Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Investec Logistics Update: South Africa’s trade outlook for 2024 (Investec)

Global growth is expected to be subdued, if not stagnant in 2024 and amidst this slow growth and some of the challenging market conditions, global trade is also expected to be sluggish. According to The World Bank global trade growth, in 2024, is anticipated to be only half the average in the decade before the pandemic.

“Current geopolitical tensions are high. While these tensions currently only have a direct effect on certain regional trade routes such as Europe-Asia, should they escalate, it certainly can destabilise global trade and supply chains in many ways,” adds Hobson.

From a South African perspective, the biggest concern is the efficiency of ports and rail infrastructure. “If sustainable progress doesn’t get made soon we may see further route and capacity changes on the South African in and outbound routes as it has become too expensive to have vessels stuck in ports for days and weeks,” says Hobson.

“Shipping lines could utilise their capacity more effectively on other trades if required. We may even see some remove direct sailings or only have limited sailings coming into South Africa – which will reduce available capacity and increase freight rates”.

South Africa Committee Approves WTO Fisheries Subsidies Agreement Ratification (BNN)

In a significant step towards sustainability, the Portfolio Committee on Trade, Industry and Competition in South Africa has given its approval to ratify the World Trade Organization’s (WTO) agreement on fisheries subsidies. The agreement, adopted by consensus at the WTO’s 12th Ministerial Conference in June 2022, is an effort to alleviate pressure on global fish stocks and aligns with the United Nations’ sustainable development goal to eliminate harmful fisheries subsidies.

The first phase of the agreement includes rules to curb harmful fishing subsidies. It also provides for special treatment for developing and least-developed countries, establishing a fund for technical assistance. The agreement prohibits support for IUU fishing, fishing of overfished stocks, and subsidies on the unregulated high seas.

Further negotiations on overfishing and overcapacity issues are scheduled for the second phase, with the objective of delivering a comprehensive agreement at the upcoming 13th Ministerial Conference.

Mashatile calls for more to be done to transform mining industry (SAnews)

Deputy President Paul Mashatile believes that although the Mining Charter has achieved some success in reforming the mining industry, more still needs to be done. “The 30 years of our nation’s democracy should compel us to become even more proactive about the issue of economic transformation in this industry and country.” The Deputy President delivered a keynote address at the South African Youth Economic Council (SAYEC) Business Dialogue during the Mining Indaba in Cape Town.

“The transformation of this sector is important because it forms a vital part of our country’s development trajectory, driving infrastructure development, which includes the construction of roads, railways, and power plants, and positively impacting the economy. “Our country’s rich natural resources provide a comparative advantage in processing, manufacturing, and beneficiation through mining value chains,” he told attendees on Tuesday.

The Deputy President said while the economic growth of the sector is important, its transformation is equally important, to the extent that it is inclusive of women, youth, and other marginalised groups in society.

Crucial to combine agricultural development with mining, Indaba hears (Engineering News)

Africa is going to have a huge amount to do to help solve the world’s climate change problems, Toronto-listed Ivanhoe Mines executive chairperson Robert Friedland emphasised in his far-reaching thirtieth address to the thirtieth Investing in African Mining Indaba in Cape Town.

In those 30 consecutive Indaba presentations, Friedland has regularly highlighted the global need to combat climate change along with the critical role that young Africans will play in saving the planet, even though Africa has done the least to damage it.

Last year, humanity experienced the highest temperatures ever recorded. “This is no joke, and it’s not going away,” Friedland told the full-house audience at the event covered by Mining Weekly. In current circumstances, the world’s greatest commodity is, no, not copper, but water, “the most valuable commodity on our planet”, with only 2.5% of it fresh and humanity facing a looming water crisis.

National food loss, waste reduction strategy on the cards (Engineering News)

The Department of Forestry, Fisheries and the Environment’s (DFFE’s) Draft Strategy for Reducing Food Losses and Waste, published for comment in September 2023, will likely result in a newly promulgated national food loss and waste strategy in 2024, says alternative waste treatment company BiobiN South Africa director Brian Küsel.

“Businesses that produce large volumes of food waste will need to make provisions to divert their waste through alternative waste treatment methods, like composting for example. “Numerous waste regulations have come into effect in recent years with the intention to divert more waste from landfill and improve recycling rates. We have seen this with the extended producer responsibility regulations and the waste classification regulations,” he notes.

The food and organic waste stream in South Africa generates about 12.6-million tonnes of food loss and waste a year. The majority of South Africa’s food losses and waste, or 68%, occur in the early stages of production, with 19% occurring during post-harvest handling and storage, and 49% during processing and packaging. Of the food that is wasted, 44% is vegetables and fruits, 26% grains, 15% meat and the remaining 13% consists of oilseeds, tubers and roots.

Despite the hazards, Ghana’s illicit waste trade is booming (ISS Africa)

Volkswagen spends big to counter loadshedding as it becomes sole Polo supplier (Engineering News)

Volkswagen Group South Africa, now trading as Volkswagen Group Africa (VWA), is investing R55-million to generate 3 MW in additional solar energy for its assembly plant in Kariega, in the Eastern Cape, says MD Martina Biene. The panels will be installed on the car ports in the employee car park.

VWA production director Ulrich Schwabe says this means the local arm of the German vehicle maker will have 6.3 MWp in solar energy installed by the end of this year, in an investment totaling R89-million, across its facilities in Kariega, as well as in Centurion and Sandton, in Gauteng.

“Our expectation is that, in 2024, we would have installed more than 6 MW,” notes Schwabe. “This means that, at around lunch time, we can cover 50% of our electricity needs in production. And this is just a first step.” He notes that VWA has the ambition for the Kariega plant to become carbon neutral by 2030.

Kenya: African Development Bank Adopts New 5-yr Plan to boost growth and human development (AfDB)

The Board of Directors of the African Development Bank Group on 14th December 2023 approved a new five-year Country Strategy Paper (CSP) for Kenya. The 2024-2028 CSP focuses on boosting private sector-driven growth through infrastructure development, strategic reforms, and human capital development.

The Bank’s country office said these priority areas will complement each other and build on what has already been achieved with the Bank’s assistance while continuing to support Kenya’s vision of structural transformation and strengthening resilience.

Uganda: Trade Ministry urged to table Consumer Protection Bill (ZAWYA)

The Deputy Speaker, Thomas Tayebwa, has tasked the Minister of State for Trade Industry and Cooperatives (Industry), Hon. David Bahati, to honour his earlier pledge and table the Consumer Protection Bill. The Bill aims at setting standards for the quality, safety, and reliability of goods and also provides remedies in case of non-compliance with those standards as well as prohibiting unfair trade practices.

“Hon. Minister, remember we discussed the Consumer Protection Bill and you said it should be different from the Competition Bill - we need you to table the Bill,” Tayebwa said in his communication during the plenary sitting on Tuesday, 06 February 2024.

The magic of Mali’s digital pharmaceutical registry (UNCTAD)

Mali announced in November 2023 that it was working on the live rapid prototyping and testing of a new online pharmaceutical registry, developed in a joint project by UNCTAD, the country’s health ministry and the national pharmaceutical association.

It will improve the efficiency of the marketing authorization process, ensure the quality and safety of medicines, strengthen transparency and traceability, optimize resources, support the development of the pharmaceutical industry locally and fight against counterfeiting.

Through the online registry, Mali’s pharmaceutical importers, producers and distributors – and the government – will be able to remedy supply chain delays and tackle fraud and accessibility challenges more effectively.

Republic of Equatorial Guinea: 2023 Article IV Consultation (IMF)

Equatorial Guinea’s macroeconomic situation has deteriorated over the last decade due to a secular decline in oil production. In 2022, economic indicators improved somewhat. However, this recovery was short-lived, with the economy projected to fall back into recession in 2023. In the years ahead, the economy would contract further. Without strong policy responses, all the gains in per capita income achieved over the last two decades are expected to fully unravel by 2028. The three-year Extended Fund Facility (EFF) approved in 2019 to support the authorities’ diversification agenda expired at end-2022 without a single completed review. The authorities have nonetheless continued to implement reforms delayed under the program as well as the 2022 Article IV Consultation recommendations.

Video: US Mission in Nigeria is particular about the future of Africa trade - Julie Le Blanc (Businessday Nigeria)

Extensive changes to COMESA competition laws out for comment (Cliffe Dekker Hofmeyr)

Changes to the existing regulations governing the enforcement of competition law in the Common Market for Eastern and Southern Africa (COMESA) have been proposed and shared for comment by the COMESA Competition Commission (CCC). The proposed changes are extensive and were apparently prompted by challenges experienced by the CCC arising from the existing 2004 regulations. Comments on the draft revised regulations are due by 14 February 2024.

Central Africa needs to enhance sub-regional cooperation to ensure satisfactory appropriation of natural capital accounting as a tool for mobilizing financing for the green economy (UNECA)

“No Central African country, despite the Congo Basin’s enormous natural resource endowments, has an economic and environmental accounting system. An integrated, participatory approach is needed to appropriate this tool and make it a lever for mobilizing project financing”, emphasized Dr. Nebiyeleul Gessese, during the sub-regional dialogue on the theme “natural capital accounting, greenhouse gas inventory, nature-based solutions, sustainable finance mobilisation: concepts, tools, methodologies, winning business models at your fingertips”, as a prelude to the ECA’s 56th session of the Conference of Ministers.

To enrich the calculation of gross domestic product (GDP) with the environmental dimension, Central African countries need to develop economic and environmental accounting systems. The aim of updating GDP is to broaden the fiscal space and improve the positioning of African countries in climate negotiations.

To achieve this, participants in the webinar recommended sub-regional cooperation to promote information sharing between countries, mastery of the concept and the technical and technological requirements associated with it. We will need to invest in the adaptation and harmonization of legal frameworks in order to link them to climate challenges, the design of measurement tools that will facilitate the qualification of statistically quantifiable assets, and capacity building through targeted training of stakeholders according to the role expected of each of them.

Trans-Kalahari Railway will boost regional trade and connectivity (Windhoek Observer)

In a decisive effort to bolster and advance regional trade and connectivity, Namibia and Botswana are moving closer to the realization of the Trans-Kalahari Railway project. This ambitious initiative aims to create a direct rail link between the Port of Walvis Bay and Botswana, extending further to the Southern African Development Community (SADC) region. The project was discussed during a recent Joint Ministerial Committee Meeting in Swakopmund.

By leveraging the strategic position of the Port of Walvis Bay, the project aims to offer a more efficient and cost-effective route for cargo destined for Botswana and beyond, thereby enhancing the economic integration of southern Africa. The Trans-Kalahari Railway is set to be implemented through a develop, operate, and transfer (DOT) model. This approach allows private investors to recoup their investments over time, making the project more attractive to potential financiers.

In Africa’s Free Trade Area, Investment In Pharmaceuticals Means Impact And Profit (Africa.com)

Countries across Africa, a continent which struggled to gain equal access to vaccines and that imports the majority of its packaged medicines from abroad, know all too well the importance of a strong domestic pharmaceutical industry and trade. Total demand for packaged medicines in Africa is worth around $18 billion annually, of which 61% is imported and 36% is locally produced and not traded. Just 3% of demand is met by intra-African trade. Now, under the newly active African Continental Free Trade Area (AfCFTA) agreement, Africa’s pharmaceutical and medicine trade is about to receive a significant boost — one fueled by intra-African trade, alleviating some of African states’ reliance on outside economies.

According to a new report by the World Economic Forum, AfCFTA: A New Era for Global Business and Investment in Africa, the pharmaceutical industry is likely to be among the prime beneficiaries of the introduction of frictionless trade in Africa. The industry’s high product complexity means there are tremendous opportunities to invest in local value chains for goods such as packaged and unpackaged medicines, vaccines, medical instruments and bandages — all of which have high local valued added potential — and the AfCFTA will open the possibility of meeting local demand locally as well as make it easier to overcome production barriers in a short time frame.

Mali, Burkina Faso and Niger want to leave Ecowas. A political scientist explains the fallout (The Conversation)

Mali, Burkina Faso and Niger have sent Ecowas, west Africa’s main political union of 15 countries, a formal notice of their withdrawal from the bloc. The three countries are governed by military rulers who have overthrown democratically elected leaders since 2021.

The three countries have given three main reasons. First is what they call the “illegal, illegitimate, inhumane and irresponsible sanctions” imposed on them for truncating their democracies. Second is the failure of Ecowas to assist them in their “existential fight against terrorism and insecurity”. The juntas have also argued that Ecowas has deviated from the founding principles of the organisation and is now controlled by foreign powers.

The main impact will be on trade and economic development. Ecowas is primarily an economic community and the loss of any member will affect trade and economic development. The three countries collectively account for 8% of the US$761 billion Ecowas gross domestic product (GDP). In 2022, the total trade volume from the Ecowas region totalled US$277.22 billion. The concern is that the exit of these countries could affect the flow of goods and services in the bloc.

Mali says it will not respect ECOWAS treaty’s withdrawal notice period (Reuters)

Mali said on Wednesday that it would not wait a year to leave the Economic Community of West African States (ECOWAS), as is required by the bloc’s treaty. Mali and its neighbours Niger and Burkina Faso, all run by military juntas, announced last month that they were immediately leaving ECOWAS, West Africa’s main political and economic bloc, reversing decades of regional integration.

In a statement posted online, Mali’s foreign ministry said that ECOWAS had violated its own texts by closing its borders to Mali when it imposed sanctions on the military regime. “Consequently, the Government of the Republic of Mali is no longer bound by the deadline constraints mentioned in Article 91 of the Revised Treaty,” the statement said.

Video: Africa’s free trade area under threat as ECOWAS shrinks (Businessday Nigeria)

First Africa Coffee Week Momentous Occasion for Elevating African Coffee to New Heights: IACO Chair (ENA)

The African Fine Coffees Conference (AFCA) and Exhibition and the First African Coffee Week is a crucial event to elevate African coffee to new heights, Inter-African Coffee Organization (IACO) Chairperson and Agriculture Minister Girma Amente said. The chairperson made that remark today at the opening of the 20th African Fine Coffees Conference and Exhibition and the First African Coffee Week 2024 at the Millennium Hall in Addis Ababa.

Stating that coffee has the power to transform lives, empower communities and drive economic growth, Girma added that it provides livelihoods for millions of small holder farmers and entrepreneurs across Ethiopia and in the continent. By investing in the sector, member countries can reduce poverty by generating meaningful employment and increase household incomes, he pointed out.

The Africa Coffee Week offers a great opportunity to provide the platform for effective dialogue on increasing coordination and collaboration between the governments and the private sectors of the African coffee producing countries and the global stakeholders representing coffee producing countries, the secretary general stated.

BRICS: Growing in strength and stature (Financial Express)

BRICS brings five of the world’s largest developing countries (Brazil, Russia, India, China and South Africa) together on one platform to review and assess ongoing global developments that could have an impact on 41 percent of the world population, 24 percent of global GDP and 16 percent of global trade.

Seen as emerging markets, the BRICS member states have sought to act as a counterbalance to traditional Western influence by establishing deeper ties between themselves and through cooperation on economic expansion, including trade.

2024 has started off with a bang with five more countries – Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates -joining this grouping as full members from January 1. Argentina was also approached to join, but hasn’t done so thus far. However, 34 other countries have expressed their desire in principle to join.

Last month, Russian President Vladimir Putin issued an agenda statement on assuming the BRICS chairmanship. He said Russia’s focus would be to ensure “positive and constructive cooperation” between all members.

E-commerce negotiators engage in first review of Chair’s text (WTO)

At the first round of e-commerce negotiations in 2024, held from 29 January to 2 February, the co-convenors of the talks — Australia, Japan and Singapore — welcomed participating members’ willingness to work in the coming months on the basis of the text circulated by the co-convenors in mid-January. The text reflects the co-convenors’ judgement on where consensus is most likely to be achieved for a future e-commerce agreement.

UNCTAD urges reforms on global debt architecture amid rising debt distress (UNCTAD)

In the wake of the COVID-19 pandemic, developing countries’ external sovereign debt – funds borrowed in foreign currency – increased by 15.7% to $11.4 trillion by the end of 2022. The mounting debt levels are further complicated by the diversity of lenders and financial instruments.

Equally alarming is the surge in debt servicing costs. Low-income and lower-middle-income countries – also referred to as frontier markets – that borrowed when interest rates were low and investors keen are now spending around 23% and 13% of their export revenues, respectively, to repay their external debt.

“To put this in perspective, after World War II, the share of export revenue going into debt servicing for Germany was capped at 5% to aid West Germany’s recovery,” says Anastasia Nesvetailova, head of UNCTAD’s macroeconomic and development policies branch.


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