tralac Daily News
Targeted Spatial Agricultural development in South Africa: operationalising the Agriculture and Agroprocessing Master Plan and capitalising on the Africa Continental Free Trade Agreement.
South Africa is land characterised by a dichotomous and dualistic economy and the contrast cannot be more striking than in the agricultural sector.
Recently, South Africa has undertaken significant steps in developing a coherent inclusive strategy for agriculture in the country. The sector, led by the Minister of Agriculture, Land Reform and Rural Development has developed the Agriculture and Agroprocessing Master Plan (AAMP), which is just short of a White Paper for agriculture.
The AAMP is a huge step in the right direction in terms of supporting an inclusive growth of the agricultural sector and it follows a value chain approach. This value chain approach enables the isolation and targeting of individual value chains while not losing sight of their interconnectedness within the sector and the broader economy.
Kenya’s export development levy sparks trade diversion fears across East Africa (Business Insider Africa)
The Kenyan government’s intention to impose an Export Development and Promotion Levy (EIPL) on imports, which might result in Kenya losing trade with its EAC allies, has been contested by the Kenya Association of Manufacturers (KAM), the Federation of Kenya Employers, and tax consulting businesses.
The EIPL on all items brought into the nation for domestic use has raised under the new law from 10% to 17.50% of the customs value. However, products with EAC partner state provenance that adhere to the Rules of provenance are exempt.
“The Act has imposed a 10 percent levy under the Export Levy while the rest of East Africa is at zero percent,” the Kenya Association of Manufacturers relayed via a statement. “The immediate impact of that is that the levy will create trade diversion in favor of neighboring countries. It will also promote investment in Comesa countries,” the statement adds.
Envoy assures traders of improved ports efficiency (Tanzania Daily News)
Tanzania has assured the business community in Zambia and SADC countries of increased efficiency in its ports following huge infrastructure improvements in the country’s gateways.
Tanzania’s High Commissioner to Zambia, Lieutenant General Mathew Mkingule said recently during the Agricultural and Commercial Show in Zambia that the improved port infrastructures especially at the Dar port are facilitating easy movement of imports and exports in the region.
“When we talk about the Africa Continental Free Trade Area, we cannot reach there if we don’t start at a regional level, it is high time that African countries traded among themselves,” he said, adding that there is already big trade between many African countries.
Why Nigeria’s export cargo face rejection in foreign markets (Businessday NG)
Export cargo leaving Nigeria, Africa’s most populous nation, is largely rejected in the international markets especially in Europe and America due to quality concerns. According to the National Agency for Food Drugs Administration and Control (NAFDAC), the Nigerian economy and exporters are recording huge financial losses as over 70 percent of the food items and agricultural products exported out of Nigeria are rejected by potential buyers.
Mojisola Adeyeye, director general of NAFDAC blamed the poor export trade facilitation at the nation’s airport and seaport for the challenges faced by regulated products that are leaving the country.
BusinessDay findings show that it takes export containers over one month to have access to the seaport and make their way out of the country. This delay, caused largely by the bottlenecks experienced by truckers lifting export containers from the exporters’ warehouses to the port, not only eats into the time the products are supposed to have left the shores of the country to its destination port but also compromises the quality of the products.
NACCIMA warns against lowering issuance of certificates of origin standard (The Guardian Nigeria)
The Nigerian Association Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has warned that deviating from the globally-acceptable standards in the issuance of certificates of origin for goods being traded internationally portends danger for Nigerian businesses and the economy.
The National President of NACCIMA, Dele Kelvin Oye, who spoke during a courtesy call on the Acting Comptroller General of Nigeria Customs Service (NCS), Bashir Adewale Adeniyi, also warned that such a move could deprive the country of its ability to compete and attract foreign direct investments (FDI).
He said NACCIMA is globally recognised as the representative of the business community and plays an important role in the administration of the certificate of origin system issuance and providing other services to businesses engaged in international trade.
Oye said attempts to take over the globally-acceptable duty imposed on the chambers of commerce under the African Continental Free Trade Agreement (AfCFTA) could be disastrous for businesses. The NACCIMA boss, however, appreciated that government by treaty can change the rules for issuing the certificates, noting that such deviation makes the certificates issued under such policies unacceptable, thereby depriving Nigeria of the ability to compete and attract foreign direct investment.
East African Community (EAC) private sector players have said classification of which goods need protection and which do not need under the African Continental Free Trade Area is an important step the government must expedite.
Speaking on the sidelines of a two-day consultative meeting in Kampala yesterday, Mr Simon Kaheru, the East African Business Council Uganda Chapter chairman, said engaging the private ahead of the EAC partner states meeting in Bujumbura, Burundi next week, is one of the ways through which the region will form a voice in identifying which kind of products need to be put under the sensitive products category.
“It’s fantastic that the private sector is sitting a head of governments to see where we can seek protection and where we can seek promotion of trade with the rest of Africa,” he said, noting that partner states must agree, which has prevented the region from benefiting from the AfCFTA two years since signing of the treaty.
Delegates from Africa’s 25 coffee-producing countries are meeting in the Ugandan capital of Kampala with the aim of influencing the African Union to make coffee a priority crop on the continent that will pull millions of people out of poverty. Experts argue that once the continent’s political leadership understands the power of coffee in transforming economies, it will bolster the continent’s efforts to internally trade the “strategic commodity” but also speak with a united force on the international market.
The meeting, dubbed the 2nd G-25 Heads of State Africa Coffee Summit, is convening from Aug. 7 to Aug. 10 under the theme “Transforming the African Coffee Sector through Value Addition,” which is in line with the theme of the 2023 African Union agenda that focuses on accelerating the implementation of the African Continental Free Trade Area (AfCFTA).
Ugandan President Yoweri Museveni said at the meeting that Africa is losing a lot of income to the international market that continues to prefer taking coffee in its raw form. He told the delegates that out of the 460-billion-U.S.-dollar global coffee value, the coffee-producing countries only take 25 billion dollars and Africa gets only 2.4 billion dollars.
Ethiopian President Sahle-Work Zewde urged international coffee trading companies to support coffee-producing African farmers technically and financially in the value-addition process.
Nigeria’s Zenith Bank has announced a signed Memorandum of Understanding(MoU) of $1 million with the African Continental Free Trade Area (AfCFTA). The deal signed by the Group CEO of Zenith Bank, Dr. Ebenezer Onyeagwu, and the Secretary-General of the AfCFTA, Wamkele Mene at the ongoing 2023 Zenith Bank International Trade Seminar, is to develop a trade portal in Africa.
Speaking at the event, the Group Managing Director talked about the need to bolster Africa’s wealth. He established that one of the many ways to channel this vision into reality is to create a single African trade portal. According to him, the portal will significantly facilitate trade among African countries, and demonstrate the bank’s commitment as a bank to digitization in African countries.
According to the Zenith Bank Group CEO, Zenith will develop the smart AfCFTA portal which will serve as a straight portal. The purpose of this portal is to showcase African products and services as well as the locations they can be found.
“Through the development of this portal, one of the capabilities we are going to build in there is that you can see it in every part of Africa and market your products and services. You can see it in every part of Africa and identify whatever products and services you require that are in Africa”, he explained.
South Africa and Morocco, two of Africa’s leading automotive centres, are considering building mega and giga factories in their bid to keep up with the increasing demand for electric vehicles worldwide. A growing question, however, is whether those countries can scale fast enough, on their own, to make a difference.
Meanwhile, mineral-rich countries like the Democratic Republic of Congo (DRC), Zambia, and Mozambique are also eyeing the market with big intentions of becoming significant suppliers of electric vehicle batteries.
Industry experts suggest that for these countries to effectively compete for a significant portion of the global electric vehicle market, they should establish regional value chains to reduce investment barriers and cross-border trade expenses.
According to the African Development Bank, Africa has several key global vehicle supply chain strengths. These include existing expertise in internal combustion engines, proximity to key auto markets, access to raw materials, and participation in the AfCFTA. But, the AfDB emphasises in its latest Economic brief dubbed ‘Strengthening Africa’s Role in the Battery and Electric Vehicle Value Chain,’ there is a pressing need for countries to rev up value addition of green mineral resources to unlock Africa’s real potential.
The African Union Commission recently organised a meeting of communications experts from across the African Union entities and partners to discuss strategic communications for the Comprehensive Africa Agriculture Development Programme (CAADP). The gathering of communications experts focused on refining communication workplans and methods to enhance awareness and understanding of CAADP’s goals and initiatives. The experts highlighted the pressing need for improved strategies for communication and enhanced collaborative efforts to drive agricultural development across the continent.
The event, which marked the first CAADP communications experts meeting, emphasized the importance of bridging communication gaps and forming a formal working group to address these issues. Participants emphasized the need to develop targeted content and products tailored for various stakeholders and especially the small-scale farmers. The importance of capturing best practices and sharing them across the continent was highlighted.
The meeting underscored the significance of youth, women, farmers associations, and Civil Society Organizations (CSOs) and other non-state actors as important voices in agriculture who should be integral to these processes especially at the grassroots level. As the 4th Biennial Review (BR) cycle of the Malabo Declaration is underway, participants stressed the need for effective communication and visibility strategies to ensure the wide dissemination of results. With CAADP having existed for over two decades, there was a consensus that many farmers are still unclear about the program’s objectives, significance and impact.
The importance of engaging national communication experts, tailoring messages to targeted audience, and collaborating with various stakeholders was stressed throughout the discussions.
Deglobalisation will hurt Africa (Nation)
The fragmentation of world trade has culminated in the formation of rival blocs, giving impetus to an emerging deglobalisation phenomenon. At the World Chambers Congress 2023, in Geneva, the WTO director-general, Dr Ngozi Okonjo-Iweala, opined that global prosperity is at risk of being curtailed by simmering geopolitical tensions that continue to birth rival trade blocs.
Deglobalisation refers to a shift towards a less-connected world characterised by border controls. Bloc members reach a mutual agreement to eliminate barriers with a view to promoting free trade among them. But despite the immense benefits to members, it can distort the world economy as regards the specialisation of national economies. Countries prefer to trade with their fellow bloc members.
African economies would be greatly imperilled if deglobalisation escalated. A salient feature of globalisation is the reshoring of value chains that has the risk of curtailing the war against global poverty. The poorer regions will have several lost opportunities in global trade. Europe’s and the US firms, especially manufacturers, are reshoring their value chains, risking pushing more Africans into poverty.
International Relations and Cooperation Minister, Dr Naledi Pandor, says she is confident that the upcoming BRICS Summit will strengthen the bloc’s partnership and benefit the people of South Africa, BRICS, Africa and the global South.
Pandor told the media that President Cyril Ramaphosa has confirmed South Africa’s readiness to host the upcoming BRICS Summit, which will be hosted in person for the first time since the COVID-19 pandemic.
Leading up to the summit, Pandor said the Department of Trade, Industry and Competition and the BRICS Business Council will host a BRICS Business programme from 19 to 23 August 2023. The gathering, according to the Minister, seeks to foster economic growth, promote collaboration, attract investment, and display opportunities within South Africa, Africa, and BRICS countries.
South Africa’s overall trade with its BRICS partners, Pandor said has increased by an average growth of 10% between 2017 and 2021. She told the media that the South African trade with BRICS reached R830 billion in 2022 from R487 billion in 2017. “Last year, BRICS accounted for 21% of South Africa’s global trade.”
On Tuesday, China’s Ministry of Commerce (MOC) said that BRICS (five emerging economies - Brazil, Russia, India, China, and South Africa) ministers of trade and economy reached a consensus and achieved significant results at a recent ministerial meeting.
On Monday, during a video conference, the ministers agreed to expand cooperation in the digital economy and green development and make joint efforts to promote a stable supply chain and support micro, small, and medium-sized enterprises.
According to several reports, the ministers agreed to strengthen the multilateral trade system with the World Trade Organization (WTO) at its core and participate in the WTO reform with a constructive attitude.
Furthermore, they stressed that the policymaking related to climate change be consistent with the principle of common but differentiated responsibilities and the WTO rules. They also reached a consensus to invite non-BRICS countries to discuss the digital economy and explore cooperation with other developing countries and the least developed countries.