Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Sales of NEVs on the rise in South Africa (Engineering News)

Amid a global emphasis on green energy and the subsequent global energy transition, total sales of new energy vehicles (NEVs) in South Africa increased by 65% year-on-year in 2023, with hybrid vehicles making up most of these sales. Toyota South Africa Motors (TSAM) witnessed a 22% year-on-year increase in the sale of NEVs.

“If we keep going in this trajectory, it’s going to be interesting to see what the next five years will look like,” TSAM president and CEO Andrew Kirby said at this year’s State of the Motor Industry event held in Kyalami, Gauteng, on January 25. TSAM senior sales and marketing VP Leon Theron pointed out that 42% of the Lexus range consists of NEVs.

“We’ve done a lot in the last three years to really increase our footprint within the NEV space,” expressed Theron. Theron described last year as a “phenomenally successful year” for TSAM, noting that the company also achieved its highest market share of 26.8%.

Competitiveness concerns could scupper once-in-century potential for South Africa to reindustrialise (Engineering News)

The global and local renewable energy transition is presenting industries, and South Africa, with a once-in-a-century growth trajectory to provide products and components into the value chains of renewable energy and battery energy storage systems (BESSs). During the second quarter of 2023, more than $1.7-billion worth of solar panels, inverters and lithium-ion battery systems were imported into South Africa, and this number excludes other components and parts.

Further, the National Energy Regulator of South Africa registered 4.5 GW of private energy projects in 2023, economic research nonprofit Trade and Industrial Policy Strategies senior economist and South African Renewable Energy Masterplan facilitator Gaylor Montmasson-Clair pointed out during a media discussion on January 24.

The global energy transition, which is under way, presents a once-in-a-lifetime opportunity to reindustrialise and South Africa should take note of that, concurred manufacturing competitiveness consultancy BMA Analysts battery energy storage research and sector lead Mbongeni Ndlovu.

Dedicated freight lanes and restricted truck operating hours mooted in draft plan to shift cargo back to rail (Engineering News)

The Department of Transport (DoT) is canvasing a series of interventions aimed at attracting freight back to South Africa’s struggling rail system from road, which has emerged as the country’s freight backbone following Transnet Freight Rail’s (TFR’s) precipitous decline in recent years. Notwithstanding a long-standing road-to-rail policy, the DoT reports that 87% of freight is currently being moved by truck, with volumes moved by TFR having declined sharply from 226-million tons in 2017/18 to only 149.5-million tons in 2022/23.

This calamitous collapse led President Cyril Ramaphosa to form the National Logistics Crisis Committee in 2023, as well as to the development of a new Freight Logistics Roadmap, which was approved by Cabinet late last year. The roadmap places emphasis on the introduction of private sector participation in both the port container terminals and the freight rail network; moves that would be facilitated by a vertical separation of port and rail infrastructure management of terminal and rail operations respectively.

A subcomponent of the roadmap is the Freight Road to Rail Migration Plan, the draft contents of which were shared by acting chief director Mihlali Gqada during a colloquium, hosted ahead of the February 2 deadline for public comments. The plan describes the country’s current freight logistics trajectory as “unsustainable” and notes that South Africa’s high logistics costs are placing importers and exporters at a competitive disadvantage. With logistics costs estimated at 11.3% of gross domestic product (GDP), South African logistics costs are materially higher than the global average of 7% of GDP, while the transport component of these costs is also high at about 55%.

Duty-free car import regulations tightened (The Herald)

Updated regulations for duty-free vehicle imports by civil servants, public health workers, and junior and specialist doctors were gazetted at the end of last month to ensure that State workers in the applicable grades can benefit, without loopholes. The scheme has been operating for some time and a lot of civil servants have benefited, but there have been some abuses and the updating of the regulations should close most of these.

The regulations are contained in Statutory Instrument 247 of 2023 gazetted on December 29 last year by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube.

“A rebate of duty shall be granted in respect of one motor vehicle imported or taken out of bond by a serving public servant of Zimbabwe who is employed in the Civil Service and Service Commissions and who is not a senior civil servant issued with a condition of service motor vehicle and is not under any disciplinary proceedings, “The money to buy the car has to be from either a loan availed under the Transport Purchase Fund managed through CMED (Private) Limited or the serving public servant’s own resources. The car is solely for the private and business use of the serving public servant and not for commercial or trade purposes,” reads part of SI 247.

Three SADC members keen to join Zim-Moza Beira Corridor route (The Herald)

The Democratic Republic of Congo, Malawi and Zambia are keen to join Mozambique and Zimbabwe who have signed a memorandum of understanding over the Beira Corridor route. Zimbabwe will soon write to the SADC secretariat to state that the DRC, Malawi and Zambia have expressed interest to come on board.

The development comes after Zimbabwe and Mozambique agreed to refurbish and extend the 10km railway line that stretches from Machipanda to Mutare, linking their two systems, within the next three months. The Transport Ministers of the two countries recently confirmed the development during a tour of the Forbes and Machipanda border posts. Last Wednesday, Mozambique’s Transport and Communications Minister Mr Mateus Magala arrived in Zimbabwe to hold bilateral meetings on co-operation in transport and transport infrastructure with Zimbabwean Transport and Infrastructural Development Minister Felix Mhona.

In an interview, Transport and Infrastructural Development Permanent Secretary Engineer Joy Makumbe confirmed the interest of the three SADC member states to come on board for the upgrading of the transport corridor. “Our discussion mostly was on the Beira Corridor where Mozambique and Zimbabwe are signatories to that MoU. But the discussion was that we also incorporate DRC, Malawi and Zambia who have also expressed interest to be beneficiaries of that agreement.

Cross border trade in Zambia and Zimbabwe to gain from value chains development in the maize and dairy sectors (UNECA)

To enhance political will and strengthen the capacity of Member States to apply the AU Guidelines for the Development of Regional Agricultural Value Chains (RAVCs) in Africa, the ECA has initiated a project on Strengthening Member State capacity to develop Regional Agricultural Value Chains to promote Diversification and Intra-African Trade. In partnership with the COMESA Secretariat, the project will promote regional value chains of two strategic commodities, maize, and dairy, in Zambia and Zimbabwe with a view to foster agro-processing.

Following a review of the policy, regulatory and institutional frameworks in Zambia and Zimbabwe, this week, COMESA and ECA are holding a series of workshops with key stakeholders to validate the report’s recommendation on strengthening maize and dairy value chains. The workshops are also aimed at reviewing the industrialization and export strategy for maize and dairy products in the two countries. In addition, key stakeholders are undergoing training in maize and dairy value chains to increase their capacities in mainstreaming regional value chain development in agricultural policies and strategies.

The Utilization of Trade Preferences by COMESA Member States (COMESA)

Governments are increasingly negotiating Free Trade Agreements (FTAs) and mega-regionals to create and expand market access for their economies. The African Continental Free Trade Area (AfCFTA) is the latest attempt in the region. Only recently, Governments have realized the importance of using utilization rates to monitor the effective use of FTAs by their firms.

The utilization of trade preferences is an instrument to measure how firms effectively use an FTA. As such, it is an essential tool that assists policymakers and administrations in establishing the effectiveness of trade agreements; and firms to realize the extent of the missed trade opportunities.

This study stems from a long-standing relationship between the Common Market for Eastern and Southern Africa (COMESA) and the United Nations Conference on Trade and Development (UNCTAD) Secretariat in trade and trade facilitation. It aims at shedding light on one important aspect of regional integration, namely, the effective use of the trade preferences provided by free trade agreements (FTAs) such as the COMESA FTA and other preferential trade arrangements (PTAs) granted by QUAD Developed countries such as AGOA, EBA, and GSP preferences.

Three Years After AfCFTA Ratification: Should Africans Still Rely On It? (Modern Diplomacy)

The main objective of the AfCFTA was to bring all African countries to the common market by eliminating customs duties and taxes on goods, allowing free movement to stimulate trade between member countries, building a free market economy, stimulating competition in the production through industries as well as the establishment of a customs community.

The World Economic Forum (WEF) mentions Africa, as the community with the lowest contribution to world trade, contributing only 2% where at the moment the total income of the continent is USD 3.4 Trillion, so the implementation of the agreement was expected to increase the income by 7% every year. According to the recommendations from the Economic Commission for Africa (ECA), agricultural production could be the main catalyst in stimulating the industrial sector hence boosting the African economy.

The production is expected to boost trade between partner countries from 18% (currently) to 52.3% by 2025 after removing customs duties and reducing non-tariff barriers for more than 60,000 approved products. This move is expected to grow the African economy to USD 29 trillion by 2050 and the growth is expected to lift more than 30 million people out of extreme poverty.

Leveraging AfCFTA’s foundations to a create new forum for inter-African cooperation (MyJoyOnline)

Oxford Business Group (OBG) and the Africa Prosperity Network (APN) are joining forces to spearhead the APN initiative to identify and address bottlenecks in manufacturing, adding value, and trading within the African continent. This strategic partnership signifies a commitment to shedding light on Africa’s economic landscape, particularly in Ghana and the context of the African Continental Free Trade Area (AfCFTA) headquarters being established in Accra.

The Memorandum of Understanding (MOU) between OBG and APN extends over three years, reflecting a dedicated effort to ensure that crucial voices from all sectors become an integral part of the ongoing conversation surrounding Africa’s prosperity. The central focus of this collaboration is to create awareness among stakeholders ranging from heads of state to corporate leaders within the continent. This initiative is primarily designed to foster understanding at various levels, offering a platform for interconnected dialogue not only among governments but also between heads of governments and private sector representatives.

The pivotal “Delivering Prosperity in Africa” conference, scheduled to take place in Accra from January 25 to 27, will mark the official launch of this endeavour. The conference will serve as a platform to bring together leaders from government and the private sector, facilitating discussions on critical issues related to manufacturing, value addition, and trade within Africa.

Second Africa Prosperity Dialogues take off in Aburi (Ghana News Agency)

The second edition of the Africa Prosperity Dialogues – a platform for discussing issues, forming formidable partnerships and committing to achieving the “Africa Beyond Aid” agenda envisioned by the African Union (AU) kicks off today at Aburi in the Eastern Region. The three-day event, which would be attended by some African heads of States and top business, political, thought leaders and development partners is on the theme: “Delivering prosperity in Africa: produce, add value, trade.”

Thematic areas for the 2024 Africa Prosperity Dialogues include agriculture and food sovereignty, natural resources and value addition, manufacturing, infrastructure and ICT, finance and investment, and transport and logistics. Mr Gabby Otchere-Darko, Founder/Executive Chairman, African Prosperity Network, has explained that the summit was aimed at changing the narrative and focusing on the prosperity of the continent.

Mr Silver Ojakol, Chief of Staff of the AfCFTA Secretariat, called for improved connection between business and political leaders to engender actions that would increase productivity, value addition, and intra-continental trade.

AfCFTA Secretariat set to establish protocol on digital trade this month, says Wamkele Mene (Asaase Radio)

The secretary general of the African Continental Free Trade Area (AfCFTA) Secretariat, has said the secretariat is set to establish a protocol on digital trade this month. Mene said the protocol on digital trade is aimed at supporting the African youth to thrive in the continent’s digital space.

Speaking at the opening of the Africa Prosperity Dialogues at the Peduase Presidential Lodge, Mene said, “… we have established a protocol on investments to protect not primarily foreign investors but to protect African investors… so we will conclude a protocol on women and youth in trade and also conclude the protocol on digital trade this month.

He added, “The protocol on digital trade positions us to harness the benefits of Africa’s digital economy for the inclusion of young Africans who are at the cutting edge of digital innovation and who require the regulatory support for them to thrive in the Africa digital market. Mene said over the last three years, the AfCFTA has recorded tremendous success in ensuring that “the vision of the founding fathers does indeed become a reality”.

He said, “As we speak, we have developed the AfCFTA tariff book which enables the private sector to determine with certainty the tariffs that apply to the products they want to export.” “… we also have the rules of origin manual for the very first time. As an African continent, we are able to apply Rules of Origin that are harmonized to enable an exporter from Kenya to export to Malawi with a great deal of certainty of the market that they are exporting to…

PAPSS adoption to support African e-commerce boom (ITWeb Africa)

PAPSS is the brainchild of Afreximbank, the continent’s trade financing institution. The adoption of the Pan African Payment Settlement System (PAPSS) is expected to boost the continent’s current e-commerce growth.PAPSS, which will launch in 2022 as a digital platform for facilitating cross-border payments in native African currencies while removing intermediaries and conversion fees, arrives at an exciting time for e-commerce.This is despite issues such as internet connectivity, delivery logistics, and cyber security.

Morris Macharia Musyoka, a notable software engineer and techpreneur, stated that tackling these and other financial difficulties, such as limited access to multi-currency payment platforms and extended settlement periods that impair cash flow, is critical for long-term success. “The PAPSS emerges as a solution, facilitating payment transactions across Africa without reliance on correspondent banks outside the continent,” added the official.”With over 10 countries and commercial banks adopting PAPSS, the e-commerce sector is poised for substantial growth, potentially challenging, arguably, global giants like Amazon.”

Djibouti, The Gambia, Ghana, Guinea, Kenya, Liberia, Nigeria, Sierra Leone, Zambia, and Zimbabwe have all implemented PAPSS through their central banks.

Africa’s resources must power continent’s development – AfCFTA Chief of Staff (Ghana News Agency)

Mr Silver Ojakol, Chief of Staff, African Continental Free Trade Area (AfCFTA) Secretariat has challenged business and political leaders to be intentional in utilising the Continent’s vast natural resources for development. He stated that for the past years, Africa’s resources had powered global development to the detriment of the continent and its people, and asked business and political leaders to change the narrative through AfCFTA.

“There is an urgent need for us [Africa] to use our vast natural resources and the demographic advantage for industrialisation, improved infrastructure and energy solutions that will enhance and reduce production cost,” he said.

The AfCFTA Chief of Staff expressed worry about a comment by Mr Ruchir Sharma, Chair of Rockefeller International, who said: “The biggest problem for global growth is Africa, now home to 1.5 billion people.” Rather, Mr Ojakol said: “Industrialisation in the world is driven by the minerals that are leaving the continent – cocoa, coffee, gold, copper, timber, bauxite, iron and manganese… If we stop our raw materials from leaving our coast, the global economy would grind to a halt,” he noted.

Critical Minerals (UNEP)

The transition from fossil fuels to clean energy sources will depend on critical energy transition minerals. Minerals – such as copper, lithium, nickel, cobalt – are essential components in many of today’s rapidly growing clean energy technologies, from wind turbines and solar panels to electric vehicles. The consumption of these minerals could increase sixfold by 2050, according to the IEA, with their market value reaching US$400 billion, exceeding the value of all the coal extracted in 2020. To stay below 2°C by 2050, more than three billion tonnes of energy transition minerals and metals is needed to deploy wind, solar and energy storage.

However, critical energy transition minerals come with environmental, social, economic, geopolitical, trade, and partnership challenges and opportunities. While the growth of minerals supply plays a vital role in enabling a clean energy transition, if poorly managed, the production and processing of these minerals can lead to a myriad of negative consequences, including: Significant greenhouse gas emissions arising from energy-intensive mining and processing activities. Environmental impacts, including biodiversity loss and pollution. Social impacts including human rights abuses such as child labour and negative impacts on indigenous people’s rights. In addition, there is a supply challenge which could slow down the energy transition or make it more expensive and unequal.

To address the intricate balance between supply and demand, we must support a just energy transition through responsible mining and circularity. This means ensuring stability in supply while reducing demand through responsible sourcing and resource circulation. Rethinking mobility, housing, and industrial systems is essential as is emphasizing material efficiency, substitutes, and circularity. Additionally, responsible extraction practices must be implemented to achieve a socially just and environmentally sustainable outcome.

Steel exports: China turns to Africa to sell surplus metal (The Exchange Africa)

Non-Aligned Movement Reaffirms Multilateralism, Inclusive Trading System (SDG Knowledge Hub)

Member countries of the Non-Aligned Movement (NAM) – a bloc of 120 developing countries championing international peace and security and a steady global recovery from the COVID-19 pandemic – have agreed to make joint efforts to realize the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda (AAAA) through development cooperation, acceleration of SDG investments, and reform of the international financial architecture, among other actions.

In the Kampala Declaration of the 19th Summit of Heads of State and Government of the Non-Aligned Movement, NAM members commit to achieving sustainable development “in an integrated and indivisible manner of its three dimensions” by: supporting sustained, inclusive, and sustainable growth; enhancing macroeconomic policy cooperation; exploring measures of progress on sustainable development that complement or go beyond gross domestic product (GDP); and implementing actions to accelerate sustainable development in developing countries with support from the international community, including financial resources, transfer of technology, technical cooperation, and targeted capacity building.

We are working towards a modern governance of public finances (New African Magazine)

Jean-Baptiste Ondaye, Minister for the Economy and Finance in the Republic of Congo, gives an overview of his country’s financial situation, and outlines the work underway in the CEMAC zone in terms of financial inclusion.

To what extent will your financial inclusion strategy, which is in line with CEMAC’s regional initiatives, stimulate greater economic integration in Central Africa? You are referring to CEMAC’s 2023-2027 regional financial inclusion strategy, which has just been adopted. It has been designed to remove the constraints to formal financial inclusion on the demand side as well as on the supply side, the legal and regulatory framework and the financial sector environment in CEMAC. The aim is therefore to promote financial inclusion in each member country and cross-border digital payments within the Community. The objective of the National Development Plan 2022-26 is to build a strong, diversified, and resilient economy, with a view to creating more wealth and jobs, particularly for young people and women.

How to Ease Rising External Debt-Service Pressures in Low-Income Countries (IMF BLog)

Financing pressures due to relatively high interest payments and the pace at which low-income countries need to repay debt are straining budgets. That prevents these countries from spending more on essential services or the critical investment needed to attract business, create jobs, improve prosperity, and build climate resilience.

One important metric is the share of revenues the government collects from its population through taxes and other fees that goes to pay its foreign creditors. While the scale of the burden differs greatly across countries, it’s generally about two and a half times higher than a decade earlier. This means for a typical low-income borrower the share has risen to about 14 percent, from about 6 percent, and as much as 25 percent, from about 9 percent in some economies. This is one of the key indicators used in the framework for assessing debt sustainability that signals a country might be at risk of needing financial support from the IMF or of missing a debt payment.

Low-income countries also have significant debt repayments falling due in the next two years. They need to refinance about $60 billion of external debt each year, about three times the average in the decade through 2020. But with many competing demands for financing, including from advanced and emerging market economies that are also trying to adapt to climate change, there’s a significant risk of a liquidity crunch—failure to raise sufficient financing at an affordable cost. That could in turn lead to a destabilizing debt crisis.

Africa: Sustainable debt management key to adequate education financing (Amnesty International)

Given the educational failings across Africa, especially in conflict-affected regions and following the disruptions to education caused by Covid-19, African governments must not just meet but go beyond the minimum budget thresholds established by the Dakar and Incheon Declarations if they are to ensure that the right to education is fully protected and promoted. The United Nations Conference on Trade and Development ( UNCTAD ) estimates that nearly 57% of Africans live in countries that spend more on debt repayments than education and health combined.

India to lead worldwide consumer growth with 31% of new consumers; digital economy to surpass US$1 trillion in LatAm and Africa (PR Newswire)

Rising markets in Latin America, Africa, and Asia are guiding the global surge in new consumers, with India leading the way, by adding 34 million people to the consumer class this year, almost one third of the 109 million worldwide. After Asia, Africa and Latin America are, respectively, the second and third regions to add more people, per the World Data Lab. This general consumer increase led by these three dynamic regions unfolds into the digital commerce realm as well: combined, LatAm’s and Africa’s digital commerce markets are expected to surpass US$1 trillion in total value by 2026, while India’s will be over US$275 billion, per Payments and Commerce Market Intelligence (PCMI) data in the new annual Beyond Borders, EBANX’s comprehensive study about the digital market and payments in rising economies, launched today.

As an early adopter of digital payments, and soon to be home to an adult population of 1 billion by 2030, Africa is also an important region for the outstanding digital growth of commerce and payments. After heavily embracing digital payments, which jumped from a 23% to a 46% penetration rate considering many of its countries in less than eight years, Africa is now on the verge of its next big leap: digital commerce, fueled by cellphone penetration rates and constant adaptability of local, alternative payment methods to the online world, like mobile money, which reached almost universal penetration in countries like Kenya.

A unified voice of the G77 plus China important at a time of multiple crises, says ECA’s Claver Gatete (UNECA)

The Group of 77 countries plus China is an important platform for developing countries to make their collective voices heard at a time when the world is facing multiple crises, said Claver Gatete, Executive Secretary of the Economic Commission for Africa (ECA). This, he said, is the key principle of ‘Leaving No One Behind’ that must guide our actions.

Mr Gatete was speaking on behalf of the five UN Regional Economic Commissions at the Third South Summit in Kampala, Uganda that took place on the theme: Leaving no one behind. The Summit was aimed at “bringing a new dynamic to the cooperation among its 134 member States of the Group of 77 (G-77) in a more competitive world.”

“As we prepare for the Summit of the Future, the unified voice of the G77 plus China will be a critical factor for success. The convening role of the regional commissions will also be essential,” said Mr Gatete adding that the principle of “leave no one behind” is more than the North-South divide. It is about the most basic and fundamental right and dignity of our people. “If there was ever a time when multilateralism demanded more from us, now is the time, and the leadership role of the G77 plus China will become even more critical.

He highlighted three key areas illustrating the regional commissions’ role in contributing to the principle of Leaving No one Behind and assessing the sources of vulnerabilities in developing countries. One is the deficit of industrialisation which prevents the creation of decent jobs to tackle poverty adequately. The second is the exposure to the negative effects of climate change. The third is the deficit in technological development that could lead to further global divide.

US and African Development Bank Forge Stronger Ties to Boost Food Production (AfDB)

United States Secretary of State Antony Blinken has praised the African Development Bank Group for the exceptional efforts it is undertaking to help Africa feed itself and the rest of the world.

“Extraordinary work is being done to get to a place where Africa feeds itself and a place where Africa feeds the world. I’m convinced that can happen,” Secretary of State Blinken said during a visit hosted by African Development Bank Group President, Dr. Akinwumi A. Adesina in Abidjan on Tuesday. The two met at the headquarters of AfricaRice—a pan-African centre of excellence for rice research, development, and capacity building that implements Bank agricultural programmes.

Dr. Adesina also thanked Secretary Blinken for a new grant of $9.5 million to support the Bank’s Technologies for African Agricultural Transformation initiative, or TAAT. The grant, which is a part of the larger US Government “Feed the Future” global hunger initiative, will be used for the second phase of the Bank programme called TAAT II, to help African countries increase food production, introduce climate-smart technologies, and expand extension services. To date TAAT has deployed climate-resilient agricultural technologies and fertilizers to 13 million African farmers in 40 African countries to help boost the continent’s food production and food security. The USAID grant will help expand the reach of TAAT II further.


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