tralac Daily News
South Africa is in the enviable position of being a net exporter of agricultural products. Aside from the obvious contribution this makes to SA’s GDP and job creation, this, combined with excellent local production and 2 prior years of record exports, are the main reasons why SA has been able to ensure food security and curb food price inflation compared to the rest of the world.
As SA’s agriculture is export-orientated, the focus must be on safeguarding its seamless continuation. Attention should be centred on improving logistics efficiency, intensifying the promotion of South African products in export markets, and sustaining solid relations with existing critical export markets while securing expansion into new markets.
This is particularly important in the context of growing tensions between the East and the West – as highlighted by the potential loss of SA’s benefits through the United States (US) African Growth and Opportunity Act (also known as AGOA) – and more onerous regulations being imposed by the European Union (EU).
Footwear and leather industry a giant in waiting (Sunday World)
Despite challenges brought on by Covid-19 in many businesses in the country, including the footwear and leather industry, the future looks bright for South Africa in its endeavour to turn its fortunes around. Trade, Industry and Competition deputy Minister Nomalungelo Gina said the shoe and leather manufacturing sector was a beacon of hope to enhance the economy and in the process create jobs.
This week, Gina pointed out at the event hosted by the South African Footwear and Leather Export Council and the eThekwini Municipality Footwear and Leather Cluster in Durban, that it was high time for the industry to turn the tide and focus on manufacturing most sought-after products in the country. The industry that produces footwear, leather, handbags and belts, has also seen declining sales due to counterfeit goods sold by illicit businesses resulting in further job losses.
“We will continue to support this industry through incentives and ensure that the Retail–Clothing Textile Footwear Leather Master Plan 2030 targets are achieved.”
Micro, small and medium enterprises (MSMEs) in South Africa account for over 2 million companies, represent over 98% of formal businesses, and have experienced two-digit growth in the last years.
However, they contribute to creating less than a third of all formal jobs, leaving job creation highly concentrated in a small number of large employers and in the government. In addition, most entrepreneurs enter the ecosystem driven by necessity and the high rates of unemployment. As a result, the majority stay in the informal sector, keeping low growth aspirations and showing a high rate of failure and a low contribution to the creation of formal jobs.
South African youth entrepreneurs face similar challenges as their counterparts in the entire continent as they are hindered by a lack of access to sufficient capital, markets, poor marketing and branding skills, suitable infrastructure (including working space and ICT), as well as business management and educational skills.
Zimbabwean Central Bank starts implementing African payment system (The Zimbabwe Mail)
The Reserve Bank of Zimbabwe (RBZ) has started implementing the Pan-African Payment and Settlement System (PAPSS) aimed at connecting all banks, non-bank financial institutions, switches, and regional systems to enhance cross-border payment across the continent.
The system, expected to save the continent US$5 billion annually in transaction costs, is being promoted by the African Export and Import Bank (Afreximbank) as the settlement bank.
Prior to PAPSS, over 80 percent of African cross-border payment transactions originating from African banks had to be routed offshore for clearing and settlement using international banking relationships. That posed multiple challenges ranging from payment delays to operational inefficiencies and compliance concerns for the disparate regional payment systems. PAPSS, which has been successfully piloted in the six countries of the West African monetary zone, delivers multiple advantages and efficiencies to intra-African trade payments.
Dollar spend on food imports hits 68-month high in March (Business Daily)
Food purchases piled pressure on Kenya’s reserve of foreign currencies, taking close to 17.1 percent of the country’s total import bill in March, the latest from the national statistician shows. The share of food imports was the highest in 68 months, pointing to inflationary pressures occasioned by a crippling drought that depressed local production.
This was the largest share of food and beverage imports since August 2017 when these items took up close to a third of the country’s import bill, the latest data from the Kenya National Bureau of Statistics shows. Kenya spent Sh32.7 billion to import food in May, a drop from Sh37 billion in March.
Trade between India and Tanzania hits $6.4 billion (The Citizen)
Trade between Mumbai and Dar es Salaam has reached $6.4 billion, with Tanzania being described as the focal point of India’s relations with the African continent. According to India’s High Commissioner to Tanzania, Binaya Srikanta Pardhan there are Indian assisted development projects being undertaken in the country valued at $1.2 billion (Sh3 trillion). The envoy was speaking in Arusha during the occasion to mark the 77th anniversary of India’s Independence.
“The Indian Communities in Tanzania are the leading investors in the country,” he pointed out adding that, there are more Indians who have expressed interest to set up more enterprises in the country.
He added: Gold, unwrought or in semi-manufactured forms, or in powder form dried leguminous vegetables, shelled Coconuts, Brazil nuts and cashew nuts are among other products that are highly demanded in India
As a shipping magnate and former president of the oldest freight forwarding association in Nigeria (ANLCA), Tony Iju Nwabunike has said that without fixing infrastructure and fighting corruption, Nigerian ports cannot develop and compete with other neigbouring ports favourably.
In this interview, he pointed out that Nigeria does not need to give any individual or company concession to fix port access roads and other infrastructure in the port, adding that the industry has the capacity to generate billions of dollars and employment but it has been neglected by the Federal Government. He spoke on the danger of the $3.2 billion Customs modernisation project and other related issues as they affect the industry.
Somalia standards body to demand conformity certificates (The East African)
Somalia’s standards body has asked importers to acquire certificates of conformity before bringing goods into the country’s territory, part of a move to abide by global quality requirements for trade.
“The Somali Bureau of Standards, inform all companies, partners, traders (importers, international organizations, UN and all humanitarian agencies) and the Somali community that imports various goods, from all ports, borders as well as airports (country entry and exit points) to acquire the Certificate of Conformity (CoC).
Imports that do not meet the applicable requirements and are not accompanied by the mandatory CoC will be subject to penalty, effective as of September 1, 2023.
On July 22, Somalia’s Minister for Commerce and Industry Jibril Abdirashid Haji Abdi launched an implementation ceremony for the consignment-based conformity assessment between Sobs and Bureau Veritas, a UK-based company dealing with protecting consumers against dangerous, substandard or counterfeit goods through verification of conformity.
Negotiations between the East African Community (EAC) and the Federal Republic of Somalia for the entry of Somalia into the EAC begun in earnest in Nairobi, Kenya today. The nine-day negotiations have brought together experts from the seven (7) EAC Partner States, the EAC Secretariat, East African Legislative Assembly and East African Court of Justice, and their counterparts from the Federal Republic of Somalia.
Kenya’s Cabinet Secretary for East African Community, ASALs and Regional Development, Hon. Rebecca Miano, said that the EAC was keen on an expanded and vibrant bloc, with high volumes of trade within itself as well as with other blocs.
Speaking at the event, EAC Secretary General Hon (Dr.) Peter Mathuki said that joining the community would enable Somalia to benefit from the EAC’s regional infrastructure projects such as roads, railways, and energy networks. “These projects aim to improve connectivity, enhance transportation links, and boost regional trade, ultimately supporting Somalia’s economic development and integration,” said Dr. Mathuki.
Southern African bloc backs $17bn gas infrastructure plan (Engineering News)
A southern African bloc of nations backed a $17-billion natural gas infrastructure plan to bolster energy supplies on a continent where almost half of the population lacks access to power.
The 16-member Southern African Development Community approved the blueprint to invest in infrastructure such as pipelines and terminals for local and imported supplies. While not yet a major source of gas, the bloc is home to some significant discoveries with projects in various stages in Mozambique, Tanzania and South Africa.
With new coal projects unlikely, nuclear power considered costly and climate change threatening hydroelectric generation, “this leaves few options,” according to the plan. The plan still requires funding, at a time when the financing of fossil-fuel supplies grows increasingly challenging due to environmental concerns and a global shift to cleaner sources of energy. Project delays could also present an obstacle, as demonstrated by liquefied natural gas projects by TotalEnergies and Shell in the region that have fallen years behind their initial target to start production.
Japan testing China’s hold on African minerals (Asia Times)
Japan’s Minister of Economy, Trade and Industry Yasutoshi Nishimura has spent a week visiting five countries in southern Africa with Ichiro Takahara, chairman and CEO of the state’s Japan Organization for Metals and Energy Security (JOGMEC). Prior to his departure, Nishimura told Japan’s Sankei Shimbun newspaper that he aimed to secure access to important minerals including rare earths, cobalt, lithium and nickel during the trip.
“I would like to visit each country, sign more than 10 agreements, issue joint statements, realize cooperation agreements and build a supply chain. Budget support of approximately $1.5 billion (215.8 billion yen) for Japanese companies participating in the development of mines and related activities is also available.”
From August 6-13, Nishimura visited Namibia, Angola, the Democratic Republic of the Congo (formerly Zaire), Zambia and Madagascar. Measured against his statements before his departure, the trip was a success.
Japan is known as a reliable investment partner with a high level of technological expertise. It can offer Africa a wider choice of investment partners and, therefore, more bargaining power. As for Africa, in the future, its population will increase the most in the world and its economy will grow, he said. “In particular, there are abundant reserves of important minerals.” He expressed hope that Africa will “join us as a reliable partner.”
Banking in Africa is on the brink of its next transformative era. Gone are the days of discussing the Fourth Industrial Revolution as a concept; we are already immersed in a world augmented and powered by artificial intelligence (AI), Big Data, and cloud computing. Now, the next frontier beckons, with generative AI, secure online watermarked fingerprints and cryptocurrencies taking centre stage.
Africa has demonstrated its propensity for embracing technology, particularly in the financial services sector. With around 8 out of 10 people on the continent owning mobile phones and over 570 million people online in 2022, up 470% from 2010 (a significant contrast to the global increase of 159%), access to information and services has become easier. Now more than ever before, digital access to financial services in Africa is at a ripe stage. However, to further and continue this digital transformation journey, we must solve the existing infrastructure challenges, collaborate more and strengthen institutional connections.
BRICS Summit updates
The BRICS Business Council says it has adopted a trade and investment promotion statement aimed at increasing intra-BRICS trade. The various chapters of the council say this is a 10-year plan of action that includes enhancing trade through bilateral agreements and the exploration of value chain opportunities.
Intra-BRICS trade is said to have been growing at an annual average of 7% over the past 10 years. Other plans aimed at ramping up trade within the BRICS group include developing a BRICS calendar for trade and investment promotional events. BRICS accounted for 7% of global trade in the year 2000 and has grown to about 30% of global trade currently.
“We have now created a model for the world that moves us away from an extractive approach in terms of economic engagement towards a collaborative approach where we can all benefit and why this is important for the African continent. We have the resources in abundance still in our continent, be it the human capital in terms of the youth that we have, be it the minerals resources or other natural resources,” says Busi Mabuza, BRICS business council, South Africa.
BRICS Business Council Chairperson, Patrice Motsepe, has emphasised the importance of accelerating the implementation and advancement of the African Continental Free Trade Area (AfCFTA). Addressing the 15th BRICS Summit in Johannesburg, Motsepe called for a sense of urgency to make sure that trade barriers – both tariff and non-tariff – are significantly diminished and eliminated.
Motsepe stressed that the future of African business depends on its capacity and ability to prove to the rest of the world that it can conduct partnerships, trade, investments as well as the ability to have business relationships that are mutually beneficial.
Last year, trade between BRICS countries totalled some $162 billion. “The potential is enormous but again the sense of urgency is what we need to translate the good ideas that we have; these big plans into effective, legislative policy instruments that allows for effective free flow of goods and services. When we started, we wanted to increase the trade between the African continent and BRICS countries.
“The commitment and the will is there. A market is an opportunity until you invest and sometimes your investment takes five to seven years before you realise value. There is opportunities in terms of what we can do, the magnitude of how we can grow and the magnitude of how we can grow the trade investment and business ties between South Africa, Africa and BRICS countries,” Motsepe said.
Vladimir Putin has told a summit of the Brics group of countries in South Africa, that it should become a trading bloc representing the “global majority”. However differences among the group – comprising Brazil, Russia, India, China and South Africa – have become apparent at the summit over accepting new members, and whether to turn Brics into a geopolitical counterweight to the west.
In his recorded remarks to the meeting, Putin blamed the volatility in global markets for food and other commodities on western sanctions, and said that Brics would be a force for fairness in international relations. “We cooperate on the principles of equality, mutual support and respect for each other’s interests,” he said. “This is the essence of the future-oriented strategic course of our association, a course that meets the aspirations of the main part of the world community, the so-called global majority.”
Bank of China, IDC sign agreement on R10bn funding package (Engineering News)
BRICS expansion: A watershed moment for the global economy (Modern Diplomacy)