tralac Daily News
South Africa likely to keep preferential US trade access, envoy says (Engineering News)
South Africa will likely keep its preferential access to US markets because hundreds of American firms are also benefitting, according to the nation’s ambassador to the Brazil, Russia, India, China and South Africa (Brics) bloc.
“I don’t think there is any serious threat of us losing preferential access to AGOA. AGOA is not a one-way issue, trade is not a one-way issue,” Anil Sooklal said at a Bloomberg conference in Johannesburg on Monday. “You have 600 US companies doing business in South Africa. Are they going to turn their backs on that?”
South Africa has asked the US to consider an early extension of the African Growth and Opportunity Act, which expires in 2025. But some US lawmakers have pushed the Biden administration to review South Africa’s access to AGOA, amid frustration over the country’s non-aligned position toward Russia’s invasion of Ukraine, and because they deem it too developed to qualify.
South Africa, which last year exported $2.7-billion of goods using AGOA and the so-called Generalized System of Preferences, will host an AGOA summit later this year.
Coal still has role to play despite naysayers, Menar MD tells conference (Engineering News)
Resources investment company Menar MD Vuslat Bayoglu has emphasised that South Africa is on the precipice of a significant industrial revolution. Fuelling this revolution, however, will require a consistent and reliable baseload power source that can only be produced by coal-fired power stations, despite calls from more developed countries for South Africa to reduce its coal-fired power station capacity to achieve sustainability and carbon dioxide emission reduction goals, he said on the first day of the Southern African Coal Processing Society International Coal Conference, in Secunda, Mpumalanga, on August 15.
Owing to the abundance of important minerals South Africa has – such as platinum, coal, chrome, manganese and others – it is vital to use and process these resources locally to generate income and create jobs, he added.
Bayoglu argued that decisions by government to close down coal-fired power stations, and therefore remove baseload power needed for the local power grid, could be detrimental. South Africa currently exports about 70-million to 80-million tons a year of coal. This stands in contrast to countries such as Australia and Indonesia, which have recently increased their coal exports from 100-million tonnes to 300-million tonnes a year and 100-milion tonnes to 700-million tonnes a year, respectively.
He also pointed out that as South Africa continues to export coal, the Asian market will be crucial for the country to supply to. “About two-thirds of coal-fired power stations are in Asia. And then the average age of those coal stations is 13 years. They’re quite young, and Asia’s going to be a key market for our coal. Globally there’s a trend that coal’s facing down, but it’s not out.”
Namibia: Peugeot plant still in limbo (New Era)
Workers at the Peugeot plant in Walvis Bay, in which government owns a 49% stake and French automaker Groupe PSA has a majority 51% share, continue receiving their basic salaries and locally assembled vehicles are still being sold domestically despite the factory being under care and maintenance. This is after the French car maker sued government for N$80 million, claiming government’s failure to honour its part of the investment agreement as it pertains to the establishment of Peugeot Opel Assembly Namibia (POAN).
The N$190 million assembly plant, which holds tremendous export and job creation potential, has been besieged by obstacles since its official opening in 2018. This has resulted in less than 200 vehicles being produced at the plant since inception. The carmaker has been left regionally uncompetitive due to import duties of between 18% and 25% into the Southern African Development Community (SADC) and the Southern African Customs Union (SACU). However, government refuted Groupe PSA’s legal assertion with what Humavindu called “evidence and facts” and this resulted in the court striking the case from the roll.
Zim elections: Agri revival burns bright for Africa’s food basket (Food for Mzansi)
Experts have called on the incoming government to be tough on consequence management and find a working mechanism to fight corruption and the non-implementation of policies that are aimed at improving the lives of the people through agriculture in Zimbabwe.
“Agriculture has always been a problem in Zimbabwe in terms of national policies, mainly the land reform programme which happened 20 years ago. What happened then continues to influence what is happening now in terms of politics.
According to Motsi, the unfair distribution of land in Zimbabwe was what led to the once food basket of Africa facing food insecurity and sanctions which has made the situation worse.
Motsi said Zimbabwean agriculture is slowly recovering, however, the biggest problem is corruption that is not being dealt with by the government. “The whole economy of Zimbabwe has been anchored on agriculture, especially on tobacco, soya beans and maize, but there was a decline since late 2000 after the grabbing of the land”
Motsi said the new model that has been introduced on how farmers can be contracted as suppliers with main foreign companies was a positive move that has yielded good results.
National African Farmers Union (Nafu) president Motsepe Matlala said the elections are important for Zimbabwe and whichever party wins has no choice but to focus on reviving the agricultural sector.
UNCTAD Secretary-General Rebeca Grynspan met today with President William Ruto of Kenya to discuss the structural challenges facing the region and offer UNCTAD’s support.
President Ruto stated, “We strongly believe that UNCTAD is a strategic partner for Kenya” underlining that trade remains key to long-term sustainable economic growth. He was accompanied by Industry, Trade and Investment Cabinet Secretary Moses Kuria.
Ms. Grynspan’s itinerary in the East African nation features discussions with Kenyan ministers, high-ranking officials and business leaders, and a presentation of UNCTAD’s “Holistic Productive Capacities Development Programme for Kenya” – a tool assessing the economy’s latent potential for output. The UNCTAD chief is also set to tour a circular economy center in Lavington, Nairobi.
Kenya’s economy has demonstrated remarkable resilience despite COVID-19 and other shocks, with growth rates projected to exceed 5%. Diversified exports, including high-tech goods like mobile phones, position Kenya to reap gains from the African Continental Free Trade Area (AfCFTA). The country’s burgeoning e-commerce market, projected to encompass nearly 40 million by 2027, and plans for a $40 smartphone align with President Ruto’s vision of affordability.
Secretary-General Grynspan will launch UNCTAD’s flagship Economic Development in Africa Report 2023 in Nairobi on 16 August.
Kenya has announced plans to remove visa restrictions for all African Union member states later this year in an effort to boost pan-African integration. The move was revealed by Cabinet Secretary for Foreign and Diaspora Affairs, Alfred Nganga Mutua. Mr. Mutua said the move demonstrates Kenya's commitment to play a leading role in regional integration. It’s also expected to boost tourism and generate revenue for Kenyan businesses.
Under the new policy, citizens of more than 50 AU nations will have reciprocal privileges to enter Kenya visa-free.
Kenya has been a strong proponent of AfCFTA, which aims to create a single market liberalizing trade and movement across Africa headquartered in Accra, Ghana. No firm date has been set for implementation, but the policy, which represents a major milestone in strengthening connectivity between African countries, is slated to take effect before the end of 2023.
The African Development Bank’s Board of Directors has invested $20 million investment in the Pembani Remgro Infrastructure Fund II which will operate across various African nations, including Nigeria, focusing on industrial and infrastructure projects.
The Pembani Remgro Infrastructure Managers was formed in 2012 in South Africa and manages the Pembani Remgro Infrastructure Fund II. Nairametrics also reports that with the Bank’s contribution, the Fund aims to attract up to $400 million from private, commercial, or institutional investors to support its endeavours in Africa.
The funds amassed by this initiative will be directed towards a spectrum of industrial and infrastructure projects which encompass digital infrastructure, the shift towards renewable energies in the energy sector, logistics and transportation, waste recovery, as well as heating, ventilation, and air conditioning, all with a specific emphasis on enhancing energy efficiency.
Economic activity in ECOWAS to recover in 2024 (The Business & Financial Times)
The West African Development Outlook (WADO) is projecting economic activity in most Economic Community of West African States’ (ECOWAS) economies to rebound over the next two years while inflation is expected to decelerate, leading to improved conditions compared with 2022.
WADO, an annual publication by the ECOWAS Bank for Investment and Development (EBID), explained that economic activity will end this year at 3.8 percent; rebounding to 4.1 percent in 2024 on account of more stable prices.
The West African Economic and Monetary Union (WAEMU) is also expected to record an uptick in economic activity, growing at 6.1 percent in 2023 and further to 6.5 percent in 2024. On the other hand, gross domestic product (GDP) growth in the West African Monetary Zone plus Cabo Verde (WAMZ+) is projected to slow to 3.1 percent in 2023 before reaching 3.4 percent in 2024.
Notwithstanding the above positive outlook of economic activity in 2024 for the ECOWAS region, the WADO report also outlined six possible downside risks the West African economy faces – which, if not contained, could derail prospects and worsen risks.
Key among its recommendations is that ECOWAS countries work toward using local currencies in intra-regional and intra-Africa trade by taking advantage of the Pan-African Payment and Settlement System (PAPSS) platform, as envisaged under the African Continental Free Trade Area (AfCFTA) framework. This will help bring more stability to local currencies, given that it will lead to a reduction in demand for the dollar; giving them a better handle on inflation. Other policy options WADO2023 proposed include the need to rethink intra-regional trade, followed by improving labour productivity and increasing electricity coverage.
A former Minister of Foreign Affairs and Professor of Political Science, Bolaji Akinyemi, has stated that the intervention of the Economic Community of West African States (ECOWAS) in restoring democracy in Niger is in a bid to stop spread of coups in the sub region. The body placed sanctions on the Niger military junta following the ouster of president Mohammed Bazoum in a coup on July 26.
Akinyemi also noted that with West Africa becoming a belt of coupist, Nigeria must be wary after the Niger coup. He said, “Whether in Nigeria, Côte d’Ivoire, Senegal and wherever, you would want to put a stop to the creeping phenomenon of coups. Yes, Nigerians whether in the north or south have been very vocal against the military component of the policy of ECOWAS.
“They felt that the military component being put on the table is so quick that there should have been more emphasis on diplomacy, dialogue and economic sanctions before you openly talk about military options.... It’s not just Nigeria, the question is why is confronting the coupist in Niger important to ECOWAS? You don’t want a domino effect.
Energising Africa’s Digital Economy: Cross-Border Data Flows and the African Continental FTA (Commonwealth Secretariat)
The African Continental Free Trade Area (AfCFTA) is the largest free trade agreement in the world by number of members and geographical area covered. It spans 54 African countries, 2 with a combined gross domestic product (GDP) of US$3.5 trillion and 1 billion consumers. Although initial trading under the agreement officially commenced in 2021, there are still ongoing negotiations on several outstanding protocols.
This issue of Trade Hot Topics provides an overview of the ongoing debate regarding cross-border data flows and their restriction. It examines this debate in light of Africa’s digital needs and explores how cross-border data flows are regulated in the multilateral
trading system and other large regional trade agreements, as well as by different African countries. It concludes with some recommendations for the negotiations on the AfCFTA Digital Trade Protocol.
The 11th Conference on Climate Change and Development in Africa (CCDA-XI) will be held in Nairobi, Kenya from 1-2 September 2023. It will serve as a pre-event of the Africa Climate Summit to be held under the theme; “African Solidarity for Global Climate Action from 4-6 September 2023 in Nairobi, Kenya. It will bring together African high level policy makers, senior officials, climate change experts, civil society organizations and other stakeholders to deliberate on the sub themes of the Summit.
“Africa has taken a position that it contributes the least to global warming but is the most vulnerable to the impacts of climate change and therefore has special needs and special circumstances warranting financial support to mitigate against and adapt to climate change,” the organizers stress. The continent is seeking to accelerate implementation of its climate change strategies and actions to avert the catastrophic impacts of global warming and build the resilience of the continent’s economies.
The Global Africa Business Initiative (GABI), the leading platform for promoting investment opportunities and business growth across Africa and the world, will bring together Heads of State and Government, CEOs, UN leaders, investors and entrepreneurs in September for a deep dive into energy, trade, and digital transformation. Themed ‘Unstoppable Africa’, the GABI event will take place on 21-22 September in New York during the high-level UN General Assembly week. This year’s program will center on three key themes: Energy Access & Energy Transitions, Inclusive Growth & Trade and Digital Transformation.
This landmark event comes at a pivotal time in Africa’s economic landscape. With a market potential of US$3 trillion, Africa presents enormous business, trade, and investment opportunities. The region’s GDP growth at 4%, expected to outpace the global average of 2.7%, is indicative of the continent’s robust economic momentum. Moreover, FDI into the region surged to US$97 billion in 2021 before moderating to US$45 billion in 2022, but still reflects a substantial increase from the US$39 billion recorded in 2020, underscoring a vibrant and attractive investment environment.
These unique attributes underscore the vast potential and innovative spirit that characterize Africa’s present and future economy. Leveraging 60% of the world’s uncultivated arable land and housing the youngest population globally, with 60% under the age of 25, the continent is poised for dynamic growth and expansion. GABI provides the perfect platform to explore and invest in these opportunities, laying the groundwork for a prosperous future in Africa and worldwide.
Wheat consumption represents 67 and 38 percent of total cereal consumption in Djibouti and Sudan, respectively; in Ethiopia, Kenya, and Somalia wheat consumption accounts for less than 24 percent of total cereal consumption.
Local wheat production remains below consumption needs across most countries in the Eastern Africa Region, with in-country production ranging between 0-25 percent of the total annual consumption requirements.
Djibouti and Somalia rely exclusively on imports to meet their domestic wheat demand. A sizeable portion of wheat demand in Kenya and Sudan is met by imports (86 and 77 percent, respectively). Ethiopia is the only exception as domestic production in 2022 accounted for 82 percent of total wheat consumption needs.
Considering the high reliance on imports from the Black Sea to meet the domestic wheat demand and weak domestic currencies, wheat availability and prices in Djibouti, Somalia and Sudan are more likely to be influenced by international trade dynamics.
Somalia and Sudan are largely dependent on imports from Russia and Ukraine to meet their domestic wheat demand. In 2022, Somalia imported 63 percent of wheat required from Ukraine. Sudan imports around 85 percent of its annual wheat requirements from the Russian Federation and Ukraine (accounting for 50 and 20 percent of wheat imports, respectively).
The suspension of the BSGI on 17th July 2022, pushed international wheat prices to a five-month high in the following days. Despite the initial spike, international wheat prices eased towards end of July through early August, reaching levels lower than those recorded before the halt of the initiative.