tralac Daily News
President Cyril Ramaphosa will on Wednesday officiate the launch of South Africa’s first shipment and preferential trading under the African Continental Free Trade Area (AfCFTA). The launch ceremony will take place at the Port of Durban and occurs on the margins of the 13th AfCFTA Council of Ministers meeting to be held at the Inkosi Albert Luthuli International Convention Centre from 30-31 January 2024. South Africa is the first among the four Southern African Customs Union (SACU) countries to practically realise the AfCFTA agreement.
The 37th African Union Ordinary Session of the Assembly of Heads of State and Government will, at its annual convention next month, take stock of the progress made thus far in the implementation of the AfCFTA. The Department of Trade, Industry and Competition said the launch ceremony will be a historic step and an instrumental tool in generating meaningful trade on the African continent through the shipment of made-in-South Africa products. “The main message being sent to Africa and the rest of the world through this event is to illustrate that companies can trade under the AfCFTA procedures to expand their markets within a legally binding framework,” the department said.
As the European Union’s (EU’s) Carbon Border Adjustment Mechanism (CBAM) became effective from October 1 last year, South Africa remains highly vulnerable and will likely pay high amounts of carbon tax. The first CBAM report for the fourth quarter of 2023 will be published on January 31.
The transition period for CBAM has been set over two years ending in December 2025, following which South African exporters are expected to report accurate greenhouse-gas embedded emissions data to EU importers. Once the transition period ends, exporting firms will have to buy CBAM certificates by paying a carbon tax at the EU border. South Africa is highly dependent on the EU market, with the region accounting for 21% of all South Africa’s exports in 2022.
Import permits for key products scrapped (The Herald)
The Government has scrapped import permits and licenses for fertiliser and other key products, including confectioneries and construction materials. Statutory Instrument 6 of 2024, published in the Government Gazette, removed import permit requirements for several products, including data and network cables, floor polish, batteries, candles, tiles, adhesives and sealants, detergents, biscuits and fertilisers.
Import permits and licenses can often lead to higher prices for consumers. By removing these requirements, this could reduce prices for the listed products, analysts say. It was not immediately clear why the permits and licences had been removed.
“The agricultural, construction, and ICT sectors are all important drivers of economic growth. By making it easier for businesses to import the goods and services they need, the Government could help to boost these sectors and create jobs,” Carlos Tadya, a Harare-based economist told The Herald Finance & Business. While supportive of the overall initiative, some critics cautioned that the removal of permits and licenses could inadvertently increase competition from imported goods, given the existing presence of small businesses in certain product categories.
Kenya oil facilities face huge losses as Uganda shifts to Dar port (The East African)
Kenya has lost $200 million worth of exports to Uganda, its largest regional market, since October 2023, new data shows. And experts warn that it will lose more going forward, as the fight over petroleum products imports escalates, with major oil infrastructure at the risk of underuse.
Last week, Uganda announced that it was moving to Tanzania for oil imports after reaching a dead end in the quest to have its national oil marketer, Uganda National Oil company (Unoc), registered in Kenya to facilitate imports via the Mombasa port. Ugandan Energy Minister of Energy Ruth Nankabirwa told reporters in Kampala on Tuesday that Kenya’s continuous frustration of the Unoc deal is threatening Uganda’s fuel supply stability.
KCB signs deal to promote intra-Africa trade (New Vision)
Kenya Commercial Bank (KCB), which now operates in many African countries including Uganda, has signed an Africa-wide deal to facilitate settlements of cross-border monetary transactions, which will greatly boost trade between African countries. “The agreement brings on board payments and collecting expertise spanning more than 120 years,” said KCG Group CEO Paul Russo. “Rest assured to have speed, affordability, reliability and boost in Africa to Africa trade.”
The agreement was signed early this week with the Pan-African Payment and Settlement System (PAPSS) in Accra in Ghana during the Afrexim Bank Annual Meeting. This makes KCB the pioneer institution in East Africa to bring on board the financial market infrastructure that provides a secure and efficient channel for processing cross-border payments.
“The major cost drivers included aviation fuel, crew allowances, crew salaries and pilot training, and depreciation [of the company’s assets],” Auditor General John Muwanga wrote, listing Uganda Airline among 15 public entities with a declining operating margin from the previous year, which makes it difficult for such corporations to pay their operating and debt expenses. However, details contained in the Auditor General’s report for the period ended June 2023 indicated that the Shs230.4b was at least 46.8 percent lower than the Shs491.8b Uganda Airlines, which trades as Uganda National Airlines Company Limited, had planned to earn in the period.
AfDB introduces new model to help turn Ugandan economy (The Independent Uganda)
Uganda has been selected among five African countries to be supported by the African Development Bank to develop circular economy policies. A circular economy is an economic system based on the reuse and regeneration of products to continue production sustainably, minimizing waste, and increasing the life cycle of products. It differs from the prevailing linear economic model, in which products are manufactured, used up, and disposed of or discarded.
It has been found that when applied as an industrialization strategy, the circular economy has the potential to decouple resource use from economic development to help address key African challenges such as climate change, food security, water scarcity, and natural resources management.
When Ghana requested an IMF-supported program in July 2022, the country was dealing with an economic and financial crisis that was the outcome of preexisting vulnerabilities and substantial external shocks. The authorities have since made compelling progress under the program that was approved by the IMF Board in May 2023.
Two years ago, elevated fiscal deficits and public debt levels, together with the combined effects of the COVID-19 pandemic, Russia’s war in Ukraine, and global monetary policy tightening, triggered a drop in international investor confidence in Ghana, resulting in a loss of international market access. This generated increasing pressures on domestic financing, with the government turning to monetary financing by the central bank, which fed into declining international reserves, currency depreciation, and accelerating inflation.
Now, the Ghanaian economy is showing signs of stabilization thanks to the authorities’ steadfast implementation of its IMF-supported economic program, which aims to restore macroeconomic stability, secure debt sustainability, and lay the foundations for higher and more inclusive growth.
The Government of Zambia has developed and validated the national blue economy strategy which is expected to help increase the prospects for achieving sustainable, environmentally friendly and socially inclusive economic growth. The strategy will guide the nation in advancing knowledge on biotechnology, environmental sustainability and ecosystem services. Other areas targeted include growth of inland water transport industry, management of fishing industry and better use of underwater mineral resources. This was revealed in Lusaka on 16 January 2024 during the validation meeting held at COMESA Secretariat.
Speaking at the opening of the meeting, Director of Agriculture and Industry at COMESA Secretariat Mrs Providence Mavubi commended the country for developing the strategy which she described is an important tool and mechanism for attaining sustainable economic growth. “The validation of the national blue economy strategy hastens the state of play of regional integration and will help development of ways and means of strengthening and deepening mutually beneficial cooperation in the area of blue economy for the benefit of Zambian citizens in particular and COMESA in general.”
UAE firm to develop $5 billion Uganda oil refinery (The Independent Uganda)
Africa Global Logistics deepens presence in Kenya with Naivasha SEZ (The Africa Logistics)
The technology already exists to bring clean energy to rural communities in developing countries that have previously never had access to any kind of electricity. However, as Moritz Brauchle, managing director of Africa GreenTec Madagascar, explains, these countries will continue to need support to turn their backs on fossil fuels.
Africa GreenTec is a social enterprise which provides sustainable energy solutions to some of the 600 million people in sub-Saharan Africa currently living without any access to electricity. With backing from the UN, the company installs minigrids – stand-alone networks run on renewable energy – to supply people in a small community or town with clean electricity.
China investors eye Africa’s Mauritius as it goes green, tries to sweeten deals (South China Morning Post)
“We want to really encourage investors who are in that particular [green energy] space on how they can come invest in those areas,” Seeruttun told the Post at last week’s Asian Financial Forum in Hong Kong. “Solar energy is one thing that we are promoting, and of course, we need to see – [for] promoters who are interested – how we can facilitate their entry into the market.” The government has said that goal will help it honour an international commitment to help reduce greenhouse gas emissions.
Meanwhile, investors from China are also looking at Mauritius as a gateway to the African market, Seeruttun added. “In the renewable-energy sector, China has gained both a technological edge and a cost advantage, which allow them to export products and technical expertise with little competition from other countries,” Xu said.
Cameroon National Development Strategy receives Afreximbank backing (African Review)
The African Export-Import bank (Afreximbank) has agreed a EU€200mn (approx. US$217mn) financing facility to help the Government of Cameroon implement its National Development Strategy The Government initiative represents a vision for 2030 to establish the country as an emerging country, democratic and united in its diversity. It targets carrying out structural transformation of the economy to promote endogenous, inclusive development while preserving opportunities for future generations.
The main objectives identified by the Government include establishing conditions favourable to economic growth; improving the living conditions of the population; strengthening climate change adaption; enhancing on governance to enhance policy performance towards achieving development goals.
Under the terms of the agreement with Afreximbank, the Government of Cameroon will deploy the facility to implement trade-enabling infrastructure projects that are approved in the country’s financing plan.
TradeMark Africa’s $2m grant to fight trade barriers (The East African)
The Eastern Africa Grain Council (EAGC) has received a $2 million grant from TradeMark Africa to eliminate trade barriers for exporters in three East African countries. The grant is part of a $75 million five-year partnership from the US Agency for International Development’s Economic Recovery and Reform Activity programme delivered by TradeMark Africa but funded by Feed the Future.
“This facility with EAGC will directly tackle these challenges, removing trade impediments and building grain exporters’ capacity in Kenya, Tanzania, and Uganda across export value chains such as maize, beans, millet, sorghum, and rice,” said TradeMark in a statement. The partnership seeks to tap into food grain production and export while creating jobs, especially for women and the youth.
Some of the challenges facing grain exporters are the ability to meet and comply with international standards, low production rates, poor harvest management and climatic factors. “These challenges contribute to the low competitiveness of these staples in regional markets, reduced cross-border trade, production deficits, and postharvest losses that threaten the region’s food security,” added TradeMark. EAGC plans to support over 80 small and medium-sized enterprises to successfully meet sanitary and phytosanitary measures - which regulate the health of animals and plants that are traded; and standards quality requirements that govern quality, health and safety systems, and environmental conservation. It also plans to establish an information hub that will act as a resource centre.
External shocks dim East Africa economic growth prospects (The East African)
The International Monetary Fund (IMF) projects that the East African economy will grow at 5.6 percent, but the region’s business lobby says external and domestic shocks could impact the positive outlook. The East African Business Council (EABC) cites the global economic slowdown, rising commodity prices, high inflation, liquidity, the war in Ukraine, international trade policies, tightening of global financial conditions, and exchange rate depreciation.
“Global dynamics do play a part in our economic growth. When you start seeing double-digit borrowing in Kenya, Tanzania and Uganda, a high cost of liquidity and slow intra-EAC trade, the economy is unlikely to grow as fast as predicted,” said Jas Bedi, EABC vice-chairperson and chairperson of the
The Southern African Development Community (SADC) Secretariat, through its Climate Services Centre (CSC) is convening the 28th Southern African Regional Climate Outlook Forum (SARCOF-28) in Maputo, Mozambique between 29-31 January 2024, to review the impacts of the October-November and December (OND) 2023 rainfall season’s predictions, issue the seasonal outlook for February-March-April (FMA) and March-April-May (MAM) 2024 together with advancing the establishment of Regional Sectoral User Interface Products (RSUIPs).
SARCOF-28 was to review and discuss the impacts of the season’s outlook for February-March-April (FMA) and March-April-May (MAM) 2024 on each sector based on the consensus outlook which will be generated during the pre-SARCOF event of Climate Experts held in Maputo, Mozambique from 22-28 January 2024.
The Climate Experts Meeting (CEM) which is aimed at building capacity of Climate Experts from National Meteorological and Hydrological Services (NMHSs) of the SADC Region would also discuss the status of global climate drivers and their likely impacts on the climate sensitive sectors within the SADC Region. The CEM will generate a Regional seasonal climate outlook for the overlapping three-monthly subseasons for the second half of the rainy season which will form the bedrock of deliberations during SARCOF-28.
The attention of the Commission of the Economic Community of West African States (ECOWAS Commission) has been drawn to a statement broadcast on the National Televisions of Mali and Niger announcing the decision of Burkina Faso, Mali and Niger to withdraw from ECOWAS. The ECOWAS Commission is yet to receive any direct formal notification from the three Member States about their intention to withdraw from the Community .
The ECOWAS Commission, as directed by the Authority of Heads of State and Government, has been working assiduously with these countries for the restoration of constitutional order. Burkina Faso, Niger, and Mali remain important members of the Community and the Authority remains committed to finding a negotiated solution to the political impasse. The ECOWAS Commission remains seized with the development and shall make further pronouncements as the situation evolves.
The Pan-African Payment and Settlement System (PAPSS) will in April this year roll out an African currency trading platform, Professor Benedict Okey Oramah, the president and chairman of the board of directors of the African Export-Import Bank (Afreximbank), has said. PAPSS, which was launched to make cross-border transactions seamless, has brought over 25 commercial banks on to its system since its launch by the African Union and Afreximbank in 2022.
Speaking at the just-ended Africa Prosperity Dialogues in Peduase on Saturday (27 January), Oramah said: “A continent with over 42 different currencies and payment systems cannot trade among itself. That’s why we have collaborated with the AfCFTA and the AU Commission to develop a common payment platform… in order to create a single payment rail for the continent.”
Governments, business leaders pledge value addition for AfCFTA’s success (Ghana News Agency)
African governments and business leaders have made a pledge with a sense of urgency to ensure value addition to raw materials and natural resources for successful intra-continental trade. This commitment was made at the end of the second edition of the Africa Prosperity Dialogues in Aburi in the Eastern Region of Ghana. The three-day summit was organised by the Africa Prosperity Network and the African Continental Free Trade Area (AfCFTA) Secretariat, under the auspices of the government of Ghana. The event ended with the adoption of thirteen strategic policy (Peduase Compact), to be presented by President Nana Addo Dankwa Akufo-Addo to the African Union (AU) for ratification and implementation for AfCFTA’s success.
“Trade between African regions is highly concentrated around primary minerals,” Mr Mohammed Irfaan Ali, Guyana, noted, all called for concerted effort to correct it. “The opportunities are there for a massive increase, but we have to fix the trade barriers, transport and logistics and the rules among ourselves that will stimulate trade among ourselves,” he said.
Ghana calls for adherence to African Mining Vision (Ghana News Agency)
Ghana has drawn the attention of African countries to their obligations under the African Mining Vision, urging renewed commitments to harness the continent’s mineral potential. The Vision enjoins countries on the continent to collaborate and use the exploitation of mineral resources to underpin broad-based sustainable growth and economic development.
“We cannot talk about Africa’s prosperity without talking about her natural resources, which for years have been the fulcrum around which most of our economies revolve,” Mr Samuel Jinapor, Minister of Lands and Natural Resources, noted. He was speaking at a discussion on the topic: “Extracting Greater Value from our Minerals – The Case of Gold and Lithium in Ghana,” at the Africa Prosperity Dialogues (APD) 2024, being held at the Peduase Presidential Lodge, Eastern Region.
Intra-Africa air connectivity up but headwinds remain (Southern & East African Tourism Update)
Intra-Africa air connectivity is making headway, with local aviation experts expressing cautious optimism about the growth prospects for the southern African region, noting that several barriers to improved air access still need to be addressed. This comes after the Centre for Aviation (CAPA) highlighted in its ‘Charting Trends’ report earlier this month that intra-Africa air connectivity had exceeded the two million weekly internal seats figure for the week commencing December 18. This is the sixth time that this landmark figure has been achieved. Previously, there was a consecutive five-week period between the weeks of December 9 and January 6, when a record of 2.04 million was achieved in the week commencing December 16, 2019 (pre-COVID).
“December is a peak travel month in the intra-Africa calendar, and capacity levels will decline over the remainder of Q1 2024, following historical trends. It may be premature to start looking ahead to the end of 2024, but there is potential for 2024 to break the record for intra-Africa connectivity,” the report stated.
The African Development Bank Group and the Consortium of International Agricultural Research Centres (CGIAR) committed on Thursday to strengthen their collaboration to increase food production and provide better nutrition for Africa’s growing population. With 65% of global uncultivated arable land, the African Development Bank believes that the continent can feed itself and the rest of the world.
CGIAR centres are located across African countries and focus on enhancing food and nutrition security, reducing poverty, and improving natural resources and ecosystem services. They are critical to achieving food security on the continent, just as their counterparts in Southeast Asia and Latin America were also key to accelerating agricultural growth and food self-sufficiency.
President Dr Irfaan Ali on Saturday encouraged more trade and bilateral relations between countries in the African continent and the Caribbean region as part of efforts to progressively develop a sustainable future. The Head-of-State delivered the keynote address at the Presidential Dialogues session, hours after he was bestowed with the Global Africa Leadership Award at the Africa Prosperity Champions Awards and Presidential Gala Dinner on Friday evening in Ghana.
President Dr Irfaan Ali receives the prestigious Global Africa Leadership Award in Accra, Ghana. President Ali was honored for his transformational leadership in Guyana”These are things that we need to fix, the opportunities are there for massive increases in a trade between Africa and the Caribbean…We have to fix the trade barriers, we have to fix the issues of transport and logistics. We have to fix the rules between ourselves that will help stimulate trade and advance trade between our countries,” President Ali said.
On the sidelines of last week’s Italy-Africa Summit, the European Commission (EC) and the African Development Bank Group have formalised a new Financial Framework Partnership Agreement to boost investments in infrastructure projects in Africa. The European Union’s contribution to co-finance operations with the African Development Bank has significantly increased over the last two years, now amounting to €972 million in blending operations and guarantees. This figure will further increase after the signing of the new Financial Framework Partnership Agreement.
This landmark agreement renews the partnership between the two organisations. It opens a wide range of opportunities for both organisations to deliver new joint financing for infrastructure projects. For the EU, this would be in keeping with the priorities of the Global Gateway, its strategy to deliver sustainable and trusted connections with partner countries. Between 2021 and 2027, through the Africa-EU Global Gateway Investment Package, the EU will support the African continent with €150 billion worth of investments.
UNCTAD Secretary-General Rebeca Grynspan underscored on 21 January at the Group of 77 and China’s Third South Summit the systemic inequalities that hinder developing countries’ efforts to achieve sustainable development. In her statement to the summit in Kampala, Uganda, Ms. Grynspan highlighted that despite now accounting for 86% of the world population, about 58% of global economic output, in terms of purchasing power parity, and almost half of world merchandise exports, these nations remain underrepresented in key international institutions.
The UNCTAD chief said systemic inequalities materialized in the uneven distribution of resources like vaccines and finance during the COVID-19 pandemic, which hindered developing countries’ responses to the crisis. Similarly, these nations are least responsible for climate change yet bear the heaviest costs.
WTO members taking part in the Trade and Environmental Sustainability Structured Discussions (TESSD) on 25 January considered further refinements to the group’s package of outcomes to be launched at the 13th Ministerial Conference (MC13) next month. The package reflects the progress made since MC12 and charts the way forward towards identifying possible concrete actions for trade policy to support environmental sustainability. Members also welcomed Peru as the newest participant in TESSD, which now includes 76 WTO members as co-sponsors.
WTO members were briefed on the latest developments in ongoing informal discussions on dispute settlement reform and work plans for talks in the coming weeks at a meeting of the Dispute Settlement Body (DSB) on 26 January. Members were mandated at the WTO’s 12th Ministerial Conference to conduct discussions, with the view to having a fully functioning dispute settlement system accessible to all members by 2024.