tralac Daily News
Industrial policy changes needed, TIPS forum hears (Engineering News)
Academics and researchers have highlighted some of the policy changes needed within a changing global economy during economic research nonprofit institution Trade & Industrial Policy Strategies’ (TIPS’s) yearly forum.
Management consultancy firm RB Africa director Odwa Mtati told delegates that the contribution of small and medium-sized enterprises (SMEs) to manufacturing production and reindustrialisation could only be achieved if the broader economy was growing.
The contribution of manufacturing to gross domestic product (GDP) had fallen from 30% in 2011 to 11.3% in 2022, while the contribution of SMEs to total manufacturing turnover has grown from below 40% in 2008 to 53% in the fourth quarter of 2022.
Meanwhile, University of Cape Town Nelson Mandela School of Public Governance research fellow Vuyiswa Mkhabela detailed some of the changes in sourcing by clothing retailers and the impact on clothing and textile manufacturing in the country.
“Manufacturing competitiveness is not helped by trade policies unless these are paired with policies that can help manufacturers become more competitive,” she said.
However, the diversification of retailers’ supply chains not only included offshore sources, but also near-shore sources. Retailers sourced clothing from Southern African countries that had built up productive capacity to participate in the US African Growth and Opportunity Act. South African retailers sourced clothing and textiles from Mauritius and eSwatini that were exported to South Africa. The demands from US buyers on suppliers meant that the products were of high standards and that the suppliers built up their capabilities. South African retailers take advantage of the capabilities built up under preferential trade agreements in other regional countries.
Additionally, the global green energy transition is set to be minerals-intensive and Africa is well endowed with most of the critical energy minerals, said University of Johannesburg Centre for Competition, Regulation and Economic Development senior researcher Elvis Avenyo. “African countries can take advantage of the transition to green production processes to transition to medium- and higher-value chains by implementing minerals-led industrial strategies,” he said.
A 12-month suspension on anti-dumping duties for poultry from five countries has ended, which has raised warnings that consumers should brace for massive price hikes for the protein. Minister of Trade, Industry and Competition Ebrahim Patel on Tuesday issued a notice indicating that with the suspension period ending, the anti-dumping duties would become effective.
The duties are based on recommendations from the International Trade Administration Commission (ITAC) of South Africa. This followed an investigation into allegations of dumping “frozen bone-in” chicken portions, like leg quarters, imported from Brazil, Denmark, Ireland, Poland and Spain. ITAC found that the poultry was indeed being dumped into the Southern African Customs Union (SACU) market, of which South Africa is part.
Patel approved the commission’s recommendation to impose anti-dumping duties – which would be as high as 265% on imports from Brazil (additional to an existing 62% tariff), 67.4% on Denmark, 85.8% on Spain, 96.9% on Poland and 158.4% on Ireland. But he decided to delay the implementation (from August 2022) by a year, given the impact it would have on consumers at the time. He reiterated this in a notice issued on Tuesday this week, which also explains why the 12-month suspension was implemented.
“The purpose of this notice is to advise all interested parties that the 12-month period is ending, and in the circumstances, the minister is of the view that the anti-dumping duties should now become effective,” the notice read.
Govt grants local sugar firms licenses to import sugar out of COMESA (Capital Business)
The Government has granted licenses to Kenyan sugar companies to import the commodity out of the Common Market for Eastern and Southern Africa (COMESA). This is meant to cool the high prices of products that retail for about Sh510 for a two-kilo packet.
President William Ruto said on Wednesday that the supply of the product in COMESA has declined, thus the need to target international markets. “There is concern around sugar and we have heard issues around the whole sugar sub sector, there has been a lot of confusion and chaos since the sector has been riddled and poaching of sugarcane from one corner to the other, and others refusing to work in accordance to the law,” he said at State House.
“In fact the reason why many companies have closed shop temporarily is because there is no can to harvest and others were even harvesting cane that has not matured.” Ruto added that the government is working to create a roadmap that will be discussed in the cabinet meeting in the coming week to sort out the sugar issues in the country.
Central Africa achieved real GDP growth of 5.0 percent in 2022, compared with 3.4 percent in 2021. The rebound in economic activity was driven by favourable prices for raw materials, in a region that is home to net exporters of crude oil, minerals and other commodities. The region’s growth rate was higher than the African average, which is estimated at 3.8 percent in 2022, down from 4.8 percent in 2021. It is set to settle at 4.9 percent in 2023 and 4.6 percent in 2024.
These are some of the findings of the Central African Economic Outlook 2023 report, published on 31 July by the African Development Bank. The report has the theme “Mobilizing Private-Sector Financing for Climate and Green Growth in Africa”.
The Central Africa region achieved the best budget performance, including the smallest deficit. The deficit – despite improvements in the prices of the main exports from the region – can be explained by an increase in total primary spending owing to budget support measures undertaken by governments in response to persisting harmful effects of the Russian invasion of Ukraine on energy prices and food products.
Hervé Lohoues, Lead Regional Economist for Central Africa and Acting Division Manager for the Southern Africa, East Africa and Nigeria Country Economists, said: “Overall, the economic outlook for the Central Africa region is positive for 2023 and 2024. This performance is the result of the structural reforms implemented to support the non-extractive sectors, and the increase in external demand and the prices of the main products exported by the various countries in the region.”
The 12th Meeting of the COMESA Ministers Responsible for Gender and Women’s Affairs was held Thursday 3 August 2023 as the region took stock of the progress it has made in advancing gender equality, empowerment of women and girls, as well as social and cultural development. The meeting, which was being held for the first time since 2021, was virtual.
COMESA Secretary General HE Chileshe Mpundu Kapwepwe delivered the opening remarks. “The pandemic pushed more women out of employment because they dominate the services sector which were shut down to prevent the spread of COVID. Moreover, according to a 2021 survey by the International Labour Organization, only 43.2 per cent of the world’s working-age women were likely to be employed post-COVID, compared to 68.6 per cent of working-age men. Women were also more likely to lose their jobs permanently compared to men,” she said.
“If women are equipped with the necessary resources, skills and opportunities to start stronger businesses, and pursue the growth potential of these enterprises, this would contribute significantly to poverty reduction, wealth creation and employment generation, and improved well-being for millions of the citizens of our region,” the Secretary General affirmed.
Actions speak louder than words – how the EU-AU partnership really works for Africa (Delegation of the European Union to the Kingdom of Eswatini)
Europe and Africa need each other to build a solid and lasting response to global and common challenges, from climate change to peace and security or economic development that affect us all. The partnership between the European Union and the African Union, rooted in dialogue and multilateralism, is solution-oriented and forward-looking.
While others seek to divide, the EU in its partnership with Africa seeks to deliver and foster cooperation. The commitments made by some countries have not stood up to the test of time. While the EU and its Member states have consistently invested in Africa and facilitated the duty free access of African exports in the EU, others only afford to invest in disinformation.
As of today, the EU is by far the main trade partner of the African continent, with a total volume of 268 billion Euro in 2021 (approx. 5. 225 trillion SZL) and 90% of African exports entering the European Union duty free. The EU is encouraged by the potential of the AfCFTA (African Continental Free Trade Area) and has been supporting it since the beginning, contributing, under a Team Europe (EU and Member States) approach, with expertise, institutional capacity and exchanges on lessons learned.
Micro Small and Medium Enterprises (MSMEs) have more opportunities to grow by leveraging the factoring industry for operations, Peter Olowononi, head, client relations, Anglophone West Africa at the African Export-Import bank (Afreximbank) has said.
Factoring is when a funding source or financier acts as an intermediary agent that provides cash or financing to companies by purchasing their account receivables. Consequently, businesses suffer issues around lack of finance skills in preparing bankable proposals, risk-averse banks with excessive collateral requirements, lack of specialized financial institutions, shallow capital markets or a weak financial sector in general, amongst others.
“Ensuring the availability of adequate and appropriate financing to SMEs is essential to help them develop to their full potential; Factoring provides an important alternative to the other external financing sources available for SMEs such as bank loans, leasing, venture capital etc,” he said.He noted that while factoring is an emerging market, it has significant potential as its volume in Africa is above €41.8 billion and is expected to reach €50 billion by 2025.
AU Regional Economic Community capacity building on Data Policy Framework (Research ICT Africa)
July also saw the start of a two-year capacity building programme driven by RIA as part of the GIZ-funded implementation phase of the African Union Data Policy Framework in Addis Ababa. The Data Policy Framework is inclusive and forward-looking to enable member states to participate in a single African digital economy by cooperating to share data responsibly and co-create the infrastructure necessary for Africans to participate equitably in the continent’s digital economy.
As part of the implementation phase, the AU Commission has also developed a responsibility matrix to which the AU’s Regional Economic Communities and other affected parties are contributing. This will be finalised over the next few weeks and will provide another layer of guidance for domestication of the Framework at the national level.
Agriculture, Land Reform and Rural Development Minister, Thoko Didiza, will next week host the 13th BRICS Ministers of Agriculture meeting aimed at increasing cooperation among its member countries to promote sustainable and fair growth.
The 13th BRICS Ministers of Agriculture meeting will take place from 8-12 August 2023 in the Waterberg District, Limpopo. Held under the theme, ‘Strengthening collaborations towards sustainable agricultural production and increasing productivity’, the meeting will seek to pursue issues of common interest relating to food security, climate change, rural development, economic challenges, poverty, and population growth. The department said the BRICS mechanism aims to promote development cooperation, security, peace, and establishment of a more equitable economic world.
“The overall aim of BRICS agriculture cooperation is to improve access to food and increase comprehensive food production. The event will showcase rural development and climate change programmes,” the department said.
$31 TRILLION: Goods and services trade jumps 13% (Trade Arabia)
Trade in goods and services amounted to $31 trillion in 2022, a 13% rise year-on-year, according to a new report from World Trade Organisation (WTO). While trade in goods exceeded pre-pandemic levels already in 2021, trade in services caught up in 2022.
The share of manufactured goods in world merchandise exports fell to 63% in 2022 (versus 68% in 2018) mainly due to high energy prices limiting demand. Trade in transport services continued to grow in 2022, although at a slower pace than in 2021 as shipping rates returned to pre-pandemic levels, the report said.
Africa’s trade deficit in intermediate goods shrank to $4.4 billion in 2022. This is partly due to growth in its exports of intermediate goods, which totalled US$ 292 billion in 2022, an increase of 47 per cent compared with its pre-Covid-19 level in 2019. A rise in value terms is largely due to high commodity prices.
Least-developed countries’ (LDCs) exports of goods increased by 41 per cent in 2022 compared with pre-pandemic levels in 2019 while commercial services remained depressed (-14 per cent). This was due to subdued recovery of international travel to Asian LDCs (74 per cent below 2019).