tralac Daily News
Taking Uganda-South Africa trade and investment forward (The Independent Uganda)
Latest data from the Bank of Uganda shows that the East African nation and South Africa’s trade volumes increased from merely US $76million in 1999 to US $334million in 2019 before slowing down to US $148.8million in 2022 owing to the effects of coronavirus pandemic.
However, most of these trade volumes are in favour of South Africa because it exports mostly high-value products such as machinery, vehicles, plastics, chemicals, electronics, parts and accessories, petroleum, live animals, books and newsprint, textiles, footwear, aircraft, and household goods. On the other hand, Uganda exports low-value products such as cotton, gold, fish fillets, tobacco, coffee, and fresh flowers.
It is on this basis that Uganda and South African governments have organized for a second leg of trade and investment summit to be held in Kampala next month to actualize deals and initiatives that started during the first summit held in Pretoria, South Africa, in February this year.
Trade cooperation between Angola and South Africa, valued at US$29.6 million is below its real potential, the executive director of the Private Investment and Export Promotion Agency (AIPEX), José Sala, said Tuesday in Luanda. José Sala added thar the two states have the potential to stimulate economic growth and promote regional development, creating more jobs for their citizens.
Speaking to the press on the sidelines of the Angola-South Africa Business Forum, the AIPEX administrator said that the South African investment, valued at US$29.6 million, is the result of seven projects, of which five in the area of service provision, one in the manufacturing sector and another in agro-industry.
José Sala suggested that the governments and companies of the two countries need to work together to facilitate trade and investment, which also includes improving infrastructure and establishing more cooperation agreements.
In recent years, the two states have reinforced bilateral relations with the signing of various commercial agreements, which include cooperation in the oil sector and the suppression of visas in ordinary passports.
Kenya eyes 6.1-month import cover to stop slide in shilling (The East African)
Kenya has set a target to ramp up its foreign exchange reserves to at least 6.1 months of import cover as it looks to provide a stronger buffer to cushion the shilling from external headwinds. This has been revealed in the details of the Medium-Term Plan 4 covering the period 2023 to 2027, the last implementation phase of Vision 2030. The first medium-term plan covered the period between 2008 and 2012.
The latest available Kenya National Bureau of Statistics data shows Kenya’s merchandise trade deficit stood at Ksh303.63 billion ($2.1 billion) between January and March 2023, an improvement from the Ksh328.1 billion ($2.27 billion) deficit reported in the same period in 2022.
The Finance Act 2023 has amended the Miscellaneous Fees and Levies Act of 2016 to introduce the Export Promotion and Investment Levy effective September 1, 2023, geared towards generating funds to boost manufacturing, increase the country’s exports and trim the monthly import bill.
Under the present environment, 6.1 months of import cover translates to about $11.2 billion (Ksh1.6 trillion) in foreign exchange reserves compared to the current $7.3 billion ($1.1 trillion), which translates to 3.98 months of import cover. According to CBK, the statutory reserves threshold is 4.0 months, an
Mining vaccines, and trade, Kenya and Indonesia ink multi-faceted agreements (Business Insider Africa)
Following bilateral discussions between President William Ruto and President Joko Widodo of Indonesia, agreements were reached that will allow Kenya’s Biovax and Indonesia’s BioFarma to work together to develop pharmaceuticals and other vaccinations for easy access between the two nations, as reported by the East African, a news publication with news centered on East Africa.
The most recent development occurs as Kenya’s government pushes for local health product manufacturing to reduce excessive importation and generate employment.
In order to strengthen regulatory collaboration for pharmaceutical goods, the Kenya Pharmacy and Poisons Board and the Indonesia Food and Drug Authority also signed a Memorandum of Understanding.
The two nations also agreed to cooperate in mining and geology, which would involve cooperative research projects, information exchange, and capacity building. Both nations also spoke about investing and trading, as well as working together in both higher and primary education.
In addition, the Kenyan President disclosed that Nairobi and Jakarta were finalizing the specifics of a potential preferential trade pact. “We also discussed the importance of concluding a bilateral investment treaty that will provide a stable and predictable investment environment, which is a prerequisite for accelerated private sector investment. We have tasked our joint teams to complete the drafting of this instrument within the next 90 days,” he said. With a favorable trade balance with Kenya, Indonesia expects to send $580 million (Ksh83.75 billion) worth of commodities to Nairobi by the year 2021, with palm oil serving as the primary export.
The ECOWAS Commission through the Directorate of Free Movement of Persons and Migration organised a meeting for Needs Assessment and Project Identification for Cross-Border Women in Development Networks (WID). The event took place in Accra, Ghana, from the 14th to the 18th of August 2023.
The primary objective of the meeting was to assess the needs and identify potential areas of intervention for women in border communities across ECOWAS Member States. This first phase of the meeting brought together representatives of Women Groups from Benin, Ghana, Guinea-Bissau, and Nigeria.
Mr. Albert Siaw-Boateng, the Director of Free Movement of Persons and Migration at the ECOWAS Commission, delivered the opening remarks on behalf of the Commissioner in charge of Economic Affairs and Agriculture, Mrs. Massandjé Touré-Litse. During his speech, he emphasized the importance of assessing the needs of women in development and exploring possible areas of intervention. He further highlighted the ECOWAS financial grant offered to the Women in Development Networks, which Member States can access to enhance women’s capabilities and provide support for small and medium-scale enterprises.
By 2050, North Africa could become a leading exporter of green hydrogen with Europe its main market, according to a recent report projecting the future of an industry still in its infancy. So-called green hydrogen is set “to redraw the global energy and resource map as early as 2030, creating a US$1.4 trillion-a-year market by 2050,” according to the report from accounting consultancy Deloitte.
Hydrogen fuel, which can be produced from natural gas, biomass or nuclear power, is considered “green” when hydrogen molecules are split from water using electricity derived from renewables such as solar and wind that do not produce carbon emissions. Less than 1% of the world’s hydrogen production presently qualifies as green. But the climate crisis, coupled with both private and public investment, has sparked rapid growth in the sector.
By 2050, according to Deloitte, the main green hydrogen exporters are likely to be North Africa (US$110 billion per year), North America (US$63 billion), Australia (US$39 billion) and the Middle East (US$20 billion). But the need to meet climate targets and generous subsidies are driving demand for clean energy of all kinds, including green hydrogen.
SMEs keen to trade under the African Continental Free Trade Area must have binding contracts in place or else they stand to lose; trade experts now say. This comes as trade under the pact starts to pick, with Small and Medium-sized Enterprises in Kenya and the East Africa Community forming the bulk of entities pushing for deals in the export market , mainly in south and western Africa.
While the continental deal holds huge potential for the SMEs in terms of trade and services, businesses are yet to find a proper footing with deals under the pact remaining low amid numerous challenges.
“Don’t sign business deals without proper procedures…friendly and mutual agreements don’t work. You must sign contracts which are binding,” said Olivier Konje, director of international trade at the Ministry of Trade, Investment and Industry (Kenya). He spoke in Nairobi during a national sensitization workshop for SMEs and women in business on AfCFTA protocols and their relevance to business in the EAC.
The forum by the East African Business Council (EABC) identified Non-Tariff Barriers, lack of harmonised tariffs and lack of access to financing as among major challenges facing business, hence slow uptake of opportunities under the AfCFTA. Meanwhile, EABC has called on improved productivity and standards to ensure goods from the region meet market criteria across the continent, while services fit the market needs.
Africa’s leaders prepare to address climate change challenge (Voice Online)
African leaders are preparing for a major conference in Kenya which will discuss the climate change challenges that face the continent. Climate change experts and environment campaigners will join senior government officials in Nairobi for this year’s Africa Climate Week (ACW 2023) which begins on September 4, The event will focus on how African countries can collaborate and find solutions to the problems that climate change is causing for the continent.
It is understood that the Africa Climate Summit will produce the ‘Nairobi Declaration on Green Growth and Climate Finance’ to drive action among African Union member states and partners leading up to the United Nations Climate Change conference (COP 28) in November.
This week a regional summit on health and climate change was held in Malawi ahead of ACW 2023 to discuss the effects of climate change on the health care systems of many of the continent’s countries. Delegates at the Regional Summit on Health and Climate Change for the African Region called for African leaders to adopt a unified African position on tackling the negative effects of climate change on health sectors.
Africa remains the world’s least industrialized region, with only one country on the entire continent, this is as per the 2022 data from the United Nations Industrial Development Organization (UNIDO). The report further states that only South Africa is categorized as industrialized. There needs to be a fundamental shift in the structure of the economies of African nations. Industry, especially manufacturing, will have to account for a far greater share of national investment, output, and trade.
It is expected that the African Continental Free Trade Area (AfCFTA) agreement, which will become operational on 1 January 2021, will usher in new and dynamic opportunities by enhancing intra-African trade and fostering an environment that can unlock foreign direct investment in the continent.
The continent is however facing a skills mismatch that has forced most countries to revamp their education systems which over the decades has been geared towards producing white-collar job graduates.
China has been Africa’s largest trading partner for 14 consecutive years, and the commerce between the two sides has sustained rapid growing momentum in the first seven months this year, according to China Customs. In 2022, China’ trade with Africa surged by 14.8 percent year-on-year to reach 1.87 trillion yuan ($282 billion), while the amount in the first seven months this year rose 7.4 percent year-on-year to 1.14 trillion yuan, official data showed. The trade index between China and Africa reached 990.55 last year, indicating rapid growing pace, as noted by China Customs.
China is the Africa’s largest export destination. In the past seven months, the nation imported 426.65 billion yuan worth of goods from Africa, including crude oil, iron ore and copper. In the same period, the import of agricultural products increased 20 percent to hit 23.66 billion yuan, including imported aquatic products and wine.
Intra-BRICS Trade and Analysis 2023 (Silk Road Briefing)
2023 is an important turning point in the BRICS development and its future global role. BRICS combined efforts are seen in cooperation and collaboration in developing alternative payment systems to SWIFT, the gradual development of a non-dollar financial system, the development of a common payment system (BRICS Pay), the increase of trade using respective domestic currencies, and creating a common currency. These are all progressing at different timescales, however the use of respective digital currencies in the settlement of future intra-BRICS trade will be a significant move. Russia, China, and India are all poised to launch their digital currencies for common usage by early 2025. This will allow trade to be conducted between them without the global SWIFT network and to reduce threats of the same upon other countries. Brazil and South Africa are close behind. In comparison, the United States and European Union, with rather more complex financial markets, have only recently agreed their digital currency protocols – a technical step the majority of BRICS members completed three years ago.
BRICS is facing many challenges, such as internal differences, global economic growth slowdown, geopolitical tensions, coordination problems, disagreements and different priorities of members, along with external pressures. Economic cooperation within BRICS is still limited, and its cohesion is not especially strong, meaning we can expect an increase in institutionalising the various BRICS initiatives during this summit. There are also likely to discussions concerning BRICS trade liberalization and reducing each other’s import tariffs.
The existing BRICS 2025 strategy, which was implemented in 2020 and will soon be due for renewal, has been useful in developing trade and mutual investment between BRICS countries, strengthening customs cooperation, inclusive growth, and diversifying cooperation into different sectors.
President Cyril Ramaphosa noted on Wednesday that global financial and payment systems are increasingly being used as instruments of geopolitical contestation. Ramaphosa was speaking during the second day of the fifteenth Brics Summit, currently underway in Johannesburg, where he said global economic recovery relies on predictable global payment systems and the smooth operation of banking, supply chains, trade, tourism and financial flows.
Ramaphosa said South Africa was deeply concerned about global conflicts that continued to cause great suffering and hardship. This came as Russia continued its onslaught on Ukraine and as African countries faced violence.
Meanwhile, Ramaphosa said South Africa would continue discussions on practical measures to facilitate trade and investment flows through the increased use of local currencies. He highlighted that new economic, political, social and technological realities call for greater cooperation between nations and for a fundamental reform of the institutions of global governance for better representation and to be able to better respond to the challenges that confront humanity. “While firmly committed to advance the interests of the Global South, Brics stands ready to collaborate with all countries that aspire to create a more inclusive international order,” he said.
The house of BRICS may be expanding (SAnews)
A decision on the much-speculated possible expansion of the Brazil, Russia, India, China and South Africa (BRICS) group of countries is imminent. This according to President Cyril Ramaphosa who was making remarks during the 15th BRICS Summit currently underway at the Sandton Convention Centre in Johannesburg.
“We stand at the cusp of expanding the BRICS family because it is through this expansion that we will be able to have a much stronger BRICS in these turbulent times that we live in. We await the decision that will be taken by the BRICS leaders in this regard, in due course, as we go on with our Summit.
“We stand at another momentous moment. This is a matter that we are discussing and hopefully we will find a clear solution to this matter as we discuss it among ourselves as BRICS leaders,” President Ramaphosa said.
Full text: Xi Jinping’s speech at the 15th BRICS Summit (CGTN Africa)
Video Address to the Participants in the BRICS Business Forum (President of Russia)
The G20 is expected to arrive at significant consensus to reform the multilateral trading system, create robust supply chains, promote micro, small and medium enterprises (MSMEs), and help people of developing and least developed countries prosper on the principle of equity, Union commerce minister Piyush Goyal said on Wednesday.
Under India’s Presidency, the G20 is looking for “global good and ensuring good future for the people in the developing and less developed countries”, Goyal added at a press conference in Jaipur ahead of the two-day trade and investment ministerial meeting (TIMM) starting from Thursday.