tralac Daily News
The First Deputy Prime Minister for East African Community Affairs, Rebecca Alitwala Kadaga, has emphasised the potential for prosperity through the expansion of the regional market, which supports the production of goods and services.
This not only increases the purchasing power of the people but also promotes the production of quality and competitive products in the regional, continental, and international markets.
During the bilateral meeting held in Busia on the 9th, Kadaga and officials from Uganda and Kenya, along with the Joint technical staff from both countries, discussed bilateral issues and matters pending at the two borders.
Kadaga advised the delegations on the importance of continued cooperation among border communities to combat insecurity and promote prosperity.
Cross-border traders in Busia have raised concern over the increasing tariffs on petroleum, saying it will hurt the business between Kenya and her neighbour Uganda where Kenya earns in excess of $1 billion annually through exports. The traders who presented a memo to the two countries’ East African Community (EAC) Cabinet Secretaries Peninah Malonza (Kenya) and Rebecca Alitwala Kadaga (Uganda), said such tariffs should be revised to ease business.
“Many countries in the EAC have protectionist policies that protect domestic industries and discourage regional trade integration. The current high tariffs recently introduced in Kenya, for example, will hurt border trade with Uganda and beyond,” said Sylvanus Mbongo Abungu on behalf of the traders.
The traders engaged the ministers who were on a working tour at the Busia One Stop Border Point (OSBP) on Thursday. “The recent proposed change of Uganda fuel import associated with the high tariffs in Kenya will affect business in Busia and stifle integration,” said Mbongo. Uganda’s Ministry of Energy and Mineral Development has proposed a bill in Parliament that seeks to cut reliance on Kenya for importation of its petroleum products.
Their memo comes even as the land-locked nation, which imports 90 per cent of its petroleum through Kenya, seeks to cease its reliance on Kenya to access petroleum products citing an increase in pump prices.
Kenya is exploring cooperation in several areas connected to the development of export markets. These include accelerated development of industrial parks, improvement of quality assurance centres, support to structured commodities trading, regional trade insurance, and development of critical transport infrastructure.
Cabinet Secretary for Investments, Trade and Industry, Rebecca Miano spoke Sunday the 12th of November 2023 afternoon when she paid a courtesy call to the President of AfriExim Bank, Professor Benedict Oramah and his senior management team at their Cairo-based headquarters. During deliberations by the two parties, CS Miano advanced the case for projects of mutual interest in trade, industry and investment.
Once implemented, each of these areas of focus clearly betoken Kenya with the capacity to shore up her prospects in intra-Africa trade over and above other global export-related opportunities.
Rwanda’s biggest port to open in December (Freight News)
The inland Port of Rubavu which is expected to boost cross-border trade with Rwanda’s neighbour on the other side of Lake Kivu, the Democratic Republic of Congo (DRC), will begin operations in December. The acting mayor of Rubavu district, Déogratias Nzabonimpa, said a provisional handover is scheduled for November 30. “The port is 96% complete with some ongoing finishing works. “It will be handed over by the end of the month and the first ship, if available, will be allowed to access it by December 1,” Nzabonimpa said.
The port spans an area of two hectares. It will reduce the costs of trade flows along the lake, Africa’s eighth largest water body and biggest supplier of fish to Rwanda, as well as bolster the region as a tourism destination, he said.
Kenya agricultural commodities exchange to go live in 2024 (The East African)
Kenya’s planned agricultural produce exchange is scheduled to go live in February next year, the Trade and Investment Ministry said in a disclosure. The ministry said the Kenya National Multi Commodities Exchange (Komex) is scheduled to commence mock trading on January 29, 2024, and go live on February 26, 2024.
“The key objective of the Komex project is to provide regulated access to structured trading of multi-commodities, market information, domestic and international markets, trade finance, and trade support services for sector regulators and value chain actors (farmers/producers, aggregators, traders, consumers, and processors),” it said.
The commodities exchange will be an online marketplace where buyers and sellers can trade in commodities with an assurance of quality, delivery, and payment. “The exchange is committed to ensuring that the market is assisted with a modern market institution that will bring in much-needed integrity, by providing a guaranteed mechanism, for the quality, quantity, and payment,” the ministry said.
Duty-free goods cost KRA Sh30bn foregone tax (Business Daily)
The importation of duty-free agricultural products denied the government close to Sh30 billion in taxes, reflecting the high cost of cushioning Kenyans against the steep consumer prices. A report by the Treasury shows that tax expenditures, or foregone taxes, increased three times from Sh15.6 billion in 2021 to Sh45.5 billion last year after waiving duty on agricultural products.
Last year imports of animal feeds, vegetables, wheat, maize, edible oils, rice and sorghum, jumped 209 percent to Sh68.06 billion as the government put in place measures to lower the cost of living. The largest increase on tax expenditure was on Import Declaration Levy (IDL), charged at the rate of 3.5 percent on all imported goods, which increased by Sh10.2 billion to Sh11.8 billion. In 2021, the government did not collect IDL valued at Sh1.6 billion.
Tax expenditure on import duty, which can be as high as 50 per cent on maize imported from outside of the seven-member East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa), was Sh13.6 billion up from Sh4.8 billion. Similarly, foregone taxes on Import value added tax (VAT) increased from Sh8.8 billion in 2021 to Sh17.2 billion in 2022, reads the 2023 Tax Expenditure Report.
Automakers’ drive to avoid China’s EV rare earth dominance gathers speed (Engineering News)
The auto industry’s drive to make electric vehicle motors with little to no rare earth content has hit high gear, with European, US and Japanese automakers and suppliers racing for alternatives in an area dominated by China. Automakers have mostly relied on motors with rare earth-based permanent magnets, which have been the most efficient at providing the torque to power EVs
But different types of motors without permanent magnets that were previously too big and too inefficient, or those with greatly-reduced rare earth content have become commercially viable, prompting the rush for alternatives. Market leader Tesla garnered headlines earlier this year saying it would cut rare earths from its next-generation EVs
China dominates the mining and processing of a group of 17 metals known as rare earths, though companies elsewhere are trying to loosen China’s grip.
Africa’s barter agreements not a solution to foreign currency crunch (The Africa Report)
For Egypt, a potential barter agreement with Kenya may allow it to import tea without further straining its overstretched foreign reserves. However, such deals are unlikely to go far in easing the hard currency crunch in Africa, experts say.
A State-backed think tank is seeking amendments to the export laws to allow traders to sell only value-added produce to overseas markets. The changes will affect the Crops Act of 2013 and the State Corporation Act of 2019. The move, according to the Kenya Institute for Public Policy Research and Analysis (Kippra), aims to maximise the potential of the agricultural sector in favour of President William Ruto’s Bottom-up Economic Transformation Agenda (BETA). Coffee, tea, avocado and macadamia are the crops targeted by Kippra.
“Agricultural value addition provides a viable option for small-scale crop and fruits farmers to enhance product shelf-life and offer them a ready market for the produce, besides providing nutritious food,” reads the policy monitor document titled, Kenya @60 and Industrialisation Prospects under BETA published this month.
Kippra cites a report by the International Food Policy Research Institute (IFPRI), which estimates horticultural losses in Kenya to be 50 per cent, mainly due to poor storage, low-value addition and poor handling practices resulting in significant losses to the farmers. Therefore, it concludes, that value addition becomes important in this case as prioritised under the BETA plan.
A Marketing Officer at the Northern Regional Office of the Ghana Standards Authority, Mahamud Misbaw, has stated that the recently commissioned Trading Standards Inspectors (TSI) of the Ghana Standards Authority will play a crucial role in checking AfCFTA controls at various markets nationwide.
Speaking at the 4th Quarter Northern Regional Shipper Committee meeting facilitated by the Ghana Shippers’ Authority (GSA), Mr. Misbaw noted that officers of the Ghana Standards Authority are equipped to identify substandard goods as well as the illegal use of its trade mark.
He emphasised that the certification of products in the name of AfCFTA on the market will also be scrutinized to prevent the nation from becoming a dumping ground for cheap and unwholesome products from the continent. “If you have the original AfCFTA certificate, it means that your goods have met all the required standards and are wholesome to be in the market. The certificate gives you the right to trade your product in all African states without any restriction,” he said.
He said that the Ghana Standards Authority aims to establish itself firmly across the country to safeguard consumers. “This move is to help Ghana Standards Authority to strengthen its activities in the regions.
Ultimately the African Growth and Opportunity Act (AGOA) could be extended by 16 years, that means until 2041, indicating its importance for strengthening Africa’s trade and economic cooperation with United States. That was, in fact, the main focus during Johannesburg’s early November forum that brought together more than 30 trade ministers, astute investors plus representatives from the regional economic blocs and the African Union.
At the forum, Africa’s geopolitical alliance with collective expectations and ambitions to shape the long-term future trade and economic architecture was obvious, and this featured prominently throughout all the speeches and discussions. As an established fact, Africa trades more with the European Union and the United States, and now China, than any other countries in the world. That is the reality, despite the diverse interests and political preferences African countries have in this emerging reconfiguration.
Intra-Africa Trade Fair 2023
Attendees continued to hear wide-ranging discussions and comments on trade and investment issues on the fifth day of the third Intra-African Trade Fair 2023 (IATF2023) in Cairo yesterday.
IATF2023 attendees were treated to a panel discussion on ‘The role of the AfCFTA in Accelerating the Implementation of African Development Agenda 2063’. The panellists said that political will was a crucial factor for success. Yahya Al-Wathiq-Bellah, Head of the Egyptian Commercial Representation Service, emphasised the importance of political will throughout the entire structure and Nardos Bekele Thomas, CEO of the African Union Development Agency- NEPAD, said that a conducive environment and willingness of governments to honour their commitments were crucial.
Kanayo Awani, Executive Vice President, Intra-African Trade Bank, at the African Export-Import Bank (Afreximbank), said that financiers played a crucial role in protecting the African continent from the adverse effects of supply chain disruptions. Ms. Awani argued that there was need to “reverse engineer” colonial trade routes, which were established without consideration for the African population. “We support that with financing but it has to be a collective effort,” she said.
Responding to the panellists, Albert Muchanga, African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, announced some upcoming projects aimed at ensuring harmonisation of regulations, including a ‘Made in Africa’ strategy. He also stressed the need to include the private sector in state-level negotiations, adding, “A time should come when our governments must say the private sector will be informed about the outcome of negotiations.”
The Economic Community of West African States (ECOWAS), African Export-Import Bank (Afreximbank) and the United Nations Economic Commission for Africa (UNECA) unveiled a study on Informal Cross-Border Trade (ICBT) in the ECOWAS Region at the ongoing 3rd Intra-African Trade Fair in Cairo on November 12, 2023. The study was launched from 2019 to 2023, with the objective of collecting ICBT data along the Abidjan-Lagos Corridor (ALCO) to measure the volume of trade.
In her statement at the unveiling ceremony, Mme Massandjé Toure-Liste, the Commissioner for Economic Affairs and Agriculture of the ECOWAS Commission, highlighted that in view of the importance of informal trade, the ECOWAS Commission established the Informal Trade Regulation Support Program (PARCI/ITRSP) to leverage the informal sector for increased intra-regional trade.
The African Export-Import Bank (Afreximbank) yesterday in Cairo, entered into a framework agreement for the Export Agriculture for Food Security (ExAFS) Initiative with ARISE Integrated Industrial Platforms (ARISE IIP) and the governments of Chad, Malawi, Zimbabwe and Egypt. The initiative seeks to initiative to improve food security in Africa.
At a ceremony on the fifth day of the third Intra-African Trade Fair (IATF2023), Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, signed the framework agreement on behalf of the Bank.
The initiative is intended to help address food insecurity in Africa, which includes a near 20 per cent hunger rate, by reducing dependence on other regions for much needed food commodities. ExAFS will also increase sales, lead to better prices, and improve profitability for Africa’s agricultural value chain stakeholders.
It will leverage upon the establishment of agricultural transformation centres (ATCs) – under a public-private partnership model – in agricultural production zones to provide facilities for agricultural produce from farming communities to be collected, sorted, stored, and transported as raw material for processing or distribution. ATCs will also provide additional services to farmers, including micro finance, basic social services, cold storage facilities, extension services and training.
Automotive industry holds key to drive intra-Africa trade (Freight News)
The automotive industry is one of four priority sectors that offer opportunities to boost intra-African trade, the African Continental Free Trade Area (AfCFTA) secretariat. Themba Khumalo, a representative of the AfCFTA secretariat, said this during the Auto Forum held on the third day of the Intra-African Trade Fair (IATF 2023) in Cairo last week. He emphasised that extensive research had highlighted the potential of the automotive sector to drive increased trade between countries.
Khumalo said improved logistics is the most important factor to boost the automotive industry, and Africa already spends $47 billion on transport and logistics. The development of efficient trade and transport corridors, customs procedures, and the use of modern technology to facilitate trade in the African market was also key to boosting intra-continental imports and exports, he added.
The Chairman of the Board of Directors and Advisory Board at the Africa Private Sector Summit, Professor Kingsley Moghalu, has said that when fully implemented, the African Continental Free Trade Area would bring 30 million Africans including Nigerians out of poverty by 2035. He made this known in a statement while speaking at the AfCFTA Joint Private Sector Session during the 2023 Afreximbank Intra-African Trade Fair in Cairo, Egypt, a report by NAN stated.
Moghalu emphasized the necessity of adopting the PSBoR as a complementary instrument alongside the Regional Economic Communities (RECs) and the African Continental Free Trade Agreement (AfCFTA) to shape the desired future for Africa.
According to him, the Private Sector Bill of Rights (PSBoR) is critical in fostering economic growth, combating poverty, and positioning Africa as a thriving business hub. In outlining the interconnectedness of the PSBoR with the RECs and AfCFTA, Moghalu stressed that its adoption would contribute to thriving businesses, increased tax revenues for governments, and the sustainability of capital markets.
The Africa Investment Forum’s 2023 Market Days generated $34.82 billion in investment interest for infrastructure, agriculture, health, and creative industry projects. The three-day global event, with the theme “Unlocking African Value Chains,” ended on Friday in the Moroccan city of Marrakech, the event drew over 1,000 delegates from more than 60 countries.
“We are building a formidable powerhouse around investments in Africa, that will deliver transformative impacts on the lives of people. That is the bottom line of the Africa Investment Forum: investing to improve lives,” said African Development Bank Group President, and Chairperson of the Africa Investment Forum, Dr. Akinwumi Adesina.
Is Africa still caught in Russian-Ukrainian grain battle crossfire? (The Africa Report)
Negotiations on the Black Sea grain corridor have not been renewed, and the critical dependence of African countries on Ukrainian and Russian grains remains a pressing issue. The previous agreement provided Russian President Vladimir Putin with diplomatic leverage to obtain certain privileges and favours, such as the export of his wheat and fertilisers or the reintegration of the Russian agricultural bank, Rosselkhozbank, into the Swift banking network. From Russia’s point of view, the game played by Ukraine and the Euro-Atlanticists has a lot to do with the current stalemate.
According to a statement from Putin on 17 July, more than 90% of the grain shipments resulting from last year’s agreement – made up of wheat, barley, sunflower and, above all, maize – were supplied to Europe and other wealthy countries, even though they had previously been destined for developing countries.
While the chairman of the African Union (AU) Commission, Moussa Faki Mahamat, has called for a return to normal – not without first expressing his concern about the consequences – Guinea has already taken the decision, on 17 July, to ban the export of several foodstuffs (including rice, maize, cassava, potatoes, palm oil, okra, tomatoes and aubergines) from its territory to ensure its food security.
The fact that so many African countries are so dependent on wheat from two countries that have been at war for the past two years is a strategic error, which undoubtedly reflects a failure of food policies on the continent.
The World Food Program (WFP) said on Monday that food insecurity levels across East Africa are likely to remain high through early 2024 despite the decrease observed since the peak of the lean season in 2022.
The WFP said in its food security update that protracted and newly emergent conflicts, persistent fragile macroeconomic conditions, and high cost of living will continue to impact the food security and nutritional status across the East Africa region. “Ethiopia, Somalia, South Sudan, and Sudan remain key countries of concern moving into 2024.”
In addition to macroeconomic factors, the WFP said conflicts in Ethiopia, South Sudan, and Sudan are likely to exacerbate the needs of the most vulnerable, such as the displaced populations and refugees. Some 62.6 million people were food insecure as of September, with four of the nine countries in the region -- Ethiopia, Somalia, South Sudan, and Sudan -- among the worst affected by the global food crisis, the WFP said.
This year’s annual UN climate summit, COP28, is taking place in the United Arab Emirates (UAE), a host choice that will highlight the role of fossil fuel extractors in the energy transition. However, while the UAE has been greatly enriched by its fossil fuels, this has not been the case for every fossil fuel-rich country. Nowhere is this more famously the case than in Nigeria. Now, as critical minerals and cleantech replace fossil fuels as the building blocks of the world’s energy system, resource-rich Africa is keen to make sure this pattern does not repeat itself and cleantech supply chains deliver local benefits.
Already, patterns of wealth accumulation for these new resources are showing familiar ownership patterns. Energy Monitor recently identified the top ten countries by ownership of critical minerals reserves – and there is a clear mismatch with those countries that actually own the supply chain. Critical minerals such as copper, lithium, manganese and nickel are essential to the development of technologies behind solar PV, wind energy, electric vehicles (EVs) and energy storage. China, Europe and North America dominate these cleantech supply chains.
Amani Abou-Zeid, the African Union’s Commissioner for Energy and Infrastructure, said at the Vienna forum she wants fairer value chains to be addressed at the COP28 summit in Dubai starting at the end of this month.
“We have great opportunities [in Africa], including an abundance of renewable energy resources and development minerals, but we are not seeing development on our continent as we would have wished it to be,” she said. “The challenge will be that we are smaller economies and not necessarily connected. Half of our population doesn’t have access to electricity. We are not in a discussion about transition, we are still at the level of access.”
The inaugural day of the third session of the Intergovernmental Negotiating Committee (INC) to combat plastic pollution, particularly in marine environments, opened with a powerful address from Kenya’s President William Ruto. Delegates, gathered to forge a legally binding instrument to address plastic pollution, received a stark reminder from President Ruto of the alarming reality: The world is generating close to 400 million tonnes of plastic annually, a figure that could triple if business continues as usual.
The President highlighted the disconcerting statistics of plastic waste mismanagement: Less than 10 per cent is recycled, 46 per cent ends up in landfills, 22 per cent is mismanaged and 17 per cent is incinerated. Equally alarming is the fact that over 23 million tonnes of plastic waste infiltrate our water bodies each year. Ruto emphasised the interconnectedness of plastics and climate change, cautioning that by 2030, plastic could contribute up to 19 per cent of total greenhouse gas emissions
As the committee commenced its work, the chair strategically pointed out that provisional application of the draft rules of procedure, especially Rule 38.1, requires further discussion. Rule 38.1, a subject of debate at the previous INC meeting in Paris, became a focal point. India, opposing its adoption, hinted at potentially obstructing progress if invoked before the final adoption of the rules of procedure.
India is set to highlight challenges, concerns and priorities of the developing countries at the second edition of the ‘Voice of Global South Summit’ it is hosting on Friday in the virtual format, over two months after the African Union was inducted as a permanent member of the G20 under New Delhi’s presidency of the bloc.
Prime Minister Narendra Modi is likely to preside over the summit that is expected to be attended by a host of leaders from the developing countries, people familiar with the matter said on Tuesday.
India hosted the first edition of the ‘Voice of Global South Summit’ under the theme ‘unity of voice, unity of purpose’ on January 12 and 13. The second edition of the summit will take place on November 17, they said. The aim of the initiative was to bring together countries of the Global
The Youth Trade Summit on Gender taking place at the WTO on 13-14 November aims to highlight young people’s perspectives on women’s economic empowerment. “This is the first time the WTO is organising such a landmark event involving young people from all over the world. They have a crucial role to play in shaping nations,” Deputy Director-General Xiangchen Zhang said at the opening ceremony. Also at the opening was Xiana Méndez Bértolo, Spain’s Secretary of State for Trade, who underlined the importance of reducing the gender gap.
“Trade is a catalyst for women’s economic empowerment,” DDG Zhang told participants. “There is an increasing need to have more women in the global economy. The more they are involved, the more economies grow.”