tralac Daily News
Why Nigeria must join BRICS (TheCable)
About five years ago, the Federal Government of Nigeria and China entered into a currency exchange agreement. The transaction, which was valued at Renminbi (RMB) 16 billion or N720 billion was aimed at providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, thereby, reducing difficulties encountered in the search for the United States Dollar. The swap was also designed to improve the speed, convenience and volume of transactions between the two countries.
While other nations are making arrangements to promote their local currencies, the federal government has continued to dollarise the Nigerian economy. Just recently, the Kenyan government signed an agreement with Saudi Aramco to supply fuel and diesel for the next six months, while Abu Dhabi National Oil Company (Adnoc) will deliver three cargoes of super petrol every month. The deal permits local oil companies to pay for oil imported on credit through a government-to-government deal in Shillings to ease pressure on the local currency. Before the deal, Kenya was paying $500 million for the importation of petroleum products per month.
Kenya seeking a 5% share of the African pharmaceuticals market (Engineering News)
Kenyan Roads and Transport Cabinet Secretary Kipchumba Murkomen has highlighted the recently announced policy of President William Ruto to make the country East Africa‘s pharmaceutical manufacturing hub by 2030, and export pharmaceuticals across the whole of the continent. Murkomen was delivering the keynote address at the ceremony for the awarding of the International Air Transport Association’s Centre of Excellence for Independent Validators Pharma certification to Kenya Airways Cargo.
Currently, the Kenyan pharmaceutical industry holds only a 30% share of the country’s domestic pharmaceuticals market, which has a total value of 100-billion shillings (about $732-million), he noted. Although Kenya exports pharmaceutics to the East Africa Community, the Common Market for Eastern and Southern Africa, and elsewhere in Africa, these exports are currently worth only 6.4-billion shillings (a little under $47-million).
South Africa: Increased quota for United States frozen bone-in chicken (Global Compliance News)
The annual quota for frozen bone-in cuts of the species Gallus Domesticus originating in, or imported from, the United States (US) has been increased from 71,290 tonnes to 71,632 tonnes, with retrospective effect from 1 April 2022.
The decision to again increase the quota of frozen chicken that is allowed to be imported into South Africa from the US may be seen by some to be a compromise that must be made for South Africa to continue to benefit from the African Growth and Opportunity Act (AGOA) program.
However, it will hopefully also assist in bringing the price of chicken down for poverty-stricken households. It is also hoped that the South African Customs Union, and South Africa in particular, will soon be able to conclude a reciprocal, mutually beneficial trade agreement with the US that further addresses the challenges around this issue, especially considering that AGOA’s preferential stipulations are set to expire again in 2025.
Tanzania’s coal exports rise seven-fold to hit $224m (The East African)
Europe’s energy crisis caused by the invasion of Ukraine by Russia has seen Tanzania coal exports record seven-fold jump in the year to March due to high demand, latest central bank data shows.
Tanzania, which has 1.9 billion coal reserves of which 25 percent are proven, saw its exports of the fossil fuel surge to $223.8 million.
“Exports of coal edged up to $223.8 million from $31.9 million, induced by rising demand for alternative energy, amid supply challenges caused by the war in Ukraine,” the Bank of Tanzania (BoT) says in its Monthly Economic Review for April 2023.
The resurgent coal demand has also seen the once sleepy port of Mtwara enjoying unprecedented operations and government collecting sizeable revenues from the exports.
RwandaAir launches new African hub with Qatar Airways Cargo, Cargo Hub (International Airport Review)
The new Kigali Cargo Hub is part of a long-term strategic plan for the cargo division of RwandAir, which has seen cargo carried rise by nearly 26% in the last five years. The initiative will help RwandAir develop Kigali into a regional cargo powerhouse, boosting exports and imports around Africa and strengthening links with key overseas markets.
The partnership saw Qatar Aviation Services (QAS) provide consultancy support to RwandAir Cargo to help improve its already highly successful cargo handling performance.
Yvonne Makolo, CEO of RwandAir, said: “We are very proud to partner with Qatar Airways Cargo to launch today the brand-new Kigali Cargo Hub, which will open up new cargo opportunities across Africa. ”Africa is home to a hugely diverse economy, with businesses and entrepreneurs looking for better connections to create new markets and expand inward investment. Together have created a fantastic new facility to meet this growing demand across Africa.”
With the launch of the new cargo hub, RwandAir will continue to offer customers reliable, high-quality cargo services across Africa. It is supported by the entry into service of its first dedicated freighter aircraft – a Boeing 737 – 800- and enabled the launch of new freighter services to the airline’s key destinations across Africa and the Middle East.
Report lauds Tanzania on Malabo Declaration goals (The Citizen)
Tanzania is largely on track in implementing its commitments under the Comprehensive Africa Agriculture Development Programme (CAADP), known as Malabo goals. The country scored higher points than its partners in the bloc in the benchmark on its commitment to cut by half the share of its population that is poor.
“Tanzania and Rwanda stayed on track,” said Mr Furaha Marwa, the principal agricultural economist with the East African Community (EAC). He revealed this here when he tabled a report on the performance of the seven nation bloc on the Malabo commitments aimed to enhance agricultural production. The commitments included, among others, enhancing finance in agriculture, ending hunger by 2025 and halving poverty also by 2025. The others are boosting intra-African trade, resilience to climate risks, mutual accountability and re-commitment to CAADP itself.
Allocate more funding for Agric, EAC partner states told (Tanzania Daily News)
Partner States within the East African Community (EAC) have been challenged to allocate more funds on agriculture. This is in a bid to cushion the sector from the pangs of persistent drought caused by climate change.
Speaking on the sidelines of the sixth EAC Budget Summit hosted by the Eastern and Southern Africa Small Scale Farmers Forum (ESAFF) here midweek, the forum’s chairperson Hakim Baliraine noted that it was high time the partner states started allocating sufficient budget on agriculture in the spirit of Malabo Declaration.
The Ministry of Commerce, Industry and Trade of the Kingdom of Eswatini, in collaboration with the United Nations Economic Commission for Africa (ECA) held a Validation Workshop for the Kingdom of Eswatini’s National AfCFTA Implementation Strategy on 4th May 2023.
Officiating at the meeting, the Minister of Commerce, Industry and Trade Manqoba Khumalo emphasised Eswatini’s need to develop a practical and effective strategy and action plan for the private sector, including MSMEs, “to be better positioned to take advantage of the available market access opportunities presented by the AfCFTA.”
He notes that for Eswatini, one of the objectives of the National Strategy is to leverage deeper integration within the framework of the AfCFTA to facilitate an increase of Eswatini’s trade and investment within the African continent.
Minister Khumalo: “It is also to support structural transformation and foster economic growth and sustainable development, as well as create employment opportunities for all emaSwati, particularly women and the youth, including people with disabilities with the ultimate aim of reducing poverty in the country.”
A successful African free trade area implementation could unlock major benefits for Africa in terms of income, jobs among other things, a report by IMF staff said.
The departmental paper published Friday (May 5) examined the prospects for African trade integration in the context of a changing world amid the climate crisis, risks of geopolitical fragmentation, technological progress, and the continent’s prospective demographic growth.
The 64-page document found that comprehensive reforms combined with the AfCFTA implementation could increase the median merchandise trade flow between African countries by 53 percent and with the rest of the world by 15%. This would consequently raise the real per capita GDP of the median African country by over 10 percent.
The Head of Client Coverage at Stanbic Investment Management Services (SIMS), Desmond Bredu, has underscored the importance of financial literacy, particularly for the youth, in realizing the full benefit of the Africa Continental Free Trade Area (AfCFTA).
Speaking at the ‘Women Lead Forum’ in Accra on the topic ‘Implementing the AfCFTA, Africa’s youth as catalysts for action and its success’, Desmond Bredu said financial literacy was crucial to ensure that the Ghanaian youth are empowered to drive the growth of AfCFTA.
He mentioned that, “There is a lot of potential in our youth to do great things. They have the potential to push the AfCFTA program and create the development in Africa that we all want to see. Unfortunately, all these initiatives and projects will be meaningless to them if they do not have the requisite knowledge and skill needed to sustain and benefit from these programs. Therefore, it is imperative that we provide them with financial literacy that will help them make sense of this project and drive them to develop new and innovative ways to even make it better.”
AfCFTA State Parties currently negotiating Protocol on Digital Trade (Namibia Economist)
The Centre for the Study of the Economies of Africa provided researchers with a platform last week to discuss the findings and policy recommendations for AfCFTA State Parties to consider when negotiating potential rules on cross-border data flows.
Against the backdrop of the African Continental Free Trade Area (AfCFTA) secretariat recently announcing that the Digital Trade Protocol is expected to be concluded in July 2023, Franziska Sucker from the University of the Witwatersrand and another co-author has written a paper titled ‘Regulating cross-border data flows under the AfCFTA Protocol on Digital Trade: The what, why, how, where, and when’, which is currently undergoing peer review for publication in the Manchester Journal of International Economic Law.
It seems likely that negotiators will at least be considering whether to include rules on cross-border data flows (CBDFs) in the Protocol. The researchers’ tack is that negotiators must try to answer five key questions when negotiating rules of this kind.
Top 10 African countries with the best environment for trade (Business Insider Africa)
Some countries tend to create more favorable business ecosystems than others, and often times this single factor is the difference between an economically prosperous region and a struggling one.
While there are other economic components to becoming a thriving nation such as industrialization, exportation, and development of natural and human resources, a fail-safe economy is typically bolstered by its local and foreign direct investment.
To this effect, businesses all across the globe are in constant search of business-enabling economies, particularly in a region such as Africa which is considered the fastest-growing economy of any continent on the globe.
Africa’s largest bank, Standard Bank, recently released its Africa Trade Barometer report, where African countries are ranked based on their business ecosystem. This report is one of the most comprehensive research reports on the state of trade on the African continent as experienced on the ground by real African businesses. It offers a comparative view of the enablers and challenges to facilitating trade across 10 key African markets.
Scholz: We support African-led efforts to build trade and security (The East African)
Visiting German Chancellor Olaf Scholz spoke to Aggrey Mutambo about East Africa’s place in Berlin’s foreign policy.
Q: How can Africa boost exports to Germany and how can bilateral trade increase?
A: “Africa has some of the fastest growing economies in the world, with enormous potential for trade with Germany. Germany produces technologies that are very important for transitioning to carbon-free economies, which African countries could use to benefit from the enormous renewable energy resources that this continent has to offer also to European customers. We should see this as a win-win situation and make the most of it. In 2017 Germany initiated the G20 Compact with Africa, an investment initiative within this group of the most important economies. Kenya is most welcome to participate in this. Germany also strongly supports the African Continental Free Trade Area. This visionary project could raise incomes in Africa substantially and lift some 50 million people out of extreme poverty. Our long-term vision is a continent-to-continent free trade agreement between Africa and Europe.”
In partnership with the UN Resident Coordinator’s Office in Tunisia and the ECA Office in North Africa, the UN-Habitat Office in Tunisia held a dissemination workshop on the project “Uncovering the effects of the Russo-Ukrainian war: How to anticipate and prepare for the repercussions of the Russo-Ukrainian war on food security in Tunisia?” on Thursday 4 May 2023, at the Movenpick Hotel in Tunis.
By 2050, about two-thirds of the world’s population will live in urban areas. This will lead to a distinct set of challenges and opportunities in urban development and food chains. Rapid urbanization challenges include growing vulnerability to climate change, spatial inequalities, migratory pressures and conflicts, as well as difficulties in promoting inclusive prosperity and economic development. In Tunisia, the urban population will reach 70%, hence the need to think about actions, solutions, and strategies for more sustainable, inclusive and healthy food systems that are resilient to shocks, said Aida Robbana, Director of the UN-Habitat Office in Tunisia.
African Maritime Leaders Debate their Role in Decarbonizing Shipping (The Maritime Executive)
Last week, the IMO (International Maritime Organization) and the umbrella body of African maritime regulators AAMA (Association of African Maritime Administrations) held deliberations aimed at accelerating shipping decarbonization in Africa. While green shipping is a complex matter globally, developing nations face a bigger challenge due to limited fiscal space to support maritime decarbonization.
Additionally, some African countries are yet to include the maritime industry in their national development action plans. This is a huge barrier in investing in projects such as green ports and national single window systems, which are key in cutting carbon emissions for the shipping sector.
“Maritime administrations in Africa must act as enablers to facilitate growth of the shipping industry. We must also come out in large numbers at IMO deliberations to ensure our needs are catered for at the global level,” implored Shadrack Mwandime, Kenya’s Principal Secretary for Shipping and Maritime Affairs.
“To raise intra-African trade from the current 15 percent, more cargo ought to be carried on African owned vessels. There is already enough regional cargo to support commercial operation of national and pan-African shipping lines,” highlighted Folorunso Olufunmilayo, the Secretary General of African Shipowners Association.
The average annual GDP (Gross Domestic Product) growth in Africa was 3.4% between 2010 and 2021, according to African Development Bank data. This is well below the targeted yearly average growth of 7%. Combined with population growth, GDP per inhabitant has barely changed.
At the same time, average purchasing power in Africa has deteriorated due to inflation, which has accelerated over the last 10 years. As well as the challenges of governance, the reality of African economies means that periods of optimism have often been disrupted by external shocks such as Covid-19, and the Russian war in Ukraine, resulting in lower GDP growth rates over the last few years.
H.E. Dr Amani Abou-Zeid, African Union Commissioner for Infrastructure and Energy, highlighted the need to advocate for more women in power to participate in the fourth industrial revolution. The remark was made during the celebration of Girls in ICT at the Transform Africa Summit held from 26th -28th April 2023, in Victoria Falls, the Republic of Zimbabwe.
Noting that only 16 percent of ICT Ministers in Africa are women yet they constitute more than half of the population, they called for investment in pro-women and girls policies to empower them to take up decision making positions.
Commissioner Abou-Zeid seized the opportunity to highlight that digital literacy for girls is of high importance and it is in line with AU policy on gender mainstreaming in tech sectors. “Improving the lives and opportunities of women and girls is an explicit objective of the African Union and this is well reflected in Digital Transformation Strategy for Africa and the AU Strategy on Gender Equality and Women’s Empowerment (GEWE),” said Commissioner Abou-Zeid.
WTO Director-General Ngozi Okonjo-Iweala called on members to renew momentum in the discussions on development issues in the run-up to the 13th Ministerial Conference (MC13), to be held in Abu Dhabi in February 2024. Speaking at the General Council on 8 May, the Director-General urged members to continue efforts to build convergence and engage more in frank conversations that would allow the WTO to move forward its agenda.
DG Okonjo-Iweala reported on her recent trip to Ghana, Côte d’Ivoire and Kenya, where she addressed how to strengthen the WTO’s partnership with the region and better help African members take advantage of the opportunities offered by re-globalisation.
“The eyes of Africa are on us, specifically on special and differential treatment. … I therefore encourage you all to work hard and speed up this area of work to constructively engage in line with paragraph two of the MC12 outcome document,” she said.
The ocean holds vast opportunities for developing countries to build more innovative and resilient economies. But climate change, pollution and overfishing threaten those opportunities and the livelihoods of about 3 billion people who rely on the ocean for food and income.
UNCTAD’s Trade and Environment Review 2023, published on 8 May, analyzes the world’s ocean economy – worth an estimated $3-6 trillion – and assesses how human activity and multiple global crises have significantly affected different sectors, including fishing, seafood, shipping and coastal tourism.
The report, presented at the 3rd UN Trade Forum, calls for a global trade, investment and innovation “Blue Deal” to sustainably use our ocean, home to 80% of all life. It builds on the recommendations from the 4th UN Oceans Forum and the 2nd UN Ocean Conference held in 2022.
“The ocean economy offers many opportunities. We must strike the right balance between benefitting from the ocean and protecting its resources,” UNCTAD Deputy Secretary-General Pedro Manuel Moreno said.
At a plenary meeting on 4 May following two days of consultations, WTO members participating in the negotiations on investment facilitation for development (IFD) commended the substantive progress made in the Draft Agreement since the start of this year. The co-coordinators of the talks, Ambassador Sofía Boza of Chile and Jung Sung Park of the Republic of Korea, introduced the latest revision of the draft text, which reflects solid progress towards the objective of finalizing the negotiations by mid-2023.