Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

South Africa’s agricultural sector recorded significant decline in the first quarter (Engineering News)

The Bureau for Food and Agricultural Policy (BFAP) has highlighted, in a brief report, that, while the total South African economy avoided a technical recession during the first quarter of this year, with national gross domestic product (GDP) rising by 0.4%, the same could not be said for the agriculture, forestry and fisheries sector. This sector experienced a year-on-year decline of 5.4% and, quarter-on-quarter, dropped 12.3%.

Of the sub-sectors of agriculture, the one that made the biggest contribution to total agricultural revenues was animal products, accounting for 56%. Quarter-on-quarter, animal products’ GVP grew by 9.4%. The components of the sub-sector which recorded the highest growth rates were pork (27%), milk (20%) and poultry (19%). In all three cases, this was due to higher prices for these products. On the other hand, the sub-sector components which saw the biggest declines were sheep, wool, and beef, which contracted by 11%, 9% and 3%, respectively. “Relative increases in all livestock inputs have been higher than that of livestock output prices, which implies that revenue gains did not translate into GDP gains,” cautioned the BFAP.

Africa needs to rapidly expand, diversify its industrial capacity – President Ramaphosa (SAnews)

President Cyril Ramaphosa has challenged African leaders to shift their focus from being producers of raw materials processed elsewhere. The President further called on the continent to be manufacturers of their own goods and to rebuild their industrial capacity to serve the growing young population. The President was speaking on Thursday in the Democratic Republic of the Congo (DRC) where he kicked off his working visit at the invitation of President Félix Tshisekedi.

“We need to shift away from simply being producers of raw materials that are processed elsewhere in the world. Africa’s appetite for industrialisation has been whetted.” He believes that the new investment in factories and logistics systems can power higher levels of growth and jobs.

“South Africa and the DRC can be leaders in this important project of ensuring African raw materials are processed on the African continent. “We can combine our raw materials and skills, our technology and capital, our young people, and universities into a powerful drive to industrialise.”

Joint Communiqué from the Second Meeting of the Southern African Customs Union’s Member States and Mozambique- United Kingdom of Great Britain and Northern Ireland, Economic Partnership Agreement (EPA) Trade and Development Committee

The Senior Officials from the Southern African Customs Union Member States (Botswana, Eswatini, Lesotho, Namibia and South Africa) and Mozambique (SACUM), and the United Kingdom of Great Britain and Northern Ireland (UK) held the Second Meeting of the Trade and Development Committee (TDC) under the SACUM-UK Economic Partnership Agreement (SACUM-UK EPA), virtually on the 5th April 2023.

The TDC took stock of actions resulting from its first meeting, in pursuance with its obligations to facilitate and supervise the implementation of the Agreement. This included consideration of the multilateral safeguard’s exemption, development of the Rules of Procedure for the institutions established under the Agreement, the selection of arbitrators, as well as other work undertaken in progressing the Built-in-Agenda (Article 117) and the Transitional Implementation Arrangements (Article 118).

Under the Built-in Agenda, the Parties noted that links to updated tariff schedules had been exchanged and work was continuing on exchanging information on the Tariff Rate Quota (TRQ) utilisation data. The Parties further noted SACUM had submitted proposals on export taxes, and the scope and volume under the automatic derogation for tuna. Consolidated information had also been shared by the SACU Member States on Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) Regimes, and capacity building needs respectively.

Kenya’s first quarter food import bill rises 58.4pc to $569m (The East African)

Kenya’s food import bill in the first quarter of the year rose 58.4 percent to hit Ksh80.2 billion ($569.4 million), nearly matching what was fetched from exporting food. The latest data from the Kenya National Bureau of Statistics (KNBS) shows the imports rose from Ksh50.6 billion ($359.25 million) in a similar period last year as the country shipped in more volumes of commodities such as rice, wheat and processed food.

The rise came in the period food imports increased by 10.4 percent to Ksh87.5 billion ($621.23 million), leaving the gap between exports and imports at Ksh7.3 billion ($51.83 million)—one of the narrowest in the recent past. Kenya’s spending on food imports in the first three months of 2021 was about 64 percent of the money received from food exports, with the difference between the two at Ksh28.6 billion ($203 million). However, food imports have been growing at a faster pace than that food exports to cut the difference to Ksh7.3 billion in the three months ended March 2023.

Setting the Stage for Implementation of the Financing Model for MSMEs for the Kingdom of Eswatini (UNECA)

An inclusive financing model for MSMEs was developed with technical assistance from the Economic Commission for Africa to alleviate a key constraint for Micro, Small and Medium Enterprises (MSMEs): that of access to finance. Although it is estimated that MSMEs in Eswatini have the potential to provide employment opportunities to more than 65 percent of the workforce and contribute over 50 percent of GDP; this potential remains unfulfilled.

MSME Director in the Ministry of Commerce, Industry and Trade, Mr. Mluleki Dlamini, indicated that an inclusive financing model for MSMEs was launched during the height of the COVID-19 pandemic on 1st September 2021 with the goal of expanding access to funding, supporting MSMEs’ growth and solving the issues in the MSME financing ecosystem.

In her opening remarks, Ms. Olayinka Bandele, Chief, Inclusive Industrialization Section, ECA, Sub-regional Office for Southern Africa highlighted that “MSMEs are cornerstones of inclusive and sustainable development, with the potential to significantly accelerate industrialization and support high-value-addition activities. They have an immense potential to promote domestic-led growth in nascent and established industries, to strengthen the resilience of the economy in a challenging environment, and to contribute considerably more to employment and poverty reduction.”

SADC launches Success Stories for Lesotho (SADC)

The Southern African Development Community (SADC) on 5 July, 2023 launched the SADC Success Stories publication for the Kingdom of Lesotho which contains stories on the programmes and benefits derived from the implementation of the SADC Regional Integration agenda.

Hon. Dr. Matlanyane added that the Lesotho SADC Success Stories will assist in building SADC visibility, which in turn, will engender collaboration and partnership in the implementation of the SADC regional integration agenda.

The Minister encouraged members of the media fraternity in Lesotho to continue reporting stories on SADC regional integration, drawing from examples of the stories contained in the Lesotho SADC Success Stories. On this point, the Minister took the opportunity to sensitise and encourage journalists in Lesotho to participate in the SADC Media Awards by focusing on positive stories that promote and deepen SADC regional integration and development.

Among other stories, the publication highlights the implementation of improved efficiency due to fast-track declaration of goods and travel, and better traffic control following the implementation of a coordinated border management project, among others. It also highlights the implementation of Cross Border Money Transfer Project between Lesotho and South Africa which has been hailed as one of the cheapest cross-border products in the world. On shared watercourses, the publication highlights the implementation of initiatives to preserve Lesotho’s most valuable resource, water, referred to as Lesotho’s ‘white Gold’.

EAC Common External Tariff changes released (The Citizen)

Tanzania has identified imported goods that will be taxed under the East African Community (EAC) Common External Tariff (CET) in the current fiscal year. These include sugar, cooking oil, clothes and footwear, and buses for transportation. The country’s tariff rates will slightly differ from those that will be applied by fellow partner states in the seven-nation bloc.

The new import duty rates are among those approved by the EAC secretariat and were expected to be applicable from July 1st this year to June 30th, 2024.

Tanzania will grant stay of application of the EAC CET rate of 100 percent or $460/MT, whichever is higher, and apply a duty rate of 35 percent for one year on cane sugar imported under a permit issued by Tanzania Sugar Board. Rwanda is granting stay of application for EAC CET of 100 per-cent, or $460 per tonne, for the same commodity. It will instead apply a duty rate of 25 percent. Uganda is also charging a rate of 25 percent on sugar (for industrial use), while Burundi will exempt the same from tax.

Mixed reactions as EAC govts roll out budgets (The New Times)

East African governments in June presented their most ambitious budgets yet, which are expected to take effect this month, seeking to strengthen their economies, finance key government operations and repay existing debts.

However, despite a notable increase, economists are warning the region’s citizens to brace for tough times as the fiscal measures proposed in the 2023/24 budgets show little to no signs of further lowering the cost of living and some measures causing investor flight in the region’s biggest economies.

Alex Mapaunda, Tax Advisor at Deloitte based in Tanzania pointed out, the budgets have also highlighted the pursuit of supporting economic recovery in respective countries.

“We have been seeing growth rates of three percent and four percent but now countries are shooting for six percent to seven percent, for this year.”

Strengthening African Aviation: African Development Bank Collaborates with Airbus and ATR (Airspace Africa)

Air travel in Africa has faced significant challenges due to the impact of the Covid-19 pandemic, limited access to credit, and high operating costs. In a bid to address these issues and boost the continent’s aviation industry, the African Development Bank (AfDB) recently held workshops with aircraft manufacturers Airbus and ATR. The workshops focused on exploring avenues to strengthen access to finance for African airlines and developing financing instruments tailored to Africa’s aviation needs.

Air travel in Africa remains unaffordable for many due to high operating costs and limited passenger traffic. To increase profitability, carriers have been forced to raise fares, leading to intra-Africa flight prices that are 2-3 times higher compared to other regions. Furthermore, a significant portion of air traffic is concentrated in a few airports, such as Cairo, Johannesburg, Casablanca, and Addis Ababa, leaving many routes underserved. This situation highlights the need to enhance connectivity and expand air transportation across the continent.

Despite the challenges, Africa’s economies are projected to recover from the pandemic, presenting opportunities for growth in the aviation industry.

New report reveals African countries have generated €1.7 billion in additional revenues from tackling tax evasion and illicit financial flows (AfDB)

According to the 2023 Tax Transparency in Africa progress report unveiled at the 13th Meeting of the Africa Initiative in Cape Town today, African countries have realised additional revenues totalling €1.69 billion thanks to voluntary disclosures, the implementation of information exchange mechanisms, and rigorous offshore investigations.

From 2009 through 2022, these measures have effectively boosted tax revenue, interest, and penalties, underscoring a substantial progress in tax transparency across the continent. The report—co-produced by the Global Forum on Transparency and Exchange of Information for Tax Purposes, the African Union Commission and the African Tax Administration Forum, with support from the African Development Bank—presents the progress of 38 African countries in tackling tax evasion and other illicit financial flows (IFFs) through transparency and exchange of information. Five non-member countries participated in the study.

South Africa’s Minister of Finance Enoch Godongwana commended the Africa Initiative in his opening remarks. “During the past eight years, the Africa Initiative has changed the tax transparency landscape in Africa and aided the mobilisation of more than €300 million in domestic resources,” he said. Stressing the importance of political will in efforts to increase tax transparency, Godongwana said, however, that more could be done. He called for the Africa Initiative to strengthen African countries’ capacity to leverage exchange of information standards and protocols.

India is not ‘extractive economy’ and is not pursuing ‘narrow economic activities’ in Africa: Jaishankar (The Hindu)

In a veiled attack on China, External Affairs Minister S. Jaishankar has said that, unlike some other countries, India is not “an extractive economy” and it was not pursuing “narrow economic activities” in the resource-rich African continent.

“Today we want to see Africa grow. We want to see African economies grow. And our approach to Africa today is to trade more with Africa, invest in Africa, work with Africa, to create capacities in Africa, so that the rise of Africa also takes place as countries like India are rising in Asia.”

“We are not here as an extractive economy. We are not here in the manner in which a lot of other countries are there for very narrow economic objectives. For us, this is a broader, deeper partnership,” Jaishankar said, in an apparent reference to China’s forays, including those of its military, into Africa.

On trade, Jaishankar said that “Our trade with Africa is $95 billion... I can predict very confidently that.. will grow very rapidly in the community and they will grow rapidly in the coming decade for three reasons. One, the Indian economy, Indian businesses are going up more and more.”

“That’s one reason for demand in Africa. Now, it is up to us to meet that Africa will have a demand. We have to compete, you know, maybe they’ll go to China, Europe or Turkey. But if Indian business is more and more competitive if people are willing to go out more and more, I think a large part of the demand will be met,” he said.

Indo East Africa expo to unveil new trade opportunities (The Star)

The highly anticipated Indo East Africa Trade Expo 2023 kicked off today at the Tsavo Ballroom, KICC in Nairobi, Kenya. Running from 5th July 2023 to 7th July 2023, this prestigious event brings together a diverse range of Indian businesses and offers a unique platform to explore and leverage the latest trade opportunities between India and East Africa.

The Indo-East Africa Trade Expo serves as a gateway for fostering strong trade partnerships, encouraging collaboration, and promoting economic growth between India and East Africa.

“This Expo serves as a vital platform for participants to meet, network, and forge strategic alliances, ultimately boosting bilateral trade between India and East Africa,” said Dr Sonveer Singh, Founder Chairman Rajasthan Association of Kenya the spokesperson for the event

Russia-Africa Summit: One More Opportunity for Raising Trade Collaboration (Business Post Nigeria)

Russia holds an African leaders’ gathering this late July 27-28 in St. Petersburg, the second largest city in the Russian Federation. The summit is the highest historical profile and the largest-scale diplomatic landmark event in Russia’s bilateral relations with Africa. In our assessment of the emerging multipolar world, the majority of African states are swiftly aligning their policy orientation toward China and Russia.

Russian Ambassador-at-Large and Director of the Secretariat of the Russia-Africa Partnership Forum Oleg Ozerov, in an interview with Kommersant daily newspaper, explicitly explained that the summit is “envisioned by the Russian authorities, are intended to boost Moscow’s relations with African countries, contacts with which are currently deemed one of the most important aspects of Russia’s foreign policy.”

In the views of many policy experts, both local and foreign, African leaders, trade organizations and corporate business executives have an extraordinary opportunity to design a well-timed strategy to take advantage of the growing market and to boost trade as a way to reverse considerably trade imbalance that has existed from Soviet days between Russia and Africa.

Within the global changes, there are equally good business perspectives for Russia and Africa, for instance, with trade facilitation and support for business enterprises, either small or medium, to seek cooperation in areas of new trade opportunities both in Africa and in the Russian Federation.

UN-brokered grain and fertilizer deals ‘indispensable’ to global food security (UN News)

In a statement issued by his Deputy Spokesperson, António Guterres reiterated “the importance of full and continued implementation” of the agreements signed last July in Istanbul, known as the Black Sea Initiative – allowing Ukrainian grain and foodstuffs safe passage to world markets – and the Memorandum of Understanding with Moscow over fertilizer exports.

Russia is still weighing up if it will continue to be a part of the deal, agreed with Ukraine and administered along with the UN and Türkiye, past a deadline of 17 July. Last May, Russia had agreed to a 60-day extension, and the UN has been leading negotiations to ensure its continuation.

The UN chief’s statement said it was vital to ensure that food and fertilizers from Ukraine and Russia can keep on heading to countries in need, “smoothly, efficiently and at scale”. “These agreements are an all-too-rare demonstration of what the world can do when it puts its mind to the great challenges of our time,” he said. “Together, the agreements are contributing to sustained reductions in global food prices, which are now more than 23 per cent below the record highs reached in March last year.”

IMO adopts new net-zero plan for “close to 2050” (Ship Technology)

The International Maritime Organization (IMO) has adopted a new plan to reduce greenhouse gas (GHG) emissions from the global shipping trade. The 2023 IMO Strategy on Reduction of GHG Emissions from Ships includes the “common ambition to reach net zero… close to 2050”.

There are several interim targets along the way to 2050, including a 20% GHG cut by 2030 and at least 80% by 2040. All the targets are made in comparison to the 2008 GHG figures. In setting its targets for the global industry, the IMO said its targets provide “a needed incentive while contributing to a level playing field and a just and equitable transition.”

The IMO said a goal-based marine fuel standard regulation and a maritime GHG emissions pricing mechanism would be developed and finalised by IMO members, but only an agreement to install future regulation was signed at this week’s Marine Environment Protection Committee (MEPC 80).

STDF Annual Report: Adapting and learning to facilitate safe trade in food (WTO)

In response to the changing global landscape, the STDF has actively collaborated with government institutions, international organizations and development partners across agriculture, health, environment, and trade and development sectors to enhance compliance with international food safety, animal and plant health standards and facilitate safe trade in food.

“The STDF is working to create a world where food traded is safe and secure for all, and also to facilitate the compliance of relevant standards by developing countries’ exports” said WTO Deputy Director-General, Jean-Marie Paugam.

“Compliance with SPS requirements is already a major challenge for many developing countries. Climate change is making this even more difficult. Strengthening developing countries’ SPS systems, including capacities to monitor and control new pests and diseases, is more important than ever and will contribute to increased food production and food security,” said Melvin Spreij, Head of the STDF.

Investment facilitation negotiators announce deal on Agreement’s text (WTO)

WTO Director-General Ngozi Okonjo-Iweala welcomed this major achievement towards concluding an IFD Agreement, which aims at attracting and retaining more and higher quality investment, taking into account the respective development priorities of members.

“This represents a momentous achievement,” said DG Okonjo-Iweala, highlighting that the text is the product of discussions among more than 110 participating members, including 80 developing economies, 20 of them least-developed countries (LDCs). In addition, out of the roughly 70 text-based proposals, two-thirds came from, or were co-sponsored by, developing or LDC members, noted the Director-General.

“The proposed IFD Agreement would not just help WTO members attract and retain more investment, but also higher-quality investment,” added DG Okonjo-Iweala. “By enhancing transparency, accountability and good governance in investment procedures, the Agreement fosters a business climate more conducive to sustainable development. The text also contains provisions addressing “Responsible Business Conduct” and “Measures Against Corruption” — again breaking new ground within the WTO.”

Co-convenors of e-commerce negotiations review progress, reflect on way forward (WTO)

DG Okonjo-Iweala added: “These negotiations are breaking new ground worldwide in that they are the first initiative to bring so many members to the negotiating table on such a comprehensive list of e-commerce-related issues. But I do want to sound a warning: you don’t have too much time. The developments in the digital area are going so fast.”

Launch of the World Investment Report 2023: Statement by Rebeca Grynspan, Secretary-General of UNCTAD (UNCTAD)

The prospects for international investment looked extremely gloomy last year, with rising inflation, fears of recession and turbulence in the financial markets causing investor uncertainty around the world, putting many investment plans on hold at the beginning of 2022. However, In the end, international investment flows suffered but proved more resilient than expected.

The major disparities in global investment patterns remained. The growth of investment in developing countries is concentrated in a small number of large emerging economies. Foreign direct investment flows to many smaller developing countries are stagnant, while flows to the least developed countries fell by 16 percent from an already low base.

Developing countries only attracted foreign direct investment in clean energy worth only $544 billion in 2022. Developing countries face an investment gap of $2.2 trillion annually for the energy transition, out of a $4 trillion annual funding gap for the Sustainable Development Goals. So we are making a strong call for massive investment in renewable energy so developing countries can make the energy transition they need.


Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010