Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

South Africa’s manufacturing improved in June 2023 (IG)

The manufacturing sector has demonstrated an impressive performance in June 2023, showing a 5.5% increase in production (as per the STATSSA production and sales report for June 2023) compared to the same period in the previous year. This significant growth is primarily driven by key divisions such as motor vehicles, parts and accessories, and other transport equipment, which contributed 1.8 percentage points with a 19.5% increase.

Furthermore, basic iron and steel, non-ferrous metal products, metal products, and machinery have also contributed 1.6 percentage points, indicating a 7.5% increase. The food and beverages division, a key component of the consumer staples sector, also contributed 1.3 percentage points, showing a 5.8% increase.

However, the same robust growth was not reflected in the manufacturing sales, which decreased by 0.5% in June 2023 compared to May 2023. This is following a 2.8% decrease in May and a 0.6% decrease in April.

Collapse of SA-Zim link derails regional trade (CAJ News Africa)

The demise of the railway link between South Africa and Zimbabwe has been to the detriment of the two countries and the entire Southern African region.

The ruling Zimbabwe African National Union – Patriotic Front (ZANU–PF) has decried the downfall of the rail route as a sad development as costs of transporting goods and service by road becomes expensive. Chris Mutsvangwa, ZANU-PF spokesperson, said exporting or importing goods and services through neighbouring South Africa had become very expensive due to lack of rail.

“It’s rather cheaper exporting or importing goods and services through Mozambique,” Mutsvangwa said, speaking in the capital Harare, to journalists drawn from the Southern African Development Community (SADC) regional bloc. He said while Zimbabwe was doing more business with South Africa than any other SADC regional member state, trade ties were increasingly becoming unbearable owing to the absence of the railway line.

Botswana road drives Namibian opportunities (New Era)

Botswana is moving at great speed to rehabilitate and fully commercialise the Nata-Maun-Mohembo road to ease the flow of goods and services between itself and neighbouring countries. This was shared by that country’s minister of transport and public works Eric Molale in a conversation with Botswana’s Daily News newspaper on Monday. New Era is privy to the discussion.

Molale said once the Nata-Maun-Mohembo road is operational, it will offer a shorter route between Mohembo in Botswana’s North-West District and the town of Katima Mulilo in Namibia for cross-border trucks.

“The trucks that are passing here going to Katima in Namibia now have to take a straight route through Mohembo, instead of having to go to Windhoek first,” Molale said. The transport minister emphasised that improving road networks will improve and promote economic activities, as well as deepen regional integration by creating a conducive environment for seamless movement of people, goods and services.

Puzzle of skyrocketing food prices in spite of cheap imports (Business Daily)

Traders used the duty-free window to import in under six months quantities of rice equivalent to what Kenya normally ships in in a year, but still failed to cool the skyrocketing prices in the country.

Fresh data from the Kenya National Bureau of Statistics (KNBS) show that despite the increase in supply, retail prices of rice have barely gone down with a five kilogramme of the cereal nearly doubling from the beginning of the year. Cheaper sugar and cooking oil imports also failed to soften food prices, raising fears that some stocks may have been hoarded.

In a rush to use the duty-free importation window opened by President William Ruto’s government, traders imported 701,743 tonnes of cheaper rice in the first half of this year, according to the official KNBS data.

The quantity of rice majorly imported from Pakistan and India, valued at Sh39.7 billion, is more than what the country imports in a year and points to possible flooding of the local market with a cereal that is grown in 23 counties. Rice and sugar farmers are braced for cut-throat competition, with fresh data pointing to increased shipment of the commodities in the first half of 2023.

Manufacturers of edible oils have decried the shipment of palm oil, critical for the making of cooking oil, under the duty-free programme being undertaken by the Kenya National Trade Corporation (KNTC), which falls under the Ministry of Trade.

The duty-free scheme came to an end on August 6, in effect ending the free inflow of commodities that fell under the scheme including cooking oil, wheat, rice and beans. The scheme was started last September by the government as a means to bring down the retail prices of critical staples and lower the cost of living.

EAC in push to fully implement AfCFTA trade terms (The Star)

East Africa is at an advanced stage in implementing trade modalities under the African Continental Free Trade Area (AfCFTA), making it among the first blocs to embrace the continental deal. Led by the East African Business Council (EABC), with support from the German Technical Cooperation (GIZ) in EAC, the region is in the progress of developing the EAC Tariff Offer under AfCFTA for sensitive products and the exclusion list.

According to AfCFTA modalities for the submission of tariff offers, the sensitive goods under category B require seven per cent of the tariff lines to be liberalised over a period of 13 years for Least Developed Countries (LDCs), and 10 years for developing countries. For the EAC, the required tariff lines under this category are 398.The excluded goods, which are under category C, cover three per cent of the total tariff lines and must meet the anti-concentration clause; that is, not more than 10 per cent of intra-African imports should be excluded from preferential terms.

So far, the EAC Partner States have agreed on 308 tariff lines under category B; hence they are remaining with 90 tariff lines that have not been agreed upon. Under category C, the EAC Partner States have agreed on 75 tariff lines. Ninety six tariff lines are yet to be agreed upon.

According to trade and policy advisor at EABC, Adrian Njau, the outstanding tariff lines are few, at 192 product tariff lines, but are of significant importance in terms of food security, regional value chain, livelihood of East Africans, and industrialisation.

Local businesses in northern Nigeria feel the sting of regional sanctions against neighboring Niger (AP News)

A decision by a bloc of West African nations to shut down their borders with Niger as a way of sanctioning its coup plotters is harming local businesses in northern Nigeria, where a cross-border economy has boomed for years.

The bloc known as ECOWAS restricted financial transactions and shut the borders between Niger and its member nations as part of measures to force the coup plotters to reinstate Nigerien President Mohamed Bazoum who was overthrown last month by soldiers in his Presidential Guard.

Niger accounts for 75% of the total value of exports from Nigeria’s cross-border informal trade, according to a study by the Central Bank of Nigeria. The bank’s latest report in 2016 valued goods traded across the border with Niger at 828 billion naira ($934 million) a year.

In Nigeria’s northwestern Katsina state, the border’s closure and restricted traffic on nearby roads left dozens of trucks stranded for days, most of them loaded with food items and other perishable goods. Prices of livestock, animal products and some commodities usually supplied from the city of Maradi in Niger have increased, local residents said. Nigeria’s authorities are enforcing the restriction of movement across the border but the measure has also impacted traffic in the surrounding area, including truck drivers not heading to Niger but other border towns in Nigeria.

Releasing the huge potential of female-run SMEs (African Business)

Sandrine Henton, MD of EG Capital, which makes private equity investments in mid-sized businesses in the health, food and education sectors, mainly within the East African region, said the organisation had been set up to focus on sectors in which women and young people were active.

“This was a very conscious strategy because youth and women are at the heart of the consumer economy in Africa,” she pointed out. The social sectors are at the heart of any resilient economy, she stressed, as proved by the fact that Eastern Africa continued to grow during the pandemic – the only region in Africa to do so.

Henton attributed this growth to robust local production and consumption, which are underpinned by the region’s informal sector, where women and the youth are most active. “It is extremely important that African countries build resilient communities. That must be achieved across society, including women and the young,” she stressed.

Infrastructure, energy and the financial sector currently command the bulk of investment in Africa while, among the social sectors, education only receives investment of around 3%. This imbalance needs to be addressed urgently, she said, explaining that these particular, highly resilient sectors will be instrumental in securing the continent in the face of future shocks such as climate catastrophe, war or pandemic.

“These kinds of shocks are expected to become more frequent and more dramatic than we have ever seen, which makes investment in the social sectors more critical than ever,” she warned.

Afreximbank and Development Reimagined Support Access of High-End, Sustainable Made-in-Africa Brands to China (Afreximbank)

In continuation of its strategy to assist African businesses in increasing their international presence, the African Export-Import Bank (Afreximbank) and international consultants Development Reimagined (DR) have entered into a partnership to promote the entry and sale of high-end sustainable African brands in China.

The partnership which includes a grant from Afreximbank, has seen Africa Reimagined (AR), a flagship programme created and managed by DR, introducing high-end value-added Made-in-Africa goods from such sectors as fashion, skincare and beverages, to China.

Mr. Yusuf Daya, Director, AU/AfCFTA Relations and Trade Policy, Afreximbank, commented; “We are encouraged about our partnership with Development Reimagined, aimed at enabling access of African brands to global markets. The vast Chinese consumer market provides immense opportunities for African businesses. We urge African entrepreneurs to embrace this challenge, crafting goods that resonate with the market, not only boosting the presence of African products in China but also fostering more jobs, collaborations, and economic growth. Alongside our partners, we will continue forging global partnerships that support African trade.”

Remarks by U.S. Consul General Will Stevens At the Africa Social Impact Summit 2023 (U.S. Embassy and Consulate in Nigeria)

At the heart of the United States’ commitment to Africa lies a steadfast focus to fostering economic growth. The African continent is dynamic, chock-full of untapped potential, from its people to its vibrant innovative and entrepreneurial spirit and her vast natural resources. Recognizing this, the United States envisions a future where economic growth is inclusive, sustainable, and far-reaching. Through increased trade and investment in sectors such as agriculture, technology, and infrastructure we hope create jobs, boost innovation, and elevate the living standards of millions of Africans.

Through initiatives such as the African Growth and Opportunity Act (AGOA), the United States has played a pivotal role in fostering two-way trade relationships that empower African economies and communities. By providing duty-free access to U.S. markets for eligible African nations including Nigeria, AGOA has paved the way for enhanced market access and economic diversification. Since its enactment in 2000, AGOA has facilitated a staggering $1 trillion in total trade. This is not just a number; it’s a testament to the fact that AGOA has contributed to the growth of industries across the African continent.

BRICS Expansion Isn’t Aimed at Countering the West, South African Official Says (Bloomberg)

A planned announcement on the expansion of BRICS at a summit in Johannesburg later this month isn’t aimed at countering the West, which remains a crucial trading partner for South Africa, an official said.

“I don’t think we see BRICS as being pro-Russia or anti-Western. I think that would be extremely wrong,” South Africa’s Foreign Minister Naledi Pandor said. “We have said many times before that South Africa’s trading partners in the West are very important to South Africa’s economic progress,” she told journalists at an online briefing Monday.

Heads of state from Brazil, Russia, India, China and South Africa will set out strict criteria for who will be allowed to join the bloc when they meet Aug. 22-24, Pandor said. Twenty-two nations have asked formally to become full-time members of the group, and more than 20 others have submitted informal requests.

Quick links

South Africa and China Conclude Trade Deals Worth $2.2 billion

Tanzania: Africa’s rising agricultural powerhouse

Integrating Ethiopia into regional and global trading systems

Kantamanto market: At one of the world’s largest clothing dumps, textiles are getting a new lease of life

Soaring rice prices stretch budgets for billions in Asia, Africa


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