Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Global demand for coal is bringing mayhem to South African towns (Engineering News)

An often impenetrable logjam of trucks laden with coal at South Africa’s crossing with Mozambique has brought chaos to a sleepy border town.

The trucks began trundling through in ever greater numbers on their way to Maputo port, where their cargos are loaded onto ships and sent around the world, after South Africa became one of Europe’s main alternatives to Russian coal following Moscow’s invasion of Ukraine in February 2022. The procession continues even though European fears of an energy crisis have faded for now. Suppliers are finding new buyers in India and China. And miners of chrome, used to manufacture stainless steel, are increasingly using the same routes.

President Cyril Ramaphosa described the rail constraints as “a crisis of catastrophic proportions” in a meeting with key exporters in April and created a task force that includes private companies to look for solutions. They will take time to find, his spokesman said in response to questions in late July, adding “this is not a challenge you can resolve overnight.”

South Africa’s coal industry is the world’s fifth largest. In all, about 15 million tons of coal last year arrived at ports by road and another 50-million tons by train, earning its miners R227-billion after prices reached a record high of $450 per ton. That boosted South Africa’s economy – and for the first time, coal came close to rivalling platinum as the country’s most valuable export.

But the failures of Transnet resulted in lost opportunities. Shipping by road costs about 40% more. And if the rail network had been running at full capacity, the miners would exported more than R100-billion worth of minerals, according to the chief economist of Minerals Council of South Africa, Henk Langenhoven.

IMF praises Tanzania’s compliance with economic reform plan (The East African)

The International Monetary Fund (IMF) Deputy Managing Director Bo Li has concluded his visit to Tanzania with a firm commitment towards supporting the country’s efforts in unlocking its development potential. Mr Bo applauded the Tanzanian authorities’ efforts in implementing the country’s economic reform agenda.

The IMF also encouraged Tanzanian authorities to enhance domestic revenue mobilisation through tax reforms to help create the fiscal space needed to finance social spending and priority investment, particularly scaling up investment in human capital through increased spending on education and health.

Uganda has third highest level of income inequality in EAC (Monitor)

Uganda has third highest level of inequality in East Africa after South Sudan and Rwanda, according to a report by the African Development Bank (AfDB).

In details contained in the East Africa Economic Outlook 2023, AfDB indicates that the East African Community has a relatively high Gini coefficients that other African regions, which mirror the high-income inequality and poverty on the continent.

“Most of the East African countries … income is relatively concentrated in the hands of a few while the majority are struggling to meet their basic needs, such as food, energy, health care, housing, and education,” the report reads in part, noting that rising energy and food prices and prolonged droughts, compounded by adverse aftershocks of Covid-19 have been major headwinds to reducing extreme poverty in the region.

AfDB further notes that with a Gini coefficient of 42.7, Uganda only ranks better than South Sudan and Rwanda but is relatively in a worse position than Tanzania, Burundi and Kenya.

Angola: TAAG strengthens air link with DRC to boost commercial exchanges (Medafrica Times)

TAAG, Angolan airlines, will reinforce with a new frequency the connection between Angola and the Democratic Republic of Congo (DRC) to promote trade between the two neighboring countries, the company announced Tuesday August 1.

According to a note from the Angolan airline, an additional frequency will be made available on the connection between Luanda and Kinshasa, capitals of Angola and DRC, respectively, from the 14th of this month.

The document emphasizes that the increase in frequency between the two countries is also based on the development of business and mobility between Angola and the DRC, as well as a response to market demand indicators.

ECOWAS develops road information systems to boost AfCFTA (GhanaWeb)

ECOWAS Road Information Technical Experts have concluded a validation workshop in Accra to put in place measures in improving and digitalizing a one-stop shop source of information on road transport among member states to serve as a catalyst for economic development for the ECOWAS community.

The ECOWAS Commission believes transportation by road continues to serve as the main mode through which trading and movement of persons, services and goods in the ECOWAS Region are carried out. Thus to facilitate the wish of a Community Citizen to move freely, enjoy holidays, access services, it is necessary to ensure an interconnected and harmonized network of regional roads which are well maintained, managed and in good condition.

Speaking at a validation workshop for ECOWAS Regional Road Information System (ECRIS) in Accra, Mr. Chris Appiah, Acting Director of Transport at the ECOWAS Commission emphasized that in order to ensure optimum management of the road network in the ECOWAS Community the following ought to be considered: I. Identify all regional economic corridors connecting key economic centers, capital cities and open up new economic zones among others. II. Define and set key decision-making elements III. Automate the planning, programming, and implementation of their maintenance.

Rwanda hosts Cybertech Africa to advance innovation and combat cyber crimes on the continent (The New Times)

As Africa advances through technological innovations, it is becoming one of the world’s fastest-growing regions in terms of innovation and cyber capabilities. However, this progress has also led to a surge in cybercrimes, highlighting the critical importance of integrating cyber security into business strategies and policy considerations.

Recognising the challenges, Cybertech Africa 2023 was organised for the first time on the continent. The two-day conference, which kicked off on August 1, brings together key players from the business, innovation, tech, and cyber ecosystems, including dozens of companies, start-ups, esteemed speakers, renowned universities, senior government officials, C-level executives, industry trailblazers, and prominent decision-makers.

Ahmed Afif, Vice President of Seychelles, commended the revolutionary impact of cyber technology on communication, business, and information sharing, emphasising that technology’s constant evolution offers immense opportunities for entrepreneurs to reach a global market.

Linkages between AfCFTA and Peace Fund, a path to sustainable development: Op-Ed by AU Director, Peace Fund Secretariat (AU)

Whilst the AfCFTA is the engine driving economic growth, the Peace Fund is a linchpin mechanism that together with other mechanisms instituted by the African Union such as the with the Peace and Security Council, the African Standby Force, the Military Staff Committee, the Continental Early Warning System, and the Panel of the Wise, works to support the prevention, management, and resolution of conflicts, and facilitates timely and effective responses to conflict and crises in Africa. Recognizing that the prosperity of Africa is intricately linked to its stability and security, and as a key pillar of the African Peace and Security Architecture (APSA), the Peace Fund delivers timely and effective support in the areas of mediation and preventive diplomacy, AU led peace support operations, and in the development of core institutional capacities that strengthen responses to conflict and build resilience.

The relationship between AfCFTA and the Peace Fund creates a virtuous cycle that enhances economic prosperity and ensures peace and stability. Peace and stability is enhanced by the utilization of the Peace Fund, and it is a prerequisite for AfCFTA’s seamless implementation. At the same time economic prosperity spurred by AfCFTA can diminish conflict triggers and expand the resource base available for Peace Fund, reinforcing its efforts towards peace and security.

Clock Is Ticking For Food Security In Africa, Says New IITA Head (Inter Press Service)

“My key message is really simple,” says Dr Simeon Ehui, the newly-appointed director general of the International Institute of Tropical Agriculture, which works with partners across sub-Saharan Africa to tackle hunger, poverty and natural resource degradation. “The clock is ticking,” Ehui tells IPS in an interview from Washington DC on his last day at the World Bank, urging Africa’s leaders to recognise the “absolute, paramount” importance of increasing funding for agriculture.

As the African Development Bank recently noted, Russia’s invasion of Ukraine resulted in fertiliser prices rising two to three times over 2020 levels, creating serious supply gaps across the continent and driving food inflation. In sub-Saharan Africa, households spend up to 40% of their budget on food, compared to 17% in developed economies. Africa, the bank says, is over-reliant on food staples and agricultural inputs, importing over 100 million tonnes of cereals a year.

“My vision is thriving agricultural food systems in Africa,” says Dr Ehui, and, specifically for IITA and CGIAR, this means fostering the conditions to sustain centres of research excellence where scientists will be excited to work, with transparency of management and gender equality.

Balancing act: AfCFTA lures US investment (The Namibian)

The United States (US) government says the Africa Continental Free Trade Area (AfCFTA) agreement attracts US companies to invest, although analysts are cautioning against big companies taking advantage of the agreement, sidelining small businesses.

Judd Devermont, the special assistant to the US president, who was speaking at a press conference in Washington on Monday, said the reach of the AfCFTA agreement is attractive for US companies.

“But as you remove tariffs, trade barriers and non-trade barriers as you create bigger and bigger markets, it gives our companies the ability to invest in multiple countries. “If you invest in The Gambia, you’d probably also want to invest in Guinea-Bissau and Senegal. As the free trade area harmonises some of the regulations, it makes it easier for our companies to invest in multiple countries,” Devermont said.

US assistant secretary of state for African affairs Molly Phee said the US is eyeing the continent’s manufacturing of critical medical supplies and improving its agricultural activities.

Namibian trade economist Maria Lisa Immanuel yesterday warned that big companies could take advantage of these opportunities, and that this should rather be done by homegrown pan-African companies. “The West still has much of the money, by the way, in Africa’s investment deficit. This requires achieving all goals at continental level.” Immanuel said the US is playing a bigger role in the West, and also has its own interests at heart.

The Black Sea Grain Initiative Is Not About Hungry Kids in Africa (Foreign Policy)

On July 17, the Russian government announced that it was pulling out of the Black Sea Grain Initiative, an agreement brokered by the United Nations and Turkey that ensured Ukrainian grain could still be exported despite the conflict. Russia has also been carrying out deadly attacks on storage facilities in the Black Sea region. The grain deal, agreed to a year ago, allowed the flow of Ukraine’s maize, wheat, and a host of other staples to global markets.

In 2022, before the deal was brokered, media coverage and political conversations centered on how African countries depended heavily on grain imports from Ukraine, a country known as the breadbasket of Europe.

The United States, in a bid to score political points and sensationalize the news, has focused on the misguided, decades-old “starving African kids” narrative. It has ignored who the biggest beneficiaries of the deal are as well as the nuances of food security in African countries.

Africa has never really been the target consumer for Ukrainian grain. According to data by the United Nations, all the grain sent to Africa since the Black Sea deal was implemented accounts for less than 13 percent of total exports, and only a fraction of this went as food aid to so-called troubled countries.

Egypt and Kenya, both of which do not exactly fit into the picture of poor aid-consuming African countries, have been the biggest African importers under the initiative and account for roughly half of the 4 million metric tons sent to Africa. In comparison, Ethiopia has gotten just over 282,000 metric tons. Countries such as Djibouti and Sudan, which receive this grain chiefly as food aid, account for even less.

India’s rice export ban to hurt millions globally. These countries will be the worst hit (CNBC)

India’s rice export ban could ripple across global rice markets — and millions are expected to be impacted, with Asian and African consumers set to bear the biggest brunt. India, the world’s largest rice exporter, banned the exports of non-basmati white rice on Jul. 20, as the government sought to tame surging domestic food prices and “ensure adequate domestic availability at reasonable prices.” The country accounts for more than 40% of the global rice trade.

“Malaysia appears to be the most vulnerable according to our analysis,” Barclays said in a recent report, highlighting the country’s sizable reliance on Indian rice. “It imports a substantial portion of its rice supply, and India accounts for a relatively large share of its rice imports,” the analysts wrote.

The markets highly exposed to India’s export restrictions are concentrated in Sub-Saharan Africa and in the Middle East and North Africa (MENA) region, said BMI, a Fitch Solutions research unit. The firm cited Djibouti, Liberia, Qatar, the Gambia, and Kuwait as being the “most exposed.”

US Apparel Retailers Break Up With China Amid Worries (Bloomberg)

A record number of US fashion companies no longer list China as their top supplier, the result of growing diplomatic uncertainty and concerns about forced labor.

About 61% of apparel retail CEOs haves stopped using China as their primary supplier, up from 30% before the pandemic, according to a new survey by the US Fashion Industry Association and Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware.

Almost 80% plan to reduce their sourcing from China over the next two years. Those companies are primarily leaving China for Vietnam, Bangladesh and India, which have relatively large-scale production capacity and stable economic and political situations, according to the report.

Quick links

Boost for Kenya farmers as tea export prices hit eight-year high

Women Shatter Gender Barriers in Uganda’s Fish Farming Industry

Burundi: AfDB’s 2019-2023 Country Strategy Paper impactful, says evaluation team

Mauritania’s Quest for Green Hydrogen Financing

Dar es Salaam Declaration: African Leaders Make Important Commitments to Investing in Human Capital

Africa-India trade is alive and well

2023 External Sector Report: External Rebalancing in Turbulent Times


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