tralac Daily News
The latest research from policy research entity Trade and Industrial Policy Strategies (TIPS) reveals that, for the first time since the start of the Covid-19 pandemic, exports declined while imports continued to grow.
The latest Imports Localisation and Supply Chain Disruption Study for the fourth quarter of 2022, shows that exports fell 3% to R495-billion during the fourth quarter of 2022, from R510-billion in the fourth quarter of 2021. Imports, meanwhile, continued to rise, increasing by 19% to R487-billion in the fourth quarter of 2022, from R409-billion in the fourth quarter of 2021. Exports for the fourth quarter of 2022 were 6% higher when compared with the fourth quarter of 2020. In contrast, imports were 39% higher.
Speaking during a Development Dialogue on Localisation on Tuesday, TIPS senior economist Nokwanda Maseko, discussing the Import Tracker and the Imports Localisation and Supply Chain Disruption Study, released in August, said that South Africa remained a net importer of many products and changing this would likely need further discussions and studies on whether it would be worthwhile to pursue localisation in certain sectors, with the country having missed the opportunity to develop within some industries.
About 59 products have been analysed since the first quarter of 2020, covering a range of sectors, including information and communication technology (ICT), clothing, textiles, footwear and leather, capital equipment and food and beverages, besides others, and combined, these amount to about R63-billion worth of imports per quarter, which shows that there can be higher value if there is potential for localisation.
Kenya and Indonesia target regional blocs (The East African)
Kenya and Indonesia are seeking to utilise improved political and trade ties to access each other’s regional trading blocs to expand their export markets. During Indonesian President Joko Widodo’s visit to Kenya this week, several cooperation agreements – in energy, health, agriculture, textile and clothing, and security – were signed.
Kenyan President William Ruto said Nairobi will utilise the improved ties with Jakarta to slim Kenya’s trade balance with Indonesia, which is currently in deficit. But Kenya is also eyeing to access the Association of Southeast Asian Nations (ASEAN) market, one of the largest common markets in the Asia-Pacific region.
Indonesia is also seeking to gain access to the East African Community and Comesa. “Kenya is the first in this domanial side, access Kenya, access the many other countries in the region,” Rendra Kusumawardana, First Secretary in charge of Economic Affairs at the Indonesian embassy in Nairobi, told The EastAfrican.
Uganda’s trade deficit narrows by 32.2% (Monitor)
Uganda’s finance ministry has said the country’s trade deficit with the rest of the world has narrowed both on a monthly and annual basis, owing to an increase in export receipts that more than offset the rise in the import bill. The finance ministry’s monthly economy performance report for July 2023, indicates that “between May and June 2023, the merchandise trade deficit narrowed by 12.3 per cent from $82.08million to $247.43million.”
The ministry’s head of communications, Apollo Munghinda, told Monitor that in June 2023, Uganda exported merchandise worth $650.57million. “This represented an 11.1 per cent increase when compared to $585.81 million exported during May 2023. This increase was mainly on account of higher export earnings from beans, simsim, cotton and gold registered during the month,” he noted.
Meanwhile, the [July] monthly economy performance report further shows that in June 2023, the East African Community (EAC) remained the top destination of Uganda’s exports, accounting for 33.9 per cent of the total market share.
Trade strengthening institutions and tourism after conflict in Liberia (Trade for Development News)
Liberia, a small West African country, is home to 5.2 million people and shares borders with Sierra Leone, Guinea and Cote d’Ivoire. It boasts abundant natural assets, including vast forests, coastlines, mineral resources and a rich cultural heritage. However, years of civil conflict between 1990 and 2003 eroded the country’s infrastructure and left more than 150,000 people dead.
As the country was rebuilding and its economy recovering, it was hit by a devastating Ebola epidemic – resulting in 3,000 deaths. The epidemic also caused a drastic downturn in the country’s informal trader-driven commercial sector. Many businesses ceased operations as movements of both goods and people, as well as trading in services, were curtailed due to increases in transport and road maintenance costs. Tourism, which is key to Liberia’s trade and economic growth, was not spared either, as the country became an overlooked destination and its competitiveness plummeted in the aftermath of Ebola.
Based on the updated Diagnostic Trade Integrated Study (DTIS) and with support from ITC, the EIF helped Liberia prepare export strategies for both the tourism and rubberwood industries.
Nigerian legal luminary and former chairman, West Africa Bar Association, WBA, Mr Femi Falana has called for the immediate lifting of the sanctions placed on Niger by the Economy of West African States, ECOWAS, following the latter suspension of the use of force to unseat the military coup in Niamey.
Falana who was the keynote speaker at the West Africa Civil Society Week’23 on Tuesday, while speaking on the theme: Civil Society in West Africa: Reimagining the Role of the Third Sector in protecting civil space and consolidation democracy for regional development, “ noted that civil society organizations should reclaim their mandate of standing and speaking for the rights of the masses, and the promotion and sustainability of democracy.
Suggesting ways to end uprisings in West Africa, especially coup d’états, the former WAS chairperson, called on ECOWAS to end the stealing of mineral resources by imperialism, and as a matter of urgency launch the single currency to be used by the continent, among other factors that he raised. “We must take advantage of the political crises in West Africa to launch the eco as the currency for the region.”
The Secretary General for International Organisation for Standardisation (ISO) Sergio Mujica, who is on a three day visit to Ghana, has paid a courtesy call on Mr K.T. Hammond, the Minister of Trade and Industry. Addressing the media after the meeting with the Minister, the ISO Secretary General praised the leadership of Ghana in the international organisation for standardisation.
“We have some of the best practice right here in this country when you approved last year. For example, the National Quality policy that is very important as well as we have more than two laws that captured Ghana Standards Authority also in the year 2022,” he said. He acknowledged the country’s ambitions of becoming a hub for industry and emphasized the essence of specifications and requirements that bring together all best practices around the world.
Commonwealth study points to green steel opportunity in East Africa (CCE Online News)
A study published by the Commonwealth Secretariat earlier this year has highlighted the potential for the East African Community (EAC) to establish a billion-dollar ‘green steel ecosystem’ and secure a profitable but less carbon-intensive steel industry for the region. The report, titled ‘Towards a Green Steel Ecosystem in the East African Community’, outlines strategic issues and key requirements for developing an emergent regional industry and some recommends steps for cutting carbon emissions in the steel value chain.
The EAC region, covering Burundi, the Democratic Republic of the Congo, Kenya, Rwanda, South Sudan, Tanzania, and Uganda, has seen a sharp increase in the demand for steel. Net imports of iron and steel by volume has grown by about 11.4% annually between 2010 and 2019. Kenya and Tanzania together used over 4 million tonnes of steel in 2019, while Ugandan demand pushed 1 million tonnes per year.
The report found that the region holds several comparative advantages to support a regional ‘greening’ approach These include a strong and growing regional market for steel products, an expanding transportation infrastructure, a range of private sector companies with steelmaking capability, as well as existing and planned hydro, geothermal, and other renewable electricity production. Moreover, because the region is not tied to conventional high carbon-emitting plants, it is less complicated to decarbonise.
Renewables offer Africa opportunity to achieve SDGs (The Namibian)
Africa must increase investment in developing its renewable energy and attract greater support of the private sector and international financial institutions if it is to achieve the United Nations’ Sustainable Development Goals (SDGs). This was the conclusion of experts at an Africa Development Bank-arranged meeting in Abidjan last week.
The continent should also control, exploit and transform its enormous mineral resources locally to generate the financial resources needed for its development, urged the experts, who represented a dozen African countries, during an African Development Bank (AfDB) workshop on 23 and 24 August under the theme ‘Financial Modelling for the Extractive Sector’.
Speaking on a panel on ‘Financial modelling for a just energy transition for certain critical minerals in transition countries’, the director of policy and research at Sierra Leone’s ministry of mines and mineral resources, John David Cooper, said renewable energy gave his country opportunities to achieve certain SDGs. “We also need to be major players in the energy field,” Cooper said. Participants noted that Africa has made considerable progress in energy transition, despite challenges.
Since 1990, global trade has increased incomes by 24 percent worldwide, and by 50 percent for the poorest 40 percent of the population. This growth has lifted more than 1 billion people out of poverty. Trade has also played a pivotal role in shaping the global economy and promoting positive socioeconomic outcomes. Today, however, protectionist measures are on the rise. And trade tensions and geopolitical challenges are raising concerns about the trajectory of globalization.
As a result, deglobalization—the process of reducing global economic interdependence—has been at the forefront of current policy discussions. At a recent Policy Research Talk, World Bank Research Manager Daria Taglioni discussed the fundamental transformations taking place in the global trading system and how they relate to patterns of industrial organization.
To illustrate the complexity at the heart of current global patterns of trade, Taglioni pointed to three apparent paradoxes. First, China has become ever more central to global trade networks in recent years, even as the United States and China engaged in a trade war. Second, despite shocks emanating both from policy and the COVID-19 pandemic, global value chains (GVCs) now account for an even greater proportion of global trade flows. In 2022, GVCs accounted for 52 percent of global trade, up from approximately 48 percent in 2015 and even slightly higher than prior to the 2007-2008 global financial crisis. And third, firms continue to connect with customers and suppliers all around the globe rather than just in their region, even as the challenges to global trade mount.
Given the breadth and depth of global interdependence, Taglioni argued that naïve trade and investment policies have significant unintended consequences. The goals that drive protectionist measures could be better achieved through increased rather than reduced international openness and cooperation, she said.
The UAE has called for further international action to ensure the free flow of capital, goods, and services, being the driver behind global development and economic prosperity. This was said in a statement given by Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, as he addressed ministers and senior government officials at the B20 Summit in New Delhi, India, during which he emphasised the need for collective action to support the multilateral trading system, strengthen global supply chains and accelerate the deployment of technology to improve supply-chain efficiency and inclusivity.
During a special plenary for G20 trade ministers on the opening day of the B20 forum, Al Zeyoudi underlined the UAE’s conviction that the free flow of goods, services and capital remains a key driver of economic growth and development, especially for the Global South.
Dr Thani also used his visit to the B20 Summit to announce the launch of a Ministry of Economy report titled “Global Trade Risks 2023: Barriers to Growth”, in which more than 500 corporate leaders from around the world were surveyed on their perception of the most significant threats to global trade. According to the survey, the rising level of public and private debt, and its subsequent impact on investment, financial liquidity and consumer demand, was considered the single largest threat to global trade – with 61 per cent of respondents saying this will have a high, very high or extremely high impact on global trade, and with the same percentage saying there was a high likelihood of this occurring.