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EU carbon levy: SA heads for clash with bloc (Daily Maverick)
The EU insists that its plan to put a price on the carbon emissions of some imports from 2026 is intended purely to counter global warming. But South Africa contends that, in reality, the EU’s carbon border adjustment mechanism (CBAM) is a unilateral and protectionist trade measure that will cost the South African economy more than R2-billion a year.
EU trade commissioner Valdis Dombrovskis says the CBAM will not distort trade as the EU intends to put the same price on the carbon emissions of imports as it does on those of its own producers, so the CBAM is compliant with World Trade Organization (WTO) rules. But Minister of Trade, Industry and Competition Ebrahim Patel retorts that the CBAM cannot be considered compliant because the WTO has not signed off on it, and South Africa is consulting other countries about a possible challenge to the mechanism at the WTO.
But Minister of Trade, Industry and Competition Ebrahim Patel retorts that the CBAM cannot be considered compliant because the WTO has not signed off on it, and South Africa is consulting other countries about a possible challenge to the mechanism at the WTO.
Patel rejected Dombrovskis’s assurances that the CBAM was a purely environmental measure and not a trade measure. He compared it with the WTO’s health standards on food, such as those that apply, for example, to bird flu. “It’s not a trade matter. It’s a health and safety matter. But it has a trade impact because it could be a reason to block chicken imports into your country. Because it has a trade impact, we have sanitary and phytosanitary agreements that are reached at the WTO.”
Poultry producers welcome lift on import ban (The Namibian)
The Poultry Producers’ Association of Namibia (PPA) has welcomed the government lifting the ban of chicken imports from South Africa. PPA chairperson Louis Kleynhans says as long as the poultry products are sourced from farms that are free from bird flu and are brought into the country legally, his association has no problem with that. This follows the recent lifting of the import ban of poultry meat by the Directorate of Veterinary Services.
In a notice dated 15 May 2024, chief veterinary officer Albertina Shilongo announced the resumption of the importation of poultry meat from South Africa into Namibia. “It should be noted that only poultry meat derived from live poultry originating from bio-secure farms as listed by the veterinary authority of South Africa will be permitted to be imported into Namibia,” said Shilongo.
Kenya, United States commit to complete trade negotiations (Capital Business)
Kenya and the United States of America (USA) have agreed to complete ongoing trade negotiations under the Strategic Trade and Investment Partnership (STIP). This was said during the fifth round of STIP negotiations between USA Trade Representative Katherine Tai and Kenya’s Cabinet Secretary (CS) for Investment, Trade, and Industry, Rebecca Miano.
CS Miano said that the two sides had made significant progress in several areas, including anticorruption, micro, small, and medium-sized enterprises (MSMEs), domestic service regulation, and the first tranche of agriculture text. “These provisions are designed to facilitate agricultural trade and advance food security; prevent and combat bribery and other forms of corruption; empower MSMEs in both economies; and ensure that service suppliers are treated fairly and in a transparent manner,” CS Miano explained.
The two sides recently concluded conceptual discussions on how STIP can advance the full, equitable, and meaningful participation in international trade and investment of all persons, including women, youth, persons with disabilities, other vulnerable populations, and the African Diaspora.
See also: Visit by Kenyan president can open the door to greater African trade, investment (The Hill)
Value of Exports Under AGOA Act Drops to KSh 50.8Bn (The Kenyan Wall Street)
The value of exports of apparels to the US market under the African Growth and Opportunity Act (AGOA) declined by almost Ksh6 billion last year, impacting on direct jobs supported by the programme.
As indicated by KNBS in the 2024 Economic Survey, the value of exports under the Agoa arrangement declined to KSh 50,802 billion last year. Total sales from Export Processing Zones decreased to KSh 111.4 billion in 2023 from KSh 116.3 billion in 2022, as value of exports reduced by 1.5 per cent to KSh 105.0 billion in 2023. The decrease was mainly due to reduced orders for some garments and agro processing enterprises. Domestic sales from Export Processing Zones, which include sales to duty free shops, decreased from KSh 9.7 billion in 2022 to KSh 6.4 billion in 2023.The number of gazetted Export Processing Zones as at end of December 2023 stood at 101 compared to 89 in 2022. The zones which were privately owned and operated were 91 while 10 were public.
The direct employment under AGOA reduced to 58.0 thousand persons in 2023 compared to 66.3 thousand persons recorded in 2022.
Manufacturers explain how new taxes have made Kenya to be flooded with EAC products (People Daily)
The Kenya Association of Manufacturers (KAM) has linked the spike of products from other East African countries in the Kenyan market to new tax measures. Speaking on Wednesday, May 22, 2024, KAM Chief Executive Officer (CEO) Anthony Mwangi indicated that the new levies and taxes have majorly burdened Kenyan producers forcing them to slow down their operations. Instead of mass production, Mwangi noted that most manufacturers have resolved to import products from other EAC markets which are affordable.
“Kenya operates within the EAC Common market, COMESA, and now AfCFTA. Any fees, levies, and duties imposed by the Government of Kenya are domestic taxes that affect only Kenyan products and companies. Consequently, Kenyan companies and products become uncompetitive, leading to our market being flooded with products from other EAC and COMESA countries,” Mwangi stated. “For instance, Kenya used to be the largest exporter of paper and steel products to the EAC, but due to the Finance Act 2023, we have become an importer of these products.”
According to Mwangi, the situation is set to be worsened if the Finance Bill 2024 is passed without amendments. Mwangi argued that the Export Investment Promotion Levy (EIPL) on the paper, steel and cement sectors will have a major negative effect on the construction industry.
Tanzania Loses Lucrative Oil Deals With Rwanda & 2 EAC Countries to Kenya (Kenyans.co.ke)
Kenya has moved to counter Tanzania’s oil trade ambitions by seeking deals with Rwanda, the Democratic Republic of Congo (DRC) and South Sudan.” Reports indicate that Kenya is already on the verge of securing a deal with Rwanda through Kenya Pipeline Company (KPC). The deal which is expected to be signed within 90 days will see Paul Kagame’s administration import oil through the Port of Mombasa instead of the Dar es Salaam Port in Tanzania.
This presents a significant blow to Tanzania considering plans to use its ports to transport oil to Rwanda have been on the pipeline since 2021. Apart from the Kigali deal, already, a delegation from KPC is in DRC trying to secure a similar agreement. Kenya has already ramped up investment in advanced infrastructure to ensure South Sudan relies on the Port of Mombasa for its oil needs.
New evidence reveal Apple sourcing minerals from conflict areas in east DRC (The East African)
International lawyers representing the government of the Democratic Republic of Congo said on Wednesday they had new evidence gathered from whistleblowers, which deepened concerns that Apple could be sourcing minerals from conflict areas in eastern Congo. In a statement, the lawyers urged Apple to answer questions about its supply chain in the country, and said they were evaluating legal options. Apple did not immediately respond to a Reuters request for comment.
Congo’s lawyers notified Apple CEO Tim Cook on April 22 of a series of concerns about its supply chain, and also wrote to Apple subsidiaries in France, demanding answers within three weeks.
The Amsterdam & Partners LLP law firm has been investigating allegations that minerals mined in Congo by several companies and armed groups are being smuggled out through Rwanda, Uganda and Burundi. The firm said in a statement on Wednesday that, four weeks later, “the tech giant has remained silent and neither answered nor even acknowledged receipt of the questions.”
Asia, Sadc are Tanzania’s key trading partners (The Citizen)
Tanzania’s trade sector grew by 4.3 percent in 2023, with Asian and Southern African Development Community (Sadc) nations emerging as the country’s leading trading partners. Requesting Parliament to endorse Sh110.89 billion as her docket’s 2024/25 budget in Dodoma on Tuesday, Industry and Trade minister Ashatu Kijaji said the sector grew by 3.9 percent in 2022. She added that the trade sector’s contribution to GDP was 8.3 percent in 2023 compared to 8.2 percent in 2022
Tanzania’s exports to Asian countries, including China, India, Japan and the United Arab Emirates (UAE), stood at Sh7.48 trillion in 2023. Although this represented a 31.6 percent decrease from Sh10.9 trillion worth of exports registered in 2022, Asian countries remained Tanzania’s key trading partners. On the other hand, Tanzania imported goods worth Sh21.52 trillion from Asian markets in 2023, slightly lower than the 2022 figure of Sh23.32 trillion.
Customs Intercepts trucks load of Donkey products, others, arrests 4 (Vanguard)
The Federal Operations Unit Zone ‘B’ of the Nigerian Customs has intercepted trucks load of illegal donkey meat and bones, hard drugs and other illegal goods with a Duty Paid Value of over N3 billion.
Comptroller of the Zone ‘B’ Federal Operations Unit, Ahmadu Bello Shuaibu while briefing the media on the activities of the Unit from 17th April to 17th May 2024 in Kaduna on Tuesday, said of great importance is the interception of the illegal products of donkey perpetrated by some unscrupulous elements with no regard for the lives and preservation of endangered species like the donkey which is near extinction.
He said the illegal trading clearly contravened Section 55 (1) paragraph c and i (1) of the NCS Act 2023 which says that “Import and Exports shall where applicable be subject to prohibitions and restrictions relating to: (c) The protection of the health and life of humans, animals, or plants; (i) Controlled goods imported or exported in line with relevant International laws, conventions and agreements (1) relevant International laws, Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
Ethiopia on track for 7.9pc economic growth in 2023/24 fiscal year, state says (The East African)
The Ethiopian government has announced that the country’s economy is on track to achieve a projected 7.9 percent growth rate for the current Ethiopian 2023/2024 fiscal year, which began on July 8. The performance in the country’s agriculture, industry and service sectors over the first nine months of the fiscal year indicates that the target is attainable, said Fitsum Assefa, Ethiopian minister of Planning and Development, as reported by state-affiliated Fana Broadcasting Corporate on Monday.
Highlighting the “impressive performance” of various economic sectors, Assefa said agricultural products have achieved commendable outputs. The industrial sector has demonstrated significant growth, and the service sector has also seen notable success, particularly in transportation, tourism, and other key areas. Ethiopia has generated about $2.5 billion from the export of goods and $5.8 billion from service exports. The country aims to reach lower-middle-income status by 2025.
Algeria: Investing in Data Key for Diversified Growth (World Bank)
Algeria’s economic growth remained dynamic in 2023, with GDP recording a 4.1 percent increase, driven by robust performance in the nonhydrocarbon and hydrocarbon sectors, according to the World Bank’s Spring 2024 Algeria Economic Update. Economic activity was stimulated by dynamic private consumption and strong investment growth, fueling a marked increase in imports. Hydrocarbon production was supported by record-high natural gas production, compensating for the decline in crude oil production amidst voluntary OPEC quota reductions.
Despite the decline in global hydrocarbon prices and an increase in imports causing Algeria’s’ trade balance to shrink, the country’s foreign reserves continued to increase, reaching a comfortable 16.1 months of imports by the end of 2023. Consumer price inflation moderated to 5.0 percent in the first quarter of 2024, down from 9.3 percent in 2023, aided by a strong dinar and a decrease in fresh food and import prices.
Despite challenging external conditions, Rwanda’s economy maintains robust growth. Real GDP growth surpassed expectations in 2023 at 8.2 percent, with services, construction, and post-flood recovery in food crop production key contributors. While fiscal consolidation may temporarily dampen growth, a rebound to 7.3 percent is anticipated in the medium term. Inflation has declined steadily since January 2023 to 4.2 percent in March, thanks to a slowdown in food prices and core inflation. The current account deficit widened more than expected in 2023, but international reserves remain adequate at about 4.1 months of imports at end-2023.
Going forward, the policy mix should prioritize macroeconomic and financial stability, fiscal sustainability, and the restoration of buffers. A carefully planned fiscal stance is needed to mitigate the impact of the 2023 floods while maintaining a credible and balanced fiscal consolidation over the medium term. Monetary policy should target inflation within the desired range, while maintaining exchange rate flexibility to manage external shocks. Furthermore, vigilant oversight of financial stability risks, particularly concerning large exposures and rapid credit growth, is important.
IFC and Absa to boost East Africa coffee trade with US$60 million facility (The Independent Uganda)
The International Finance Corporation, a member of the World Bank Group, has partnered with Absa Group Limited, a South African-based bank intends to extend US$60 million commodity trade finance facility to Volcafe, a leading global green coffee merchant, to strengthen the company’s operations in East Africa, supporting tens of thousands of coffee farmers in the region.
The financing will provide working capital to facilitate the purchase of coffee cherries – the fruit from which coffee beans are extracted – from smallholder farmers and local traders, as well as the processing, storage, and transport of coffee to export ports.
East Africa is a coffee-growing hub, accounting for over 80 percent of the continent’s production and 10 percent of the global total. An estimated five million smallholder farmers rely on the industry for jobs and livelihoods in the region. However, many smallholder farmers lack access to relevant financial support, and crop production is impacted by the unpredictable effects of climate change.
African economies have become less diversified and the competitiveness of their exports has declined, leaving the continent vulnerable to external shocks. In addition, African countries are not transforming their economies at a consistent or steady rate. These are some of the key findings of the latest African Transformation Index (ATI), a tool used to measure the progress of African countries in relation to economic transformation. The 2023 index was launched on 20 May during a summit hosted by the African Center for Economic Transformation (ACET), the University of Pretoria’s Faculty of Economic and Management Sciences and Future Africa.
University of Pretoria Interim VC and Principal, Professor Themba Mosia, said: “The context within which we convene today is one of both urgency and opportunity… The imperative for economic transformation has never been more pressing, as underscored by ACET’s pioneering work in introducing the concept of ‘Growth with DEPTH.’ This analytical framework, focusing on Diversification, Export competitiveness, Productivity increases, Technological upgrading, and Human well- being, provides a roadmap for sustainable economic progress,” continued Prof. Mosia.
Raila says to champion free movement under an African passport (Capital News)
Raila Odinga has promised to champion free movement within the African continent to promote trade. The African Passport, an initiative coined by the African Union (AU) in 2018, proposes to remove restrictions on Africans’ ability to travel, work and live within the continent. It seeks to transform “restrictive laws and promote visa-free travel to enhance the movement of all African citizens in all African countries”.
He spoke on Wednesday when he hosted, separately, Netherlands ambassador to Kenya Maarten Brouwer and his Egypt counterpart Wael Nasreldin Attiya. “I underscored the importance of a phased, evolutionary approach to tackle issues like multiple currencies, numerous visa requirements, and various air traffic control regulations. I believe the time has come for the introduction of an AU passport to ease travel across Africa,” Odinga said. “Together, we can pave the way for Africa’s takeoff, fostering a continent that is integrated, prosperous, and unified.”
Grand Finale of the Support towards Industrialisation and the Productive Sectors (SIPS) Programme (SADC)
The grand finale of the Support towards Industrialisation and the Productive Sectors (SIPS) Programme was held on 21 May 2024 at the Avani Hotel in Gaborone, Botswana. This event marked a significant milestone in the discourse on regional economic integration and industrialisation within the Southern African Development Community (SADC) region.
The SIPS programme, a cornerstone initiative of GIZ’s Cooperation for the Enhancement of Southern African Development Community (SADC) Regional Economic Integration (CESARE) programme, was funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Union (EU) with a budget of over 20 million euros. This programme, a joint action between SADC, the German Government and the EU, aims to promote self-sustaining economies, reduce import dependence and strengthen regional resilience, with a particular focus on the agro-processing and pharmaceutical sectors in the SADC region.
ECOWAS, ITC Launch West African Competitiveness Observatory to Boost Regional Exports (ECOWAS)
Policymakers and businesses in West Africa now have an online tool to track their countries’ trade competitiveness and to find new business opportunities in the region, with the launch of the West African Competitiveness Observatory. The ECOWAS Commission and the International Trade Centre (ITC), with financial support of the European Union (EU), launched the online platform at a high-level event on 21 May 2024, in Abuja, the Nigerian Capital city, to help unleash economic growth across West Africa, where more than half of intraregional export potential, valued at $3.2 billion, remains untapped. West Africa’s exports are more competitive within the region than on the rest of the continent or in global markets.
The West African Competitiveness Observatory serves as a monitoring tool for assessing the trade competitiveness of West African countries and the region. Its primary function is to aid policymakers in crafting policies that promote trade competitiveness and facilitate the development of value chains, which also support local firms, especially small businesses, in integrating into regional value chains.
“The Observatory will provide important information for Policy makers and businesses to take advantage of international markets. Supporting SMEs to effectively access the market and generate employment and contribute to economic growth,” stated Madame Massandjé TOURE-LITSE.
Africa Pledges to Triple Fertilizer Production and Distribution to Empower Small Farmers (AU)
African Heads of State and Government united to bolster agricultural sustainability and enhance smallholder farmer livelihoods by endorsing the Nairobi Declaration articulating the outcomes of the Africa Fertilizer and Soil Health Summit convened in Nairobi, Kenya from the 7th to 9th May 2024. In recent years, there has been a significant increase in local manufacturing of mineral fertilizers with over $15 billion of investments by the private sector. However, even as Africa’s mineral fertilizer production is estimated at 30 million metric tons annually, most of it is exported outside the continent. Majority of Member States are still over-dependent on imported fertilizers, especially non-phosphate-based fertilizers which exposes Africa to external market shocks and price volatility.
Thirteen (13) critical points are outlined on the Nairobi Declaration on the implementation of the commitments to among others, triple the domestic production and distribution of certified quality fertilizers by 2034. This ambitious initiative aims to uplift smallholder farmers by ensuring they have access to the essential inputs necessary for enhancing agricultural productivity.
pdf Nairobi Declaration: 2024 Africa Fertilizer and Soil Health Summit (406 KB)
Geopolitical rivalries are costly for global businesses (World Economic Forum)
International trade is under extraordinary pressure, experts warn, as crises ranging from continued supply chain disruptions to heightened geopolitical rivalries compound stains on the global economy. Moreover, the merits of free trade are increasingly being questioned in economies around the world.
“We’ve had a sequence of shocks which have hit the world economy,” Simon Evenett, the founder of the St. Gallen Endowment for Prosperity Through Trade, a Switzerland-based trade policy think tank, said in an interview with the World Economic Forum. The benefits of globalization, Evenett added, are “potentially at risk if geopolitical rivalry gets too far out of control.”
Evenett, who is also a member of the World Economic Forum’s Trade and Investment Council, is a contributor to a new white paper, The Costs of Geopolitical Rivalry for Business: Ten Lessons for Better Policy Design, which provides analysis on how corporations and policymakers can best prepare for and respond to the various geopolitical pressures fragmenting the global economy. The paper is based on interviews with over a dozen senior executives from international businesses representing a range of manufacturing and service sectors.
Global trade could more than double in 2024. Here’s why (World Economic Forum)
Global trade growth is set to increase by more than two-fold this year, driven by low inflation and a booming US economy. That’s according to the three major international economic organizations – the International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) – which all forecast an uptick in global trade flows in 2024.
The OECD expects global trade in goods and services to grow by 2.3% this year and 3.3% in 2025 – more than double the 1% growth seen in 2023. The first OECD Economic Outlook in 2024, published in April, expects falling inflation will enable central banks to start lowering interest rates, but adds that real rates are likely to remain “above estimated neutral levels”. Meanwhile, the IMF’s latest World Economic Outlook puts world trade growth at 3% and 3.3% for 2024 and 2025, respectively, despite revising down its projections from earlier in the year. And the WTO projects world merchandise (goods) trade volumes to grow 2.6% and 3.3% in 2024 and 2025, respectively, after a significant decline last year.
Despite the cautiously optimistic outlook delivered by the IMF, OECD and WTO, world trade is not out of the woods yet.
DDG Ellard calls for more inclusive trade policies at WTO Chairs Programme event in Peru
Delivering a keynote speech at a WTO Chairs Programme event on trade and gender in Lima, Peru, on 16 May, Deputy Director-General Angela Ellard noted the contribution of WTO Chairs to helping governments design evidence-based policies on inclusive trade and women’s economic empowerment. She encouraged the participants to continue their collaboration and innovation to build a future where the benefits of international trade are shared equitably by all.
DG Okonjo-Iweala cites members’ desire to complete unfinished business from MC13
WTO members are eager to complete the unfinished business pending from the organization’s 13th Ministerial Conference (MC13) in Abu Dhabi earlier this year and find ways to advance the work in Geneva instead of waiting for a future ministerial to deliver results, Director-General Ngozi Okonjo-Iweala said at a meeting of the WTO’s General Council on 22 May.
International Day for Biodiversity calls for collective action to protect biological resources (SAnews)
As the world celebrates International Day for Biodiversity (IDB), Minister of Forestry, Fisheries, and the Environment Barbara Creecy, has called on all South Africans to participate in restoring and protecting South Africa’s biological resources. Cabinet recently approved the White Paper on the Conservation and the Sustainable Use of South Africa’s Biological Diversity as the guiding framework, which sets out the goals and objectives aligned with the Kunming-Montreal Global Biodiversity Framework (GBF).
“South Africa is rich in biodiversity, which is crucial for our ecosystems to function effectively, providing us with clean air, water and medicinal resources amongst the many benefits we derive. The White Paper is a milestone achievement for South Africa, as it is aspirational and advocates for a society where all people have a high quality of life, a voice and a nurturing earth supporting them,” said Creecy.
Quick links
Leveraging E-Payments for Financial Inclusion in Ethiopia (World Bank Blog)
Abuja Light Rail ready for commissioning (Premium Times Nigeria)
AfCFTA: Potentially costly at first, but promising great rewards (ISS Africa)
Grain Becoming Russia’s Tacit Weapon in Confrontation With the West (Jamestown)
Webinar looks at use of digital technologies to improve supply chain procedures (WTO)
Long, dangerous journeys on the rise but migration drives prosperity (UN News)
