Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

South Africa foreign policy in a tangle (CAJ News Africa)

This year will go down the annals of history as one in which the southern African nation faced the greatest dilemma in juggling its foreign policy. The upcoming Brazil, Russia, India, China and South Africa (BRICS) Summit is exacerbating South Africa’s Catch 22 as it precedes other summits to boost relations with the United States and Europe, which are nemesis to some allies within BRICS. South Africa’s policy of non-alignment, which according to critics is merely genuine on paper, is under a litmus test.

On one hand, South Africa must mend some regularly frosty relationships with some fellow African Union (AU) members, maintain relations between the continent and Asia, nurture continental ties with America as well as enhance affairs with Europe.

Amid the BRICS Summit, South Africa is inviting more than 30 African trade ministers and senior United States (US) Administration and Congressional representatives to the next forum of the African Growth and Opportunity Act (AGOA) scheduled for November this year. Again, later this year, South Africa will hold the European Union-South Africa Summit.

Overall, Ramaphosa said South Africa advocates for an open and rules-based global governance, trade, financial and investment system.

Kenya, Indonesia to sign preferential trade agreement (Nation)

Kenya and Indonesia yesterday signed four bilateral agreements on food security, mining, renewable energy and health following talks between President William Ruto and Indonesia’s Joko Widodo. Mr Widodo is on his first visit to Africa, which will also take him to Tanzania, Mozambique and South Africa, where he will attend the Brics (Brazil, Russia, India, China, and South Africa)summit in Johannesburg this week.

After a closed-door meeting between the two presidents that lasted about an hour, Dr Ruto announced the scrapping of visa requirements for Indonesians travelling to Kenya, saying, “nobody should need a visa to go home”.

Kenya is open for business. An important step in this direction must continue to be the easing and gradual removal of visa restrictions between our two nations. For our part, Kenya has decided to extend visa-free entry not only to diplomatic passport holders,” said Dr Ruto.

Kenya, South Sudan keen on infra projects under Lapsset (Africa Aviation News)

Kenya announced that it is committed to strengthening bilateral relations with South Sudan for the mutual benefit of the citizens of the two nations. President William Ruto said, “The two countries are pursuing joint infrastructure projects to enhance regional integration and boost trade.” “Kenya,” he added, “Is keen on implementing the infrastructural projects under the Lamu Port-South Sudan-Ethiopia-Transport Corridor project (LAPSSET). This will enhance connectivity, further integration and boost intra-regional trade for shared prosperity. This is instrumental in supporting bilateral trade.”

President Ruto made the remarks at State House, Nairobi, on Saturday (August 19, 2023) where he held talks with the President of South Sudan Salva Kiir. The two leaders signed a Memorandum of Understanding on the establishment of a fiber optic cable along the Eldoret-Juba road. They also agreed to complete the construction of the 11km Nadapal to Nakodok road to boost business between the two nations.

President Ruto said Kenya and South Sudan have also agreed to exploit the Africa Continental Free Trade Area Agreement to increase trade between the two nations.

Addis-Djibouti corridor to get $730 million major upgrade (Addis Standard)

The World Bank said the Addis-Djibouti corridor will get a significant upgrade with a $730 million grant following a newly approved Horn of Africa Initiative’s Regional Economic Corridor Project.

The “vital trade route and a lifeline for Ethiopia’s 120 million people,” received $730 million grant from the International Development Association (IDA), aimed at improving regional connectivity and logistics efficiency in Ethiopia along this key trade route connecting landlocked Ethiopia to the port of Djibouti, WB said.

“Improved regional connectivity and trade are essential to unlocking Ethiopia’s economic potential,” said Ahmed Shide, Minister of Finance. “This project is important to support our commitment to fostering inclusive growth and regional integration, as we are now fully focused on sustaining the growth and reaping the peace dividends,” he added.

Over 95% of Ethiopia’s import-export trade (by volume) uses the Addis-Djibouti corridor. The project aims to upgrade the road to Djibouti, including the Mieso-Dire Dawa section, which is currently in poor condition and unsuitable for growing truck traffic.

Trade vulnerability prompts urgent AfCFTA utilisation (The Business & Financial Times)

A recent report by the Ghana Statistical Services (GSS) has spotlighted the intricate dynamics of trade across the African continent, igniting discussions on the pressing need for economic diversification and the significance of the African Continental Free Trade Area (AfCFTA) initiative.

The release of the ‘Ghana 2022 Trade Vulnerability Report’ has shed light on the prevailing trade landscape, drawing attention to South Africa’s formidable position in intra-African trade. With exports reaching nearly GH₵15billion, South Africa retains a dominant role, influencing the direction of trade within the continent.

Ghana’s trade interactions, spanning both exports and imports, show a strong affinity toward European nations, accounting for over a third of all exports (35.9 percent) and imports (39.2 percent). Following closely is Asia, contributing 28.5 percent of exports and 37.2 percent of imports.

Notably, imports outweigh exports for all continents except Africa and North America. Specifically, exports to other African countries outpace imports by GH₵13.2billion while the margin narrows to GH₵6.8billion for North America.

Trade dynamics illuminate the significance of mineral fuels and oils in the import scene. Substantial imports from South Africa, Togo and Nigeria are anchored in these products, underscoring the interconnected nature of Africa’s trade network.

Ghana’s embrace of AfCFTA is palpable, evident through its issuance of the inaugural certificate of full commercial trading in 2022 to a ceramic tiles manufacturing firm. Under the banner of AfCFTA Guided Trade, this landmark initiative marks a pivotal stride toward meaningful trade relationships. Beginning with Ghana, Cameroon, Egypt, Kenya, Mauritius, Tanzania and Malawi, Guided Trade has recently extended its impact to Rwanda. The Rwanda Customs Division, operating under the Ghana Revenue Authority (GRA), received its first consignment of goods, bolstering AfCFTA’s role in cultivating regional trade ties.

DRC-Africa Battery Metals Forum ready for crucial launch (Miningreview.com)

The inaugural edition of the DRC-Africa Battery Metals Forum, taking place in Kinshasa from 20–21 September* this year, will contribute to the establishment of an inclusive and equitable battery metals industry, support large-scale sustainable growth, local beneficiation and socio-economic development.

“The DRC’s Ministry of Industry has been tasked by the government to build a battery metals industry in Africa, with a state-owned firm processing some of the battery minerals in the country and other African countries playing various roles in the value chain,” states Samukelo Madlabane, mining Events Director at the VUKA Group.

He adds: “In an effort to curb the effects of climate change, the world needs to go through an energy transition that will be driven largely by battery metals. With the DRC endowed with these minerals, the country needs a platform for dialogue on how to leverage the demand. The theme of the conference is: Creating wealth for the DRC and Africa’s battery metals industry value chain.”

Kenya to host Negotiations on the admission of Somalia into EAC this Tuesday (RegionWeek)

Negotiations between the East African Community (EAC) and the Federal Republic of Somalia on its admission into the EAC will start on Tuesday, Aug.22, 2023, in the Kenyan capital Nairobi, according to a statement issued on Saturday, Aug.20, 201 by the EAC headquarters in Tanzania’s northern city of Arusha.

In June 2023, the EAC Heads of State accepted the verification report of Somalia to join the EAC and directed the Council of Ministers and EAC Secretariat to commence negotiations with Somalia with immediate effect.

It was in 2012 when Somalia made its first application to join the East African Community (EAC), However, the verification mission to assess Somalia’s readiness to join the EAC was not conducted immediately due to various reasons. If Somalia joins the EAC, it will be the eighth member after the Republics of Burundi, Kenya, Uganda, Rwanda, South Sudan, the Democratic Republic of Congo, and the United Republic of Tanzania.

Somalia’s admission would further enhance economic integration within the EAC as it has a strategic location along the Indian Ocean coastline and has significant potential for trade and investment. This would open up new opportunities for cross-border trade, investment, and economic cooperation. In addition, the EAC would have a larger market size, which could attract more foreign investment and stimulate economic growth. The inclusion of Somalia’s population and resources would contribute to the overall economic development of the EAC member states.

Fresh move to curb services trade restrictions in EAC (The Citizen)

The East African Community (EAC) has embarked on addressing hurdles impacting trade in services. In that vein, a mechanism has been put in place to identify and monitor removal of the most nagging hurdles. This was announced by EAC secretary-general Peter Mathuki last weekend during his ‘State of the EAC’ address.

The removal of trade in service restrictions is being carried out within the framework of the Common Market Protocol. The protocol signed in November 2009 and enforced in July 2010 is one of the four pillars of the EAC integration.

EAC partner states have committed to scale up trade and investment in services sectors through guaranteeing free movement of services. Originally under the EAC Common Market Protocol, partner states made commitments to liberalise a total of 144 sub sectors and seven priority sectors. These are business, communications, distribution, education, financial, tourism and travel and transport. The EAC partner states further agreed to make additional commitments, at a future date, to liberalise the following additional service sectors not covered by the initial commitments. These are energy services, environmental services, health and social services, construction and related services and recreation, cultural and sporting services.

Dr Mathuki said in order to facilitate the free movement of services, the Community adopted and is implementing a Mechanism for Removal of Restrictions in trade in services.

Fresh Thrust Towards Free Movement in the COMESA Region as Immigration, Labour Ministers Meet (COMESA)

Ministers responsible for immigration and labour matters in COMESA have renewed their countries commitment to the implementation of the regional protocols on free movement as critical step towards unlocking the benefits associated with having free movement of factors of production in the region.

In their meeting conducted on 18 August 2023, Livingstone, Zambia the ministers welcomed the revised strategy for the implementation of COMESA Protocol on the Gradual Relaxation and Eventual Elimination of Visa, and the Protocol on the Free Movement of Persons, Labour, Services, Right of Establishment and Residence.

The two protocols have been in existence for a long time but have not yet attained the required ratifications by Member States to enable full implementation. Hence the Ministers adopted the immigration and labour experts’ recommendations to have a strong component on capacity building for migration stakeholders in the implementation of the Protocols as well as the past Decisions of the COMESA Council of Ministers relating to migration.

Addressing the ministers, COMESA Secretary General Chileshe Mpundu Kapwepwe said there cannot be meaningful integration of the region and the attainment of the aims and objectives of COMESA without the facilitation of seamless movement of goods, services and investment across the region. “Trade is on-going in goods, provision of services, investment, tangibles and intangibles. However, for the goods, services and investment to move across borders, there is need for a human interface between them to facilitate an effective delivery of those goods and services,” the Secretary General said. Currently, intra-COMESA trade potential is valued of over US$100 billion which could be unlocked through enhanced movement of goods and services across the region.

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