tralac Daily News
Energy transition has potential to dramatically increase demand for steel (Engineering News)
With local electricity grid constraints becoming more prevalent and given the global emphasis on decarbonisation, the ongoing energy transition, as well as loadshedding, is expected to present both opportunities and risks for the South African steel industry, which is in decline. The South African Steel and Metal Fabrication Master Plan – released in 2021 – describes the local steel industry as being “largely in survival mode”, necessitating measures to increase demand for local steel and effective localisation.
To this end, the Steel and Engineering Industries Federation of Southern Africa (Seifsa) argues that government spending should prioritise local steel suppliers, with Seifsa COO Tafadzwa Chibanguza noting that the evolving energy transition and local energy constraints are creating a market for local steel supply for this transition.
“The global decarbonisation drive is well and truly under way, presenting both opportunities and risks for the South African sector,” he notes, explaining that renewable- energy implementation, which will also include strengthening the transmission grid, will require the establishment of more fabricators that
KwaZulu-Natal Economic Development, Tourism and Environmental Affairs MEC, Siboniso Duma, says the investment in a new Futurelife manufacturing facility at the Dube Trade Port Special Economic Zone (SEZ) has created hope for a better future for the province. Duma made the remarks during the launch of a R75 million investment by South African health foods manufacturer, Futurelife, which took occupation in a new manufacturing facility in Dube TradePort, located near the King Shaka International Airport.
The modern factory is set to streamline Futurelife’s production processes, enhancing the organisation’s efficiency through the purchase of advanced machinery and equipment that will enable the factory to operate at international standards. Cutting the ribbon to officially mark the factory opening for business, Duma emphasised the important role that the factory will play in sustainable economic development in KwaZulu-Natal.
Duma said locating the business within the Dube Trade Port SEZ will ensure efficiencies in the operations while reducing the logistics costs. Ahead of the COVID-19 lockdown, about 315 000 people were employed in manufacturing, representing just of 12% of total formal and informal employment. He said the plant is an integral part of the provincial industrial strategy which aims to stimulate the manufacturing industry in order to increase employment.
‘Anchor demand’ a must for renewables masterplan to succeed (Engineering News)
The energy sector requires consistent demand from a consistent flow of renewable energy projects in order to invest in local manufacturing, and not “haphazard demand that comes and goes”, says South African Renewable Energy Masterplan (Sarem) facilitator and Trade and Industrial Policy Strategies (TIPS) senior economist Gaylor Montmasson-Clair.
“Anchor demand is critical. For me it is really important that we smooth out that process going forward. “We have to acknowledge that every country that has built a renewable energy industry to date has done it with significant anchor demand and a very supportive policy framework. “If we think we are going to manage that without those two factors, we are kidding ourselves,” says Montmasson-Clair.
Sarem seeks to expand South Africa’s manufacturing industry on the back of government’s procurement of renewable energy from private investors, among other goals.
South Africa wants to see the continuation and expansion of international trade, but trade must be balanced and mutually beneficial amongst trading partners.
It is encouraging to note that the South African government and the U.S. administration are working together to explore extension of the African Growth and Opportunity Act (AGOA) for a further period of 10 years.
This is a welcomed development considering that AGOA, which expires in 2025, provides eligible sub-Saharan African countries including South Africa with duty-free access to the U.S. market for over 1,800 products. This is in addition to the more than 5,000 products that are eligible for duty-free access under the Generalised System of Preferences programme.
As part of the engagement to extend AGOA, South Africa will host the 20th U.S.-sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA Forum) in Johannesburg from 2-4 November 2023.
The long-awaited AGOA Forum, which is expected to also feature the ‘Made in Africa Exhibition’, seeks to strengthen trade and investment ties between the United States and sub-Saharan Africa countries.
Kenya and the United States are in advanced talks to extend the African Growth Opportunity Act (Agoa) for another 10 years. Industry Principal Secretary Juma Mukhwana disclosed that his trade counterpart Alfred K’ Ombudo is in the US to escalate the talks and conclude the same in order to allow smooth trade operations between the two countries. The high-level talks between officials of the two governments follow the conclusion of a visit to the US by President William Ruto.
Mukhwana said the country has continued to access the United States market under the Agoa since 2000, an opportunity that has led to the continued growth of textile and apparel industry among other sub-sectors.
“I can confirm the talks between the two governments are at progressive stage and there is positive indication of us being granted the 10-year extension,” he stated.
The talks come at a time data from Kenya National Bureau of Statistics (KNBS ) shows that export of duty-free goods to the US under Agoa crossed the Sh50 billion mark after declining last year. It indicates that the value grew by 20 per cent, marking one of the biggest leaps in seven years. The goods, mainly textile products, increased from Sh42.2 billion in 2020 to Sh50.6 billion in the review period. “All the selected indicators under the EPZ garment and apparel sub-sector reported growths in 2021,” said the KNBS. Mukhwana said the US trade opportunity is over and above other strategies Kenya is fast-tracking to expand her share in the international market.
He gave the example of the recently concluded Economic Partnership Agreement (EPAs) with the European Union, the African Continental Free Trade Area (AfCFTA), bilateral agreements and through treaties under the regional blocs.
Imports from EAC dip by Sh5.4b on frosty relations (People Daily)
Kenya slashed its import from East African Community (EAC) Partner States by about Sh5.4 billion in the first six months of 2023 as protectionism and border clearance difficulties raged among the bloc members. Data from Kenya National Bureau of Statistics (KNBS) shows that by June 2023, the combined value of imports from the bloc narrowed to Sh42.9 billion, representing an 11.2 per cent dip compared to Sh48.3 billion in a similar period in 2022.
Other sources, save for far East Asia, benefited from this decline in Nairobi’s trade with the EAC bloc, with countries from the Common Market for Eastern and Southern Africa (Comesa) and European Union (EU) sealing the gap.
Kenya has often had a frosty relationship with its major neighbours – Uganda and Tanzania – leading to reactionary policies and restrictions from either side.
For instance, Uganda, Kenya’s main export market, has also been having frequent trade tiffs with Nairobi over products like sugar, milk, and eggs, which are now attracting heavier levies. Tanzania also imposed new guidelines on trade in grains with its EAC partners during the period, forcing Kenya to seek alternatives.
Exports to Mozambique worth N$4.1 billion (Windhoek Observer)
Namibia exported goods worth N$4.1 billion to Mozambique in the period 2015 to 2022, statistics by Namibia Statistics Agency revealed this week. The figures also revealed that on the demand side, goods amounting to N$1.7 billion over the same period were sourced from Mozambique.
The export basket to Mozambique comprised mainly of fish, medicaments (including veterinary) and motor vehicles for the transport of goods whereas the import basket comprised of special commodities not classified according to kind, ‘electrical machinery and apparatus’ and milk.
The Agency said in August 2023, Namibia exported goods worth N$4.5 billion to the whole of Africa of which N$45.7 million was exported to Mozambique. Whereas, on the demand side, the country sourced goods from Africa worth N$4.8 billion during the month under review of which N$665 240 thousand was sourced from Mozambique.
Southern African Customs Union (SACU) was the dominant export destination for Namibia’s goods during August with a share of 44.3% of total exports.
Finance minister Enoch Godongwana says there is no official proposal to introduce a new BRICS currency at this point in time, and that the trade relationships with the United States and the European Union are not under threat from talks of stronger ties within the bloc.
Responding in a written parliamentary Q&A this week over the proposed unified BRIC currency, Godongwana reiterated that this was not a formal proposal, and there was no talk of this emanating from the bloc at this stage.
It was heavily speculated ahead of the BRICS Summit in August the bloc would put forward a proposal to create a new currency between the participating nations to ease trade and to side-step sanctions imposed by the West.
According to Harry Scherzer, CEO at Future Forex, with over 74% of international trade being done through the US dollar, there has been a push from the East for some form of de-dollarisation – which basically suggests not using the dollar as much for international trade in order to remove the USA’s control over international trade.
However, Scherzer noted that having a BRICS currency would be extremely onerous to put into place including difficulties with aligning monetary policies and interest rates across countries with hugely differing populations and economic circumstances.
“Faced with an acute economic and financial crisis, the authorities have adjusted macroeconomic policies, successfully completed their domestic debt restructuring operation, and launched wide-ranging reforms. These actions are already generating positive results, as growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized.
“Consistent with the authorities’ commitments under the Fund-supported program, fiscal performance has been strong, and Ghana is on track to lower the fiscal primary deficit on a commitment basis by about 4 percentage points of GDP in 2023. Spending has remained within program limits. To help mitigate the impact of the crisis on the most vulnerable population, the authorities have significantly expanded social protection programs. On the revenue side, Ghana has met its non-oil revenue mobilization target. Ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, and enhancing transparency.
Ambassador Zniber underlined that since the last Working Party meeting, held in January this year, Comoros has made significant strides towards filling the remaining gaps in the WTO accession process. He noted that “a key milestone” was reached in May when Comoros’ draft Goods and Services Schedules were verified by WTO members who had negotiated market access agreements bilaterally with Comoros.
“This is a very significant development as two of the three key elements constituting Comoros’ draft Accession Package are now ready for consideration by the Working Party,” said the Chair.
For Comoros to have a fiscal policy that achieves inclusive growth, while being sustainable, the country must improve public financial management, enhance domestic resource mobilization, improve the efficiency of public health spending, and take steps to incorporate climate change and disaster risk management.
Improved public financial management could generate fiscal space of up to 1.8% of GDP, which could be used to finance expenditures that will improve public service delivery, such as healthcare. This is according to the World Bank’s Public Expenditure Review (PER), launched today.
The Union of the Comoros has long struggled with modest economic expansion and fiscal issues which have had an impact on long-term growth. GDP growth averaged 2.7% from 2011–2020, resulting in per capita GDP growth averaging 0.4% over the same period. The economy has been primarily driven by consumption, fueled by remittances and tourism receipts from the diaspora. Economic activity is undiversified, characterized by a small, largely informal, private sector with limited value added.
Illicit trade in marine resources costs West Africa $26b – Minister (Ghana Business News)
Mr Samuel A. Jinapor, Minister for Lands and Natural Resources, has said that the West African Sub-region annually loses $26 billion to illicit trade in marine, including illegal fishing. “On the economic front, Interpol estimates that 38 per cent of global criminal proceeds are derived from nature crimes,” he said. Mr Jinapor was addressing selected media personnel at the nature crimes in Ghana workshop, organised by the US Agency For Global Media-USAGM, held in Accra.
“Crimes such as illegal fishing, illegal mining, illegal logging, illegal overland export, under-declaration of products, mislabeling of products, poaching, wildlife trafficking, illicit wildlife trading, and land degradation, continue to threaten our environment, biodiversity, and the lives and livelihoods of millions of people across the world, while robbing us of the resources needed for development,” the Minister said. He said these crimes had damaged some vital and vulnerable ecosystems in the world, such as forests, wildlife, oceans, wetlands, coral reefs, and mangroves.
Cote d’Ivoire is the latest member of the Economic Community of West African States (ECOWAS) to host a workshop meant to emphasize the importance of the regional biometric ID card dubbed ENBIC. Through its Directorate of Free Movement of Persons and Migration, the ECOWAS Commission, on October 2 and 3, organized a workshop in Abidjan which brought together Customs, Police and Gendarme officers, union leaders, students and immigration officials as well as representatives of the National Institute of Public Hygiene, according to a press release.
The goal of the event was to underline the usefulness of the ENBIC (ECOWAS National Biometric Identity Card) in boosting regional travel and economic integration among the 15 members of the regional grouping. The ENBIC is a biometric credential adopted by ECOWAS heads of state in 2014 as a way of enhancing travel and trade transactions among the countries that make up the economic and political bloc.
Ghana fell to the 5th position from 2nd in the third edition of the Stanbic Bank Africa Trade Barometer (ATB). This show’s that Ghana’s trade attractiveness and openness have taken a nose dive.
Although the country improved from position 10th to 7th in the Stanbic Bank 3-Year Quantitative Trade Barometer (SB QTB) ranking, this was not enough to maintain its overall position relative to the other markets. South Africa maintained its position as number one in terms of trade infrastructure development and attractiveness. In all, 10 countries were assessed. They were Angola, Ghana, Kenya, Mozambique, Namibia, Nigeria, South Africa, Tanzania, Uganda and Zambia.
While the government collaborates with fellow African countries through membership in Africa Continental Free Trade Agreement (AfCFTA) where preferential tariff regulation exists, perceived difficulties have increased over time. This emphasises the importance of enhanced government support through policies that prioritise local businesses, as tax burdens tend to be higher for local businesses compared to foreign businesses, in light of the government’s focus on attracting FDI.
According to the report,exporters and importers remain bullish on the prospect of increased cross-border trade.
The Africa Continental Free Trade Area (AfCFTA) has suggested that African countries have the potential to generate over $70 billion in trade activities. This was disclosed by Silver Ojakol, Chief of Staff of the AfCFTA Secretariat, during the 2023 Regional Integration Issues Forum in Accra, Ghana.
The RIIF is aimed at increasing awareness of AfCFTA’s benefits, especially for Small and Medium Enterprises (SMEs) which helps to enhance SMEs’ capacity for intra-African trade. The AfCFTA also emphasized that significant earnings could be realized if SMEs collaborate and adopt AfCFTA principles to overcome trade barriers.
Ojakol, who was representing AfCFTA Secretary General Wamkele Mene, said: “If African countries unite and achieve even a one per cent increase in trade among themselves, we would generate $70 billion, surpassing the $58 billion provided by donors as development assistance.”
Silence guns not trade: Africa’s entrapped trade corridors worsen AfCFTA implementation (The Guardian Nigeria)
The recent military coup in Niger and later Gabon has not only undermined democratic governance but also threatened to reverse the scanty gains of intra-continental trade under the African Continental Free Trade Agreement (AfCFTA), which is now in its third year of implementation. It also threatens trade treaties and agreements, creating an environment of uncertainty for businesses and investors in the affected countries with a spillover effect on neighbouring countries.
As a result of the coups, heavy trade and financial sanctions have been applied on Niger as France, Germany, European Union (UN) and the United States (US), have suspended aid programmes. The ECOWAS sanctions include the freezing of Nigerien assets, a ban on all commercial flights, cutting off its electricity supply, shutting down trade activities at all the country’s borders and suspending all commercial and financial transactions.
The bilateral trade deficit between Nigeria and Africa continues to widen in favour of the rest of the world, even more so in the last five years. Data sourced from the John Hopkins China-Africa Research Initiative revealed that China’s exports to Nigeria last year stood at $23.9 billion and $164.16 billion for the whole of Africa. Imports from Nigeria for the same time frame were just $1.6 billion, a deficit of over 22 million dollars.
Quality control and stable markets are essential pillars of Africa’s food systems, ensuring that households can access nutrient-rich food, stabilize prices, and improve overall diets. However, with Africa’s swelling population, the current food value chain often falls short, leading to concerning outcomes. Approximately 37% of Africa’s food production goes to waste or is lost, resulting in significant financial implications and exacerbating hunger issues.
To bridge this gap and address these pressing challenges, Africa urgently needs innovative value chains, regional integration, and robust cross-border trade links. As the landscape of consumer preferences, technology, and global markets evolves, so must our strategies in agriculture and food production. Enhancing postharvest management, particularly within nutrition-sensitive value chains, can be a vital part of the solution.
The International Monetary Fund (IMF) has strongly supported a call by the African Development Bank Group urging countries in Africa to stop borrowing loans backed by their natural resources. The IMF Managing Director Kristalina Georgieva met Thursday with the President of the African Development Bank Group, Dr Akinwumi Adesina, in Abidjan, Cote D’Ivoire. It is the first time an IMF head has visited the Bank headquarters since its establishment in 1964.
Welcoming Georgieva, Adesina said, “the natural resource-backed loans are non-transparent, expensive and make debt resolution difficult.” He warned that if the trend continues, “it will be a disaster for Africa.”
The IMF chief said she is visiting Africa at a time when the continent holds much promise for more dynamic growth in the world. “We often focus on the challenges that the continent is facing because it is here the impact of climate change is much more severe, where macro-economic and financial instability and debt are amplified.” “But we want to focus on opportunities in Africa for the simple fact that the capital is in the North and a young population is in the South, primarily here in Africa. Unless we build a bridge for capital to flow to where it is needed most, it could lead to a bigger problem.”
Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), says African governments must remove trade barriers to increase the continent’s per capita income. Georgieva said international cooperation is weakening at a time the world needs it most, adding that the bridges that connect countries are corroding as trade and investment barriers rise.
The IMF managing director gave advisory on Thursday, in Côte d’Ivoire, during a curtain raiser speech in preparation for the 2023 World Bank and IMF annual meetings scheduled for October 9 to 15, in Morocco. Georgieva, speaking on trade barriers, said operating a free trade market will push up the per capita income of an African country by more than 10 percent.
In her remarks, Georgieva said the full implementation of the African Continental Free Trade Area (AfCFTA) will transform Africa into the world’s largest free-trade area and improve the living standards of the continent. “A fragmented world is especially challenging for emerging and developing countries, because of their greater reliance on trade and their more limited policy space,” she said. “Compared with other regions, the African continent stands to suffer the biggest economic losses from severe fragmentation”.
To put it simply, a prosperous world economy in the 21st century requires a prosperous Africa. Advanced economies are rapidly ageing, but they have abundant capital. The key will be to better connect that capital to Africa’s abundant human resources—to inject more dynamism into the current anemic global growth outlook. Africa also makes the strongest case for building economic resilience. The COVID-19 pandemic, Russia’s war in Ukraine, climate disasters, the cost-of-living crisis, political instability: these are the many faces of a shock-prone world. Their impact is most fully on display in Africa, as is the overwhelming necessity to better prepare ourselves for that world. And a prosperous Africa requires maintaining the most important bridge of all, the bridge that connects all countries—that of international cooperation.
Let me conclude by returning to 1973, the last time the Annual Meetings were held in Africa. Back then, delegates faced many of the same challenges we face now: high inflation, conflicts, and fundamental economic shifts. In his speech at the Annual Meetings, Kenyan President Jomo Kenyatta declared the “need for effective cooperation has never been greater.” And he finished with one word: “Harambee,” meaning “pulling together in full cooperation.”
The International Telecommunication Union (ITU) Regional Development Forum for Africa has concluded today with calls to transform pledges to commitment. During the closing session of the three-day forum in Addis Ababa, Partnerships for Digital Development Chief Cosmas Zavazava said ITU has through its Partner2Connect Digital coalition received a pledge of 31.88 billion USD from 392 entities in 132 countries.
As a result “we had numerous commitments to be implemented in areas of infrastructure, cyber-security, digital skills and capacity-building, digital innovation systems, and digital inclusion and others,” he added. Getting the pledges is an important step, but implementing the pledges is a bit of a challenge, the chief said, noting that making impacts on people with these pledges is more crucial.
Ministers from the world’s 46 least developed countries (LDC) issued a joint Dakar Declaration on Climate Change 2023 outlining their expectation and priorities for 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change. The Dakar Declaration called for urgent global emissions reductions, increased climate finance, a strong outcome operationalising the new Loss and Damage Fund and an ambitious Global Stocktake to close the gaps in global climate action.
While LDCs account for more than 14 per cent of the global population, they only account for about 1 per cent of emissions from fossil fuels and industrial processes, according to the ministers. In addition, the countries bear the least historical responsibility for climate change, are forced to adapt beyond their capabilities and are at the forefront of the climate crisis.
The COP28 will be convened from November 30, 2023 to December 12, 2023 in Dubai, United Arab Emirates.
Based on notifications from developing members and least-developed country (LDC) members, five measures in the Trade Facilitation Agreement (TFA) have been identified where assistance has been most commonly requested for implementation for the next two years. The WTO Secretariat presented this update at a meeting of the Committee on Trade Facilitation dedicated to assistance and capacity building on 5 October as part of “Trade Facilitation Week”.
The Chair of the agriculture negotiations, Ambassador Alparslan Acarsoy of Türkiye, briefed WTO members at meetings on 2-3 October on the latest state of play and outlined his plan to advance the talks. Members discussed a range of negotiating topics, emphasizing the need to address food security challenges. They also exchanged views on guidance that senior officials could provide when they meet on 23-24 October at an event at the WTO which is expected to be crucial in defining the path towards the 13th Ministerial Conference (MC13) in February 2024.