Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

SA has capacity to produce its own pharmaceutical products – President’s advisor (SAnews)

Special Advisor to President Cyril Ramaphosa, Professor Olive Shisana, says South Africa faces challenges in medical products, vaccines and technologies in terms of supply chain management and procurement, despite having the capacity to produce therapeutic goods.

According to Shisana, the country has a well-developed pharmaceutical industry and access to a range of medical products and technologies. “However, access to these is often limited to the private sector due to their high cost.”

“The recent example of issuing a tender to a non-South African supplier instead of a local pharmaceutical state-owned company is an example of policy misalignment that is currently been addressed.

“It would be good for the Department of Trade and Industry to expedite the preferential procurement policy Bill by tabling it in parliament to strengthen the Department of Health’s ability to invoke preferential procurement provisions in law and purchase local products even if they come at a premium because, in the end, this would benefit the economy,” she explained.

Automotive trade performing strong after pandemic (Engineering News)

Although the domestic automotive industry’s recovery to prepandemic levels continued in 2022, it was at a slower pace than in 2021, with many key performance indicators still remaining below the prepandemic levels, the 2023 Automotive Export Manual publication released by the Automotive Industry Export Council (AIEC) on May 5, shows. The manual states that, in terms of trade, however, the industry reflected a sound performance.

The export value of vehicles and automotive components increased by R19.8-billion, or 9.5%, from R207.5-billion in 2021 to a record R227.3-billion in 2022, comprising 12.4% of total South African exports.

IMF Chief Calls Kenya ‘Innocent Bystander’ in World’s Debt Shock (BNN Bloomberg)

The International Monetary Fund’s chief capped a visit to Kenya with an enthusiastic endorsement of its economic management and expressed confidence that the cash-strapped nation would keep servicing its debts. Kristalina Georgieva said that in the IMF’s assessment, Kenya’s debt is sustainable and the administration of President William Ruto is moving swiftly to improve its fiscal position. The remarks come at a sensitive time for the East African nation, with some investors dumping its bonds and questioning its ability to make a $2 billion payment next year.

Kenya is one of several African countries facing growing investor concern about debt and access to funding, with Ghana and Zambia already declaring default and entering into restructuring talks. As of Friday, the African continent as a whole was trading as a “distressed” credit, according to a JPMorgan index, with an average yield of more than 1,000 basis points above the US benchmark.

“Countries that are at the point of needing debt restructuring are still a relatively small group. Kenya is definitely not among them,” Georgieva said in a briefing with reporters on Wednesday in Nairobi. “We think Kenya is a case of innocent bystander. It has been hit by external shocks.”

The $2 billion Rwandan airport that could help African aviation take off (CNN)

Some 40 kilometers south of the Rwandan capital of Kigali in the Bugesera District, construction vehicles and high-visibility vests swarm across an arid expanse of land.

Here, two strips of tarmac are the cornerstone of a $2 billion airport, whose developers want it to be the jewel in the crown of Africa’s aviation industry.

Slated for completion in 2026, the new facility will boast a 130,000-square-meter main terminal building capable of accommodating 8 million passengers a year, a figure expected to rise to over 14 million in the following decades. Adjacent will be a dedicated cargo terminal, capable of accommodating 150,000 tons of cargo a year.

Yet benefits could spread far beyond Rwanda’s borders. The arrival of the new airport will help chip away at the critical problem of a fragmented network of routes that means passengers often have to travel via Europe or the Middle East when flying between African countries.

Jules Ndenga, CEO of Aviation Travel and Logistics Holding, said: “What what’s making it more challenging is the conditions of operating within the African continent. The cost of operations is so much more, whether it’s airport fees, whether it’s ground handling, parking, overflight (flying from one country’s airspace to another’s) – everything is much more expensive. Sometimes up to 50% more than in the Middle East and Europe, which makes the ticket prices even more expensive and makes (some) routes unviable.”

But solutions are touching down, starting with the Single African Air Transport Market (SAATM). First proposed in 2018, if implemented the policy would create a single market for African aviation, facilitating the free movement of people, goods, and services. The continent currently operates under bilateral air service agreements, a highly restrictive policy that makes it difficult to open new routes.

“Liberalization is not an easy subject – even in other regions, it took a lot of time. So, we are working on it. What is missing is the willingness of states to really implement it.”

The UK must seize the big trading opportunities Africa has to offer (Politics Home)

With Africa’s potential as an economic powerhouse, the continent presents an opportunity for investors and trade partners to engage in mutually beneficial partnerships. The UK, with its long history of ties with Africa, is one such partner, and a renewed focus on a trading relationship between the two regions could unlock tremendous opportunities for both.

It was not that long ago that UK’s share of trade with Africa was 30 per cent and now it is less than 4 per cent. Now that we have left the European Union, we are able to engage with Africa on our own terms and are starting to make progress. The UK currently has nine trade agreements with 18 countries across Africa; six Economic Partnership Agreements (EPAs) in sub-Sahara Africa, and three Association Agreements (AAs) in North Africa. However, we need to do more to break down the barriers of trade and work to engage with Africa.

What Africa should learn from Brexit (African Business)

A long-standing commercial truth is that it’s optimal to trade with those closest to you. It’s common sense really – the costs of moving goods are lower, synergies are better, the economies of scale kick in and so on. Africa, for example, is banking a great deal on the benefits that the African Continental Free Trade Area (AfCFTA) agreement will bring to growth and prosperity.

Covid-19, rocketing transport costs and security of supply issues – such as in May 2021, when a single giant ship containing vital manufacturing parts became grounded in the Suez canal for six days – have undermined the age of hyper-globalisation where supply-parts were outsourced to the cheapest places, however far away.

Countries are increasingly seeking to re-source global supply chains to friendly neighbours. The UK faces multiple crises, which can only be overcome in cooperation with our immediate European neighbours: these include catastrophic climate change, the Ukraine war, economic decline

UK ‘obvious choice’ as Morocco seeks to diversify trade (Al-Monitor)

In recent years, trade ties between the two countries have been growing. A trade deal in 2019 was one of the first since the UK voted to leave the European Union in June 2016. Since then, the countries have been signing a spate of partnerships across multiple sectors, including education, transport and renewable energy.

Intissar Fakir, senior fellow and director of the North Africa and Sahel Program at the Middle East Institute, told Al-Monitor: “I think the volume of trade [between the two countries] has increased something like 50% over the past couple of years,” mostly in aviation, automotive and renewable energy.

“For both countries, there’s a lot of advantages to increasing that collaboration,” she added. “In the post-Brexit situation, it makes sense for the UK to reach out to Morocco.” And Morocco, she said, wants to diversify its economic partnerships beyond the EU.

Zimbabwe commits to COMESA regional integration agenda (ZBC News)

ZIMBABWE has pledged its allegiance to the Common Market for East and Southern Africa (COMESA) regional trade agenda, which calls for the refining of competition regulations to reduce monopolies and protect consumer interests.  

The COMESA Competition Commission’s 10th year anniversary in Malawi has created a platform for member states to assess the effects of competition in stimulating industrial growth.

A competition and tariffs law consultant based in Zimbabwe, Mr Alexander Kububa revealed on the sidelines of the celebrations in Malawi this Thursday that commitment by Zimbabwe to focus on increased competition will boost quality of goods and services.

“There is that aspect which we need to focus on that is on identifying competition needs and rectifying challenges so that the competition law is modelled along regional market expectation,” noted Dr Alexander Kububa.

The agreed position is that Zimbabwe should not lag behind in facilitating a competitive climate for local industry by continuously reviewing laws governing company mergers and unfair trading practices.    

Association Laments Over Economic Crisis, Calls for Economy Improvement (Voice of Nigeria)

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Centre for the Promotion of Private Enterprise (CPPE) have called on governments at all levels to urgently work in synergy with relevant stakeholders in fashioning appropriate strategies to improve and stabilize the economy.

They lamented the deplorable state of the economy, stressing that virtually all the sectors are seriously struggling to remain afloat.

Specifically speaking at the second quarter media briefing of the year on socio-economic issues in Lagos state, the President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ide John Udeagbala, said that economy instability in the country has become a worrisome situation.

“It will also address the impact of fuel subsidy removal without adding additional debt burden on the nation. Besides, our ability to provide some basic raw materials internally will help our industries compete better to benefit from the African Continental Free Trade Agreement (AfCFTA),” he said.

Calling on the Federal Government to urgently fix the country’s four refineries, which have remained in comatose for almost two decades to end petroleum products importation into the country, he said this would help generate employment opportunities for the youths.

Africa trade pact could boost economic growth, IMF says (BusinessLIVE)

Africa’s continent-wide free-trade area if successfully implemented could significantly boost economic growth and improve living standards at a time of rising geopolitical tensions and climate change, the International Monetary Fund said in a study.

“Greater trade openness would help countries adapt to climate change and to strengthen food security, including by improving the availability and affordability of food supplies,” the IMF said in its Trade Integration in Africa — Unleashing the Continent’s Potential in a Changing World report. “More diversified and broad-based trade would reduce the impact of disruptions in specific markets and products that could result from shifts in global trade patterns.”

To obtain the full benefits of AfCFTA, which could be the world’s biggest free-trade zone by area when the treaty becomes fully operational by 2030, large cuts in tariff and nontariff trade barriers among African nations will be needed, the IMF said in the report.

The IMF also found that comprehensive reforms along with the AfCFTA implementation could increase the median merchandise trade flow between African countries by 53% and the rest of the world by 15%. That could raise the median per-capita GDP in Africa by more than 10% and lift as many as 50-million people in the world’s poorest continent from extreme poverty by 2035, it said.

WTO: Africa to Benefit from Ocean Sustainability If Fisheries Subsidies Agreement is Secured (This Day)

Africa stands to gain greatly from strengthened ocean sustainability if the World Trade Organisation (WTO) agreement on fisheries subsidies and further outcomes from the second wave of negotiations are secured by the 13th Ministerial Conference (MC13) of the global trade body expected to hold in February 2024.

The Deputy Director-General, WTO, Angela Ellard, who made the remarks at a workshop on fisheries subsidies organised by the WTO for English-speaking African countries held in Zanzibar, Tanzania, highlighted the urgency of improving the sustainability of marine fisheries and the importance of collective action by all governments.

She noted that with over 12 million people in Africa depending directly and indirectly on the marine fishing industry for their livelihoods, it, “is crucial that we work together toward sustainable management of our ocean resources.”

Capacity building of ECOWAS Member States towards operationalising the implementation and monitoring mechanisms of the Digital Transformation Strategy for Africa 2020-2030 (ECOWAS)

Experts from Member States of the Economic Community of West African States (ECOWAS) involved in the process of achieving a Digital Africa were sensitized on the Digital Transformation Strategy (DTS) for Africa, and the Monitoring, Evaluation and Learning Framework (MELF) 2022-2030 from 26-28 April 2023 in Abuja, Nigeria.

Addressing the opening session of the workshop, Mrs Mihret Woodmatas, Senior Information and Communication Technology (ICT) Expert of the African Union Commission (AUC), recalled that the DTS 2020-2030 aims to create an integrated and inclusive digital society and economy in Africa, driven by digital technologies and innovation to promote continental integration, inclusive broad-based economic growth, boost job creation, bridge the digital divide and eradicate poverty.

She was followed by Mrs Marie Ndé Sène Ahouantchédé, who spoke on behalf of Mr Sédiko Douka, Commissioner for Infrastructure, Energy and Digitalisation. Mrs Ndé Sène Ahouantchédé reiterated the commitment of the ECOWAS Commission to serve as an intermediary and to provide unfailing support at the regional level for any action aimed at coordinating digital transformation in line with the region’s ambitions for socio-economic development and integration.

She also recalled the coordination dynamics of the digital transformation launched by ECOWAS and manifested through the organisation of the first Experts’ Forum on e-Governance on 28 and 1 March, and a workshop on the Internet of Things and Emerging Disruptive Technologies held on 29 and 30 March 2023, to leverage the potential of digital technology and thus help tackle the challenges and meet the ambitions of the region, including the 4×4 Strategic Objectives 2022-2026 of the ECOWAS Management.

ATPC reaffirms its commitment to contribute to the AU Theme of the Year 2023 – “Acceleration of AfCFTA Implementation” (UNECA)

Addressing the opening of the third African Trade Policy Centre (ATPC) Steering Committee Meeting (SCM) in Accra, Ghana, Mr. Karingi said while celebrating the AfCFTA, Africa is now mulling its next steps towards a customs union and a common market. Thanks to the AfCFTA, Mr Karingi added, the continent was no longer a helpless bystander as developed countries pursued their own strategic interests at Africa’s expense.

Stephen Karingi, Director of Regional Integration and Trade Division at the Economic Commission for Africa (ECA), called on African countries to expedite the reform of their domestic policy and institutional landscape to boost intra-African trade and accelerate economic transformation through effective implementation of the African Continental Free Trade Area (AfCFTA).

“The AfCFTA now offers the perfect platform for Africa to pursue policies of strategic autonomy just like everyone else is doing,” Mr. Karingi told participants, underlining that the AfCFTA was a development tool that can help Africa tackle many challenges such as food insecurity, joblessness, marginalization and health insecurity.

“The AfCFTA can help Africa fix its macroeconomic challenges, address food insecurity, overcome the predicament of jobless growth, and serve as a tool for inclusive and sustainable development. All this is possible, but only if we fully implement the AfCFTA and unleash its potential to the full,” said Mr. Karingi.

Why Africa consumes what they do not produce (Monitor)

Recently, the East African Community (EAC) started moving towards harmonising trade among its member countries where it hopes to have one test, one standard and one certificate. However, while trade harmonising among African trade blocs has been going on, ensuring member countries can trade among themselves, trade amongst African countries is yet to happen. Therefore, the next step, according to Mr David Livingstone Ebiru, the executive director of Uganda National Bureau of Standards (UNBS), is to create a harmonised trade among African countries.

“While there is 1.3 billion people in Africa, there is only 16 percent trade among African countries. The irony is that while many African countries are drawn to trade with other trade blocs, these have rejected our goods on grounds of product quality. Additionally, several trade blocs have also used the issue of standards against Africa,” he says.

Mr Odrek Rwabogo, the presidential advisor on export and industrial development points out that our major exports are horticulture products and European standards keep getting tighter to protect their population but also limit our sales.

“If the importers detect something that goes against their standards, the destruction is done for the whole consignment and at the importer’s cost. We lose between $100m and $180m in interceptions. While all that affects our revenue, it also destroys our reputation as we are looked at as those with wanting standards. We need to be smarter with the standards that are regularly updated.

Africa’s $1trn agribusiness pot open to investors by 2030 (Businessamlive)

Africa’s agribusiness sector is predicted to grow to become a $1 trillion business by 2030. Already, leaders of the continent’s top agribusiness companies, while sharing their thoughts on the future of the industry, believe that agribusiness will become the ‘new oil’ on the continent.

“By transforming Africa’s agriculture sector, it will become the engine that drives Africa’s economic transformation through increased income, better jobs higher on the value chain, improved nutrition, and so on,” Blanke said in a remark at an Africa Investment Forum (AIF) session titled, Agribusiness: Investment Conversation with Industry Leaders.

Jennifer Blanke, vice president for agriculture, human and social development at the African Development Bank (AfDB), says agriculture is a key priority for the pan-African multilateral development bank through its Feed Africa strategy.

German chancellor, on ‘charm offensive’ in East Africa, backs G20 seat for AU (The North Africa Post)

Germany supports the inclusion of the African Union (AU) in the G20 group of nations, the country’s Chancellor, Olaf Scholz, said on Thursday, May 4, as he arrived in Kenya on a three-day trip in East Africa, that will also take him to Kenya. The visits are meant to advance talks on trade and co-operation pacts with the two countries.

Scholz’s tour is widely seen as part of a European effort to make inroads with countries of the so-called Global South and push back against Russian and Chinese influence. Berlin — much like Washington — is convinced that Western democratic nations can make better partners with Africa than can China that has faced criticism for its so-called ‘debt-trap diplomacy.’

Beijing has been accused of using its Belt and Road Initiative (BRI) as part of a manipulative global strategy, funding major infrastructure projects especially across Africa, which has turned it into the world’s largest government creditor to developing nations, with poorer borrowers struggling to manage their debt loads. Hence the EU and the US have touted their own alternatives to the BRI, but both schemes rely on private lenders, making their prospects uncertain.

Intergovernmental Group of Experts on E-commerce and the Digital Economy, sixth session (UNCTAD)

This Intergovernmental Group of Experts aims to strengthen the work of UNCTAD on information and communications technologies, e-commerce and the digital economy for development, so as to enhance its ability to support developing countries to engage in and benefit from the evolving digital economy, and reduce the digital divide, for the creation of more inclusive knowledge societies.

Agriculture: The Black Sea Grain Initiative is approaching a critical moment, with potentially large impacts on global agricultural prices (Credendo)

18 May is on the agenda of all observers of international trade. On that date (small delay is possible), we will know if the Black Sea Grain Initiative is extended. Until now, the Black Sea Grain Initiative has been key to moderate global prices of grains (see first graph below). Indeed, according to official figures of the United Nations, 56% of exported commodities via the agreement are destined for developing countries.

However, for the moment, Russia indicated that it would not renew the deal if sanctions against Russia were not lifted beforehand. In the event the agreement is not renewed, the risk for ship owners will be too high and they would stop shipping Ukrainian agricultural products. Consequently, a non-renewal would put a lot of pressure on Ukrainian farmers, who are stuck with high stocks of cereals, while the rest of the world – mainly developing countries – would face an umpteenth food shortage combined with higher grain prices.

Bridging the SDG’s financing gap (Observer Research Foundation)

India’s G20 Presidency coincides with the rapidly increasing dangers posed by climate change, rising inequality, and the looming threat of an economic recession. Nonetheless, it offers New Delhi a unique opportunity to shape the post-pandemic development narratives, and to delineate and advance a new global development discourse from the perspective of the Global South.

The Decade of Action is quickly approaching its deadline, as progress towards achieving the Sustainable Development Goals (SDGs) falls perilously behind in many parts of the world. One of the most significant concerns for the countries of the Global South is the massive shortfall in financing required to achieve the goals. It is estimated that developing countries face an annual deficit of US$ 1.7 trillion in SDG financing, while more than US$ 4 trillion accounts for the annual gap in closing the SDGs for the world. It is the least developed countries that face the biggest hurdles. Table 1 illustrates that GDP growth in these countries would need to reach heights—seemingly insurmountable given current trends—to meet the required financial investments for achieving SDG targets 8.1, 1.1, and 9.2 by 2030.


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