Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

naamsa disappointed at yet another delay in NEV policy announcement (Engineering News)

The Automotive Business Council says it is disappointed that Finance Minister Enoch Godongwana has postponed the long-awaited announcement on government’s new-energy vehicle (NEV) policy to February next year. Godongwana made this announcement as he delivered his Medium-Term Budget Policy Statement earlier this week. Government originally promised to present an NEV policy to Cabinet in 2021.

naamsa CEO Mikel Mabasa notes, however, that the auto sector body is pleased that National Treasury plans to implement tax and expenditure measures to support the industry’s transition to NEVs. “We expected more from the Minister after the numerous engagements we had with government on this topic leading up to the budget announcement,” he adds.

“South Africa has procrastinated far too long, and we believe that the NEV policy pronouncement should be made by President Cyril Ramaphosa during his State of the Nation Address, and supported by fiscal measures the Minister of Finance has promised to now announce in the 2024 National Budget Review,” says Mabasa.

Coffee leads exports in AfCFTA trials (The Citizen)

Coffee is leading the list of agriculture exports as Tanzania participates in the African Continental Free Trade Area (AfCFTA) pilot programme. Dubbed “Guided Trade Initiative,” the window has seen the export of 273.28 metric tonnes of coffee, 52.4 metric tonnes of sisal fibre, and 37.6 metric tonnes of tobacco between May and June this year, according to the Ministry of Industry and Trade.

“We are still collecting data, but from May to July this year, Tanzania has sold goods to countries participating in the Guided Trade Initiative,” said the ministry’s principal trade analyst, Ms Sekela Mwaisela.

In October 2022, the Guided Trade Initiative was launched to pilot AfCFTA preferential trade among eight member states, including Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia. The pilot involved 96 identified commodities, including ceramic tiles, tea, coffee, processed meat products, corn starch, sugar, pasta, glucose syrup, dried fruits, and sisal fibre, amongst others, in line with the AfCFTA focus on value chain development.

‘Value addition is key to doubling Uganda’s exports,’ says Odrek Rwabwogo (African Business)

The medium-term goal of Odrek Rwabwogo, special advisor to the President and chair of the Presidential Advisory Committee on Exports and Industrial Development (PACEID), and his team is to lift the value of Uganda’s exports from just under $5bn to $12bn a year by 2028. PACEID put 13 of the country’s main products – coffee, sugar, grains, fruit and vegetables, poultry, tourism, beef, dairy, cement, steel, fish, flowers and plant materials and banana flour – under the microscope to see where the bottlenecks were and how to remove them. It was clear that going forward would entail considerable change – abandoning some traditional systems and procedures and venturing into hitherto unknown territory. The strategy is to expand trade in traditional markets, penetrate new markets and add value across the board.

Transport costs making Ugandan exports uncompetitive, says report (Monitor)

Transport and logistics comprise between 35 percent and 42 percent of production costs in Uganda, according to a report by Standard Bank, which trades as Stanbic in Uganda. The report - Africa Trade Barometer - which measures performance of trade in 10 African countries including Uganda, Angola, Ghana, Kenya, Mozambique, Namibia, Nigeria, South Africa, Tanzania, and Zambia, notes that the cost of transport and logistics in Uganda is too high to enable production of competitive products with countries in Asia, majority of which have an input of only 8 percent on transport and logistics.

“This poor infrastructure undermines the competitiveness of Ugandan exports and significantly increases the costs of receiving imports. An improvement in the transport and logistics infrastructure in Uganda may, therefore, be an important enabling factor that allows Ugandan businesses to realise the benefits of increased intra-African trade,” the report reads in part.

Trade reforms can improve food supplies in West Africa (ZAWYA)

Regional and continental trade pacts open the door to free trade in food and farm goods. The 10th Annual Borderless Conference in Tema, Ghana brought together experts from government, business, and international organizations to look at how to deliver on that potential. Borderless Alliance, a group which advocates for removing trade barriers, organized the event with the German Development Agency GIZ to look at trade within the 15-member Economic Community of West African States (ECOWAS).

‘This 2023 edition holds particular relevance for the private sector,’ said Jonas Lago, President of Borderless Alliance. ‘It falls upon us to conduct the necessary analysis and devise solutions to tackle the prevailing challenges. Our success in the ECOWAS region would serve as blueprint in the Africa continental area.” These insights revealed that 60% of the burdensome regulations originate domestically. Using the Trade Obstacle Alert Mechanism (TOAM), a tool developed by ITC, Vianney Lesaffre showed that 51% of the obstacles reported pertain to the agricultural sector.

‘AI will benefit Africa more than any other continent’ says Smart Africa’s Lacina Koné (African Business)

In April this year, Smart Africa, a consortium of African states and organisations dedicated to the acceleration of access to ICT on the continent and a thriving digital economy, held its Transform Africa Summit in Victoria Falls, Zimbabwe. This was the first time the Summit was held outside of Kigali, which is where Smart Africa is headquartered.

For Lacina Koné, director general of Smart Africa, the Summit was a success. Attended by five heads of state alongside ministers from 44 countries and over 4000 delegates from 91 countries around the world, it also saw the consummation of several significant deals for the continent’s digital future. For Koné, the Summit was an opportunity to rubberstamp the organisation’s strategy and once again put to the fore some of the key agenda points that need to be addressed if the continent is not to be left behind by the digital revolution.

How the mobile industry will be integral to Africa’s growth (African Business)

The United Nations Conference on Trade and Development (UNCTAD) estimates that, if effectively harnessed, digital trade in Africa has the potential to contribute an additional $180bn to the continent’s GDP by 2025. Despite this tremendous potential, e-commerce in Africa is currently underutilised. In 2022, out of a potential market of 1.2bn people, only 400m used e-commerce services. Several factors hinder the sector’s growth, including limited financial resources and digital skills, regulatory gaps, poor implementation of legislation, low adoption of digital payments, and challenging logistics and delivery.

Additionally, limited smartphone penetration, low digital literacy, and a lack of confidence in online product quality impede e-commerce adoption. These are the conclusions of a report prepared and published by GSMA Central Insights in collaboration with the United Kingdom’s Department for Business and Trade (DBT). The report, titled E-commerce in Africa: Unleashing the opportunity for MSMEs, was launched at the 2023 Mobile World Congress in Kigali, Rwanda. The report also makes some key recommendations for policy makers to address the challenges and enable the sector to reach its potential.

Africa must build a new social contract for a sustainable development says, ECA’s Claver Gatete (UNECA)

A new social contract that will boost fair and equal opportunities for citizens is a must to accelerate sustainable development in Africa, the new Executive Secretary of the Economic Commission for Africa (ECA), Claver Gatete, has told a meeting of experts and policy makers which opened in Addis Ababa, Ethiopia, this week.

“Governments must increase their commitment to forging new social contracts that ensure equal rights and opportunities for all, while integrating employment, sustainable development, and social protection,” said Mr. Gatete, in remarks delivered by the ECA Deputy Executive Secretary and Chief economist, Hanan Morsy, at the opening of the Fifth Session of the Committee on Social Policy, Poverty and Gender of the ECA being held under the theme, Building New Social Contracts in Africa: Choices to fulfill Developmental Aspirations.

Investing in the female future: Why we need better financing for women entrepreneurs (UNCTAD)

For developing countries, having more female entrepreneurs offers the benefits of more jobs, new skills and growth for communities and economies. But gender inequalities in society mean women who are running or starting a business often face daunting challenges securing loans or investment. Listen in to UNCTAD’s Stephania Bonilla to find out how we can increase investment in women and unlock their full potential.

AGOA Forum updates

US Committed to ‘Seamless’ Africa Trade Pact Renewal, Tai Says (Bloomberg)

The US aims to ensure that its preferential trade pact with Africa is replaced without interruption when it expires in two-year’s time, while bringing it up to date. “We want to make sure that as of Sept. 30, 2025, that there will be another AGOA that will pick up from this one,” said US Trade Representative Katherine Tai, referring to the African Growth and Opportunity Act. “It is a seamless renewal that we’re looking for,” she said in an interview with Bloomberg Television in Johannesburg broadcast on Friday.

Tai said one of the developments the US wants to ponder is the launch of the African Continental Free Trade Area, which the World Bank says can lift 30 million people out of extreme poverty. “As part of looking at the AGOA program, we should try to figure out whether there’s more and what more we could do with the AGOA program to complement the program and the aspirations that are within the AfCFTA,” she said.

AGOA, AfCFTA can be complementary (SAnews)

Secretary General of the African Continental Free Trade Area (AfCFTA), Wamkele Mene, says the United States of America’s African Growth and Opportunity Act (AGOA) initiative and the AfCFTA can be complementary and supportive trade initiatives. He was speaking at a media briefing on the side lines of the ongoing AGOA forum held in Johannesburg.

At its core, the American driven AGOA is aimed at enhancing market access for countries in Sub-Saharan Africa while the African Union’s AfCFTA is aimed at significantly boosting and enhancing intra-trade across all African states. “An example of how that alignment can take place is if you look at the protocol on investment which establishes enhanced legal rights for investors but also enables countries to regulate investment inflows in the public interest. “Similarly in the area of intellectual property rights. The USTR [United States Trade Representative] under Ambassador [Katherine Chi Tai] has been very clear that they support reforms of the global patent system so that it is at the service of public health and at the service, in our case as the continent, at the service of industrial development and job creation.

America suspends duty-free access to four African countries (The Economist)

In the eyes of American officials, the African Growth and Opportunity Act (AGOA) is about “more than just trade”. The flagship policy grants duty-free access to America for almost 7,000 products from sub-Saharan Africa. To qualify, countries must respect human rights, uphold labour standards, promote a market-based economy and eliminate barriers to American investment, among other criteria.

But can a system of trade preferences also be a tool of foreign policy, without stifling trade’s potential for development? That question will rumble beneath the surface as American and African officials gather in Johannesburg between November 2nd and 4th for the annual AGOA forum. Out of 45 countries that could benefit from the scheme, ten are already ineligible. On October 30th President Joe Biden said four more – Niger, Gabon, CAR, and Uganda – would be kicked out next year, while Mauritania would be reinstated after making progress on workers’ rights.

African apparel industry’s future hangs on a U.S. thread (The Hindua)

Apparel companies and industry insiders warn that Africa risks a once-in-a-generation shift away from Chinese manufacturing passing it by, with an estimated 240,000 to 290,000 jobs such as Nasimiyu’s under threat. U.S. officials visiting South Africa this week to meet African trade ministers will face calls to reauthorise the African Growth and Opportunity Act (AGOA) which expires in 2025.

Ramaphosa seeks lengthy and inclusive Agoa extension to stimulate investment, regional value chains (Engineering News)

Opening the Agoa Forum in Johannesburg on Friday, Ramaphosa also underlined the “great value” of retaining all beneficiary countries to support the development of regional value chains and help industrialisation on the continent.

Ramaphosa said an early reauthorisation and renewal would help to ensure that the legislation achieved its objectives and reached its full potential. “An early renewal can help to strengthen trade and investment. “At the same time, we see potential to enhance Agoa with reforms that will add more products and will make it easier for small and medium-sized businesses to use it,” Ramaphosa said. Total goods imports into the US under Agoa recovered to $10-billion in 2022 from $6.8-billion in 2021, and South Africa emerged as the top exporter, with $3.6-billion in exports to the US last year.

Patel outlines vision for prosperous Africa united in trade (SAnews)

AGOA important in reducing inequalities in Africa: Brand SA (SABC News)

AGOA vital to sustainable growth, jobs, and industrialisation - Standard Bank (Uganda Business News)

DDG Zhang calls on LDCs to explore ways of boosting agriculture and services trade

Speaking at a workshop on least-developed countries (LDCs) and the multilateral trading system on 3 November at the WTO, Deputy Director-General Xiangchen Zhang said: “We need to keep building on the progress made to support the greater integration of LDCs into global trade.” The event provided an opportunity for WTO members and trade experts to discuss the findings of a new study outlining the participation of LDCs in agriculture and services trade.

The Coordinator of the WTO’s LDC Group, Ambassador Kadra Ahmed Hassan of Djibouti, said: “One-third of people living in LDCs are undernourished and LDCs remain on the side-lines of international services trade. We need to keep exploring what more can be done to support LDCs in overcoming their vulnerabilities and boosting their exports.”

Participants examined the findings of a new study by the WTO and the Enhanced Integrated Framework (EIF), which outlines LDCs’ priorities in agriculture and services trade. Entitled “LDCs and the multilateral trading system”, the publication stresses that certain governmental trade and non-trade measures could undermine the prospects of LDCs’ exports.

Europe’s Rapid Renewable Shift May Depend On Chinese Materials (OilPrice.com)

After decades of globalization and free-trade-oriented energy policies, the West is taking pains to separate itself from Eastern energy markets. The impetus of the market fracture came early last year, when Russia illegally invaded Ukraine and inadvertently kicked off an all-out energy war with Europe. The global energy crisis that followed was a wake-up call for the West, which realized that it allowed itself to become dangerously reliant on a small number of streams of energy production, several of which are headed by volatile and authoritarian governments. It’s a recipe for an energy security disaster.

China, Africa to keep deepening industrial chain cooperation (People’s Daily Online)

A report titled “Chinese Investment in Africa 2023” was recently released in Beijing. By analyzing over 90 Chinese companies and 20 China-Africa cooperation projects, the report explores the impact of the China-Africa policy framework and existing cooperation models on the African industrial chain. It particularly emphasizes the role of Chinese enterprises in the development and transformation of the African industrial chain, and highlights the future potential of China-Africa industrial chain cooperation.

The report showcases a wide range of examples to demonstrate the contributions made by Chinese companies to the transformation and development of Africa’s industrial chain in various sectors such as agriculture, manufacturing, digital economy, pharmaceuticals, logistics, and infrastructure.

US, China To Seek Climate Progress In Talks Before Dubai Summit (Barron’s)

The United States and China, the world’s two largest greenhouse gas emitters, said Thursday that they will hold climate talks this weekend in California, raising new hopes for headway at the COP28 summit in Dubai. Liu Pengyu, spokesman for the Chinese embassy in Washington, said the two sides “will have an in-depth exchange of views on promoting action and cooperation on climate change and supporting the success of COP28 in Dubai.”

Annual Climate Finance Exceeds $1 Trillion In 2021, But More Is Needed To Tackle The Climate Crisis: Report (SolarQuarter)

In a groundbreaking development, the annual flow of climate finance reached a historic milestone in 2021, surpassing $1 trillion for the first time since the adoption of the Paris Agreement in 2015. According to the Climate Policy Initiative (CPI), the Global Landscape of Climate Finance 2023 report revealed that the average annual flows in 2021 and 2022 amounted to nearly $1.3 trillion, doubling compared to 2019 and 2020 levels. This substantial increase can be attributed in part to improved data availability and enhanced methodologies, accounting for approximately 28% of the rise. This signifies a positive trend towards compiling, tagging, and making higher quality climate finance data publicly available.

While this achievement is laudable, it’s important to note that the $1 trillion threshold represents just 1% of the global Gross Domestic Product (GDP). Dr. Barbara Buchner, Global Managing Director at CPI, emphasized that all stakeholders must accelerate investments to significantly reduce future economic and social costs. However, it’s not just about costs; substantial opportunities exist for businesses to pursue low-carbon and climate-resilient pathways.

Climate action: ‘Take steps to close the adaptation gap, now’ (UN News)

The Adaptation Gap Report 2023 issued by the UN Environment Programme (UNEP), says the world is underprepared, under invested and lacking the necessary planning, leaving us all exposed. It warns that instead of speeding up, progress on adapting to climate change is stalling. The slowdown extends to finance, planning and implementation, says UNEP, with massive implications for loss and damage, particularly for the most vulnerable.

“Today’s report shows the gap in adaptation funding is the highest ever. The world must take action to close the adaptation gap and deliver climate justice,” said the UN Secretary-General António Guterres, commenting on the report’s findings.


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