Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

President Cyril Ramaphosa visits Port of Richards Bay (South African Government)

President Cyril Ramaphosa on Thursday, 23 November 2023, visited the Port of Richards Bay to assess the state of the port and efforts underway to address congestion. The President received a briefing from the leadership of Transnet on the current challenges at the port and the interventions underway to reduce congestion and improve efficiency.

The National Logistics Crisis Committee (NLCC) has established five Corridor Recovery Teams (CRTs) comprising Transnet managing executives, rail and port users, and independent experts focused on five strategic corridors which are crucial to support the country’s exports, including the Northern Corridor which runs to Richards Bay. These teams meet on a weekly basis to accelerate the delivery of key actions to improve the volume of goods transported on the network. Transnet has put in place a short-term plan to ramp up operations on the corridor, including the injection of four additional locomotives by the end of November 2023; an increase in the length of trains from 40 to 50 wagons; and the return of a conveyor belt at the Richards Bay Dry Bulk Terminal on an expedited basis by December 2023.

The African Development Bank, Libya strengthen cooperation, sign funding agreements

The African Development Bank has signed three technical assistance grant agreements with the government of Libya, reaffirming its commitment to the North African country. The agreements were signed in Tripoli, the Libyan Capital, on 21 November 2023, the first day of a consultation mission by an African Development Bank delegation led by Mrs Malinne Blomberg, deputy director general for the North Africa region and country manager for Libya.

The grants include $1m in emergency support which will be channelled through the United Nations Children’s Fund in collaboration with the Libyan government and used to procure much needed wash and hygiene kits and emergency materials for temporary learning spaces and rehabilitated classrooms. The supplies, which were swiftly arranged by the bank, became necessary following the Derna floods which devastated the eastern part of the country. The three parties to the agreement will make the funds speedily available for the worst-affected people, especially women and children.

Parliament Petitioned By GUTA And Other Groups Against Plan To Ban Imports Of “Strategic Products” (Yen.com.gh)

Six prominent business associations have jointly submitted a petition to Parliament, urging the rejection of the government’s proposed import restrictions bill. The controversial bill, which is being sponsored by the Ministry of Trade and Industry on behalf of the Nana Akufo-Addo administration, seeks to ban the importation of certain goods labelled “strategic”. The trade ministry says the ban will improve local production of such goods and thereby improve the local economy. However, the Ghana Union of Traders Associations (GUTA) and six other interest groups say the bill should not be passed.

According to the trade minister, KT Hammond, the Legislative Instrument is designed to restrict the importation of specific strategic products like rice, poultry, and sugar, among others.

Seychelles’ trade officials brush up on negotiating skills with WTO experts (Seychelles News Agency)

Officers and partners of the Seychelles Department of Trade will improve their negotiating skills through a one-week training programme starting Monday, facilitated by the World Trade Organisation (WTO). The training is expected to give the participants the required skills to negotiate for Seychelles, other nations and organisations on trade issues.

“This training will help all the participants to better understand how trade negotiations work and will do both theory and practical sessions during the workshop,” Veronique Brutus, a senior trade officer, told reporters. The Trade Department is mandated to negotiate trade agreements for Seychelles, an archipelago in the western Indian Ocean.

Enabling Business Environment: AfCFTA supports private sector bill of rights (Vanguard)

In a bid to work in close partnership with the private sector, the African Continental Free Trade Area (AfCFTA) Secretariat has thrown its weight behind the Private Sector Bill of Rights (PSBoR) for an Enabling Business Environment in Africa.

AfCFTA secretariat made the commitment when it hosted a private sector session in collaboration with Africa Private Sector Summit (APSS), which led an Ecosystem based side event at the just concluded Intra-African Trade Fair (IATF) 2023 in Cairo. The parties also emphasized the importance of the Charter on Private Sector Development, Rights and Protection Environment in Africa. PSBoR, a pioneering initiative proposed by the APSS in partnership with PACCI. This bill is designed to establish a conducive trade and investment climate for the vast opportunities in intra-African trade across the continent.

According to the Secretary General of the AfCFTA Secretariat, H.E. Wamkele Mene, “The private sector is the core pillar for achieving the AfCFTA goals, because the private sector creates jobs, fosters innovation and enables fair competition for business in the continent.”

Implementing the African Continent Free Trade Agreement: Evidence from Southern Africa (AfDB)

In light the limited and persistently intra-Africa trade and investment flows, the launch of the African Continent Free Trade Agreement (AfCFTA) is believed to be a ‘game changer’ for enhanced investment and trade flows on the African continent. But as in all reforms, some countries and sectors gain more than others. Using a computable general equilibrium (CGE) modelling, we [AfDB] investigate the impact of the implementation of AfCFTA on import and export trade in addition to producing economy-wide effects on growth, employment and welfare in Southern Africa. Our [AfDB] simulation analyses are based on three policy scenarios focusing on the liberalisation of tariff and non-tariff barriers (NTBs) in the time window of 2020 – 2031. Our findings show an overall positive aggregate export growth in all countries despite differences when we look at the estimates by each of the 20 commodity sectors.

India: ‘Work in progress to remove trade barriers in sub-Saharan African nations’ (Business Standard)

The Indian commerce ministry is working to address issues related to non-tariff barriers and market access for domestic products in sub-Saharan African countries like Nigeria, Ethiopia, Ghana and Gulf nations to boost India’s exports, an official said. The official said meetings have been held with Indian missions of the sub-Saharan African countries with which India has significant bilateral trade.

The major trading partners of India in that region in 2022-23 were South Africa (total trade USD 18.9 billion, exports USD 8.5 billion); Nigeria (USD 11.85 billion, exports USD 5.15 billion); Togo (USD 6.6 billion, exports USD 6 billion), and Tanzania (USD 6.5 billion, exports USD 3.93 billion). The other countries were Mozambique (USD 5 billion, exports USD 2.5 billion); Angola (USD 4.22 billion, exports USD 621 million); and Kenya (USD 3.4 billion, exports USD 3.2 billion).

“A virtual meeting with Indian Mission of top 10 countries (bilateral trade-wise) in sub-Saharan African region was held in September to discuss the overall economic and commercial relations with those countries, export performance and non-tariff barriers which are acting as impediments to bilateral trade and enhance exports,” the official said.

Senators fault state of Malaba and Busia customs posts (The Star)

The Senate Trade committee has criticised the government for neglecting operations services at Malaba and Busia One Spot Border Point (OSBP), despite the significant revenue generated by the busy East African gateway. Despite Malaba and Busia OSBPs generating over 10 billion annually, the two customs offices face with numerous challenges among them leaking roofs in the server rooms, regular power outage, water shortage, poor hygiene and understaffing.

The committee led by Busia senator Okiya Omutata, Kiambu senator Karung’o Wa Thang’wa and Crystal Asige, visited Malaba and Busia to ascertain how best the government can improve the operation efficiency to boost revenue collection. “We are here on a fact finding mission to establish how best we can improve the operations at OSBPs to boost revenue collection from 10 billion to 15 billion per year. The two entry points need urgent intervention and upgrade to match international standards,” said Thang’wa.

Electrical and Electronics Sector standard compliance Critical for global trade (Capital Business)

Stakeholders in the electricals, electronics, and related technologies field have been urged to embrace the use of established International Electrotechnical Commission (IEC) standards to gain a competitive edge in the global market, thus driving economic growth and innovation. The Kenya National Committee of the IEC (KNCIEC), and the International Electrotechnical Commission (IEC), the KEBS Director, Legal and Corporation Secretary, Miriam Kahiro emphasized the need for experts’ participation in the standards development process at IEC to make it easier for adoption at the National level.

From February 2022, Kenya started participating in the IEC System of Conformity Assessment Schemes for Electrotechnical Equipment and Components, popularly known as the IECEE, Certification Body Scheme for Destination Inspection of electrical and electronic products. The scheme requires that national standards are fully harmonized with the IEC standards.

Comesa grant Kenya another sugar import safeguard (People Daily)

The Council of Ministers of the Common Market for Eastern and Southern Africa (COMESA) has granted Kenya a two-year extension of the sugar safeguard measures. This decision comes amid ongoing efforts to protect the domestic sugar sector from external competition and ensure the stability of the industry. “These measures are meant to protect vulnerable industries and in our case, sugar from adverse effects of trade liberalisation.” The sugar companies were among those marked to be sold by the state, but activist and politicians and farmers have opposed the move.

These safeguard measures, initially implemented to shield Kenya’s sugar producers from the potential negative effects of increased imports within the COMESA region, have been a longstanding feature of the country’s trade policy. The extension, which secures the measures for an additional two years, underscores the continued importance placed on safeguarding the local sugar industry.

Sugar Prices Rise after El Nino Damages Crops (Voice of America)

The sudden and large increase in sugar prices left Ishaq Abdulraheem with few choices. Raising the cost of bread would mean decreasing sales, so the Nigerian baker decided to cut his production by half. For other struggling bakers in the West African nation, it was the latest of many problems they have faced. Many bakers just closed their shops.

Sugar is needed to make bread, the daily food for Nigeria’s 210 million people. For many, bread offers a less costly source of calories, or energy. Rising sugar prices — an increase of 55 percent in two months — means fewer bakers and less bread. “It is a very serious situation,” Abdulraheem said.

East African Community continues on a trajectory of expansion as Summit admits Somalia into the bloc (EAC)

The East African Community has once more expanded its borders and market size with the admission of the Federal Republic of Somalia as the 8th member of the bloc. The Summit of the East African Community (EAC) Heads of State at their 23rd Ordinary Meeting held in Arusha, Tanzania on Friday, 24th November, 2023 considered the Report of the EAC Council of Ministers on the Negotiations with the Federal Republic of Somalia into the EAC, and resolved to admit Somalia as a full member of the Community.

The Summit further designated the Chairperson of the Summit, H.E. Salva Kiir Mayardit, the President of the Republic of South Sudan, to agree with Somalia on when to sign the Treaty of Accession of the Somalia into the Community.

Will new financing model end EAC cash woes? (The Citizen)

The long-awaited sustainable financing mechanism for the East African Community (EAC) is here at last. This time around mandatory contributions will partly depend on the size of the partner state’s economy.. The new funding plan was adopted at the Summit of the regional Heads of State held here on Friday. The leaders agreed on a hybrid system of equal contributions and remittances which will be based on each country’s economy.

Another 35 percent will be assessed as a contribution formula which will largely depend on the size of the economy. The sustainable financing project for the EAC was mulled and made public in 2011 and was aimed to address financial challenges facing the organization.

For about a decade, EAC annual expenditure has revolved around $100 million, about a half through remittances by the partner states and the rest from the development partners. For instance, of $103 million EAC budget for 2023/24 financial year, some $59 million (25 percent) would come from the partner states. The remaining $44.8 million will be sourced from an array of the development partners supporting the Community.

Communiqué Of The 23rd Ordinary Summit Of The East African Community Heads Of State

Accession hands EAC mandate to fix Somalia’s security (The East African)

The Horn of Africa needs more trade - but not at the cost of more war (Ethiopia Insight)

The Horn of Africa and the adjacent Red Sea is a strategically important area that has been ravaged by instability. Sudan is torn apart by a civil war, while Somalia continues to grapple with al-Shabaab, an extremist Salafist group which controls large swathes of territory. Meanwhile, Ethiopia has only recently overcome a devastating war in Tigray that resulted in the loss of countless lives, and remains embroiled in low-level conflicts in Amhara and Oromia.

And now, concerns are mounting that Prime Minister Abiy Ahmed may lead Ethiopia towards another war, this time with Eritrea, as he endeavors to secure a port near one of the world’s busiest shipping routes, casting a pall of uncertainty over what the future holds. Another Ethio-Eritrean war would be disastrous for both countries and the entire region, so must be avoided at all costs. Ethiopia should instead consider peaceful diplomatic routes to secure better access to a port.

Why Kenya failed to give world much awaited global plastics treaty (The East African)

Negotiations seeking to deliver the first global plastics treaty ended with no solid plan, rippled by oil-producing countries and major plastic manufacturers. Endless disagreements over the wording and punctuation of some key sections of the zero-draft took centre stage during the third session of the Intergovernmental Negotiating Committee (INC-3) with major oil-producing countries, led by Saudi Arabia, Iran and Russia, determined to make it impossible for the world to birth the plastics treaty.

The oil-producing countries and major plastic producers like the United States ganged up and insisted that the revised draft text must give emphasis to plastic recycling and reuse. Kenya, Canada and the European Union insisted on limiting plastic pollution.

A day before the final day of the negotiations, Saudi Arabia, one of the biggest sellers of polymers in the world, had threatened to withdraw from the talks after it rejected any ambitious language in the text.

Mozambique approves $80bn energy transition strategy (Engineering News)

Mozambique’s government approved a strategy to reduce the nation’s dependence on fossil fuels that it estimates will cost $80-billion to implement by 2050, a step aimed at winning finance to develop the economy.

The first steps envisioned in the Energy Transition Strategy, approved by the Council of Ministers on November 21, include the addition of 2 000 MW of hydropower capacity by 2030 and expanding the transmission grid to allow for the addition of more renewable energy, the government said. The full program will be announced by President Filipe Nyusi at a Dec 2 event at the COP28 international climate summit in Dubai, it said in a statement sent to Bloomberg.

“Mozambique has major potential to be a global leader in climate-aligned development,” it said. “The ambitious ETS lays out a clear pathway for harnessing these assets to enable sustainable nationwide growth while supporting emissions reductions.” Mozambique is the latest developing country to seek international funding to finance an energy switch. South Africa, Indonesia, Vietnam and Senegal have won pledges of billions of dollars from some of the world’s richest nations to reduce their reliance on coal and other fossil fuels.

South Africa needs to leverage global goodwill at COP28 (Engineering News)

The upcoming 2023 United Nations (UN) Climate Change Conference, or Conference of the Parties to the UN Framework Convention on Climate Change, more commonly referred to as COP28, will be an important opportunity for South Africa to develop global goodwill in support of the country’s energy transition and translate it into flows of investment to fund the infrastructure needed to transition South Africa’s economy, private sector lobby group Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso has said.

“We are a unique country – vulnerable to climate change given our water scarcity and ecology, and yet largely still economically dependent on coal and other fossil fuels. We must transition our economy but do it in a way that ensures justice for those whose jobs and livelihoods are at risk in a transition. “We must do so while also solving our electricity crisis and lifting the most vulnerable out of poverty. This is a difficult set of objectives to achieve simultaneously, calling for all of us to work together,” Mavuso said in her weekly newsletter on November 27.

South Africa’s Just Energy Transition Investment Partnership (JET-IP), first tabled at COP26 two years ago, envisages about $8.5-billion worth of investment support from the world’s largest economies being funnelled into South Africa’s transition.

UNCTAD: A levy on fuels or a carbon price vital to support the green transition (SAFETY4SEA)

UNCTAD published a new policy brief focusing on the twenty-eighth session of the Conference of the Parties to the United Nations Framework Convention on Climate Change provides an opportunity to assess progress in decarbonization efforts in the shipping sector and adds further momentum to carbon reduction actions. As noted in this policy brief, taking swift measures to reduce the carbon footprint of this sector is instrumental, given the economic role of the sector and the potential for the current carbon footprint to grow in tandem with global economic growth and trade expansion.

Shipping connects world economies and underpins global supply chains, with over 80 per cent of the world’s merchandise trade by volume transported by sea. About 40 per cent of seaborne trade volume is made up of energy-related commodities, including coal, oil and gas. The sector contributes around 3 per cent of global greenhouse gas emissions. Emissions per cargo unit and per distance travelled (ton-mile) have declined in recent years, partly due to economies of scale, yet the total global emissions of the sector have increased by 20 per cent in the past decade.

Africa: Climate Crisis Exposes Vulnerabilities of Africa’s Weak Infrastructure (allAfrica)

Extreme weather events such as floods, droughts, and heatwaves are becoming more frequent and intense. These events are displacing millions of people and causing significant damage to roads, power grids, and other vital infrastructure, disrupting essential services, and costing economies billions of dollars. This is particularly concerning for Africa, already one of the most vulnerable continents to the climate crisis.

Africa’s infrastructure investments are at risk from the climate crisis, and leaders must urgently implement measures to make them more resilient, according to South Africa’s Forestry, Fisheries, and Environment Minister, Barbara Creecy. The minister spoke at the inaugural Africa Climate Summit held in Nairobi, Kenya in September. She warned that if the impacts of the climate crisis are not taken into account now, the current and next generation of infrastructure in Africa could be locked into designs that are inadequate for the future and costly or impossible to modify later. She called for planning new infrastructure for climate resilience and adapting existing infrastructure to reduce risks, saying that there is a high probability that the climate crisis offsets or reduces the economic and developmental benefits of these investments.

Report unveils USD21 Trillion climate losses (Standard Media)

Developing countries in tropical regions are losing ten per cent or more annually of their national income due to climate change. When Gross Domestic Product (GDP) and capital losses are combined, a new analysis has found that low and middle-income countries have experienced a total loss of USD 21 trillion since the Rio Convention was adopted in 1992.

The University of Delaware released a new report on the impacts of climate change on output and capital ahead of Cop 28. As agreed at COP27, countries are expected to adopt a framework for the new UN fund to assist nations in recovering from “loss and damage” caused by climate change. As the report comes, final talks earlier this month to agree on a proposal for a new climate disaster fund have avoided a deadlock ahead of a climate summit, but tough new questions still remain about who will pay and when.

How will the EU’s carbon border tax affect Africa? (EUobserver)

African and European officials are heading for a confrontation over the costs of a new carbon tax which could cut trade levels and complicate wider negotiations at the UN COP28 Climate Summit in Dubai starting on Thursday (30 November). South Africa and India, with the discreet support of the United States, are challenging the new tax at the World Trade Organization arguing that it constitutes a discriminatory trade barrier.

At issue is the European Union’s Carbon Border Adjustment Mechanism (CBAM) which came into force in October. The first bill for companies will land on 31 January 2024, and the new system of taxation will take full effect by 2032.

Goods barometer shows trade volumes returning to trend amid high uncertainty (WTO)

The latest quarterly WTO Goods Trade Barometer issued on 27 November indicates that the volume of global merchandise trade is recovering after its recent slump, with automobile sales and production and electronic components trade driving the recovery. However, mixed economic results coupled with increasing geopolitical tensions make the near-term outlook highly uncertain.

The current reading of 100.7 for the barometer index is above the previous reading of 99.1 from last August and close to the baseline value of 100. This suggests that merchandise trade volume will gradually revert towards its medium-term trend in the second half of 2023, although uncertainty remains high due to mixed economic data and rising geopolitical tensions.

Quick links

How Tanzania can reduce petrol-import dependency

Africa’s new online foreign exchange system will enable cross-border payments in local currencies

Traders optimistic for growth prospects in intra-regional trade

African states need new economic models amid external shocks

Unleashing Africa as an Economic Powerhouse Through Unrestricted Trade

The Loss And Damage Fund Must Deliver At COP28 – Analysis


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