, Michael Okyere Baafi says the intention of government is not to kill any businesses.
“The intention of government is not to cripple or sabotage businesses. That’s not what government has in mind. Government’s interest is to encourage people to do business and also when they do businesses and when they grow, those businesses are supposed to pay more taxes to government so that we can be able to undertake projects like very good infrastructural projects like roads, other things that will benefit car users and users of social services in the country,” he said while announcing that a series of dialogues will continue in order to find common grounds with private sector.
High food prices pressure Morocco export-led agricultural model (The East African)
Soaring inflation in Morocco is driving up living costs and stirring public anger, and as food prices increase the country’s export-led agricultural model is coming under fire.
Official figures from February put year-on-year inflation in the North African country at just over 10 percent, a figure that also included a 20 percent jump in food prices. The price of fresh produce in Morocco is almost as high as in some Western European supermarkets, but the minimum wage for Moroccans is just $300 (275 euros) a month.
Faced with growing criticism, Morocco’s Agriculture Minister Mohamed Sadiki attributed high food prices to ‘external and cyclical factors’ such as the rising cost of raw materials and a cold snap that delayed the picking of tomatoes.
In an attempt to stem the price rises, Rabat suspended exports of some products in early February including tomatoes, to ensure supplies for the local market. But that move drew protests from professional bodies who urged Moroccan Prime Minister Aziz Akhannouch reconsider the measure.
Trade in local currency may boost Egypt’s economic recovery (ZAWYA)
Egypt has started trading with other countries using their own currencies instead of the USD dollar. This comes as the country has agreed to import products from Russia and India using the Russian ruble and the Indian rupee. Accordingly, Egypt will no longer need to secure USD in order to import goods from both countries. Since 2018, the local currency settlement (LCS) mechanism has been implemented and embraced by a number of countries, including Malaysia, Japan, Thailand, and China. This helped maintain a positive LCS growth trend within the financial markets, recording $868 million in the first quarter (Q1) of 2022, according to the Bank of Indonesia. Experts believe that adopting this LCS mechanism in international trade will help Egypt’s economic recovery.
In September 2022, Russian Ambassador to Cairo Georgy Borisenko said that his country adopts a settlement mechanism using the local currency in trade exchange between Egypt and Russia, which includes a mutual acceptance of payments in the Egyptian pound or the Russian ruble in the two countries trade.
Moreover, India adopted a new foreign trade policy to trade in rupees with countries facing a shortage of dollars in order to “disaster-proof” them and to boost its exports, Sunil Barthwal, Commerce Secretary, said in a news conference in New Delhi late March 2023.
To import using the local currency of the exporting country, Egypt needs to reach an agreement with the central banks of these countries to obtain their currencies for trade or to allow the payment in EGP for them. While the North African country mainly imports its wheat from Russia, its wheat imports from Russia decreased by 6.7% in 2022; however, Russia’s share of Egyptian wheat imports increased to 57% from 50% in 2021, according to Reuters. Moreover, Egypt’s rice imports from India were worth $87.19 million in 2022, according to the United Nations COMTRADE database on international trade. Egypt plans to purchase at least 150,000 tons of rice from India; therefore, getting into a deal with both India and Russia is beneficial for Egypt, which has just resolved an issue of goods piling up at ports due to the USD shortage.
EAC to digitise tariffs for imported goods (The Citizen)
The East African Community (EAC) secretariat has commenced the process of digitising its Common External Tariffs (CET). The programme, being implemented with the support of the World Customs Organisation (WCO), is geared to enhance the private sector’s participation in international trade. Through the digitisation of the CETs, the business community—exporters and importers—will have access to trade information from the private sector in international trade.
The platform, which is currently under development in partnership with Global Trade Solution (GTS), will enable seamless migration of the EAC CET during the transposition of the Harmonised System (HS).
The EAC currently implements a four-band CET with a minimum rate of 0 percent for raw materials and capital goods and 10 percent for intermediate goods not available in the region. The other is 25 percent for intermediate goods available in the region and 35 percent for imported finished products available in the region. There are, however, other products classified as ‘sensitive products, which attract a rate above 35 percent, listed in Schedule 2 of the CET.
In automating the EAC CET, the scale, scope and speed of engagement by the private sector are expected to increase as a result of enhanced access to trade information in a digitally connected environment.
Concern as alternative funding model for EAC not yet in sight (The Citizen)
The alternative funding mechanism for the East African Community (EAC) is not yet in sight, over 20 years after it was mooted. The regional body, which has expanded to seven nations from three in 2000, is still partly dependent on donor support to finance its activities.
Minimal progress has reportedly been made despite an earlier commitment to roll out the new funding model by 2018.
The report tabled before a recent sitting of the East African Legislative Assembly (Eala) in Bujumbura, Burundi, noted: “We need a self-sustaining community rather than a donor-dependent one.”
ECOWAS member states urged to open market to Spanish investors (Ghanian Times)
The Ghana’s Ambassador to Spain, Mr Mohammad Adam has urged the Economic Community of West Africa States (ECOWAS) to make its partnership open to Spanish investors.
He has stressed the need for ECOWAS to consider a business forum with the Spanish Chamber of Commerce and the Spanish Confederation of Business Organisations (CEOE) umbrella to enable business investors geton-board, share their experiences and investment projections with the community.
“This business world in Spain when given the opportunity could provide needful tools to support the ECOWAS region and its agencies by increasing investments, jobs, shelter, commerce, social amenities and providing more to the economic sustainability mechanisms for the millions of inhabitants in the community,” he added.
The Third Meeting of the ECOWAS Regional Trade Facilitation Committee (RTFC) was held on 27 – 29 March in Accra – Ghana, to review the implementation of regional trade facilitation reforms and consider innovative approaches to improve free movement of goods in the region. The meeting also provided the regional experts with a platform to consider the ECOWAS Non-Tariff Barrier (NTB) Elimination Policy and the Regional Trade and Transport Facilitation Strategy, which are expected to significantly reduce the challenges faced traders in the region and increase intra-ECOWAS trade.
Mr. DJALO, Secretary General at the Ministry of Trade of the Republic of Guinea Bissau, and Chair of the Meeting, noted that the region can greatly benefit from the opportunities presented by the continental free trade area. He also highlighted that the need to reduce barriers to intra-regional trade and facilitate free movement of goods as enshrined in the ECOWAS protocol. He noted that the meeting will provide an opportunity for participants to make proposals in order to address challenges associated with free movement of goods and urged participants come up with actionable recommendations during the meeting.
Africa needs to reduce structural and regulatory barriers to market entry - Paul Mashatile (IOL)
South African Deputy President Paul Mashatile has hailed the establishment of the African Continental Free Trade Area (AfCTA) adding that it will “become a game changer to the continent’s growth trajectory.”
According to Mashatile, “there exists continental-wide consensus on the need for Africa to reduce structural and regulatory barriers to market entry and to invest in the necessary infrastructure to facilitate intra-African and global trade – more so road and maritime infrastructure. At present, the quality of much of the continent’s maritime, road and railway infrastructure is less than satisfactory. There are few road links, general poor road infrastructure maintenance and limited regional road linkages throughout the continent’s five regions.”
African countries should engender innovation, not become dumping ground —AU official (Tribune Online)
Professor Olalekan Akinbo of the African Union Development Agency (AUDA-NEPAD) has said that African countries should create room for innovation in order to avoid becoming a dumping ground for other countries’ innovations. Prof. Akinbo stated that it was imperative for African governments to create the enabling policy and environment to support innovations.
The supervisor at the Centre of Excellence in STI added that countries unwilling to innovate would definitely be left behind. 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.
“We are in a global village and every country, every continent relates in the area of trade. Therefore, Africa needs to be competitive
Africa’s industrialisation drive - the role of AfCFTA & regional DFIs (Trade Finance Global)
Over the next two years, Africa’s economic growth is expected to average around 4% above the estimated growth for developed economies. Yet, the majority of its population remains below the poverty line.
The sustained economic growth is partially attributable to commodity trade in its raw form but does not translate into similar levels of economic development. Industrialisation is a critical component of economic development, with many benefits that include improved standard of living, economic stability, growth in agricultural production, the balance of payment surpluses and high employment rates.
While several African countries have unique policies as part of the import substitution drive to reap the benefits of industrialisation, the impact of these policies are yet to be realised. There is a need for governments to create an enabling environment to help industries succeed.
Illicit trade crackdown can help pull debt-ridden African governments back from the brink (Ventures Africa)
Amid significant global economic turbulence, all eyes last week were on the annual Spring Meetings of the World Bank and International Monetary Fund (IMF) held in Washington, D.C. between 10 and 16 April.
High on the agenda were the deteriorating debt and climate finance crises facing the developing world. New research from ActionAid published alongside the meetings highlights that 93% of the most climate-vulnerable countries in the Global South – including Somalia, Malawi, and Mozambique – are “drowning in debt.” Alarmingly, nearly two-thirds of these nations are drastically slashing public spending to repay loans, hindering progress in funding vital climate resilience and sustainable development efforts.
A silent menace is greatly exacerbating this budgetary disaster: the illicit trade, which robs governments of massive amounts of tax revenue every year while undermining medical, environmental and economic health. Robust action to tackle Africa’s thriving counterfeit markets – namely traceability and authentication systems paired with regional regulatory cooperation – thus has a crucial role to play in easing budgetary pressures and unlocking the continent’s potential.
U.S.-Africa duty free program has had mixed results - trade panel report (Reuters)
A major U.S. trade preference program for Sub-Saharan Africa has been successful for developing the region’s apparel sector in selected countries, but its benefits are not widespread throughout all countries and sectors, a new report to the U.S. Congress showed on Monday. The U.S. International Trade Commission (USITC) said its report on the African Growth and Opportunity Act (AGOA) trade benefits shows that they have helped reduce poverty and create jobs in certain countries, particularly for women.
The report highlighted apparel as the biggest success story for the program, with the industry having a positive impact on poverty reduction in major exporters Madagascar, Kenya, Lesotho, Mauritius and Ethiopia.
“AGOA benefits appear to be essential for Sub-Saharan Africa countries to maintain their apparel exports to the United States,” the USITC report said, noting that loss of AGOA benefits by failing to meet eligibility criteria results in significant declines in exports to the United States.
“While certain sectors and countries have benefited from the program, AGOA has not achieved all that we had hoped, and more work must be done to improve our economic relationships,” said U.S. Representative Richard Neal, the top Democrat on the Ways and Means Committee.
Global Africa Business Initiative introduced to South Africa (UN Global Compact)
The Global Africa Business Initiative (GABI) has been introduced to South Africa at the Africa Continental Free Trade Area Business Forum being held in Cape Town this week held under the leadership of Wamkele Mene, Secretary-General of AfCFTA.
During opening remarks at the AfCFTA Business Forum Sanda Ojiambo, Assistant Secretary-General and CEO, UN Global Compact noted the importance of GABI to AfCFTA’s work:
“By leveraging an extensive network of partners, including the African Union, GABI seeks to address challenges unique to Africa and catalyze long-term solutions. In alignment with the African Union’s 2023 priorities, GABI will foster collaboration on initiatives that support the implementation of AfCFTA. The African business community must utilize this Agreement to drive forward socioeconomic transformation.”
Untapped renewable resources in Africa should receive more attention – RES4Africa (Engineering News)
As the majority of the world embraces a shift in electricity generation away from fossil fuels towards greener, renewable sources of energy, Africa faces several challenges in attracting investment capital to undertake a significant energy transition, renewable energy support foundation Renewable Energy Solutions for Africa (RES4Africa) secretary general Roberto Vigotti stated on April 19.
Speaking during the first of RES4Africa’s Online Lab series, he said Africa’s energy sector was faced with five main decisions about its green energy trajectory, including its ambitions to achieve universal access to energy, meeting energy demand growth and building a reliable power system.
WTO Members Should Allow Digital Trade to Flourish, Not Constrain It (US Chamber of Commerce)
The World Trade Organization (WTO) recently released its latest global trade projections. The headline: sluggish global trade growth of 1.7% projected this year, well below the average of the past two decades.
That’s not good news for a global economy beset by crises. The value of world merchandise trade was $25.3 trillion last year, a record, though inflated by high global commodity prices. The value of world commercial services trade hit $6.8 trillion, of which digitally delivered services exports accounted for more than half, or $3.8 trillion.
This growth can be attributed to a number of factors, but unquestionably, the longstanding WTO moratorium on the application of tariffs on electronically transmitted digital products has played a catalytic role. This is exactly what it was intended to do, for countries across the development spectrum. It’s also why moves by countries such as Indonesia to end this moratorium are so deeply troubling.
Don’t let SDGs turn into ‘mirage of what might have been’: UN chief (UN News)
The Secretary-General pointed to reports showing that, since the pandemic, the richest one percent of people around the world have captured nearly twice as much new wealth as the rest of the world combined.
Inequalities within some countries, he said, are regressing towards early 20th Century levels, a time when women did not have the right to vote; and before widespread acceptance of the concept of social protection.
The UN’s SDG Stimulus Plan, explained the UN chief, aims to boost investments that will help to achieve the Sustainable Development Goals (SDGs), relieve the debt burden of developing countries, and improving access to funding.
Working group on food security discusses building resilience, financing challenges (WTO)
At a meeting of the WTO’s working group on food security held on 17 April, WTO members stressed the need to enhance agricultural production and productivity in least-developed countries (LDCs) and net food-importing developing countries (NFIDCs) to improve their resilience to the acute food security crisis. Members exchanged insights from the workshop on production resilience that took place on 12 April and continued their discussion on financing challenges. They also reviewed the most recent results from the needs assessment questionnaire.
