tralac Daily News
Rising global demand for South African vegetables (FreshPlaza)
The National Agricultural Marketing Council hosted a workshop on South Africa’s fresh produce chain today in which economist Thabile Nkunjana provided an overview of recent broad trends in international trade and its impact on South African fresh produce. The fresh produce sector has been at the mercy of international turbulence and climate-related problems, made more complex by recent trade restrictions.
“As of March 13, 2023, at least 22 countries have implemented 26 export bans on certain food, ten countries had implemented 14 export limitation measures, affecting specifically onions, potatoes, fruit, and other processed food,” he noted.
Africa remains the largest buyer of South Africa’s vegetable exports, taking almost two-thirds (64%) of vegetables – dominated by onions and potatoes – in 2022.Asia and the Middle East accounted for 10% of South Africa’s vegetable exports, while the share of the European Union is a significant 22%.
“The interesting thing is that from the European Union, because of high energy prices affecting greenhouse production and their vegetable supplies, we’re seeing opportunities there, at least in the short-term, for South African fresh produce.”
The European Union’s Green Deal will have an increasing impact on its trading partners (and it remains South Africa’s largest market for fruit).
UK competes with Europe for South African citrus (Fresh Plaza)
The early citrus season has been characterized by a strong pull from Europe. “Everyone believes EU prices will be better than prices in the UK this season – even though it’s easier to export to the UK – so we’re all trying to maximise our EU volumes,” comments a Western Cape packhouse manager who asks not to be named.
“We’re just hoping that prices on soft citrus remain strong. There are guys who have in the past sent a ‘rough’ class 2 and might be tempted to pack that 5% less strict this year because the European market is empty,” he adds. “There is the temptation to maximise exports now that the market is empty, and after the difficult few years we have behind us.”
In his latest newsletter the Citrus Growers Association CEO Justin Chadwick noted that last year South Africa had overall supplied 7% of Europe’s oranges, with the bulk (87%) from its own orchards in Spain, Italy and Greece.
“If South African fruit was not available over that time, EU consumers would have little oranges available, forcing the consumer to shift to alternative fruit categories.”
Western Cape moves to woo the US as trade tensions rise (BusinessTech)
The Western Cape Government (WCG) has prioritised protecting the Africa Growth and Opportunity Act (AGOA) shared between South Africa and the United States as tension and talk of punishing South Africa’s Russian ties reaches a fever point.
On 13 June, the New York Times reported that a group of influential congressmen had written to US national security and foreign relations officials calling for South Africa to no longer be the host country for the AGOA conference as well as raising questions regarding South Africa’s position in the Act.
As a result of the possible economic headwinds this could bring to the surface, Western Cape premier Alan Winde is leading a delegation of the WCG to the US intending to further promote trade and investment with the province.
Kenya’s restrictions leave Uganda stuck with 24m litres of milk (The East African)
Uganda says Kenya’s restrictions on importing dairy products has left Ugandan processors stuck with 24 million litres of milk.
The Dairy Development Authority (DDA) said that while Nairobi has not imposed a ban, it is limiting the issuance of permits needed to access its market. “It is not like Kenya has issued a formal ban, but this is through a refusal of import permits, which is a requirement for access to the market,” said Dr Samson Akankiza Mpiira, the acting Executive Director of DDA.
Agriculture Permanent Secretary Maj-Gen David Kasura Kyomukama said besides promoting local consumption through school milk-feeding programme, the government will export to other countries due to Kenya’s restrictions.
“Those who are slow in clearing imports from Uganda are playing with fire. They buy maize from our gardens,” he added.
Kenyan tea exports take 26pc hit from Sudan war (The East African)
Kenya’s tea export dropped 26 percent in the first quarter of the year, taking a hit from the civil unrest in Sudan. Sudan, which is among the top five export destinations for Kenyan tea, has already seen the volumes shipped to the destination decline by 59 percent with traders projecting less imports by Khartoum in the coming months should the civil strife continue.
The Tea Board of Kenya says the total volumes exported in the review period was 99.8 million kilogrammes, a drop from the 135 million kilos recorded in the corresponding period last year. “Lower export volumes were due to less imports by Pakistan, Egypt and Sudan owing to challenges of forex reserves affecting these markets,” said the directorate.
Traders have lamented that it is becoming difficult for tea to access the Sudan market because of the challenges caused by war, which has cut demand for the beverage and posed a logistical nightmare for shippers.
Rice processing in the country has received a boost following the introduction of a new processing technology known as Colour Sorter. The Colour Sorter machines have the ability to sort out unwanted solid materials using higher-resolution sensors, leaving the rice grains clear and of high quality.
The technology is an initiative of a Japanese company called Satake, which has entered into an agreement with local processors for supply and maintenance. Processors say they are optimistic that the rice sorting technology will open more export markets to Tanzania-produced rice, whose quality has been the stumbling block.
The Director of Mechanization and Irrigation in the Ministry of Agriculture, Ms Anna Mwangamilo, encouraged farmers to grow more rice to help the government achieve the 2019–2030 National Rice Development Strategy (NRDS) phase II.
“The aims of NRDS are to sustain rice self-sufficiency, contribute to regional self-sufficiency, be a rice market leader, and be well positioned to become competitive through improvement of quality, quantity, and value of the produced rice,” she said yesterday. In recent years, rice yield has risen, but quality has remained a challenge. The main goal of NRDS II is to make Tanzania sufficient and a major exporter of rice to the East Africa Community (EAC) and the Middle East.
Ngozi Okonjo-Iweala, Director-General, World Trade Organisation: Interview – Nigeria Economy (Oxford Business Group)
Nigeria has forged closer trade ties with other countries since 2000, particularly with China and India. After the Covid-19 pandemic, trade levels rose substantially. However, Nigeria is still dependent on the export of raw materials and should diversify its economy to integrate further in global value chains.
Nevertheless, Nigeria has the will and the power to diversify and profit from the opportunities that trade offers, particularly in the region. The African Continental Free Trade Area (AfCFTA) is key in this respect, but it will require further liberalisation and trade facilitation to increase productivity and investment. Free trade zones (FTZs) are equally critical, as they provide support to trade through increased competition, economies of scale, investment incentives and better resource utilisation. FTZs, however, must be properly equipped with infrastructure and allowed to function as intended. Another critical tool is special economic zones to spur exports, thereby promoting economic growth by incentivising specified sectors and industries.
To ensure that Nigeria and the rest of Africa reap the benefits of AfCFTA, it will be important to have a strategy that addresses both tariff and non-tariff barriers, and cuts trade costs, which for African countries are the equivalent of a 304% tariff on average. Africa should aim to double its share of world trade within the next decade by adding more value to its products and becoming part of global value chains.
The World Trade Organisation’s responsibility is threefold: to keep markets transparent, open and equitable. By reducing trade barriers, countries like Nigeria can benefit from predictable access to other markets, and the protection and guarantees that a rules-based, multilateral trading system offers.
As part of its Vision for 2030, the Egyptian State believes in the vital role of green investments for promoting inclusive growth, creating more jobs, and ensuring environmental sustainability, Minister of Planning and Economic Development Hala El-Said said.
Under the Fiscal Year 2024/2025 investment plan, the State targets a 50 percent increase in the share of green investments, added the minister in a speech delivered on her behalf by Heba Shaheen, Executive Director of the Egyptian Initiative for Business Climate Reform “Irada,” during a conference on empowering businesses for green economic development.
As part of a structural reform program, the government took several important steps to create an environment conducive to green investments by rolling out more incentives for the private sector, she said.
Last Tuesday, June 6, 2023, there was a significant gathering of government officials, business leaders, and trade experts at the first leg of the Caribbean-West Africa Trade mission to Ghana.
Hosted by the Caribbean Export Development Agency (Caribbean Export), the mission aimed to foster collaboration and explore emerging areas for trade and investment opportunities between Ghana and the Caribbean.
Benjamin Dzoboku, Managing Director of Republic Bank Ghana PLC, and Mr. Gerald Nsomba, Specialist Trade, and Corporate Finance with Afreximbank, also shared their perspectives on the significance of the Ghana-Caribbean partnership and their efforts to support SME development along with trade and business opportunities between the regions.
The signing of Memoranda of Understanding (MoUs) took place between Caribbean Export and prominent Ghanaian organizations, including the Private Enterprise Federation, Ghana Union of Traders Association, and Ghana National Chamber of Commerce and Industry (GNCCI). These MoUs aim to foster closer collaboration and enhance trade relations between the Caribbean and Ghana, exploring potential partnerships for joint activities and facilitate businesses in key sectors such as renewable energy, agriculture technology and ICT.
Việt Nam and Côte d’Ivoire will strengthen cooperation in agriculture, and facilitate each other to promote the trade of cashew, cotton and cocoa, among others.
The statement was made during talks between National Assembly Chairman Vương Đình Huệ and President of Côte d’Ivoire’s National Assembly Adama Bictogo held yesterday during the latter’s visit to the country.
Emphasising Việt Nam’s increasing position in the international arena, President of Côte d’Ivoire’s National Assembly Adama Bictogo said Việt Nam is a model of success, resilience, an example and an inspiration for many countries in the fight against poverty and underdevelopment.
The two sides agreed that economic-trade cooperation is one of the pillars of cooperation between the two countries, on the basis of cooperation for mutual benefit and development.
The two sides agreed to create maximum convenience for the products that are strengths of each country to penetrate each other’s markets.
China expands Africa investment to boost trade cooperation (Global Times)
China will expand investment in Africa with various measures in a bid to strengthen economic and trade cooperation between the two sides, Chinese officials said on Tuesday. The remarks were made at a press conference held by the Ministry of Commerce and the Hunan provincial department of commerce. The Central China province is to hold the third China-Africa Economic and Trade Expo from June 29 to July 2 in Changsha, capital of Hunan.
Representatives from 50 African countries and eight international organizations have registered to attend the expo. China is willing to sign or update investment promotion and protection agreements and elimination of double taxation agreements with these countries to improve the level of liberalization and the facilitation of trade and investment cooperation, said Deputy Commerce Minister Li Fei at the press conference.
China will continue to encourage domestic firms to strengthen cooperation in China-Africa industry and supply chains by relying on trade cooperation zones in Africa, and China will also organize various exhibition platforms to further tap the potential of the two sides, Li added.
How instant payments in Africa boost development (New Business Ethiopia)
Over 350 million adults in Africa are unbanked and primarily excluded from the formal economy, relying heavily on cash or informal providers for their financial needs, which is costly, risky and leaves them vulnerable to economic instability.
This is according to AfricaNenda, an African-led institution that is working to unlock the potential of inclusive digital financial services on the continent. The institution’s interventions aim at reducing vulnerability to economic shocks by those excluded from the financial system, particularly women in rural areas.
In its inaugural annual report, AfricaNenda highlights its work and achievements to accelerate implementation of more inclusive payment systems across Africa by removing barriers to instant and inclusive payments, accelerating access to digital payments and mobilizing the continent’s digital financial ecosystem for inclusive growth.
The CEO of AfricaNenda, Dr. Robert Ochola said: “Today, the need for a more inclusive society is becoming increasingly urgent. One of the fastest ways to achieve this is by putting in place systems that expand access to financial services and leave no one behind. Instant and inclusive payment systems can play a pivotal role in creating universal access to financial services for all Africans.”
With a population spanning almost 400 million people across 16 countries, the Southern African Development Community has the widest-reaching regional bloc in Africa, holding massive appeal for trade exchanges to strengthen economies and benefit communities. However, unlocking this potential to enable a seamless and regulated flow of money across borders has been one persisting challenge that requires solving.
A new white paper, ‘SADC Regional Payments Interoperability – exploring the value of mutual digital infrastructure to drive more formalised, accessible and inclusive payments in the region’, by BankservAfrica together with Cenfri, explores the region’s cross-border payments landscape.
“With exciting innovations and new product launches, payments is an exciting space in the region. However, these fall short of the one critical need: broad-based and all-to-all interoperability. The ability for money to flow from wallets to bank accounts inexpensively enhances inclusivity, reduces pain points and can encourage the move from cash and informal money send. Achieving this is key to solving the cross-border payments dilemma in the SADC,” explains Ruhling Herbst, Executive Head: Africa Business Development at BankservAfrica.
The biannual meeting of the Southern African Development Community (SADC) Development Finance Institutions (DFI) Subcommittee was held on 9th June 2023 at the Swakopmund Hotel and Entertainment Centre in Swakopmund, Namibia to review progress on the implementation of Annex 9 of the SADC Protocol on Finance and Investment.
In her opening remarks, Honourable Mrs. Hinda-Mbuende Deputy Minister of Finance and Public Enterprises of the Republic of Namibia pointed out the economic downturn and challenges, recent global COVID-19 Pandemic and international geo-politics that have negatively impacted the SADC integrated development agenda which created and continues to create challenges for respective Member States, in terms of providing critical support to DFIs.
Hon. Hinda-Mbuende appealed for a greater consideration and action required by DFIs in terms of innovative, agile and strategic alignment amongst others with the likes of other development partners, financial technology (Fintech) and green climate finance mechanisms, to strengthen the balancing act while executing the development mandate.
The East African Community (EAC) has tabled before the East African Legislative Assembly (EALA) the budget estimates for the 2023/2024 Financial Year totaling US$103,842,880 for the 2023/2024 Financial Year.
Hon. Amb. Dr. Ezéchiel Nibigira, said that the budget estimates for the Financial Year 2023/2024 were being presented at a time when the EAC economies were experiencing global shocks arising from the on-going Russia-Ukraine war, tight global financial conditions, lingering effects of Covid-19 and the impact of climate change.
“Despite these challenges, economic growth in the region improved to 4.8 percent in 2022 from 3.5 percent in 2021. The strong growth in the region was supported by the good performance of the industry, services, construction, mining and manufacturing sectors,” said Dr. Nibigira.
Hon. Nibigira projected a positive outlook for EAC economies, largely driven by the strong performance of the services sector, prudent government policies and increased public and private investment.
Hon. Nibigira disclosed that the EAC total trade increased by 13.4 percent to US$74.03 billion in 2022 from US$65.268 billion in 2021. “In 2022, EAC total exports to the rest of the world were valued at US$20.139 billion, while total imports from the rest of the world into the EAC amounted to US$53.891 billion. Further, total intra-EAC trade grew by 11.2 percent to US$10.910 billion in 2022 from US$9.810 billion in 2021,” said the Minister.
“The major Intra-EAC traded products are cereals, cement, iron and steel, live animals, petroleum products, sugar, foods and beverages, which signify that our economies are agro-based with good signs of moving to industry-based.”
On priorities for the 2023/2024 FY, Hon. Nibigira said that the Community would focus on nine (9) priority areas, including harmonisation of trade related policies, laws and regulations, and streamlining of customs and trade facilitation systems for increased trade and investment
Building Back Better from the Coronavirus Disease (COVID-19) while Advancing the Full Implementation of the 2030 Agenda for Sustainable Development
The Africa Sustainable Development Report (ASDR) for the year 2022 comes at the midway of the implementation of the 2030 Agenda for Sustainable Development to which world leaders, including African leaders, made commitments in 2015, to end extreme poverty, inequality and climate change by 2030. In addition, the ten-year implementation plan of the African Union’s Agenda 2063, titled, “the Africa We Want,” that was initiated in 2013, ends in 2023. This report is also paramount because it covers the period when the Covid-19 pandemic and the Ukraine-Russia crisis emerged with significant bearing on the implementation of both agendas.
It tracks the performance of all African countries using latest data and highlights critical areas that require urgent policy interventions. The report also provides a benchmark with which to assess the scale of the impacts of both shocks on the SDGs. Overall, African countries need to invest in building and strengthening the capacities of national statistical offices for better and timely collection of highly disaggregated data that tracks the implementation of the SDGs and Agenda 2063.
New partnerships and sources of development financing are required to meet the rising needs of future development in Africa. Both regional development banks, as well as the Bretton-Woods institutions, need to urgently step up their efforts to boost their financial support to African countries. African governments should aim to strengthen domestic resource mobilization through accelerating digitalization, improving tax policy and administration, curbing illicit financial flows, and creating the enabling governance, legal and judicial frameworks for enhanced accountability, transparency, and participation.
ICYMI: African Food Systems Can Produce $1trn In Value – AfDB (The Tide News Online)
African Development Bank (AfDB) President, Dr. Akinwumi Adesina, has said African food systems have the potential to produce $1 trillion in value over the next seven years.
Addressing the ongoing Eighth Africa Agribusiness and Science Week (AASW) in Durban, South Africa, Adesina said, “Working with development partners from around the world and the AUC, the private sector companies, and global and national agricultural research centers, we developed Food and Agricultural Delivery Compacts for 41 countries”.
According to him, partners to the summit have built on its success, mobilising $72 billion so far, to support the national compacts.
FARA’s Chairperson, Alioune Fall, spoke about the interlocking relationship between climate change and agricultural production. “Climate change and its effect on the continent require new ways of doing things in almost all facets of our society”, he said, adding: “Africa’s young farmers would not adopt nature-based approaches unless they are well packaged, affordable and technology-serviced”.
The special presidential representative for the United States (US)-Africa Leaders Summit, Johnnie Carson, said the global superpower remained committed to maintaining strong trade ties with the African continent.
The reassurance from the US special presidential representative came after the summit that intended to tighten programmes on shared priorities, something the Biden Administration believed faltered with Trump’s presidency.
Carson spoke at a media briefing arranged by the US Department of State’s Bureau of African Affairs on Tuesday. “The United States has been the continent’s strongest partner in the most important areas of development over the last three or four decades, and a lot of the very great and outstanding work that we do across the continent is not seen as visibly as some other things.”He added that work was being done to address the continent’s energy crisis.
Improved transport and logistics in Africa have immense potential to realise the vision of the African Continental Free Trade Agreement (AfCFTA). The AfCFTA envisions a borderless Africa, removing barriers to trade and investment by eliminating tariffs on most goods and harmonising customs procedures, while encouraging entrepreneurship and foreign investment, and promoting the free movement of people and capital.
During a recent online panel discussion, various challenges and opportunities were placed on the agenda to be unpacked at the shows later this year.
Beatrice Chaytor, Head of Division – Trade in Services of the AfCFTA Secretariat in Ghana believes once the AfCFTA is fully implemented, traffic routes across air, ports, rail and road travel will improve. “There are significant opportunities for investors in vital infrastructure like airports, warehousing, cold storage and more, and with tourism on the continent back to 88% of pre-pandemic levels for the first quarter of the year, ensuring a robust and reliable transport and logistics system across the continent makes good business sense.”
African Medicines Agency set to start work in Rwanda (Modern Diplomacy)
The African Medicines Agency (AMA), a newly launched continental regulatory body for medical products, is set to start its work, with its headquarters in Rwanda. Rwanda was selected to be the host of the agency during a 2022 AU Executive Council meeting in Lusaka, Zambia.
AMA is a specialised agency of the African Union (AU) intended to facilitate the harmonization of medical products regulation throughout the AU in order to improve access to quality, safe and efficacious medical products on the continent.
Many AU member states including Rwanda ratified the treaty establishing the continental agency and deposited the legal instrument of ratification to the AU Commission. On June 10, Rwanda and the AU signed the host country agreement, an important step in getting the work of AMA started.
The AU Commissioner for Health, Humanitarian Affairs and Social Development, Minata Samate Cessouma, said AMA will hugely contribute to the production of medicine on the continent, and allow it to move across the continent.
Low-income countries face multiple economic challenges—including rapid inflation, food insecurity, costly borrowing, and mounting debt—heightened by shocks from the pandemic and Russia’s war in Ukraine.
As a result, the IMF has revised down its growth projections for low-income countries, where per capita income growth is falling further behind the rates needed to catch up with advanced economies. This threatens to reverse a decades-long trend of steadily converging living standards.
To boost economic growth and put them back on a path to income convergence with advanced economies, we estimate that low-income countries need an additional $440 billion of financing through 2026 from all available sources. As part of this, IMF concessional financing offered at low or zero interest rates will play a key role in helping these countries cushion the impact on growth from ongoing shocks and future crises.
The Data Gaps Initiative was launched in 2009 by the G20 Finance Ministers and Central Bank Governors to close data gaps that were identified in the wake of the global financial crisis. Fast forward to 2021 and – in the midst of the pandemic – the G20 initiated a new phase, covering climate change, household distributional information, data access, fintech and financial inclusion.
Policy advice must be based on hard data. Data sharpens how we understand the economic and financial implications of the world around us—and is particularly important for tackling new and emerging issues like climate change, financial innovation and changes to wealth and income distributions.
But there are still gaps in our data. This impedes our ability to develop and monitor policies—from measures to incentivize cuts in emissions, to regulation that mitigates the risks of rapid financial innovation or helps boost financial inclusion.
Remittances Remain Resilient but Likely to Slow (World Bank)
Officially recorded remittance flows to low- and middle-income countries (LMICs) are estimated to grow by 1.4% to $656 billion in 2023 as economic activity in remittance source countries is set to soften, limiting employment and wage gains for migrants, according to the World Bank’s latest Migration and Development Brief released today.
This edition of the Brief also revises upwards 2022’s growth in remittance flows to 8%, reaching $647 billion. In the post-COVID period of slower economic growth and falling foreign direct investments, remittance inflows have become more important to countries and households, given their resilience as a source of external financing, particularly for LMICs with high external debt.
Gross domestic product (GDP) in the G20 area grew by 0.9% quarter-on-quarter in the first quarter of 2023 according to provisional estimates, up from 0.4% in the previous quarter.
This acceleration in the G20 area in Q1 2023 mainly reflected the reopening of the economy in China, where GDP growth picked up to 2.2% compared with 0.6% in the fourth quarter of 2022. The acceleration was also driven by higher growth in India, 1 where GDP rose by 1.9% in Q1 2023, up from 1.0% in Q4 2022. In Mexico, GDP growth reached 1.0% in Q1 (compared with 0.6% in Q4) and in Japan it reached 0.7% (compared with 0.1%). Several economies returned to growth after contracting in the fourth quarter of 2022: in Brazil GDP rose by 1.9% in Q1 after contracting by 0.1% in Q4, while in South Africa and Korea, GDP grew by 0.4% and 0.3% respectively after contracting by 1.1% and 0.4%.
One of the biggest achievements of MC12 was the conclusion of the binding Agreement on Fisheries Subsidies, the first WTO Agreement with environmental sustainability at its core. This accomplishment has greatly energized our Members and has given them great confidence in multilateralism. And it has encouraged them to do more.
But the adoption of the Agreement did not bring an end to the WTO’s work on fisheries. To the contrary, now that the Agreement is concluded, WTO Members are engaged in three parallel processes to carry the work forward.
First is accepting the new Agreement. To deliver its benefits for the ocean, the Agreement must enter into force, which requires two-thirds of WTO Members to deposit their instruments of acceptance with the WTO.
The second effort underway relates to how the WTO will assist developing and least developed Members in implementing the new disciplines.
The final of the three strands of ongoing work on fisheries is continuing negotiations to resolve the outstanding issues that could not be agreed at MC12, which include disciplining subsidies that contribute to overcapacity and overfishing, along with appropriate and effective special and differential treatment for developing and least-developed Members.
Seven Takeaways From Tracking SDG7: The Energy Progress Report 2023 (Sustainable Energy for All )
Despite a recent slowdown in the global pace of electrification, the number of people without electricity almost halved over the past decade, from 1.1 billion in 2010 down to 675 million in 2021.
The annual Tracking SDG7 report is produced to monitor global progress toward Sustainable Development Goal 7 (SDG7) and to offer a clear picture of how far we still need to go to ensure affordable and clean energy for all by 2030.
The report tracks global, regional, and country progress on energy access, energy efficiency, renewable energy, clean cooking, and international cooperation to advance SDG7. It presents updated statistics for each of the indicators and provides policy insights on priority areas and actions needed to spur further progress on SDG7, as well as related SDGs.