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tralac Daily News
Sustaining growth for South Africa’s vibrant fintech industry (Daily Maverick)
Fintech enterprises frequently leverage cutting-edge technologies like artificial intelligence, blockchain, and big data to develop novel financial products and services that surpass traditional financial institutions in terms of efficiency, accessibility, and customer experience. The fintech market encompasses start-ups, well-established financial institutions, and other companies employing technology to revolutionise and innovate within and outside the financial services sector.
According to Research and Markets, South Africa’s financial services sector is internationally recognised as one of the most sophisticated. In the last decade, this has been complemented by a small but fast-growing fintech sector that is transforming financial services through digitisation, streamlining and/or disruption. Accounting for 40% of all fintech revenue in Africa, Research and Markets adds that South Africa has a relatively mature fintech market with a strong focus on development.
Investors in growth sectors to benefit from two strategically located purpose-build zones (Global Africa Network)
One of the competitive advantages of investing in the Eastern Cape lies in the two Special Economic Zones, one in East London and one at Coega, which hosts a deepwater port. Both SEZs are strategically situated on major transport and shipping routes and provide purpose-built infrastructure for investors wishing to produce and manufacture for the Southern African Development Community and world markets.
The Eastern Cape Development Corporation (ECDC) focuses on a number of specific growth sectors which are all aligned to the Provincial Economic Development Strategy and Provincial Development Plan. Agriculture and agro-processing; Sustainable energy, generation; and component manufacture; Oceans Economy; Automotive; Light manufacturing; Tourism, infrastructure and product; and Film.
Itac rebates for optic fibre cables, electrical apparatus imports (Engineering News)
The International Trade Administration Commission of South Africa (Itac) has created a rebate facility for the import of optic fibre cables and electrical apparatus used in international submarine optic fibre cable infrastructure. This followed Telkom subsidiary Openserve’s 2019 application for the products classified under tariff subheadings 8544.70 and 8536.90.90, respectively.
According to Itac’s ‘Report 614’, published on Tuesday, the optic fibre cables and electrical apparatus for making connection to and in the electrical circuits, both used in the maintenance of the international optic fibre cable system, are not manufactured locally.
The report outlined that optic fibre cables attract a general rate of customs duty of 15% ad valorem, while electrical apparatus attracts a general rate of customs duty of 5% ad valorem.
Burundi economy to grow by 4.3pc in 2024, IMF says (The East African)
Burundi’s economy is projected to expand 4.3 percent this year from 2.7 percent in 2023, helped by improved performance in the agriculture sector, the International Monetary Fund (IMF) said. With a population of 12 million, Burundi’s economy relies heavily on agriculture revenues, especially from tea and coffee.
“Growth is projected to accelerate ... supported by strong agricultural production, productive investment, and the ongoing reforms,” the fund said in a statement late on Monday. Fuel shortages had hampered economic activity in 2023, the fund said. Burundi’s economy is only starting to recover from years of conflict and political upheaval under former leader Pierre Nkurunziza that left key sectors blighted.
Somalia: We are ready to do business with East Africans (The East African)
From the start of his term in office, President Hassan Sheikh Mohamud’s agenda was to join the EAC. In his current tenure, he renewed determination to surmount the internal obstacles that stood in the way of their integration into the Community. “For President Mohamud, the EAC mission has become deeply personal. It represents a commitment to ensure that Somalia, despite its internal challenges, does not lag in the collective progress of the region,” Dr Omer said.
Somalia boasts the longest coastline in Africa, spanning 3,300 kilometres along the Gulf of Aden to the north and the Indian Ocean to the east and south. This geographical advantage presents strategic opportunities with immense potential for fishing. This has attracted the interest of Chinese, Spanish, and Iranian fishermen, both legally and illegally.
“The fisheries potential, and as Somalia improves its security situation, abundant livestock, and the vast arable land of eight million hectares further contributes to the nation’s potential for agricultural development, and food security for the region,” Dr Omer said. Dr Omer said the majority of Somalia legislators support the EAC integration, although a minority may express opposition, “which is expected in any democratic setting”.
Kenya’s solo trade deals irk EAC members, thaws ties with key states (The Star)
Uganda in talks with UAE investment firm over planned $4 billion oil refinery (The East African)
Uganda is negotiating with an investment company led by a member of Dubai’s royal family to develop a planned $4 billion refinery for some of its crude oil, its energy minister said on Tuesday. Uganda in July last year terminated negotiations with a consortium that included a unit of US firm Baker Hughes over its failure to mobilise financing in time. Uganda is counting on the 60,000 barrel-per-day refinery for its nascent hydrocarbons industry.
“Expressions of interest were received from several potential investors and they were evaluated ... following which a memorandum of understanding was signed on the 22 of December 2023,” Minister of Energy and Mineral Development Ruth Nankabirwa said at a news conference.
Uganda expects to start pumping crude commercially in 2025 from fields in the Albertine rift basin in the country’s west near the border with the Democratic Republic of Congo. President Yoweri Museveni’s government wants to process some of its crude domestically to boost employment and benefit from technology transfer.
The Gambia: Minister of Trade gives figures of unemployed youth in Africa (The Voice)
One-third of the 420 million youth aged 15-35 years has been stated to be unemployed and discouraged while another third are vulnerably employed, and only one in six is in wage employment. This was disclosed by the Minister of Trade, Industry, Regional and Employment on Saturday while presiding over the inauguration of the National Employment Technical Committee (NETC), a ceremony held at the Sir Dawda Kairaba International Conference Center, Bijilo on Saturday.
He said according to a recent report on Africa youth face roughly double the unemployment rate of adults with significant variations by country.
Minister Joof, explained that the current unemployment situation in Sub-Saharan Africa including The Gambia, prompted Professor Robert Kappel, to call for a rethink and the deployment of more unconventional measures by African governments and their international partners. He urged them to encourage greater participation of civil society in searching for solutions, particularly trade unions, and also better integration of small and medium-sized enterprises in the global economy.
“He argued that it is unlikely that Africa’s economic growth alone will create the necessary jobs for her population. The impending job crisis as he said can no longer be resolved with traditional methods which have failed to live up to expectations. With the pressing need for a new paradigm shift on the horizon, he recommends a new endogenous economic policy approach in Africa as he believes that employment opportunities must be improved through industrialization, urban-rural linkages, and by connecting foreign investment and local entrepreneurship,” the Minister added.
The resource curse theory: Unboxing the $3.4bn Afrexim deal (Businessday Nigeria)
#BizTrends2024: Africa’s growing role in global trade dynamics (Bizcommunity)
Assessing opportunities for SMEs and entrepreneurs under AfCFTA (GhanaWeb)
The African Continental Free Trade Area (AfCFTA) Agreement is regarded as the leading and most important flagship project under the African Union’s Agenda 2063 to transform the continent of Africa into a global powerhouse. Some opportunities for SMEs under AfCFTA.
Firstly, the AfCFTA initiative has created the opportunity for enhanced access to a larger market. In particular, governments across the continent are aiming to advance trade in value-added production across all service sectors of the African economy. In the process, a common market for the free movement of goods and services will be created leading to an increase in new market opportunities that meet the criteria under the Agreement.
Secondly, AfCFTA has created the opportunity for the free movement of goods and services. This is intended to create a visa-free zone within the AfCFTA countries to allow for easy movement of goods and services.
Thirdly, AfCFTA has created the opportunity for partnership and collaboration across the continent. This opportunity has the potential to create new partnerships in production, marketing, sales, distribution, and customer service among others.
Fourthly, AfCFTA has created the potential for increased access to funding and investment for SMEs. The introduction and adoption of the AfCFTA has opened the African market to a wide range of economic interests in various areas across the global economy.
Fifthly, there is the opportunity for healthy competition that leads to better, and quality products and services.
Business and Political Leaders gear up for 2024 edition of Africa Prosperity Dialogues (Africa Prosperity Network)
Heads of institutions with strong representation on the African continent, captains of industry, top government officials, and members of the diplomatic community have signaled their readiness to attend and contribute to the success of APD 2024, will be hosted by the President of the Republic of Ghana, Nana Addo Dankwa Akufo-Addo under the theme; “Delivering Prosperity in Africa: Produce, Add Value, Trade.” The Dialogues will be held at the Peduase Lodge, Aburi Hills in the Eastern Region of Ghana.
“We are not just going to have conversations, we will see deliverables from there [the APD] and whatever comes out of the dialogues, there will be a compact that will be presented to the AU for their consideration,” Gabby Otchere-Darko remarked.
Executive Chairman of the Africa Prosperity Network, Gabby Asare Otchere-Darko, Chief Staff at the Africa Continental Free Trade Area (AfCFTA) Secretariat, Silver Ojakol, on behalf of Wamkele Mene, the Secretary General of the AfCFTA, described the AfCFTA secretariat’s partnership with APD as a strategic development that will go a long way to influence the ability of the AfCFTA to deliver the much-needed prosperity the Africa continent so desperately needs.
“The pillars of regional value chain development, value addition, increased production on the continent in order that we can trade more with each other, and the pillar of trading, even trading across our borders. “The AfCFTA secretariat is very much committed to ensuring that this process (the Africa Prosperity Dialogues), moves forward and delivers prosperity for the continent,” Silver Ojakol said.
South African Finance Minister Enoch Godongwana pledged that South Africa would uphold the core principles of the African Continental Free Trade Area (AfCFTA) in the enlarged BRICS group of developing countries.
The African Continental Free Trade Area Secretariat has unveiled the first ever AfCFTA private sector action plan, with 12 industry giants committing to projects to transform the automotive, agriculture and agro-processing, pharmaceuticals, and logistics and transport sectors.
AfCFTA Secretary General Wamkele Mene admitted that these commitments totalling $130 billion signify a leap in realising the potential of intra-African trade. Godongwana said that the development of AfCFTA and the expansion of the BRICS bloc are the two important developments for the South African economy this year as they are happening simultaneously.
EAC Partner States approve Labour Migration Policy (EAC)
The Directors of Labour and Employment from the EAC Partner States have considered and approved the EAC Policy and Legal frameworks governing labour migration and the outcome of the national and regional consultations during the regional meeting of Experts in Bujumbura, Burundi. The overall aims of the policy are to advocate for the protection of migrant workers; strengthen labour migration governance and maximise the benefits accruing from labour migration
The Policy whose implementation Plan spans from 2025-2030, has ten (10) key Priority areas namely: Labour Migration Governance; Harmonisation of Labour Migration Policies; Protection and Empowerment of Migrant Workers; Access to Social Protection and Social Security Benefits; Mutual recognition of Academic and Professional Qualifications. Other priorities area are: Recognition of Skills Obtained through Informal Training; Promotion of Fair and Ethical Recruitment Practices; Remittances by Migrant Workers; Exchange of Young Workers; and Labour Market Information Systems.
The policy recognises that Partner States have also put in place robust efforts to recognize, certify, and qualify skills acquired through experiential learning. However, a notable gap remains at the EAC level where there is currently no specific mechanism for the recognition of such skills.
Kenya questions jurisdiction of East African court (The East African)
Kenya’s Attorney General Justin Muturi on Tuesday pleaded with the Supreme Court to hear his application seeking the top court’s opinion on the legal consequences and effects of decisions of the East African Court of Justice (EACJ) on the country’s sovereignty. Mr Muturi said whereas there is no express provision in the East African Community (EAC) Treaty conferring upon the EACJ the jurisdiction to interpret the constitutions of partner states, the regional court has in several decisions, interpreted its jurisdiction to include the review of decisions issued by apex courts of member countries.
The Attorney General said he was apprehensive that the exercise of appellate jurisdiction by the regional court over decisions by national courts may pose serious conflict to Kenya’s commitment to the rule of law, because of differing holdings by national courts on one hand and the EACJ on the other hand. He said the conflict exposes the government to a legal dilemma when it comes to compliance with contradictory yet binding decisions from two courts, stemming from differing interpretations based on the same set of facts. Mr Muturi wants the court to clarify which of the two different interpretations should be effected, to facilitate compliance.
Africa’s gas sector is benefiting from a global shift towards greater flexibility (Global Africa Network)
Africa may not possess the vast conventional gas resources of the Middle East or Russia and it may not be able to match the combined conventional and unconventional resources of North America. But it does have a sizeable amount of gas – at least 620-trillion cubic feet (tcf) or 17.56-trillion cubic meters (tcm) ‒ in proven reserves.
That’s more than enough to make Africa a key player in the global gas industry. In fact, it puts Africa in a position to influence the course of the industry, especially in light of long-term trends, including the shift to more flexible contract and delivery terms, along with more recent developments such as the Russia-Ukraine conflict.
The African Energy Chamber (AEC) has outlined our expectations for Africa’s gas sector in the “The State of African Energy Q1 2023 Report”, a new publication available for download on our website. The report covers our outlook on both upstream and downstream trends. Here, I’d like to offer some extra insight into our take on downstream developments – that is, on African liquefied natural gas (LNG) projects, including the countries currently dominating the industry and those preparing to make their presence known.
Will a prolonged rerouting of ships from Suez trigger a new supply chain crisis? (World Bank Blog)
In the near term, the global container shipping industry will likely absorb the shock to capacity caused by attacks on vessels in the Red Sea because demand is generally soft in January and February. However, should the attacks persist into March and April, when global trade experiences a seasonal rebound, capacity constraints could trigger a supply-chain crisis like the one that occurred in 2021-22.
The source of supply-chain stress is different today, but the outcome could be similar. Major freight carriers, including Maersk and Hapag-Lloyd, have suspended operations through the Suez Canal to avoid the Red Sea and are rerouting vessels around the Cape of Good Hope , adding 3,000 to 3,500 nautical miles (5,500 to 6,500 km) and seven to 10 days to a typical trip between Europe and Asia. The extra distance could absorb from 700,000 to 1.9 million standard containers (twenty-foot equivalent units, or TEUs) of shipping capacity, depending on the estimate.
Africa must raise its voice on resolving Red Sea crisis (Daily Maverick)
The Red Sea crisis is now a United Nations Security Council (UNSC) priority, with three meetings held this year already. Following several months of Houthi attacks on vessels in the Red Sea and Gulf of Aden, a coalition of concerned countries launched military operations on 11 January to degrade Houthi maritime capabilities in Yemen.
The attacks are causing many ships to be rerouted around the Cape of Good Hope, with disruptions to supply chains and higher costs. The immediate impact will be on Egypt’s economy, which relies heavily on Suez Canal revenues. A prolonged decrease in canal traffic and income could strain its economy and stability. Egypt hasn’t been outspoken on the issue — perhaps out of fear that its populace would interpret that as tacit support for Israel over Palestine. Africa is already facing difficult economic challenges. The effect on global supply chains will be higher costs and lower availability of goods across the board. Increased shipping costs due to longer routes or heightened insurance premiums can have a cascading effect on global trade and economies. This rise in expenditure trickles down to customers and imperils vital economic growth and recovery.
Third South Summit ends in Uganda with calls for deeper cooperation (Africanews)
The 3rd South Summit ended in Kampala on Monday (Jan. 22). It gathered high-level representatives from nearly 100 countries and heads of United Nations agencies. Uganda’s president called to keep promoting interests of the global south. “That the Group of 77 and China remains united in its pursuit of collective interests at the United Nations. In the inter-governmental processes of the United Nations, We must ensure that priorities of the Group are promoted and defended,” Yoweri Museveni said.
The South Summit is the supreme decision-making body of the Group of 77 (G77), which was established in June 1964. Since the 1990s, China has been coordinating and cooperating with the G77 through the “G77 and China” mechanism which is an important platform for developing countries to unite to strengthen themselves and coordinate to respond to challenges. Over the years, China has joined hands with other member countries to promote South-South cooperation to achieve new and greater progress.
Agriculture negotiations enter final straight as MC13 approaches (WTO)
At the first of this year’s agriculture negotiations meetings on 16-17 January, Ambassador Alparslan Acarsoy of Türkiye, the Chair of the talks, urged delegates to focus “more specifically and concretely” on potential outcomes at the upcoming 13th Ministerial Conference (MC13), which is due to be held in Abu Dhabi from 26 to 29 February. Participants also discussed new or revised submissions on export restrictions on food; agricultural production and trade in net food importing developing countries (NFIDCs) and least developed countries (LDCs); and domestic support to the agricultural sector.
DDG Hill stresses importance of IFD Agreement to foster sustainable development (WTO)
Deputy Director-General Johanna Hill on 22 January opened the webinar on the benefits of the Investment Facilitation for Development (IFD) Agreement, organized by the co-coordinators of the initiative, Ambassador Sofía Boza of Chile and Ambassador Jung Sung Park of the Republic of Korea. The event was the opportunity to hear from, and exchange with, renowned academics and representatives of leading international organizations who shared their experience and provided insights into the relevance and expected benefits of the IFD Agreement.
What the OECD’s latest data tells us about global aid in 2022 (Bond)
The Organisation for Economic Co-operation and Development’s Development Assistance Committee (DAC) recently published its final aid data for 2022, and it’s not good news for the world’s least-developed (LDCs) and low-income countries (LICs).
Their share of total Official Development Assistance (ODA) fell to its lowest level since 1996, while growing debt and increasing interest rates added to a challenging economic picture. Most attention will understandably be on unprecedented in-donor refugee costs, and support for Ukraine bringing headline ODA to new highs, but that’s not the whole story.
When aid spent in provider countries is removed, ODA disbursements to LDCs and other LICs (henceforth LDCs) were 3% lower in 2022 than in 2021. This is partly a result of support for COVID-19 control falling from its peak, but it also reflects a longer term trend. Excluding COVID support, cross-border aid to LDCs has been stagnant for around six years: in 2022, it was roughly $57 billion, broadly unchanged relative to 2017.
