tralac Daily News
Mpumalanga Businesspeople Confident African Continental Free Trade Agreement will Improve Ease of Doing Business (Department of Trade, Industry and Competition)
The Mpumalanga businesspeople who attended the African Continental Free Trade Agreement (AfCFTA) awareness workshop in Mbombela last Thursday are confident that the agreement will provide them with export opportunities across the continent and improve the ease of doing business to address the challenges in order to enable them to trade effectively.
According to the President of National African Farmers Union in Mpumalanga, Mr Jabu Mahlangu, one of the biggest challenges that farmers are faced with is at the Lebombo border post where there is an estimated 1 500 trucks per day crossing to and from South Africa. He said there is a system blockage at the border.
“Some of our members export fresh produce that cannot be kept in trucks at the border for the whole day. The cost of keeping the machinery operational at the border gate is extremely high. We are therefore urging the South African officials to urgently deal with the border post challenges. We also recommend that there should be clearance away from the border post for bigger trucks that are clogging the system. This can fast-track crossing the border. We are confident that the workshop today did not only share opportunities but will look into the challenges we are facing. We want effortless and seamless movement of goods and people between South Africa and Mozambique so that our produce can find their way to the hotels and restaurants there on time and in good condition,” said Mahlangu.
Agriculture Master Plan still doable but needs adjusting (Engineering News)
Agricultural Business Chamber of South Africa chief economist Wandile Sihlobo has asserted that the implementation of the Agriculture and Agroprocessing Master Plan (AAMP) is still doable. However, it needs to be adjusted and treated as a recovery plan.
Speaking during a webinar on June 20, he noted that many of the issues addressed in the AAMP had become much more complex over the last year and that South Africa would need to adapt it to the current context.
During the webinar – which is part of a series called ‘Think Big’, hosted by financial investment consulting firm PSG and facilitated by journalist Alishia Seckam, which examines some of the most pressing issues impacting South Africa‘s economic development – Sihlobo reflected on whether the master plan was still fit for purpose given the heightened level of local and global challenges in the operating environment.
INDIA is South Africa’s second largest trading partner within the BRICS (Brazil, Russia, India, China and South Africa) grouping.
In 2022, China accounted for 9.4% of South Africa’s exports, while India had less than half that at 4.5%, according to the South African Revenue Service (Sars). China dominated South Africa’s imports with a 20.2% share while India’s share was around a third of that at 7.2%.
In rand terms, exports to China totalled R188.4 billion, while exports to India were R90.1bn. South Africa imported R367.4bn from China and R130.6bn from India, resulting in a trade surplus in favour of China worth R179bn and in favour of India of R40.5bn.
In 2010, South Africa still enjoyed a trade surplus with India of R1.4bn as trade with India was only starting to expand. In 2010, South Africa only exported R22.1bn to India resulting in a 3.3% share, while imports from India were R20.8bn for a 3.4% share.
What has changed is that imports from India have seen a switch to higher value added vehicle imports.
The African Development Bank’s Urban and Municipal Development Fund is partnering with the Eswatini Water and Agriculture Development Enterprise on a new urban planning project, closely linked with the development of a transformative agro-industrial hub which will boost economic activities and to attract tens of thousands of workers.
The Fund approved a grant of $400,000 to the “Eswatini New Eco-Green City Masterplan” on 8 June this year. The grant will support the planning of a new urban area in the Shiselweni region of the country, where population and economic activities are expected to grow quickly over the next few years.
The project includes the setting up of a special agro-processing zone, to be undertaken by the Eswatini Water and Agriculture Development Enterprise (ESWADE), as a public-private partnership. The project will generate approximately 100, 000 jobs for workers, creating the need for housing, health and education services for workers and their families.
One hurdle will be to accommodate the influx of workers stimulated by the growth of the agro-industrial complex. A well-planned new eco-city is expected to provide high quality services for the population, stimulate economic diversification, create sustainable employment and reduce poverty in the area, while safeguarding the environment.
“Climate adaptation and mitigation approaches and solutions will be at the center of the urban planning, solutions and sector investment development,” Stated Marcus Mayr, UMDF coordinator, who presented the project during the Oversight Committee.
Over the course of 2022, Gabon’s economy has benefited from high oil prices. However, the rise in global energy prices has also led to high fiscal cost which is affecting social spending for the most vulnerable and impacting the environment. Released today, the latest edition of Gabon Economic Update highlights the importance of implementing adequate reforms to limit the economic, environmental, and social costs of fuel subsidies, while strengthening social protection programs to support the most vulnerable and improving fiscal sustainability.
Gabon’s economic recovery picked up, reaching 3.1% in 2022. The country’s trade balance and its public finances have benefited from high commodity prices and a good performance of commodity exports such as oil, timber and manganese. As a result, Gabon recorded its strongest budgetary surplus in 2022 since the 2014 oil price shocks.
However, combined with the impact of the Russian invasion of Ukraine, the prolonged effects of the COVID-19 pandemic on global supply chains have pushed up global food and energy prices. As the Gabonese population, particularly the most vulnerable, was increasingly affected by inflationary pressures, the Government increased spending on fuel and food subsidies to contain the rising cost of living.
The African Export-Import Bank’s 2023 edition of the African Trade Report (2023ATR) examines trade and economic developments in Africa and other parts of the world during 2022, a period during which the world economy witnessed a sharp synchronised global deceleration on account of a confluence of overlapping global crises including the lingering effects of COVID-19, particularly in China, where the country’s “Zero COVID” policy led to a sharp reduction in output; heightening geopolitical tensions stoked by Ukraine crisis; increasing risk of fragmentation exacerbated by geopolitical tensions; and the persistence of trade wars among others. Global GDP expanded by a mere 3.4 percent – down from 6.3 percent posted in 2021. Additionally, disruption in global supply chains has been exacerbated by the ongoing Ukraine crisis, while record high inflation and tightening global financial conditions have increased the risk of debt crises, especially in low income and developing market economies that have limited options for refinancing – these fallouts amplify the challenges of globalization where trade is dominated by manufactured products.
Southern Africa youth consultative workshop on AfCFTA set for Windhoek (Namibia Economist)
The Ministry of Industrialisation and Trade (MIT) in collaboration with the Ministry of Sport, Youth and National Service and the National Youth Council will host a two-day Southern Africa Youth Consultative Workshop on the Africa Continental Free Trade Area Agreement (AfCFTA) Protocol on Women and Youth in Trade, from 22 to 23 June.
In partnership with the AfCFTA Continental Secretariat, Youth for Tax Justice Network Africa, and with the support of the United Nations Development Programme and European Union Delegation to Namibia, the Consultative Meeting will bring together young people and women in business, Government officials, and youth leaders across the SADC region to, among others, galvanise action and mainstream youth voices towards a common voice on the AfCFTA Protocol on Women and Youth in Trade and foster a deeper awareness of challenges faced by young entrepreneurs, producers, and traders across the region.
The outcome and recommendations derived from the workshop will culminate into a Report containing strong policy and programme recommendations that will inform the design of national policies and complementary measures to address and remove systematic barriers so that women and youth share in the gains of the AfCFTA Agreement.
Disruptions push Africa to the back of the queue (fDi Intelligence)
The African Continental Free Trade Area (AfCFTA) has long been celebrated for its potential to create the world’s most populated economic bloc.
Secretary-general Wamkele Mene believes the recent disruption in global value chains has once again pushed Africa to “the back of the queue”, strengthening the case for the development of more intertwined and resilient African value chains.
Q: How does the AfCFTA fit the global push for nearshoring? A: The events that unfolded from the Covid-19 pandemic are good examples of the urgency facing the AfCFTA. During the pandemic, global supply chains were disrupted. Individual countries imposed export restrictions on the critical tools that were required to fight the pandemic, at least in the first six to nine months. That pushed Africa to the back of the queue for things like vaccines, antiseptics and masks, because we are so reliant on these global supply chains and Africa’s productive capacities are very low.
Then the war in Ukraine happened. Last year, I visited an African company that manufactures car seats, and they told me they had to suspend production for months because they couldn’t get the wiring harness produced in Ukraine that they required. But that wiring harness is produced with copper that comes from Zambia, and then gets sent back to Lesotho for the production of the cast. These are clear examples that when global supply chains are disrupted, Africa suffers. People lost jobs in Lesotho because for three to four months there was no production.
What this reinforces is that SEZs are absolutely essential for Africa to be able to establish an alternative and more resilient supply chain without disengaging completely from global supply chains. Otherwise, we will be forever at the mercy of global supply chains. And when there’s disruption, we will forever be at the back of the queue.We have to develop self-sufficiency and the productive capacity in priority areas. SEZs are an essential part of creating that local productive capacity.
The 46th Ordinary Session of the Permanent Representatives’ Committee (PRC) kicked off on 19 June 2023, in preparation for the 43rd Ordinary Session of the Executive Council and the 5th Mid-Year Coordination Meeting between the African Union, The Regional Economic Communities and the Regional Mechanisms to be held from the 13-16 July 2023.
Speaking on activities carried out under the theme of the year 2023, the Deputy Chairperson underscored the need to enrich the report submitted to the consideration of the PRC. “The report on the activities carried out under the theme of the year 2023 will certainly be a source of inspiration to appreciate and enrich the policy brief and the roadmap for the theme of the year 2024 devoted to education,” emphasized Dr. Monique Nsanzabaganwa.
The Deputy Chairperson of the AU Commission, concluded her statement by encouraging the members of PRC to conduct a critical reflection in order to improving the operational performance of the continental organization. “The African Continental Free Trade Area confirms and strengthens its first steps in the deployment of its action plan. The report concerning it, submitted for your consideration, I am sure, will provoke your desire to see it grow at an accelerated rate to achieve the objectives assigned to it in the well-understood interest of the affirmation of the commercial presence of the Africa on the international stage,” said Dr. Monique Nsanzabaganwa.
EAC coffee, avocado exports grow amid Covid-19 hiccups (Tanzania Daily News)
Export of coffee and avocados from the East African Community (EAC) to the Europe Union (EU) have grown by 35 percent and 7 percent respectively from 2018 and 2022. A report provided by the EU-EAC Market Access Upgrade Programme (MARKUP), a development initiative started to grow EAC’s agri-export trade, indicates that export of the two commodities also blossomed within the region in the four years of the program.
“The (EAC) region was not spared the far-reaching effects of the COVID- 19 pandemic. Despite these challenges, great milestones on exports of agri-based products, including MARKUP priority value chains, were recorded,” the report reads in part.
MARKUP is a regional development initiative of the EAC and the EU that provides support to small and medium-sized enterprises (SMEs) in the EAC.
Speaking during the launch, EAC Acting Director of Trade Flavia Busingye, said MARKUP had created numerous trade opportunities for agri-SMEs in the region. “The campaign “MARKUP: Growing agri export markets” aims to raise awareness of the opportunities in agricultural trade, and to demonstrate that international markets are within reach of East African exporters,” she explained. The EAC official noted that since its inception in 2018, MARKUP has generated useful resources for growth of agri-exports in the five EAC countries.
DP World in Talks to Expand East African Coverage to Tanzania (BNN Bloomberg)
Container terminal giant DP World Ltd. is in talks with Tanzania to manage seven berths at the East African nation’s main port of Dar es Salaam. If successful, the negotiations will expand the the Dubai-based company’s reach on the east African coast, where it already has interests in nations including in Somalia, Eritrea, Djibouti and Mozambique.
Tanzania wants to improve efficiency at the port and upgrade its transport infrastructure in a bid to become a regional trade and logistics hub, Works and Transport Minister Makame Mbarawa told reporters in Dar es Salaam.
Its main rival is Kenya’s Mombasa port to the north and they compete for business from African states such as Democratic Republic of the Congo, Rwanda, Uganda and Burundi. Dar es Salaam also serves as a gateway for Zambia, Malawi and Zimbabwe.
Fresh investment from DP World will help reduce congestion and slash the average stay for a vessel to 24 hours from five days, and speed up clearing times to 60 minutes from 12 hours, Mbarawa said.
COMESA has kicked-off a series of workshops to create awareness about the Single African Air Transport Market (SAATM), which provides for the full liberalisation of intra-African air transport services in terms of market access, traffic rights for scheduled and freight air services by eligible airlines thereby improving air services connectivity and air carrier efficiencies.
The first workshop took place in Mogadishu, Somalia, 18 – 19 June 202, organized by COMESA under the programme on Support to Air Transport Sector Development (SATSD) in Eastern Africa, Southern Africa and the Indian Ocean Region (EA-SA-IO). Malawi, Seychelles and Burundi are next.
In her statement, COMESA Secretary General Chileshe Mpundu Kapwepwe observed that while many air transport markets outside of Africa have been liberalized to a significant extent, most intra-African air transport markets remain largely closed.
“This has affected air connectivity within Africa as air travel costs remain prohibitive and continued to limit the potential for economic growth and development in our region,’’ she noted in a statement presented by Mr. Francis Okome, Air Transport Policy & Regulatory Expert under the SATSD project.
Inside African Union drive to manufacture vaccines (The Independent Uganda)
Ramping up its vaccine and pharmaceutical manufacturing is probably one of the most audacious goals set by the African Union recently and players in the sector say manufacturing can move from the current 1% of local production to about 60% by 2040 In fact, the African Union has a new public health order which also seeks to increase the manufacturing of therapeutics and diagnostics as one of the continent’s pillars to ensure health security for its 1.4 billion people.
“Our ambition is to progressively increase the share of vaccines manufactured within the continent from 1% to 60% by 2040,” Yared Yiegezu Zegiorgis, a Senior Research Data Analyst at the Addis Ababa-based Africa Centres for Disease Control and Prevention (Africa CDC) recently told delegates who met in Uganda to discuss the state of vaccine and pharmaceutical production in Africa.
The AU has already set up and mandated the Partnerships for African Vaccine Manufacturing (PAVM) to develop a framework for action to execute this plan.
According to Zegiorgis, the PAVM framework, which was launched in 2021, is on a multi-stage journey to realize the AU’s new public health order with the current focus being “strategy implementation.”
In an effort to enhance foreign investments, tourism and provide easier access to abundant opportunities within the ECOWAS region, the Authority of ECOWAS Head of State and Government adopted in 2011 the introduction of ECOVISA, a single visa system similar to the Schengen model. The ECOWAS Commission has been tasked with working towards the realization of this visa for Migrants of third countries.
On May 25, 2023, the Directorate of Free Movement of Persons and Migration of the ECOWAS Commission organized the Seventh Heads of Immigration Meeting in Accra, Ghana. The purpose of this meeting was to discuss the implementation of ECOVISA, its related cost, design as recommended by Experts in charge of visa issuance and control drawn from Member States and determine the way forward.
During the Accra meeting, it was recommended that a comprehensive comparative analysis of visa regimes in other continents be conducted to ensure the implementation of ECOVISA aligns with global best practices. Additionally, the Heads of Immigration recognized the need for regular engagement to discuss modalities and assess the progress of ECOVISA implementation at different stages.
ECOWAS has been dedicated to a harmonized approach in implementing the Protocol of Free Movement of Persons since its adoption. Member States prioritize creating a secure environment for migrants and removing barriers to facilitate mobility, particularly for community citizens. This requires a collective effort from all stakeholders and key actors involved in migration management within their respective countries.
Experts pitch for Kenya to join BRICS (China Daily)
As more countries are considering joining BRICS, the bloc of emerging economies, experts in Kenya are now urging the new administration to follow suit for economic and trade benefits.
The 15th summit of BRICS, comprising Brazil, Russia, India, China and South Africa, will be held in Johannesburg, South Africa, in August. The five countries account for over 40 percent of the world’s total population and a quarter of the global GDP. Some 19 countries reportedly have expressed willingness to join the group.
X.N. Iraki, an economist at the University of Nairobi, said Kenya, as a major economy in East Africa, should consider joining BRICS for trade and economic prosperity. Kenya should follow its peers like Algeria and Egypt in Africa in applying for BRICS membership, he said. “This will enable us to create better markets for our agricultural products.” Iraki also suggested that for Africa to grow its economy, there is a need to use local currency to promote intra-Africa trade.
A historic ministerial meeting took place on 14 June in Moroni, the capital city of the Comoros, where blue economy experts and government officials from across Africa gathered around President Azali Assoumani to discuss how to leverage the potential of the oceans, seas and rivers for sustainable development.
The meeting resulted in the adoption of a strategy known as the Moroni declaration, which outlines a common vision and commitment to promoting the blue economy as a key driver of growth, innovation and resilience in Africa.
The blue economy refers to the sustainable use of oceans, rivers and lakes resources for economic and social benefits while preserving the health and diversity of marine ecosystems.
Africa has a unique position in the global blue economy, with 38 coastal states, 90% of its imports and exports conducted by sea, and an estimated value added of $100 billion generated by coastal tourism by 2030. The continent also has 49 million jobs currently generated in the blue economy sectors, and a projected value of $405 billion by 2030.
The participants agreed on a set of priority actions to implement the Moroni declaration, such as deepening trade relationships between Island States and other States throughout the AfCFTA, expanding the regional maritime security architecture for the Western Indian Ocean and advocating for increased public and private investment in; sustainable coastal and marine value chains, promoting, among others, responsible and sustainable fisheries, green infrastructures, ecotourism, renewable energies, and blue innovation.
The Moroni declaration will serve as a basis for engaging with other regions and stakeholders in advancing the blue economy agenda at the global level.
UNCTAD launched on 20 June a new generation Productive Capacities Index (PCI) to help countries make more accurate diagnostics and measurements of their economic performance.
In turn, this can shape more effective policies and their implementation. The PCI measures countries’ abilities to produce goods and deliver services, which are critical for international trade and global production value chains.
The PCI is available through a dedicated online portal with publications, manuals, resources and tools. It maps the productive capacities of 194 economies and provides a better measure of development than other traditional benchmarks such as gross domestic product (GDP). It’s multidimensional and measures economic inputs and potential as opposed to outputs.
UNCTAD Secretary-General Rebeca Grynspan said: “No nation has ever developed without building the required productive capacities, which are key to enabling countries to achieve sustained economic growth with accelerated poverty reduction, economic diversification and job creation.” UNCTAD defines productive capacities as “the productive resources, entrepreneurial capabilities and production linkages that together determine the capacity of a country to produce goods and services and enable it to grow and develop.”
The Chair of the TRIPS Council, Ambassador Pimchanok Pitfield of Thailand, said that since the last TRIPS Council meeting in March, she had met with members in various configurations to try and find common ground on the TRIPS Decision extension. The Chair recognized that no significant progress was made as some domestic consultations were ongoing but stressed her intention to keep working to bridge the existing differences.
The informal meeting “is a further important opportunity for confidence and trust-building which can enable us to continue working on a good footing on these issues and overall on WTO reform,” she told members.
Director-General Ngozi Okonjo-Iweala said the discussions were part of better harnessing the potential of all WTO bodies to address pressing global trade matters and concerns and deliver meaningful results for the benefit of people around the world.
The Committee meeting featured a dedicated session on the particular challenges faced by landlocked developing countries (LLDCs) in the transit of goods.
Concrete solutions were developed at the workshop to address challenges relating to customs formalities, transit guarantees, container seals and tracking, transit corridors and improving support to WTO members in TFA implementation relevant to transit activities.
How Digital Trade Can Drive Africa’s Economic Growth (U.S. Chamber of Commerce)
Digitization has shaped the way millions across Africa shop, bank, and communicate. It has also changed the prospects of the continent’s trade landscape and has the potential to unlock new pathways for economic growth. The next step in Africa’s digital future will be regional, fulfilling the vision outlined in the African Union’s Digital Transformation Strategy for Africa through strong frameworks and policies offered by the African Continental Free Trade Area (AfCFTA) that can help the continent get there.
How the digital economy and regional integration through the AfCFTA can transform African trade, lift economic growth, and support livelihoods across the continent dominated discussion at the latest Kenya International Investment Conference (KIICO.)
At the invitation of the Cabinet Secretary for Trade of Kenya Moses Kuria and the Kenya Investment Authority (KenInvest)’s Managing Director June Chepkemei, the U.S. Chamber’s U.S.-Africa Business Center (USAfBC) was the strategic partner of this year’s conference, “Unlocking Africa’s Gateway.” The conference took place May 29 – 31 in Nairobi, Kenya, on the periphery of negotiations held by the AfCFTA Council of Ministers
The AfCFTA Digital Trade Policy Dialogue was but one of several events organized with the input of the USAfBC, as part of fulfilling its partnership under the historic MOU signed in late 2022 between the AfCFTA Secretariat and the U.S. Chamber—the only private sector organization to sign such an MOU in the world.
Both the AfCFTA and digital trade are poised to be engines of African growth. An interconnected Africa, made possible through the AfCFTA and a single digital African market, will lower barriers to business, trade, the internet, online communication, banking, health care – and much more. Connections throughout the continent are key to bridging digital divides, sparking economic growth, creating jobs, and moving all of Africa into the digital age. The U.S. Chamber stands ready to be a trusted partner and engaged advocate.
UK withdraws duty benefit scheme; to hit Indian exports (The Tribune India)
The UK’s decision to withdraw duty benefit scheme GSP may impact Indian exporters from certain labour-intensive sectors such as leather and textiles as they were the major beneficiaries, according to experts and traders.
The UK is replacing the Generalised Scheme of Preferences (GSP) with a new Developing Countries Trading Scheme (DCTS) from June 19. Labour-intensive sectors, including certain textile items, leather goods, carpets, iron & steel goods and chemicals may get impacted due to this.
“As the UK has come out of the EU, it has designed its own GSP scheme. Each country sets a product-wise threshold limit, if a country’s exports cross the limit, the GSP concessions stop. The UK withdrawing GSP concessions on labour-intensive products was expected as the two countries are negotiating a free trade agreement,” GTRI co-founder Ajay Srivastava said.
The changes include simpler product specific rules (PSRs) and more generous cumulation options for exporters in Least Developed Countries ( LDCs ). For example, leather shoes under Chapter 42 have alternative PSRs. LDCs could either meet a Change of Tariff Heading or satisfy the 75% non-originating material maximum rule.
After the pandemic storms, digital trade offers LDCs rays of sunshine (Trade for Development News)
The dark storm of the coronavirus pandemic came with a silver lining: new ways of providing services and doing business by leveraging e-commerce and other digital opportunities. Video conferencing apps enabled lessons or work to be accessed remotely; mobile apps delivered food, groceries, and medicines at the click of a button.
But silver linings don’t shine bright for all. Gaps in technology, infrastructure and skills, especially in Least Developed Countries (LDCs), highlighted the need to help entrepreneurs grasp the possibilities of digital transformation.
With funding from the Enhanced Integrated Framework (EIF), the United Nations Conference on Trade and Development’s (UNCTAD) E-commerce and Digital Economy Program has conducted many rapid e-trade readiness assessments to identify policies that need to be adjusted to boost e-commerce.
As a result, several countries are investing in infrastructure, such as building e-commerce platforms in Cambodia and Senegal, while also developing skills and payment solutions. Such initiatives require partnerships with key agencies and institutions, and need financial resources to be mobilised through public-private partnerships.