tralac Daily News
Critical infrastructure blackouts have emerged as the number one risk for businesses in South Africa for the second consecutive year, highlighting the severe impact of power outages and the failure of essential infrastructure such as ports, railways, roads and more on the economy and businesses, insurance and risk multinational Allianz says.
“South Africa’s business community must remain vigilant in the face of critical infrastructure blackouts. The persistent threat of power outages and infrastructure failures poses significant challenges to businesses, disrupting supply chains and impacting the overall economy,” says Allianz Commercial South Africa CEO Thusang Mahlangu.
“The report underscores the urgent need for investment in infrastructure resilience and the development of contingency plans to mitigate the potential consequences of blackouts. By proactively addressing these risks, businesses can enhance their ability to withstand disruptions and ensure continuity of operations,” he emphasises.
Godongwana warns of difficult budget next month (Engineering News)
South Africa’s finance minister warned that next month’s budget will be a “difficult one” as the nation’s ability to service its growing debt remains a challenge. Enoch Godongwana will table the annual budget in late February, when he will announce more details on the National Treasury’s plans to arrest ballooning debt, he told Johannesburg-based broadcaster Newzroom Afrika on Monday.
In his mid-term budget in November, Godongwana stressed the need to stabilize public finances and accelerate growth as the Treasury warned off a higher debt trajectory over the next two years. Ongoing power cuts and a logistics crisis continue to constrain economic growth in Africa’s most-industrialized economy. Next month’s budget will come before South Africa’s general election that’s expected to take place by August.
Port of Maputo reports record volume for 2023 (Engineering News)
The Maputo Port Development Company (MPDC) says the Port of Maputo has achieved a record volume of 31.2-million tons in 2023, up 16% on the previous year. The record volumes at Maputo come as South Africa’s State-owned Transnet group battles inefficiencies at its own ports and on its railway lines.
Of the 31.2-million tons handled at Maputo, about 25-million tons were made up of various ores, including chromium, ferrochrome, magnetite, coal, phosphate, vanadium, titanium, copper, vermiculite, among others. “The handling of these cargoes reflects the diversification strategy on which the Port of Maputo has focused in recent years,” says MPDC CEO Osório Lucas. He also points to the more balanced distribution of the volumes transported.
Tanzania and Kenya have agreed to promptly resolve the imposed travel restrictions on each other’s airlines, Tanzania’s Minister for Foreign Affairs and East African Cooperation, January Makamba said on Monday. The decision comes in response to Tanzania’s earlier move to suspend all Kenya Airways passenger flights connecting Nairobi and Dar es Salaam from January 22, 2024.
The dispute stems from Kenya’s denial of Air Tanzania’s request to conduct cargo flights between Nairobi and third countries. In an official statement, the Tanzania Civil Aviation Authority (TCAA) asserted that this denial violated Section 4 of the 2016 Memorandum of Understanding on Air Services between the two nations. TCAA Director General Hamza Johari clarified the decision, citing Kenya’s refusal as the reason for the temporary suspension.
How Dangote Refinery exposed Nigeria’s shipping inadequacies (Tribune Online)
Checks by the Nigerian Tribune has revealed that no single Nigerian shipping company participated in the six crude oil delivery process that took place at the $19.5bn Dangote Petro-chemicals Refinery located in Lagos. This is even as further findings revealed that Nigeria lost out due to the very large sizes of ships used in the delivery of crude oil products to the Dangote Refinery.
Speaking with the Nigerian Tribune in an exclusive interview at the weekend, the President of the Nigerian Chamber of Shipping (NCS), Mallam Aminu Umar explained that six different ships loaded crude products to the Dangote Refinery, with none owned or operating from Nigeria. The NCS President expressed optimism that more local players should get involved when the Diesel and Aviation products being produced needs to be shipped out.
Afreximbank announces an initial disbursement of US$2.25 billion under a syndicated US$3.3 billion Crude Oil Prepayment Facility sponsored by the Nigerian National Petroleum Company Limited (Afreximbank)
African Export-Import Bank (Afreximbank) has successfully arranged a syndicated US$3.3 billion crude oil prepayment facility sponsored by the Nigerian National Petroleum Company Limited (NNPCL). An initial disbursement of US$2.25 billion has been made. A second tranche of US$1.05 billion is expected to be disbursed subsequently.
This landmark financing is Nigeria’s largest crude oil prepayment facility and one of the largest syndicated loans raised in Africa in 2023. Investors were keen to consider ticket sizes of US$250 million and US$500 million amidst current headwinds and year-end pressures in the loan markets.
Shell to exit Nigeria’s onshore oil after nearly a century (Engineering News)
Museveni to open EAC business forum in Kampala (New Vision)
President Yoweri Museveni is today (Tuesday) expected to officially open the East African Trade and Investment Forum in Kampala which is running concurrently with the 19th summit of the Non-Aligned Movement (NAM).The Ugandan government is banking on this three-day forum, which started on Monday at Kampala Serena Hotel, to attract at least $1b (about sh3.7 trillion) worth of investments in various sectors of the economy.
The sectors include energy, ICT, commercial agriculture, trade, infrastructure, mining, industrialisation, tourism, and oil and gas. The forum brings together big investors from the East African Community (EAC) to showcase and explore the investment opportunities in Uganda and other EAC member states, according to the government.
Africa Finance Corporation (AFC), the continent’s leading provider of infrastructure financing solutions, is to provide a US$250 million Sharia-law compliant trade loan facility to the Government of Egypt in partnership with the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group. The proceeds from the loan will contribute to addressing Egypt’s immediate priorities and boost economic resilience by financing the purchase of critical petroleum products and agricultural commodities, essential pillars of Egypt’s economic infrastructure.
The 1-year trade loan facility will be evenly split between two key state-owned entities in Egypt: the Egyptian General Petroleum Corporation (EGPC), in support of the procurement of fuel and petroleum products, and the General Authority for Supply Commodities (GASC), in support of improving food and economic security through essential agro-based commodity imports, such as wheat, corn, vegetable oils and sugar.
The Africa Prosperity Network (APN) in collaboration with the Africa Continental Free Trade Area Secretariat is set to organise the Africa Prosperity Dialogues in Ghana from January 25-27, 2024. The meeting will offer top business leaders, heads of international development institutions, and social change markers a unique platform to deliberate and proffer comprehensive policies aimed at boosting intra-Africa trade.
Addressing journalists ahead of the three-day conference, Founder and Executive Chairman of Africa Prosperity Network, Gabby Asare Otchere-Darko said it’s time to invest in key sectors and prioritise trade to unlock Africa’s global potential.
More than half of African nations will use the rules of a continental free-trade pact this year as the region moves closer to fully integrating into a single market. Of the 47 countries that have ratified the African Continental Free Trade Area, 31 will join the so-called guided trade initiative, up from eight in 2023, AfCFTA Secretary-General Wamkele Mene said at a World Economic Forum panel in Davos Tuesday.
Last year’s trial included processed agricultural products, manufactured goods and services, he said. Uganda, for example, exported some of its excess 2 billion liters of milk to Algeria, while a ceramic-tile manufacturer in Ghana shipped the product to Cameroon. ”AfCFTA enabled a 20% reduction in duty,” Mene said. “That is 20% competitiveness as of the start of trade.”
The expanded pilot will include a pan-African payments and settlement system using local currencies to overcome the continent’s foreign-exchange shortages and convertibility limitations. “The frictional cost of trade on the continent — because people need to access currencies that they don’t trade in — it’s about $5 billion a year, which actually could go back into the economies,” Mary Vilakazi, the incoming chief executive officer of FirstRand, said at the forum.
The United Nations Economic Commission for Africa, through its African Trade Policy Centre (ATPC), and in partnership with the African Continental Free Trade Area (AfCFTA) Secretariat and the United Nations Development Programme (UNDP), organized the first conference on AfCFTA implementation strategies, titled: AfCFTA Implementation Strategies: Towards an Implementation Peer Learning Community.
A key objective of the three-day conference that started on 15 January in Nairobi, Kenya, is to lay the foundations of a permanent continental peer-learning platform through which AfCFTA State Parties would exchange experiences on their efforts to operationalize the AfCFTA Agreement through national and regional implementation strategies.
The Director of Regional Integration Trade Division at the ECA, Mr. Stephen Karingi, speaking on behalf of ECA Executive Secretariat Claver Gatete, stated “The AfCFTA holds the promise for our Continent to overcome the colonial legacy of small and fragmented markets and replace them with a single market.” Mr Karingi added that, while the AfCFTA promises to transform Africa, the realization of that promise is dependent on the implementation, by AfCFTA State Parties, of the commitments contained in that Agreement that established the AfCFTA.
Also speaking at the opening, H.E. Ambassador Albert Muchanga, African Union Commissioner for Economic Development, Trade, Tourism, Industry, and Minerals (ETTIM), described the AfCFTA as “the launch pad for deeper continental integration.” The Commissioner informed the conference that the AUC, in collaboration with ECA and other pan-African institutions, is undertaking studies to assess the readiness of the continent for the next phase of African integration - the African Customs Union and Common Market.
African businesses are benefiting from key developments in trade finance (African Business)
A 10-year plan that guides Africa’s development program will be approved by the 37th Ordinary Session of the Assembly of the Heads of State and Government of the African Union which take place from 17th – 18th February 2024.
The 47th Ordinary Session of the African Union’s Permanent Representatives Committee (PRC) opened in Addis Ababa yesterday with the objective to discuss various draft reports and prepare the agenda of the 44th Ordinary Session of the Executive Council scheduled to take place 14-15 February 2024 in Addis Ababa. During the occasion, the African Union Development Agency-NEPAD (AUDA-NEPAD) announced that a 10-year plan that targets to guide Africa’s development program will be approved at the 37th Ordinary Session of the Assembly of the Heads of State and Government of the African Union.
AUDA-NEPAD CEO Nardos Bekele told ENA that one of the priorities of the agency in 2023 had been preparing a 10-year plan for African development program. Highlighting that the plan comprises the Africa’s development stakeholders and partners, Nardos stated that the amount of finance required for the continent’s development and finance it need to get from other sources are included in the plan.
In his letter motivating the most recent removals, President Biden called out the Central African Republic’s government for “gross violations of internationally recognised human rights”, and stated that Niger and Gabon “have not established, or are not making continual progress toward establishing, the protection of political pluralism and the rule of law”. It provides duty-free access to the US market for products from eligible sub-Saharan African countries, impacting approximately 6,800 tariff lines in the US tariff schedule.
The societal, political, commercial and environmental requirements of future trade demand transformative technology solutions. Novel technologies are being deployed for supply chain management, logistics infrastructure integration and information financial flows to cope with the scale, complexity and diversity of emerging trade relationships. Active partnership between exporters and importers, logistics operators, technology innovators and policy-makers is accelerating a global shift to new models.
The TradeTech Global initiative, a joint venture between the World Economic Forum and the Government of the United Arab Emirates, has issued a report, TradeTech: Catalysing Innovation, outlining steps to seed, cultivate and harvest technology-enabled upgrades to global trade. It notes the rapid growth of artificial intelligence, ubiquitous sensing and distributed ledgers for managing complex physical, digital and financial flows.
“Leveraging technology for trade has the potential to unlock trillions of dollars in growth,” said Børge Brende, President, World Economic Forum. “Fostering trust among stakeholders will drastically speed-up how quickly we can benefit.”
Despite the challenges of 2023 and escalating geopolitical tensions, business leaders remain surprisingly optimistic for 2024, according new research from Economist Impact and DP World, Trade in Transition 2024, unveiled today at the World Economic Forum.
The primary driver is a growing belief that technology will transform the efficiency and resilience of supply chains. Amid escalating concerns about protectionism, global fragmentation and political instability, businesses are reassessing risks within their supply chains and pivoting towards friendshoring and dual supply chain strategies.
Economic uncertainty to persist, report shows (Engineering News)
Global economic prospects are expected to remain subdued and uncertain, according to the latest ‘Chief Economists Outlook’ report released on January 15, as the global economy continues to grapple with headwinds from tight financial conditions, geopolitical rifts and rapid advances in generative artificial intelligence (AI).
“Though global inflation is easing, growth is stalling, financial conditions remain tight, global tensions are deepening and inequalities are rising – highlighting the urgent need for global cooperation to build momentum for sustainable, inclusive economic growth,” says WEF MD Saadia Zahidi.
“The latest Chief Economists Outlook highlights the precarious nature of the current economic environment. Amid accelerating divergence, the resilience of the global economy will continue to be tested in the year ahead... There is a notable uptick in growth expectations for Latin America and the Caribbean, sub-Saharan Africa and Central Asia, although the views remain for broadly moderate growth.
At the 15 January opening of “Fish Month”, WTO members agreed to use the latest draft text on curbing subsidies contributing to overcapacity and overfishing as the basis for negotiations ahead of the 13th Ministerial Conference (MC13) in Abu Dhabi on 26-29 February. The chair of the fisheries subsidies negotiations, Ambassador Einar Gunnarsson (Iceland), said the draft is intended to help members to reach agreement over the next four weeks on a “clean” text for submission to ministers.
Despite billions in development aid being spent in the last 50 years, only seven countries have emerged from least developed country (LDC) status. We can do better. But that will require leaders in Davos this week to focus on how their global job creation plans, opens new tab and energy and climate strategies will benefit the one billion people who live in the world’s 45 LDCs.
G20 countries must act now to ensure that billions of people will not still be living in poverty for another century. They must mitigate the “green squeeze, opens new tab“ that occurs when their industrial policies hurt LDCs.
As China’s economy slows, Africa stands at a critical juncture (South China Morning Post)