tralac Daily News
The African Continental Free Trade Area (AfCFTA) has emerged as a game-changer, presenting South Africa with unparalleled benefits and opportunities. This was said by the Director of Africa Bilateral Economic Trade at the Department of Trade, Industry and Competition (the dtic), Mr Calvin Phume, during the AfCFTA awareness workshop which took place in Cape Town.
“This unparalleled market reach will catalyse a surge in trade, enabling local businesses to tap into new market opportunities, expand their operations, attract investments and bolster their revenue streams,” he said. He emphasised the transformative power of the AfCFTA and the benefits and opportunities that it will bring to South Africa are truly remarkable.
“We are poised to witness a surge in trade activities, fueling economic growth and fostering cross-border collaboration. With the AfCFTA now in full swing, South Africa stands at the forefront of a momentous trade revolution that will shape the future of the continent encouraging innovation and promoting the development of value-chains, thereby spurring industrialization and job creation across sectors. As businesses gear up to leverage the vast consumer base offered by AfCFTA, the stage is set for unprecedented growth and prosperity,” he said.
Transport sector has role to play in sustainable economies – Chikunga (Engineering News)
The transport sector is not untouched by climate change and also has considerably high negative externalities, and this necessitates innovative thinking around the opportunities to renavigate transport systems towards greater resilience and becoming a true enabler of sustainable economies.
This was emphasised by Minister of Transport Sindisiwe Lydia Chikunga, delivering the keynote address on the first day of the forty-first South African Transport Conference, being held in Pretoria this week.
Chikunga said that, as the stakeholders in the industry look to rethink transportation, they must first identify and respond to the current existing modalities, which makes building resilient transport systems difficult to achieve.
This, she said, includes glaring extensive vulnerabilities, which include a lack of harmonisation of policy, regulation and automated planning across the region.
SA rallies Nigerian businesses for BRICS’ multi-sectoral investments (Businessday NG)
The South African Consulate in Lagos has urged Nigerian businesses to take advantage of South Africa’s hosting of the regional economic group, BRICS, an acronym for Brazil, Russia, India, China, and South Africa, this August.
Bobby Moroe, consul-general of the Lagos Consulate made the call at a roundtable with the Nigerian business community with the theme, “Promoting Regional and Continental Trade through African Continental Free Trade Area (AfCFTA) and BRICS” in Lagos.
According to him, while South Africa is currently the only African member of the BRICS, it is hosting on behalf of the entire continent. Moroe said Nigeria as well as other African countries will also benefit immensely from participating in the meeting as countries on the continent share similar challenges, which require similar solutions.
While emphasising the importance of collaboration of all countries in the Southern part of the globe, Moroe said: “In the post-COVID-19 world order, South-South cooperation has become very important. The socio-economic and political challenges faced by South Africa are no different from the challenges that are facing the entire continent. So, whatever it is that we advance at the level of BRICS formation, we advance not only on behalf of South Africa, but on behalf of the rest of the continent.
The US government has expressed its continued commitment to supporting and developing Nigeria and other African countries’ economy and trade. It also charged Nigeria to develop its agricultural potentials particularly cocoa production to boost the economy and stressed the need for the country to take advantage of the American law on the African Growth and Opportunities Act.
This came as the Cocoa Farmers Association of Nigeria (CFAN) called for the semi-deregulation of the Cocoa economy and establishment of the Cocoa Commission.
A member, Advisory Council to the American President, Joe Biden, Mr Franklin Olakunle Amoo spoke in Ado Ekiti, the Ekiti state capital at the inauguration of the CFAN 12-member 2nd National Working Committee.
Delivering a keynote address on the ease of doing business in Africa, during the event with the theme: “Renewed Hope: Rejuvenating Nigeria’s Cocoa Culture”, Amoo said, “The US government is very interested in seeing more private sector environment from US companies to engage with the Nigeria economy in particular.
AfDB urges diversification of Nigeria’s export, revenue bases (Newsdiaryonline)
The African Development Bank (AfDB) has urged the diversification of Nigeria’s export, revenue bases and trade facilitation capacity to boost revenue generation potential. The AfDB President, Dr Akinwumi Adesina, said this at the second edition of the Nigeria Employers’ Summit on Monday in Abuja. The summit has as its theme, “Trade and Non-Oil: Changing the Narratives for Rapid National Development.
Adesina, represented by Mr Lamin Barrow, the Director-General, Nigeria Country Department of AfDB, said the measures would address some major risk faced by the country. According to him, Nigeria like many other oil-exporting countries, faces several challenges related to global commodity price volatilities. He said that the key challenge was the fiscal risks associated with overdependence on oil exports for fiscal revenues.
“Nigeria’s economy is one of the most diversified in Africa, with the oil sector accounting for less than 10 per cent of the Gross Domestic Product (GDP) with the non-oil sectors accounting for more than 90 per cent. “The key challenge is revenue concentration.
Unplanned and rapid urbanization interacts with environmental degradation and climate change to amplify flood risk in the country
The 2023 Chad’s Economic Update shows that floods cause significant spillover effects that disrupt economic activity, negatively impact on the well-being of the most vulnerable and exacerbate issues linked to internal displacement and conflict. As Chad is one of the most vulnerable countries to climate change, in the absence of urgent measures to effectively reduce risks and strengthen climate adaptation, the consequences of floods could further worsen, and hamper long-term growth and development prospects.
As for the country’s macroeconomic outlook, the report indicates that Chad experienced a modest GDP growth in 2022, with the expected recovery dampened by floods and a volatile security environment. After contracting by 1.2% in 2021 (-4.3% per capita), the Chadian economy was expected to recover in 2022 thanks to high oil prices, an increased oil production and the depreciation of the FCFA/USD exchange rate. However, the recovery was dampened by floods and a volatile security environment, with GDP growth estimated at 2.2% (-0.9% per capita), and non-oil GDP growth at 1.3%, from 0.4% in 2021. Industry, mainly the oil sector, was the main contributor to growth (4.1 percentage points), followed by agriculture with a contribution of 0.6 percentage points, due to inadequate rainfall distribution and severe floods.
Liberia: Russia Blamed for Wheat Surge in Africa (Liberian Observer)
A German-based agricultural economist at the Institute of International and Security Affairs in Berlin said the impact of the Russia and Ukraine war on food supply to Africa is based on complicated characteristics of vulnerability for different countries.
For Dr. Bettina Rudloff, the impacts are composed of import quality and prices, own stocks, and food aid. “The wheat prices have currently relaxed to the pre-war level,” she said. “But these prices are still much higher than the average of the last few years. And the war’s effects came on top of anyhow problematic situations as well as concerns about global hunger.”
One of the immediate effects of the crisis has been the disruption of trade flows. Russia and Ukraine were important exporters of agricultural commodities such as wheat, corn, and sunflower oil. However, the conflict has led to trade restrictions and disruptions, making it difficult for these countries to export their products. This has resulted in a reduction in the global supply of these commodities and subsequently, an increase in their prices.
Countries like Liberia depend on exports from these countries, the war is a setback to them. The loss of grain and food imports means that it will be more difficult for Africans to obtain these goods and, above all, pay for them.
Afreximbank launches the African Trade Report 2023 (Afreximbank)
The African Export-Import Bank’s (Afreximbank), 2023 edition of the African Trade Report (ATR2023) was launched at the Bank’s Annual Meeting – AAM2023 and 30th Anniversary celebrations in Accra, Ghana.
Launching the ATR2023 along with HE Ambassador Albert Muchanga, the African Union Commissioner for Economic Development, Trade, Industry and Mining, Professor Benedict Oramah, the President and Chairman of the Board of Directors of Afreximbank, said that Africa showed growth resilience amid a synchronised global deceleration under the confluence of overlapping crises, including lingering effects of the Covid-19 pandemic, record-high inflation, heightening geopolitical tensions and intensification of trade wars.
Indeed, amid these global headwinds Africa remained on a growth trajectory, with its GDP growth increasing by 3.9% and its merchandise trade expanding by 20.9% in 2022, above the world’s average of 12%, according to the report.
Economists call for EAC trade tribunal (93.3 KFM)
Players in the small and medium enterprise sector are calling for the establishment of an East African Community (EAC) trade tribunal to address regional trade bottlenecks such as the recent stand-off at Elegu border. This follows the release by the government of South Sudan, of the first 26 of the 92 trucks that have been impounded for more than a month over allegations of high levels of aflatoxins in the grain cargo.
the Executive Director of the Federation of Small and Medium Enterprises (FSME), John Walugembe says having a trade tribunal will help address such unjustified non-tariff barriers in the future, and will foster smooth and full regional economic integration.
EAC plan to raise revenue from fourth tax band faces headwinds (The East African)
East Africa’s plan to generate an additional $18.9 million worth of intra-regional trade from the revised Common External Tariffs (CET) is facing headwinds as partner states seek preferential tax treatment, putting implementation of the four-band tariff structure in jeopardy.
Last year, the EAC Secretariat underscored the enforcement of the 35 percent duty on finished products imported into the region, under a new tariff structure that took effect on July 1, 2022.
The secretariat through a report dated January 2022 analysing the potential benefits of the fourth band argued that the maximum tariff of 35 percent will eliminate frequent use of stay of applications (SOAs) by partner states by adoption of mixed customs tariff structure and help promote intra-regional trade, investments and employment creation.
However, a review of an EAC gazette notice dated June 30, 2023 shows how virtually all EAC member states have sought preferential tax treatment through stays of applications and exemptions on several finished and sensitive items.
A new report commissioned by the Mitumba Consortium Association of Kenya on the Second-Hand Clothing Industry in the East Africa Community has warned that countries must avoid protectionism against the import of second-hand clothing. This report comes as trade ministers converge in Kenya this week for the 54th All-Africa Trade Ministers meeting of the African Continental Free Trade Area (AfCFTA), where the origin of textiles is set to be discussed.
The report, launched on the 10th of July in Kenya and written by Professor Patrick Diamond of Queen Mary University, London, states that any restrictions would violate trade agreements, particularly with the WTO and United States.
The report also shows that a policy approach in which governments focus on proactively expanding state of the art sorting-facilities while boosting skills and entrepreneurship is far more likely to deliver growth and jobs in the future.
Of particular interest to the EAC, the paper argues that the new domestic textile production industry and the second-hand clothes (SHC) industry can and should work together, for the mutual benefit and growth of both sectors.
The contribution of the used clothing and footwear industry to the economic growth and employment performance of the EAC is vast. We estimate that the SHC industry supports up to 3.4 million jobs throughout the supply chain in East Africa.
Moreover, the sector delivered government revenues estimated at US$419 million in 2021 across East Africa through taxing consumption and incomes associated with SHC. Moreover, SHC generates competition that helps to incentivize technological innovation throughout the textile production sector.
Ruto woos Comoros to join EAC in quest for expanded bloc (The East African)
Kenya’s President William Ruto is making his vision of a future East African Community clear with the latest offer to the Comoros to join the bloc.
On an official trip to Moroni on Thursday, where he attended the country’s 48th independence anniversary, President Ruto said Nairobi supports closer collaboration with the Comoros, an island nation east of the Mozambican channel.
“Kenya and Comoros stand as partners in progress, committed to deepening their collaboration for the benefit of its citizens,” President Ruto told his host Azali Assoumani, also the current Chairperson of the African Union.
Nairobi and Moroni signed a General Co-operation Agreement; an omnibus pact providing guidelines on supporting one another on key global issues such as trade, climate change and blue economy.
It will offer a “framework which the two countries will establish structured co-operation in areas such as Trade and Investment, Transport, Education, Tourism, Agriculture, Blue Economy and Maritime Security to meet the aspired social — economic growth and Africa Union’s Agenda 2063,” said a joint communique.
About 29% of Non-Tariff barriers reported through the tripartite online reporting, monitoring, and eliminating mechanism are in the intra-COMESA trade. Majority of them, 82% emanate from operational issues including on Rules of Origin while the remaining 18% are policies/measures that result in NTBs.
Currently the tripartite NTBs system, which is a joint initiative of the regional economic blocs, COMESA, the EAC and SADC is used to maintain vigilance on the NTBs as they pose the greatest hindrance to intra-regional trade.
Hence, COMESA Member States are under obligation to establish recommended institutional and regulatory frameworks by strengthening the NTB implementation framework at national level, including setting timelines for their elimination as they occur. Notwithstanding, some member States lack the capacities to report, monitor and resolve such trading disputes, according to COMESA Director of Trade and Customs, Dr Christopher Onyango: “Besides, multiple memberships to various RECs also pose a challenge to harmonizing the various mechanisms for resolving trade disputes across regional and international markets,” Dr Onyango said.
African countries have realised additional revenues totalling €1.69-billion owing to voluntary disclosures, the implementation of information exchange mechanisms, and rigorous offshore investigations, the ‘2023 Tax Transparency in Africa‘ progress report, published by the Africa Initiative, shows.
From 2009 to 2022, these measures have effectively boosted tax revenue, interest and penalties, underscoring a substantial progress in tax transparency across the continent, development finance institution the African Development Bank (AfDB) reports.
The release of the report comes as African governments continue to step up efforts to bolster domestic resource mobilisation in the face of economic headwinds that include global inflation and mounting debt levels. Developed economies bloc the Organisation for Economic Cooperation and Development (OECD) estimates that Africa loses as much as $60-billion each year in illicit financial flows.
The African Development Bank-managed Sustainable Energy Fund for Africa (SEFA) has showcased hydropower as a key element of meeting the accelerating demand for renewable energy at the Africa Energy Forum held in the Kenyan capital. The Africa Energy Forum took place in Nairobi from 20-23 June, organised by Energy Net with support from the Government of Kenya, the African Development Bank, IFC and other partners.
A session titled ‘Hydropower Modernisation to Accelerate Africa’s Energy Transition’ posited that renovating existing hydropower infrastructure represents a compelling opportunity. This is because greenfield hydropower projects have high upfront costs, and significant environmental and social impacts, leading to long lead times before they come onstream.
African Development Bank Director for Renewable Energy and Energy Efficiency, Dr, Daniel Schroth, who moderated the session, said: “Modernising existing hydropower assets are accelerator for Africa’s energy transition and it increases the availability of dispatchable renewable energy in a relatively short period of time while providing opportunities for integrating variable renewable energy sources, such as floating solar.”
The Executive Committee of The Arab-Africa Trade Bridges (AATB) Program, a multi-donor, Inter-regional program, launched a US$1.5 billion Food Security Program to address the issues of food insecurity in the Arab and African regions amidst the ongoing global food security crisis. The crisis is a critical challenge facing the world today and continues to be a top priority on the international development agenda.
By emphasizing its special interest in the food sector, AATB aims to leverage its expertise, resources, and partnerships to implement targeted engagements that address the specific challenges faced by member countries. The Food Security Program is developed around the four pillars of the AATB Program, namely Trade, Investment, Insurance, and Infrastructure. In addition, the program incorporates a fifth element, which is capacity development and technical assistance, serving as a cross-cutting theme and an enabling factor. As part of the program, funded and unfunded financial transactions related to food security will be provided, alongside capacity development and technical assistance services.
South African bank highlights importance of US-Africa business summit (Engineering News)
South Africa‘s Standard Bank (not to be confused with the now-unrelated UK-based Standard Chartered Bank) has highlighted the importance of the US-Africa Business Summit, which will run from Tuesday (July 11) to Friday this week. The summit will take place in Botswana, and is expected to involve some 1 000 participants from across Africa and the US, including representatives of the public and private sectors, including senior government officials, Cabinet Ministers (including from the US) and African Heads of State.
“There is immense potential for stronger ties and greater mutual benefit between the world’s biggest economy and Africa,” stresses Standard Bank Group CEO Sim Tshabalala. “Achieving this will require greater levels of collaboration, access and participation, which is precisely why this summit will be so valuable.”
Debt-stricken nations that are also highly vulnerable to the climate crisis have paid a staggering $50bn (£39bn) to G20 creditors since the onset of the Covid-19 pandemic, according to a new report.
The analysis, conducted by the International Institute for Environment and Development (IIED), sheds light on the financial burden faced by the world’s poorest and most climate-vulnerable countries, as they grapple with repaying debts to the 20 richest nations of the world. The report, based on the latest data from the World Bank, comes ahead of the upcoming meeting of G20 finance ministers and central bank governors in Gandhinagar, India.
The analysis reveals that the payments made by 58 Least Developed Countries (LDCs) and Small Island Developing States (SIDS) reached $21bn (£16bn) in 2022, marking an increase from $14bn (£11bn) in 2021 and $13bn (£10.3bn) in 2020.The rising debt repayments mean that the world’s poorest countries, which also face the biggest risks from the worsening climate disasters, are trapped in an ongoing cycle of financial burden.
To shore up funding for the UN Sustainable Development Goals (SDGs), countries need more proactive and tailored services for investors. An estimated $4 trillion is required in developing countries annually to achieve the SDGs.
A new UNCTAD publication entitled “Facilitating investment in the Sustainable Development Goals” outlines how investment promotion agencies (IPAs) can be a game changer, as they are the focal point for government-wide efforts to facilitate foreign investment. UNCTAD recommends ways for IPAs to help bolster SDG implementation through investment facilitation.
“They (IPAs) can do this by ensuring that investment facilitation services are inclusive and address the specific needs and opportunities of SDG-related sectors as well as of specific investor groups that have a high SDG impact, such as social entrepreneurs and women, youth and rural investors,” the publication says.
At a meeting of the Council for Trade in Goods on 6-7 July, WTO members discussed how the Council should move forward in implementing some of the outcomes of the 12th Ministerial Conference (MC12) related to improving the functioning of the Council and its subsidiary bodies. The Goods Council also continued discussions on the Least-Developed Countries (LDC) Group’s proposal concerning countries graduating from LDC status and revisited 37 trade concerns raised in previous meetings.
The chair of the fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, on 10 July opened the fourth of a series of “Fish Weeks” with the aim of seeking WTO members’ views on what elements from the various documents before members, including new proposals, would form the best basis for text-based discussions in the fall. Deputy Director-General Angela Ellard acknowledged the progress made but also affirmed the need to deepen discussions at this last Fish Week before the WTO’s August break.