tralac Daily News
R4.5 Billion Investment Represents a Change in Minerals Beneficiation (Department of Trade, Industry and Competition)
The Deputy Minister of Trade, Industry and Competition, Ms Nomalungelo Gina says the R4.5 billion investment by Nyanza Light Metals and East China Engineering Science and Technology represents an opportunity that South Africa and native Africans can change the resource curse that Africa has been known for, which is being the net exporter of raw materials from gold, diamond, platinum, iron ore and many miners endowment, including titanium.
According to Gina the minerals endowments the continent has, must be beneficiated in Africa and be exported as value added goods. She said Nyanza Light Metals represents that desirable direction of downstream beneficiation efforts.
Survey reveals alarming trends in the SME road freight sector (Engineering News)
Sixty-eight per cent of small and medium-sized road-freight companies have inadequate vehicle maintenance programmes. This neglect of proper maintenance increases the risk of mechanical failures, leading to accidents and disruptions in supply chains.
This was one of the findings of an online survey conducted by JC Auditors (JCA) within South Africa‘s small and medium-sized enterprise (SME) road-freight sector.
“It also has a significant economic impact, especially when considering that the last Road Traffic Management Corporation report indicated the cost of crashes to be R142-billion, or 3.4% of gross domestic product.”
MPs demand scrapping exemption on imported crude palm oil (Tanzania Daily News)
Minister for Finance and Planning, Dr Mwigulu Nchemba has dropped a hint on plans for East African Community Common External Tariff (EAC CET) on scrapping of imported crude palm oil tariff. He said in the National Assembly on Tuesday that the government has heard members of Parliament’s concerns over plans to exempt CET for imported crude palm oil.
Presenting government’s budget in the House last week, Minister Nchemba announced that the government planned to revert back to EAC CET rate of 0 per cent, instead of 25 per cent on Crude Palm Oil (CPO) to protect consumers’ welfare against skyrocketing prices henceforth enhance economic growth.
Members of Parliament expressed concerns over the plan, saying that will discourage sunflower farmers who had bumper harvest this year.
The East African Community was top destination for Uganda’s exports in April 2023, accounting for 39.3 percent of the total market share.
In the performance of the economy report for May 2023, the Ministry of Finance noted Kenya, Congo and South Sudan were the top three destinations of Uganda’s exports to EAC, taking up 35.7 percent, 25 percent and 21.3 percent, respectively.
“Some of the top earning export commodities to Kenya during the month were animal products particularly day old chicks, milk, maize, fermented black tea and sugar,” the report said.
“Increase in exports of mineral products follows the resumption of gold exportation that was on a halt the previous financial year,” the report reads in part, noting, that merchandise export receipts, however, declined to $538.8m (Shs2 trillion) from $681m (Shs2.5 trillion) in March, representing a 20.9 percent decline due to lower receipts from exports of coffee, mineral products and maize.
The trade deficit dropped to $1.9 billion in March 2023, compared to $3.8 billion in the same month a year earlier, according to data released by the Central Agency for Public Mobilisation and Statistics (CAPMAS).
CAPMAS said that the decline happened in spite of a 34.6 percent shrinkage in exports, which declined to $3.75 billion in March, down from $5.7 billion a year earlier. During March 2023, Egypt’s exports of natural gas, fertilizers and crude oil plummeted by 67.9 percent, 54 percent, and 50.5 percent on a yearly basis, respectively. Ready-made clothes exports decreased by 25.3 percent in the same period.
However, exports of fresh fruits inched up 0.7 percent annually in March, while exports of bakeries and prepared foods soared 23.2 percent.
Senegal’s economic growth slowed in 2022, against a backdrop of rising world commodity prices, says the World Bank in its 2023 Senegal Economic Update.A decline in private investment and exports, as well as a contraction in the agricultural sector and industrial production, are at the root of this slowdown. The result is a deceleration in real GDP growth in 2022 of 4.2%, after a strong recovery post COVID 19 in 2021 at 6.5%.
“The country’s growth remains resilient despite multiple crises, and the macroeconomic outlook is favorable. However, this growth needs to be more inclusive, given the inflation that has accentuated poverty in 2022”, said Keiko Miwa, World Bank Country Director for Cabo Verde, Gambia, Guinea-Bissau, Mauritania, and Senegal.
His Majesty King Mswati III of the Kingdom of Eswatini and Chairperson of the SACU Summit will be hosting the 8th SACU Summit of Heads of State or Government on the 29th June 2023, in Ezulwini, Eswatini.
The SACU Summit will be attended by the Heads of State or Government and representatives of SACU Member States being the Kingdom of Eswatini, the host; the Republic of Botswana; the Kingdom of Lesotho; the Republic of Namibia; and the Republic of South Africa.
The 8th Summit will consider progress being made on the implementation of the SACU Strategic Plan.
Professor Ricard Hauman Professor Ricardo Hausmann, Founder and Director of Harvard’s University Growth Lab will present to the Summit on the theme ”SACU Industrialisation Opportunities through Improving Economic Complexity.”
Regional MPs tell EAC leaders to lower flight costs (The New Times)
The cost of air travel within the East African Community (EAC) region is still very high, making flying more of a preserve for those who are relatively well-off, the regional parliament has concluded. It urged the EAC Member State leaders to lower these costs to make travel affordable for citizens.
The East African Legislative Assembly (EALA) made the recommendation on June 20, in Arusha, as it adopted the report of its Committee on Communication, Trade, and Investment on the assessment of the Civil Aviation Safety and Security Oversight Agency (CASSOA)’s performance.
Sub-Saharan economies have for a long time been plagued by foreign exchange shortages, especially against the US dollar, fanning inflationary pressures across the continent as import prices continue to surge. This has left many policymakers across the continent with difficult choices on how to overcome foreign currency liquidity challenges, promote trade finance, and foster sustainable economic growth in the region.
According to industry experts, currencies play a major impact on how trade is conducted across borders globally and Changes in currency exchange rates affect international trade by increasing or decreasing exports and imports.
Gerald Ndosi, head of trade coverage at Bank One, a Mauritius-based full service commercial bank, noted that commodity dependence can affect the volume of dollars available in African markets, as many countries in SSA heavily rely on commodity exports, such as crude oil, minerals, and agricultural products.
“Fluctuations in commodity prices, which are often denominated in US dollars, can lead to revenue volatility, and affect the availability of US dollars in the local markets,” he added.
The Government of Senegal, through the Ministry of Trade, of Consumer and Small and Medium-Sized Enterprises, have launched the Expert work Group Meeting in Dakar on Tuesday for examining the Report of the Study on “The Opportunities of Regional Value Chains in West Africa in the context of the African Continental Free Trade Area (AfCFTA )”.
The Director of ECA/SRO-WA, Ngone Diop affirmed that the multifaceted crises such as the Covid19 pandemic, the war in Ukraine and the climate crisis have slowed down or even annihilated the development efforts of the countries in the West African sub-region as shown by the deceleration of economic growth estimated to an average of -2% in 2020, compared to 3.4% in 2019”.
“In response to these worrisome trends, the positioning of West African economies in value chains, through tariff and non-tariff disarmament, should be an integral part of a more comprehensive approach to the integration of production and trade sectors in the AfCFTA,” explained Ngone Diop.
However, continued the Director of BSR-WA/CEA, “It is necessary to identify and prioritize regional value chains capable of positioning the region as a production and a preferred trade center, competitive within the “single African market”.
Afreximbank champions more intra-African trade at 2023 Annual Meetings opening (Ghana News Agency)
The 2023 Annual General Meetings of the African Export-Import Bank (Afreximbank) opened in Accra on Sunday, with speakers urging Governments to increase efforts to boost intra-African trade and regional integration. That, the speakers said, would contribute to Africa’s recovery process, engender stable economic growth, create employment for its citizens, and reduce poverty on the continent.
Dr Ernest Yedu Addison, Governor of the Bank of Ghana told the gathering that the time had come to reflect on how the continent could meaningfully contribute to Africa’s recovery process after the pandemic. He stressed the need for economies to speed up intra-African trade and improve Africa’s trade performance in the global marketplace through the creation of a single market for goods and services. Dr Addison said Africa must also promote industrial development through diversification and regional value chain development and the Continent.
Mohamed Ahmed Maait, Minister of Finance of Egypt and Chairman of the Afreximbank Annual Meetings, who was represented by Gamal Negm, Deputy Governor of the Central Bank of Egypt, asked Africans to work collaboratively towards finding integrated solutions to the new challenges confronting the continent.
“If trade barriers were eliminated but there was no trade finance, all the efforts would come to nothing. At the same time, if trade finance was available but trade barriers persisted and prevented trade, then all the efforts would still have been wasted,” said Wamkele Mene, Secretary-General of the AfCFTA Secretariat.
The African Export-Import Bank (Afreximbank) yesterday in Accra launched the Africa Trade Gateway (ATG), a suite of five digital platforms that have been designed as a single window to enable the Bank better deliver on its mandate by providing critical services to support and promote African trade and the implementation of the African Continental Free Trade Agreement (AfCFTA).
Launched by Mrs. Kanayo Awani, Executive Vice President, Intra-African Trade Bank, of Afreximbank on the sidelines of the ongoing 30th Afreximbank Annual Meetings (AAM2023), the gateway digital ecosystem comprises the MANSA due diligence platform, the Pan-African Payment and Settlement System (PAPSS), the TRADAR Club, the Africa Trade Exchange (ATEX) and ATG Connect.
Addressing guests at the launch, Mrs. Awani said that Afreximbank’s digital evolution was part of its deliberate strategic response to address Africa’s key challenges to accelerate the pace of development and foster economic prosperity for Africans using and applying digital technologies and business models.
Global development financiers attending this year’s Organisation of Petroleum Exporting Countries (OPEC) Fund’s forum in Vienna, Austria, have pledged a strong commitment to remodel their investments to support green projects at scale.
African Development Bank Group president Akinwumi Adesina called for new ways of project preparation and de-risking of projects to mobilise private sector investment at scale for sustainable development.
“We’ve got where the private sector is. We’ve got US$ 145 trillion of assets under management (and) by 2026 it’s going to be there… but the issue here is that we need new ways of aggregation to prepare the projects, to de-risk the projects and lower the transaction cost for those deploying capital,” Adesina reiterated.
“It [the Africa Investment Forum] has become today the premier investment platform to do anything on investment in Africa, and in the last four years, we have been able to leverage about US$ 142 billion of investment interest into energy, water and sanitation, infrastructure, and transport corridors,” Adesina said.
He added that the African Development Bank and its partners are also creating opportunities for the private sector to invest in agriculture through special agro-industrial processing zones, which are being established across the continent.
Annual clean energy investments in emerging and developing economies will need to more than triple from USD 770 billion in 2022 to as much as USD 2.8 trillion by the early 2030s to meet rising energy needs and align with the climate goals set out in the Paris Agreement, according to a new report released today by the International Energy Agency (IEA) and International Finance Corporation (IFC).
The report, Scaling Up Private Finance for Clean Energy in Emerging and Developing Economies, shows that public investments alone would be insufficient to deliver universal access to energy and tackle climate change. Increased public funding can be used most effectively in partnership with private sector capital to reduce project risks – a concept known broadly as blended finance. According to the report, two-thirds of the finance for clean energy projects in emerging and developing economies (outside China) will need to come from the private sector. Today’s USD 135 billion in annual private financing for clean energy in these economies will need to rise to as much as USD 1.1 trillion a year within the next decade.
Climate Finance: Developed countries ready to fulfil $100 billion pledge by year end (Premium Times Nigeria)
As France prepares to host world leaders at a global financial summit seeking to reconfigure global financial systems, sources in the French government say developed countries will be able to, by year end, deliver on the $100 billion climate financing pledge of 2020.
The financial summit hosted by France seeks to establish a system that will be more responsive, just and inclusive. A system that will fight inequalities, finance the climate transition, biodiversity protection, and move closer to achieving the United Nations Sustainable Development Goals (SDGs).
The OECD in its most recent analysis (2022) put the figure mobilised by developed countries in 2020 at $83.3 billion for climate finance. This is realised from a range of sources including bilateral public, multilateral public, export credit and the private sector.
The president of the African Development Bank Group (AfDB), Akinwumi Adesina, in May, hinted that Africa will need $2.7 trillion to upscale climate change adaptation by 2030. Mr Adesina made this known at the AfDB annual meeting themed: “Mobilising private sector financing for climate and green growth in Africa,” held in Sharm El Sheikh, Egypt. “Africa is being shortchanged by climate finance. Africa is choking. Africa will need $2.7 trillion by 2030 to finance its climate change needs,” Mr Adesina said. Despite being the world’s lowest emitter of greenhouse gases, Africa is one of the worst hit by climate change in the world.
List of 32 African countries to benefit from the UK’s new trade scheme (Business Insider Africa)
According to the UK’s government official website, the scheme dubbed, The Developing Countries Trading Scheme (DCTS) entered into force on 19 June 2023 and replaced the UK’s Generalised Scheme of Preferences (GSP). The DCTS is a simpler and more generous preferential trading scheme that has been designed to boost trade with developing countries in order to support their development.
Nigel Huddleston, UK’s Minister of International Trade, unveiled the program during a trip to Bole Lemi, Ethiopia’s largest industrial business park.
“It will create opportunities for businesses around the world, supporting livelihoods, creating jobs, and diversifying local and international supply chains. It will also benefit UK businesses and consumers by lowering import costs on a whole range of products,” Huddleston said.
The DCTS applies to 65 countries that fall under one of the following categories, least-developed countries (LDCs) as defined by the United Nations low-income and lower-middle-income countries as defined by the World Bank. Below are the African countries set to benefit from this scheme:
Former cabinet minister Ranil Jayawardena has hailed an Appeal Court ruling which has confirmed that UK trade deals can no longer be interfered with by international organisations post Brexit. The challenge had been brought because of an attempt by separatists to breakaway from Morocco and the ruling in effect also confirmed the integrity of the north African nation’s borders.
The court ruling last month, dismissed a challenge by an international NGO, The Western Sahara Campaign (WSCUK) to the invalidate the Association Agreement between Morocco and the United Kingdom which has boosted trade between the two countries by 50 percent since 2021.
However, importantly, it confirmed that trade deals are a matter between two sovereign states and cannot be interfered with by international organisations post Brexit.
During the first quarter of 2023, trade growth was positive for both goods and services, according to UNCTAD’s latest Global Trade Update published on 21 June. After the downturn in the second half of 2022, world merchandise trade rebounded in both volume and value.
Over the first three months of 2023, trade in goods went up by 1.9% from the last quarter of 2022, adding about $100 billion. Global services trade also increased by about $50 billion, up by about 2.8% compared to the previous quarter.
For the second quarter of 2023, the UNCTAD nowcast suggests a slowdown in global trade growth, pointing to recently downgraded world economic forecasts and factors such as persistent inflation, financial vulnerabilities, the war in Ukraine and geopolitical tensions.
“Overall, the outlook for global trade in the second half of 2023 is pessimistic, as negative factors dominate the positive,” the report says.
Statement by Rebeca Grynspan, Secretary-General of UNCTAD
Around 3 billion people, or 40 per cent of our global population, reside near coastlines. Our oceans are treasure troves of assets such as fisheries, shipping lanes, tourism that are estimated to be worth at least $24 trillion. According to UNCTAD, the value of global exports in ocean-based goods and services was $1.3 trillion in 2020, which represents about 6 per cent of global trade that year. The blue economy is therefore an important part of any development strategy.
But, as we convene today, we must recognize the plight that climate change poses to the blue economy, affecting food production, increasing natural disasters, decreasing fisheries productivity, and causing ocean acidification, among other challenges. The brunt of these effects is borne by countries and communities that have historically contributed minimally to greenhouse emissions and are under-equipped for adaptation. This is where climate justice takes center stage.
But we must be in this together. We must act with speed to make the blue economy resilient to climate change, but we must be aware of the unforeseen and differentiated impacts that our policies can have on the most vulnerable countries. We need to ensure the most vulnerable have access to the right technologies, resources, and capacities, not doing so will endanger the livelihood of 150 million people who depend on the ocean for sustenance, but also millions more engaged in carbon-intensive export sectors who might suffer from market-access obstacles.
This is why trade is so important. Trade can bolster technology transfer and provide access to environmental goods and services, which are essential to the low carbon transition.
last April, UNCTAD launched the Trade and Environment Review 2023, calling for a “Blue Deal” to increase investment in sustainable ocean-based goods and services, and to ensure that action is global, fair, and multilateral.
we also see immense potential in South-South Trade initiatives such as the Global System of Trade Preferences among developing countries (GSTP) for creating low-carbon markets and building resilient value chains.
Russia confirmed that for 60 days it would continue to be a part of the Initiative and the complementary Memorandum of Understanding on food and fertilizer exports from Moscow, in late May – but the deal in effect expires on 17 July.
UN chief António Guterres said in a statement issued by his Spokesperson that food exports via the Black Sea have fallen from a peak of 4.2 million metric tonnes in October last year to just 1.3 million tonnes last month, the lowest volume since it came into operation. Mr. Guterres called on the parties to “accelerate operations and urges them to do their utmost to ensure the continuation of this vital agreement”.