Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Gas-supply cliff is South Africa’s next crisis, energy body says (Engineering News)

South Africa’s supply of natural gas is set to plunge within the next three to four years and there’s a risk of a shortfall triggering the country’s next economic crisis, the head of an industry body warned.

With Sasol set to curb production of the fuel from its fields in Mozambique between 2026 and 2027 as reserves dwindle and retain more output for its own operations, 300 000 to 400 000 jobs at firms that use gas for industrial purposes are endangered, said James Mackay, the chief executive officer of the Energy Council of South Africa.

“We have a supply cliff coming,” Mackay, whose organisation represents companies including Sasol and Glencore, said in an interview on Thursday. “There isn’t currently a supply alternative that will readily be available in the time frames needed.”

Bank of Kigali unveils two agriculture finance products (The New Times)

Bank of Kigali (BK) has introduced two new agriculture finance products as part of its commitment to finance the agricultural sector. The bank’s intervention is timely given that the agriculture sector is often regarded as a high-risk financing sector with many business people decrying the lack of access to credit from the banks, yet the sector holds a bigger share of the economic activities in the country, with more than 70 percent women engaged in it.

Alexis Bizimana, the Head of Agri-business in Bank of Kigali said that the two products - Coffee Working Capital and Agriculture Inventory Facility-aim to finance coffee industry, and aggregators / processors of food crops.

“The Coffee Working Capital product targets coffee value chain actors, especially the traders that collect coffee cherries from farmers and process them into green coffee for export,” he said. On the other hand, the “Agriculture Inventory Facility” targets different value chain actors in rice, maize, soybean and other cereals.

New standards for sweet potato and pecans to facilitate international trade (FreshPlaza)

The adoption of a UNECE recommendation for sweet potatoes this week will ensure product quality and fairness in trade, thus enhancing sustainable development outcomes. The standard was initiated by Germany and South Africa. Sweet potatoes are becoming an important part of our cuisine: mashed sweet potatoes (American cuisine), sweet potato fries (international fusion), sweet potato gnocchi (Italian cuisine), roasted sweet potato and chickpea salad (Mediterranean cuisine).

“Sweet potatoes play a significant role in food security and poverty alleviation. It is a staple food for millions of people around the world, especially in developing countries, providing a source of affordable and accessible nutrition,” explained said Cyril Julius, Chairperson of the UNECE Specialized Section on Standardization of Fresh Fruit and Vegetables, and Chief Operations Officer of the Perishable Produce Exports Certification Agency of South Africa. “That said, it has significant importance in trade as well, creating income opportunities and contributing to economic growth in agricultural sectors. Having a standard for sweet potatoes levels the playing field, allowing growers, exporters and importers to trade with confidence.”

Over the past 5 years the value of trade in sweet potatoes has increased by 33% globally, from USD 564 million in 2018 to USD 753 million in 2022. The value of sweet potato imports to the European Union increased by 40% in the same period from USD 278 million to USD 388 million.

The UNECE Working Party on Agricultural Quality Standards (WP.7) also adopted two new standards for pecan kernels and in-shell pecans. Pecans rank as one of the top 15 foods with the highest levels of antioxidants. They are loaded with vitamins and minerals like manganese, potassium, calcium, iron, magnesium, zinc, and selenium.

Mtwara Port puts smile on cashew farmers (Tanzania Daily News)

The cashew season in 2023/2024 has started with a bang in the Southern Tanzania regions of Lindi, Mtwara and Ruvuma. Mtwara Region is the central meeting point for cashew farmers and stakeholders who meet in Mtwara to ensure that their cashew shipments leave the country for markets in various parts of the world. The port of Mtwara has been given the big responsibility to be the only link to transport all the cashews from the Southern Regions of Tanzania by ship abroad according to the needs of customers and stakeholders of the product.

The government’s order regarding the transportation of all cashews from the Southern Regions of Tanzania to be carried out through the Port of Mtwara was issued by the President of the United Republic of Tanzania, Dr Samia Suluhu Hassan on 15th September 2023 when she made a visit to inspect the development of the Mtwara Port Improvement Project.

Since the start of this cashew season two weeks ago, hundreds of vehicles carrying cashews have been seen entering Mtwara Region and the port of Mtwara to follow the procedures set by the cashew board and the port of Mtwara before starting the loading of the cashews in warehouses and being loaded onto ships ready for shipping. The first ship to leave with cashew cargo MV Kailas, which left the port on 11th November with 51 boxes of cashew to India Currently, the second ship, MV Groton has docked and is loading cashews and is expected to leave with 309 boxes of cashews to different countries across the globe

IMF Concludes 2023 Article IV Consultation with Kenya (IMF)

“The tightening global financing conditions for frontier economies and global geopolitical tensions are compounding the challenges from the legacy of the pandemic and multi-season drought, further straining Kenya’s balance of payments and fiscal financing requirements. The authorities’ strong reform program aims to enhance macroeconomic stability and restore confidence to ensure access to the international bond markets.

“The economy has displayed resilience, with real GDP expanding by 5.4 percent in the first half of 2023, primarily due to a robust recovery in the agriculture sector following the return of rains. In the fiscal year 2022/23, the primary deficit came in as expected at 0.6 percent of GDP, reflecting tight expenditure management in light of tax revenue shortfalls. Financing conditions continue to be challenging. With a tightening of monetary policy in June, and tighter liquidity conditions, yields on government bonds have experienced a notable upward trend. The external current account deficit has narrowed, driven by a recovery in the tourism sector to pre-COVID-19 levels, resilience in remittances reductions in imports and a real exchange rate depreciation. Headline inflation has fallen within the target range of 2.5–7.5 percent since July.

Economists propose key areas to spur Tanzania’s economic growth (The Citizen)

Economists have proposed some critical areas to spur economic growth in the country. The target areas include human capital development, changing the organisation of production, formalising the currently large informal sector, as well as augmenting labour with innovation and technology to reach larger markets. Other areas include improvement of trust between the public and the private sector to spur growth, and capitalise on the available savings to fund investments.

This was discussed during the 27th Annual Research Workshop held in Dar es Salaam from 8-9 November 2023 under the theme of Promoting Inclusive and Sustainable Economic Growth through System Change. The workshop also saw the launch of REPOA’s 5-year Research Programme on Structural Transformation & Development Trajectory in Tanzania – and was organised by REPOA in collaboration with the Central Bank of Tanzania (BOT), President’s Office – Investment & Planning, and Gatsby Africa.

Parliament passes law giving government exclusive right to import fuel (Uganda Business News)

Parliament has approved legislation granting the government exclusive rights to import and supply fuel and petroleum products in a deal to be implemented with the Dutch-registered Vitol Group. The government argues that the law — which, if assented to by the president, is expected to come into force on 1 January 2024 — will lead to lower fuel prices by removing Kenyan middlemen from the fuel supply chain. Uganda currently imports 90 per cent of its petroleum products through Kenya.

“Uganda imports 90 per cent of its petroleum products through Kenya and 10 per cent through Tanzania. The system currently imposes three layers of middlemen from overseas refineries to the Ugandan oil marketing companies. Each of the middlemen companies adds a profit margin which is ultimately fed into the final pump price,” said Emmanuel Otaala, chairperson of the parliamentary committee on environment and natural resources, while presenting a report on the bill on Tuesday.

How Nigeria Can Enhance Foreign Exchange Earnings - Customs CG (News Agency of Nigeria)

The Nigeria Customs Service (NCS) says the African Continental Free Trade Agreement(AfCFTA) stands as a golden opportunity for Nigeria to significantly enhance its foreign exchange earnings. The Comptroller General of Customs (CGC), Comptroller Adewale Adeniyi, said this at the Distinguished Lecture Series organised by the Nigerian Institute of International Affairs (NIIA), on Thursday, In Lagos.

The lecture had the theme: “Nigeria’s Economic Growth and Development: Reforming and Positioning the Nigeria Customs Services for the AfCFTA and other Emerging Challenges.”

According to Adeniyi, the expansive marketplace created by AfCFTA can serve as a catalyst for increased trade, attracting diverse businesses and stimulating economic growth. He said Nigeria, with her rich array of sectors from agriculture to technology, had the potential to capitalise on this opportunity by strategically positioning herself within the continental trade framework.

The CG said that Nigeria should focus on targeted sector-specific initiatives, invest in infrastructure to facilitate seamless trade, and actively engage in cross-border collaborations to solidify its position as a key player in the African trade landscape.

Seychelles: African Development Bank grants a loan of USD 33 million to sustain inclusive green growth and reinforce climate resilience and environmental sustainability (AfDB)

Improving Agriculture, Human Capital, and Infrastructure - Key to Take on Poverty in the Central African Republic (World Bank)

Rwanda: Irembo discusses protection of national infrastructure in e-govt era (The New Times)

Climate Action Key to Kenya’s Upper-Middle-Income Country Aspirations (World Bank)

Kenya remains vulnerable to frequent climatic shocks that pose significant economic risk. Without adaptation measures, the impact from climate change could not only disproportionately affect the poor, but also result in real GDP losses of up to 7% from the baseline by 2050. Kenya is a relatively low emitter of greenhouse gases (GHGs) generating less than 0.1%of global GHG emissions although its emissions have more than doubled since 1995.

The inaugural Kenya Country Climate and Development report notes that not acting to address climate change will set back Kenya’s poverty reduction gains and increase inequality. Inaction against climate change could result in up to 1.1 million additional poor in 2050 in a dry and hot climate future scenario. Kenyan households are already experiencing the effects of climate change. To cope with climate and other shocks, 37% of affected households reduce food consumption and 33% look for additional income sources, taking a toll on Kenya’s human capital.

“The Africa Climate Summit’s Nairobi Declaration committed to propel Africa’s economic growth and job creation in a manner that not only limits emissions but also aids global decarbonization efforts,” said Kenya’s Cabinet Secretary for the National Treasury and Planning, Professor Njuguna Ndungu. “This Country Climate and Development Report is an important first step in defining a resilient and low-carbon development growth path that could help Kenya leapfrog traditional industrial development and foster green production and supply chains.”

Morocco’s Economy Has Become More Resilient (World Bank)

After a sharp deceleration in 2022 caused by various overlapping commodity and climate shocks, economic growth is set to increase to 2.8 % in 2023, driven by a partial recovery of agricultural output, services, and net exports, according to the World Bank’s latest report, ”From resilience to shared prosperity”. This recovery is expected to firm up in the medium term, and real GDP growth is projected to reach 3.1 % in 2024, 3.3 % in 2025, and 3.5 % in 2026 as domestic demand gradually recovers from recent shocks. Inflation has halved between February and August 2023, but food inflation remains high and continues to disproportionally affect poorer households.

Morocco’s external resilience is also evidenced by a solid external demand for the country’s goods and services, despite the international economic slowdown. Equally, Foreign direct investment (FDI) inflows remain strong and increasingly directed towards the manufacturing sector. Various modern industrial niches well connected to global value chains have emerged and the country maintained access to international capital markets despite the ongoing tightening of global financial conditions.

Morocco has launched ambitious reforms to improve human capital and encourage private investment. These reforms will achieve the desired economic and social development impact only if, though, combined with other critical initiatives, including the removal of regulatory and institutional barriers that limit competition and slow the reallocation of factors of production to more productive firms and sectors.

The Sahel, Central African Republic Face Complex Challenges to Sustainable Development (IMF)

Countries in the Sahel (comprising Burkina Faso, Chad, Mali, Mauritania, and Niger), along with neighboring Central African Republic (CAR) are facing a medley of development challenges. Escalating insecurity, political instability including military takeovers, climate change, and overlapping economic shocks are making it even harder to achieve sustainable and inclusive development in one of the poorest parts of the world.

In 2022, conflict-related fatalities in these countries increased by over 40 percent. The deterioration of the security situation over the past decade has caused a humanitarian crisis, with more than 3 million people fleeing violence in Burkina Faso, Mali, and Niger, according to UNHCR.

More frequent extreme weather events in the Sahel—including historic floods and drought—depress productivity in agriculture, resulting in the loss of income and assets, while exacerbating food insecurity and reinforcing a vicious circle of fragility and conflict.

East Africa’s exports to rest of the continent hit $9 billion (The Citizen)

Exports from the East African Community (EAC) bloc to the rest of Africa hit a record $8.9 billion last year having increased from $8 billion in 2021. However, the share of intra-EAC trade as part of the region’s total trade globally remained stagnant at approximately 15 percent in both 2022 and 2021. Statistics show that total intra-EAC trade grew by approximately 11.2 percent to $10.9 billion in 2022 from $9.8 billion in the previous year.

This emerged as the East African Business Council (EABC) met business stakeholders in Burundi early this week to discuss how to promote regional trade. The workshop in Bujumbura was also aimed to further boost Burundi’s exports to Africa, which according to the EABC, stood at about $68.1 million last year.

Stakeholders say transformative industrialisation is critical for Africa’s sustainable development (UNECA)

Some stakeholders have reiterated the need for transformative industrialisation, saying it is critical for sustainable development on the continent. They have been speaking at a special event, “Leveraging on strategic foresight for an agile, robust, and forward-looking sustainable industrial development in Africa,” on Thursday at the African Economic Conference (AEC) in Addis-Ababa, Ethiopia.

Fiona Tregenna a Professor at the University of Johannesburg, and Chair of the Industrial Development National Research Foundation (NRF) of South Africa, delivered a paper on Transformative Industrialisation for Africa (TIFA) and links with strategic foresight. She highlighted some of the challenges that have hindered industrialisation on the continent.

According to Tregenna, achieving the Africa we want is not business as usual, otherwise we will not get the transformative change to give us the Africa we want.

Public-private partnerships needed to bridge infrastructure development gap in Africa (UNECA)

Public-private partnerships (PPPs) are essential for infrastructure development in Africa, and governments and the private sector should work together to create effective PPPs, said Robert Lisinge, Acting Director of the Private Sector Development and Finance Division at the UN Economic Commission for Africa (ECA). Mr. Lisinge was the moderator at a plenary session at the African Economic Conference 2023 (AEC), on Public-Private Partnerships to catalyse infrastructure development and innovative financing for industrialization in Africa.

“Financing Africa’s infrastructure is still a big challenge faced by many countries on the continent. To bridge the infrastructure gap, public-private partnerships are essential for infrastructure development in Africa,” said Lisinge. He noted that the African Development Bank (AfDB) estimates that between $130 and $170 billion is needed for infrastructure development every year, leaving a substantial financing gap of $68 to $108 billion.

Traditionally, African governments and international partners like China have been primary investors in infrastructure. However, due to financial constraints, there is a growing need to explore public-private partnerships. These can harness private investment, technology and expertise, improving service delivery efficiency and cost-effectiveness.

“The infrastructure financing gap in Africa is around $100 billion. To bridge the infrastructure gap there is a need to bring in the private sector,” added Ms Ogbebor, saying that PPPs provide options to financing, and leverage risk sharing like financial and technical risks.

Leveraging Digital Technologies to Enhance Market Access for Women-owned Export Companies in the horticulture Value Chain (UNECA)

“The establishment of digital traceability systems in the horticulture supply chain in our countries reduces compliance costs for exporters”, said Ms. Olayinka Bandele at the side event organized by the Economic Commission for Africa, Sub-Region Office for Southern Africa (ECA SRO-SA) in collaboration with the African Union Regional Office for Southern Africa (AU-SARO), during the Africa Industrialization Week (AIW), 11-13 November 2023 in Cairo, Egypt to support women exporters.

The Chief, Inclusive Industrialization Section, SRO-SA was moderating a high-level panel discussion whose major objectives were to: Interrogate the major market access impediments faced by women-owned export companies in the horticulture value chain; assess the role of digital technologies in driving competitiveness through effective Sanitary and Phyto Sanitary (SPS) management systems, traceability applications and enhanced cultivation methods; and proffer recommendations to address the challenges faced by women.

Both exporters outlined the major impediments faced by women in horticulture business. Ms. Mulapesi emphasized the importance of African women producers, she indicated that most women were good producers and had great potential to feed the continent. She called on African leaders and international organisations to use the platforms such as Intra-African Trade Fair (IATF) and Africa Industrialisation Week (AIW) to support women’s access to external markets such as the European Union. She noted that, “Standards, especially private standards and licensing increases the costs of certification, making it difficult for women to export to lucrative markets”.

Is Africa having potential for regional value chains? (UNECA)

Experts discussing the African Continental Free Trade Area (AfCFTA), have called for African nations to invest in developing regional value chains (RVCs). The consensus among thought leaders is that for the AfCFTA to deliver on its ambitious development promise, countries must harmonize trade policies and strategically invest in industrial development. The key to success in this economic landscape lies in countries positioning themselves within niche industrial sectors.

This was the main message on Thursday, during the session: “Is Africa having potential for regional value chains?” at the Africa Economic Conference 2023 in Addis Ababa, Ethiopia, with the theme, “Imperatives for sustainable industrial development in Africa”.

Ms. Joy Kategekwa, Strategy Advisor to the United Nations Development Programme (UNDP) and moderator of the session, emphasized the transformative potential of regional value chains (RVCs) for Africa’s industrial revolution. RVCs enable nations to leverage their comparative and competitive advantages, allowing them to participate in industries that might otherwise be beyond their capacities. “Africa is industrializing, we must now grow bigger and faster,” declared Kategekwa.

This growth requires a multifaceted approach, including consistent government policies, fostering public-private partnerships (PPPs), and establishing special economic zones (SEZs) to drive the development of regional value chains. Removing barriers to the free movement of people is equally crucial, as Ms. Kategekwa highlighted, stating, “We can’t trade and industrialize if we can’t move.”

‘AfCFTA offers crucial trade-off between revenue (The Guardian Nigeria)

The Comptroller General of Nigeria Customs Service (NCS), Bashir Adewale Adeniyi, said the objectives of Africa Continental Free Trade Area (AfCFTA) presented beacon of hope for Africa’s economic transformation, ranging from the promotion of intra-African trade to sustainable economic growth.

He stated this at the 18th Roundtable of Managing Directors/Exhibition of the Port Management Association of West and Central Africa (PMAWCA) hosted by the Nigerian Ports Authority (NPA) in Lagos. Adeniyi spoke on the topic: “What does the AfCFTA offer to African Ports after three years of implementation.” He said unfortunately, the free trade area is poised to usher in significant changes that will have a profound impact on customs operations, which is the shift in customs’ focus, moving from the import side to the export side of trade facilitation.

Adeniyi said this adjustment presents a crucial trade-off between revenue collection and trade facilitation, adding that Customs will need to strategically allocate resources to enhance export procedures and ensure that exporters can thrive in a streamlined environment that ultimately benefits the government through increased foreign exchange earnings.

Stakeholders urge Africans to think, produce, consume African goods (Peoples Gazette)

Some stakeholders have called on Africans to think, produce and consume goods produced on the continent to promote African growth and development. They made the call at the 2023 Africa Economic Conference (AEC) in Addis-Ababa on Thursday. They spoke during a plenary on how Africa could leverage the African Continental Free Trade Area (AfCFTA) to spur sustainable, inclusive industrialisation.

“To fully implement the AfCFTA, African member states should prioritise production with a focus on manufacturing. We need to invest more in hard infrastructure such as roads, rails, and airlines for moving goods to market and to improve on factors of production and manufactured goods.

“Trade barriers among countries are still a challenge, making trade difficult. Thus, there is a need to address this challenge. There is a need to also invest in border agencies and customs to remove the barriers and improve the efficacy of AfCFTA,” stated Mr Urama. Melaku Alebel, Ethiopia’s minister of industry, said export and import promotion was crucial to enhance the manufacturing sector on the continent.

African Economic Conference calls for stronger political will to spur Africa’s industrialisation (AfDB)

African countries need to show stronger political will to advance industrialisation, including the adoption of new policies to promote improved productivity and harness the potential of a growing youth population, delegates attending the 2023 African Economic Conference heard. The three-day conference opened in the Ethiopian capital, Addis Ababa, on Wednesday under the theme “Imperatives for Sustainable Industrial Development in Africa”.

Organised by the African Development Bank, the United Nations Economic Commission for Africa and the United Nations Development Programme, this year’s conference, the 18th edition, brought together experts, the private sector, researchers, and young people to discuss the challenges and prospects of industrialisation in Africa.

Africa Investment Forum 2023: Capital market integration in Africa is essential to meet funding needs - experts (AfDB)

India-Africa trade up 9% yoy in FY 2022/2023 to $98bn (Ecofin Agency)

More than thirty African countries benefit from India’s duty-free tariff preference (DFTP) scheme for least-developed countries. “Trade with the African continent has climbed to $98 billion in FY 2022/2023 from $89.6 billion in the previous year,” Indian External Affairs Minister Subrahmanyam Jaishankar

said at the Confederation of Indian Industry (CII) and Exim Bank of India conclave on India-Africa partnership, while expressing “confidence that trade volume will exceed $100 billion in FY 2023/2024”. The head of Indian diplomacy also pointed out that New Delhi has already granted more than $12.37 billion in concessional loans to African countries.

UNCTAD’s inclusive growth index underscores need to move beyond GDP (UNCTAD)

New UNCTAD data released on 16 November highlights the limitations of Gross Domestic Product (GDP) as an all-encompassing metric for progress, underscoring that higher economic output doesn’t equate to more inclusive and sustainable growth. Launched in June 2022, the UN trade and development body’s Inclusive Growth Index measures not only traditional economic metrics like GDP but also indicators of living conditions, equality and environmental sustainability.

It was expanded in 2023 to include large economies like China and India and now covers 129 countries representing 93% of the world’s population and 96% of global GDP. The latest edition shows that while significant disparities remain – developed economies’ average overall score on inclusive growth is nearly double that of developing ones – some gaps are narrowing. For example, in the environmental category, developed economies score an average of 42.5 out of 100, compared to 31.3 for developing countries – a less stark contrast than in the economic category, where the scores are 41.7 and 14.7, respectively.

“GDP is a strong measure of economic activity but doesn’t necessarily measure what counts most for people and the planet today and in the future,” says Anu Peltola, who heads UNCTAD’s statistics unit.

Members agree on changes to improve the functioning of the Customs Valuation Committee (WTO)

Members adopted a series of changes to improve the functioning of the Committee on Customs Valuation as part of the work towards WTO reform. At a formal meeting of the Committee on 15 November, delegates also reviewed national customs valuation legislation notified by 35 members and agreed to use the eAgenda platform to assist the work of the Committee.

DDG Ellard calls for APEC leadership in reforming the WTO, delivering at MC13 (WTO)

At the 2023 Asia Pacific Economic Cooperation (APEC) Leaders Meeting in San Francisco on 15 November, Deputy Director-General Angela Ellard emphasized the role of the WTO in achieving an open, dynamic, resilient, inclusive and peaceful Asia-Pacific community. She called for APEC leadership in reforming the multilateral trading system and said the best way to strengthen it is to deliver positive outcomes at the WTO’s upcoming 13th Ministerial Conference (MC13) that demonstrate how trade helps raise living standards, improve people’s lives and protect the environment.

Climate Change is Disrupting Global Trade (IMF)

Around 1,000 ships pass through the Panama Canal each month carrying a total of over 40 million tons of goods—about 5 percent of global maritime trade volumes. But water levels in this vital link between the Atlantic and Pacific oceans have fallen to critical lows because of the worst drought in the canal’s 143-year history.

Drought restrictions imposed amid insufficient rainfall at the Gatún Lake, which feeds the canal, have reduced throughput by some 15 million tons so far this year. Ships have faced an additional six days in transit. The authorities are exploring strategic options to boost the water supply in the canal.

ports in Panama, Nicaragua, Ecuador, Peru, El Salvador and Jamaica are suffering most from these delays, with 10 percent to 25 percent of their total maritime trade flows affected. But the drought’s effects are felt as far away as Asia, Europe and North America. The drought will hamper trade for months to come, with canal passages set to halve to 18 ships per day by February, down from 36 in ordinary times. Economies reliant on the canal for trade should prepare for more disruption and delay.

Quick links

Time Is Running Out To Help Africa Feed Itself

AFCFTA: Antidote to current macro-economic challenges

BRICS nations’ prosecution bodies commit to enhance cooperation

Q&A: What is the ‘global stocktake’ and could it accelerate climate action?


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