Building capacity to help Africa trade better

tralac Daily News


tralac Daily News

tralac Daily News

Unpacking South Africa’s trade priorities under GNU (CNBC Africa)

South Africa’s Ministry of Trade, Industry, and Competition is undergoing a significant transition as the ruling African National Congress and the Democratic Alliance, the country’s second-largest party, come together in a government of national unity. Trudi Hartzenberg, the Executive Director of Trade Law Centre, shares insights on the necessary shifts and focus areas for South Africa as it navigates this new political terrain.

Addressing the need for a revised trade policy strategy, Hartzenberg emphasizes the importance of updating South Africa’s trade priorities. The existing trade policy dates back to 2010, with revisions in 2012 and a trade policy statement in recent years. However, she notes that significant changes have occurred in the global trade environment since then, warranting a comprehensive review and the development of a new strategy that encompasses trade in goods, services, digital trade, and the intricate linkages between trade and industrial policy.

One of the foundational elements of South Africa’s trade policy is enhancing export performance and bolstering import strategies. Hartzenberg highlights the significance of smart importing, as imports play a crucial role in the country’s production processes by supplying inputs and intermediates essential for industrial development. With a focus on strategic trade partnerships, South Africa is in the final stages of negotiating the African Continental Free Trade Area (AfCFTA). Hartzenberg stresses the need for effective implementation of the agreement and preparing the private sector to leverage the new opportunities offered by the AfCFTA, extending beyond regional trade to global partnerships.

Shell wants permission to drill off South Africa’s west coast (Engineering News)

Shell is seeking government permission from authorities to drill up to five offshore wells off the west coast of South Africa, a draft scoping report from environmental consultancy SLR showed on Tuesday.

Shell Offshore Upstream South Africa and its joint venture partners need environmental authorisation from the government before they can operate in the Northern Cape Ultra Deep Block (NCUD) in the Orange Basin. Operator Shell wants to drill exploration and appraisal wells as oil companies shift their focus south of Namibia, where a string of discoveries in its prolific Orange Basin holds the potential of more finds.

South Africa imposes safeguard duty on imports of hot-rolled steel (GMK)

South Africa has notified the World Trade Organization that it will impose a 9% safeguard duty on imports of hot-rolled steel from all countries for a period of 200 days, starting from June 28 this year. This was reported by XA Global Trade Advisors. The measure is aimed at protecting the local industry from the influx of imports. Developing countries will be exempt from the duty.

In February of this year, the South African Iron and Steel Institute (SAISI) filed an application on behalf of ArcelorMittal South Africa (AMSA), the largest producer of these products in the Southern African Customs Union (SACU). The South African Administrative Commission for International Trade then initiated a safeguard investigation into the hot-rolled steel products. According to SAISI’s complaint, the SACU industry is suffering significant damage due to the recent sharp increase in imports of the products in question.

«Chinese steelmakers are aggressively exporting due to overcapacity and the economic downturn. This imbalance has led to an increase in exports from overcapacity countries. Chinese producers continue to increase exports at reduced prices to manage excess inventories,» the statement said.

Kenya’s taxation dilemma in face of EAC-CET scheme (The East African)

Kenya could be allowed to withdraw duty imposed on items by the East African Community after the withdrawal of its controversial Finance Bill 2024, experts say. John Kalisa, chief executive of the East African Business Council said the country could apply for a stay of application in line with the provisions of the EAC Treaty.

The  pdf Gazette Notice dated June 30 (1.91 MB) and signed by Council of Ministers chair Deng Alor Kuol, lists the approved measures on import duty in the EAC common external tariff that will affect partner states. Businesses in Kenya are bracing for “unintended consequences” of the EAC harmonised tax, which was earlier agreed on by Finance ministers.

“It may have a distortionary effect on business. It will have an impact on revenues, as it implies that Kenya will be applying a different rate from that of other partners,” Mr Kalisa said. This is the second time the four- band CET is being implemented in the region.

The CET, one of the key instruments of the Customs Union, is meant to foster regional integration through uniform treatment of goods imported from third parties. Protect local manufacturers. It also seeks to protect local manufacturers against competition from similar goods imported from outside the region. According to experts, a 35 percent duty on imported finished products has the potential of growing intra-EAC trade by $18.9 million. In addition, the region’s industrial production could increase by 0.04 percent to $12.1 million, and tax revenues by 5.5 percent.

In a Cabinet meeting held on Thursday, President Ruto said the National Treasury was reorganising the budget to accommodate the new reality. He announced again on Friday that his government was going to implement measures to ensure more austerity. These would include substantial cutting down of budgets to “balance between what to be implemented and what can wait, and ensuring that key national programmes are not affected. But the Kenya Association of Manufacturers warned that it may not be easy for Kenya to review the duty as per the CET requirements.

Nairobi slaps Uganda with fresh hurdle on fuel imports (The East African)

Kenya has thrown a fresh hurdle on Uganda’s direct fuel import scheme, doubling the bond fee for imported consignments destined for Kampala to $45 million. Uganda’s Energy and Mineral Resources minister Ruth Nankabirwa said Kenya increased the requirement on the size of bond fees at the Vitol Tank Terminal International (VTTI) storage facility in Mombasa from $15 million —posing a bottleneck to Uganda’s hopes of lowering pump prices of the commodity.

A bond fee is a bank guarantee that an oil company importing fuel for the transit market (usually duty-free fuel) uses to secure duties and taxes payable to the relevant revenue authority should goods be disposed of locally.

VTTI is a privately owned terminal that ties into the Kenya Pipeline Company pipeline network in Mombasa and gives access to the Ugandan market and other landlocked countries further west.

Sources privy to the matter say that the Ministry of Energy in Kenya wrote to the Kenya Revenue Authority (KRA) to increase the fee —a change that is expected to be passed on to consumers in Uganda. “We expect prices to be more competitive for as long as we are not pushed to incur extra costs at the port because as we speak now, I am going back to Kenya to meet my colleague, Mr (Davis) Chirchir because of one thing….” Mrs Nankabirwa said.

Uganda and Kenya have the joint costliest fuel in the East African region at $1.46 per litre of super. A litre of diesel is going for $1.37 in Kampala compared to $1.33 in Kenya. Kampala had hinged on the direct importation of fuel to lower pump prices, months after President Yoweri Museveni blamed the costly fuel on middlemen in the Kenyan fuel importation structure.

Revelations of the higher bond fee demands from Kenya once again bring to the fore the spats that are largely attributed to Kenya’s decision to enter into a Government- to- Government-backed importation of fuel. This is the latest setback coming months after delays in issuing Unoc with a licence, prompted Kampala to take Kenya to the regional court towards the end of last year.

Ugandan sugarcane farmers bitter as regional market shrinks on glut, low prices (The East African)

As Ugandan consumers celebrate the lowest retail prices for sugar in five years, the industry is in a state of turmoil. Outgrowers are protesting falling prices of cane amid a glut millers blame on rapidly shrinking regional markets, which has resulted in domestic stocks rising to unprecedented levels.

This week, growers in the eastern district of Buikwe resolved to halt supplies of cane to Lugazi-based Sugar Corporation of Uganda Ltd (Scoul) in protest against the fall in the price of cane from Ush250,000 ($67.72) per tonne, just over a year ago to Ush140,000 ($37.92) today. The millers say they are hamstrung and warn of further declines unless clogged regional markets open up to Uganda.

“It is a misconception for anyone to believe that cane prices are a simply a reflection of the supply of cane; they are more a reflection of the challenges in the market for refined sugar,” said Wilbur Mubiru, spokesperson for industry lobby Uganda Sugar Technologists Association.

“Whenever we face challenges in the market for refined sugar, that is transmitted backwards to the price for cane. If we had better access to the East African market, we would be happy and outgrowers would be happy, but there is nothing we can do about it now.”

Tanzania amends sugar laws to tame shortages, prices (The East African)

Targeting to stabilise sugar supply and control prices, Tanzania has imposed regulations on sugar production, importation and distribution within its borders. Parliament has passed a bill containing amendments to the Sugar Industry Act that gave the National Food Reserve Agency (NFRA) exclusive mandate to import, store and distribute sugar for domestic consumption.

Finance Minister Mwigulu Nchemba said that the newly amended Sugar Act would help to control arbitrary shortages, hoarding of the commodity and inflating of prices. “This amendment will monitor price stabilisation. It is the government’s responsibility to intervene during market failures,” Mr Nchemba said. The newly amended Sugar Act gives the Sugar Board of Tanzania (SBT) discretion in issuing import licences. SBT will not issue licences unless it is satisfied that the local production is below the required level.

The new amendments require local sugar producers to declare their production costs then submit any relevant information that may be required by the SBT at the beginning of every production season. Domestic manufacturers are also required to declare and publish in a widely circulated Tanzanian newspaper the names of their distributors in every region at the beginning of every production season.

Zim ratifies SADC Protocol on Environment Management (The Chronicle)

Zimbabwe has approved and ratified the SADC Protocol on Environment Management for Sustainable Development whose principles are aimed at enhancing management of the environment at transboundary levels among member states. The protocol establishes principles derived from the Rio Declaration on Sustainable Development that include cooperation in good faith among State Parties, sovereign rights of State Parties to use their resources, participation of all interested parties in environmental governance, and resolution of differences amicably.

In a Post-Cabinet Briefing on Tuesday, Minister of Information, Publicity and Broadcasting Services Dr Jenfan Muswere said the protocol places the needs of people at the centre of development, precautionary approach, polluter pays principle, and extended producer responsibility among others.

Mozambique: IMF Executive Board Completes Fourth Review under Extended Credit Facility and 2024 Article IV Consultation (IMF)

“Economic growth is positive but expected to moderate, with tight financial conditions acting as a drag on activity. While inflation pressures have declined, Mozambique faces significant risks, mainly from adverse climate events and the fragile security situation.

“A tight monetary policy stance has helped to contain inflationary pressures and rebuild FX reserves. With the weak outlook for non-mining growth, well-anchored inflation expectations, and continued fiscal consolidation, a gradual easing of the monetary policy stance is appropriate. A carefully calibrated fiscal and monetary policy mix is key to preserving macroeconomic stability. Improving monetary policy transmission by deepening the interbank, money, and foreign exchange markets remains important for improved macroeconomic management. Allowing greater exchange rate flexibility is necessary to enhance resilience to external shocks. Further progress in enhancing the AML/CFT framework is also warranted.

Egypt’s exports to international blocs rise 5.1 percent to $42 billion in 2023 (Economy Middle East)

Egypt’s total exports to international blocs reached $42 billion in 2023, marking a 5.1 percent rise compared to $39.9 billion in 2022. The latest data from Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS) reveals that the total value of Egypt’s imports from international blocs declined 22 percent in 2023 to $37.5 billion. The international blocs that include Egypt are the ESCWA Community, Coast and Desert, COMESA Community, Group of Fifteen, Arab Free Trade Area, and the Developing Eight Islamic Countries Group.

Egypt’s exports from the European Union Association came in the first rank despite declining by 31.3 percent to $13.1 billion. Then came the NAFTA Association with a 24 percent decline in export value to $2.5 billion. The EFTA Association ranked last with a 197.7 percent surge in export value to $482.1 million in 2023. As for Egypt’s imports, the European Union Association ranked first with an 8.1 percent decline in import value to $21.2 billion in 2023 followed by the NAFTA Association with a 19.9 percent decline to $6.0 billion. Finally, the EFTA Association ranked last with a 6.6 percent decline in import value to $1.25 billion in 2023.

Digital Economy To Generate N18.3bn By 2026 - Minister (The Whistler Newspaper)

The Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani has said the digital economy sector is projected to generate up to N18.3bn by 2026. Tijani disclosed this on Tuesday, in Abuja at an event organised by the Senate Committee on Information and Communication Technology (ICT) and Cybersecurity and House of Representatives Committee on Digital and Information Communication Technology to sensitise Nigerians on the National Digital Economy and e-Governance Bill. The minister said the sector is the backbone for any economy today and is a prerequisite for any prosperous nation.

He said, “For those who follow the growth and trajectory of our economy in Nigeria, you should probably know that the ICT sector contributes about 13 to 18 percent of GDP. In Q4 2023 the sector contributed about 16.6 percent of GDP. “The digital economy recorded about N5.49bn in revenue in 2019.This sector is being projected to generate up to N18.3bn by 2026.

“Nigeria is one of the top two destinations for capital foreign direct investment to technology staff in Africa. Last year we recorded about 2 billion dollars in FDI to tech startups, “It will create jobs. The sector is extremely special and unique because of its capacity to unlock opportunities and raise productivity in every sector. If the digital economy is strong, it will catalyse development in every other sector.

“The bill we are here today is a bill that will accelerate the progress in our digital economy. There is no clear legislation that is pushing competition and ensuring development in that digital space.”

Nigeria accelerates value chain localisation agenda with global stakeholders (Radio Nigeria)

Nigeria is intensifying efforts towards fast tracking her value chain localisation initiative. This spurred the Special Presidential Envoy on Climate Action, Chief Ajuri Ngelale, to have deliberations with the World Economic Forum’s Head of Africa, Chido Munyati, and the Africa’s Regional Agenda Lead, Ms. Abir Ibrahim, on how best to achieve the goal. Their interaction focused on how to actively create linkages between the Organised Private Sector in developed markets and critical Nigerian public-private stakeholders in advancing new wealth-creating industries supported by localised supply chains.

Chief Ngelale also exchanged views with the Country Director of ProVeg International, Hakeem Jimo, on how they could generate tangible value from reviewing food systems, which globally contribute up to 25% of all greenhouse gas emissions.

The duo noted that sustainable agricultural practices and food system alignments could minimise forest destruction and biodiversity loss, arguing that it is a major area of opportunity as Nigeria seeks to create a new industrial ecosystem for biomass in-country in close collaboration with her technical partners and investors.

Blue Futures: Integrating Blue Economy Trade into Development for African SIDS and Coastal Nations (UNDP)

The UNDP, alongside São Tomé and Príncipe’s Ministry of Economy and the African Union Commission (AUC), hosted a notable side event at the WTO’s 9th Global Review of Aid for Trade in Geneva. Titled “Blue Futures: Integrating Blue Economy Trade into National Development Strategies for African Small Island Developing States (SIDS) and Coastal Nations,” this session focused on the transformative potential of the blue economy within the African Continental Free Trade Agreement (AfCFTA).

Africa’s blue economy is a powerful engine for sustainable growth, generating USD 296 billion and supporting 49 million jobs in 2019. Projections suggest these figures could soar to USD 576 billion and 78 million jobs by 2063. Strategic alliances and innovative investments are viewed as the keys to unlocking this potential.

Ahunna Eziakonwa, UNDP Africa Bureau’s Regional Director, emphasized the crucial role of vibrant trade in economic development. The AfCFTA, by increasing intra-African trade, expanding market access, and encouraging regional integration, is a game-changer. “Harnessing its full potential depends on ensuring that benefits are widely shared, and ocean ecosystems are sustainably managed, with good governance playing a crucial role,” Eziakonwa noted.

The struggle to achieve sustainable development goals amid rising debt levels (Final Call News)

The inability of Global South countries—which include the continent of Africa—to achieve sustainable development goals in the face of rising debt levels, requires financial resources which the current Global Financial Architecture (GFA) doesn’t allow many to meet. This was the assessment made by economists Dr. Abel Gwaindepi and Dr. Amin Karimu who also wrote about the “reforms” needed to address the problem.

Many African leaders see the current GFA “as rooted in colonialism and there (being a) need for fundamental reforms, including … new and alternative institutions,” the men wrote in an analysis published on europarl.europa.eu, the website for the European Parliament.

A case in point is Kenyan President William Ruto, who according to the BBC, had to borrow $7.6 billion, he said, just “to be able to run our government.” This was in the face of a “rejection” in the form of mass protest of a “hugely unpopular finance bill that was going to raise more money in taxes,” reported the BBC. Immediate criticism of the president’s latest plan, also came from Kenyan economist Odhiambo Ramogi who told the BBC that it was not necessary or prudent to borrow more as this would put Kenya in “a greater position for debt distress.”

Mali Says ECOWAS Exit Irreversible (Channels Television)

Mali’s Foreign Minister Abdoulaye Diop has reiterated the irreversible exit of his country, Burkina Faso and Niger from the Economic Community of West African States (ECOWAS), despite reconciliatory efforts from the bloc. The military leaders of Niger, Mali and Burkina Faso broke away from regional grouping ECOWAS earlier this year and formed a confederation of their own on Saturday.

The three countries’ decision to leave the bloc was fuelled in part by their accusation that France was manipulating ECOWAS and not providing enough support for anti-jihadist efforts. “Our heads of state were very clear in Niamey when they said the withdrawal of the three countries from ECOWAS is irrevocable and was done without delay, and from now on we must stop looking in the rear-view mirror”, Diop said on Monday.

Women, Girls in Focus as AU, SADC Stress Financing Gender Data for Development (UNECA)

African policymakers, gender experts, and development actors are calling on countries and the region to invest and collaborate more to finance the production and use of gender data to improve the lives of women and girls.

Senior public sector officials and civil society actors from nearly 40 African countries are convened in Gaborone, Botswana for the Africa Gender Statistics Forum 2024 (AGSF24). Held under the theme Pooling Together for Gender Statistics: Financing the Numbers that Make Women and Girls Count, the 2024 theme is informed by the International Women’s Day 2024 call: Invest in Women, Accelerate Progress.

“The financing gap for the Sustainable Development Goals (SDGs) stands at $1.3 trillion per year,” said William Muhwava, Chief of the Demographic and Social Statistics Section speaking on behalf of Oliver Chinganya, Director of the African Centre for Statistics, at the Economic Commission for Africa (ECA). “Africa needs at least an additional $800 million per year towards meeting the SDGs. At the current pace, gender equality will only be achieved in 2094,” said Muhwava.

While development assistance for gender equality has increased every year since 2015, funding for gender data and statistics has fallen by nearly half compared to averages from 2019.

Enhancing Macroeconomic Policies Pave the Way for A Prosperous Future for The Continent (AU)

The Ministerial Session of the 7th African Union Specialized Technical Committee (STC) on Finance, Monetary Affairs, Economic Planning and Integration kicked off on 6th July 2024 in Tunis, the Republic of Tunisia. On behalf of H. E Mr. Moussa Faki Mahamat, the Chairperson of the AU Commission, H.E. Excellency Ambassador Albert M. Muchanga, African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, said: “We are meeting against the background of the hard and smart work of the senior officials whose report you will consider. We are also meeting against the backdrop of the first year of the African Union being a permanent member of the Group of 20. To give us a strong and influential voice in this multilateral institution of global governance, policy coordination, harmonization, and the growth of the African economy are critical and urgent,”

Ambassador Albert M. Muchanga emphasized the need for coordinated policies in Africa to foster economic growth and resilience, as well as quick actions and deliverables to navigate complex geo-economic shifts. He highlighted the objectives/deliverables for the meeting as follows:

Finalizing the Statutes of the African Monetary Institute to expedite macroeconomic convergence and reform. Launching the African Credit Rating Agency and establishing a Pan African capital market to reduce borrowing costs. Advocating for the preferred creditor status of African multilateral banks in international markets. Establishing the African Financial Stability Mechanism for debt sustainability. Assessing readiness for an African Customs Union/Common Market to enhance economic integration. Adopting a strategic framework for inclusive growth and sustainable development. Contributing to the G20 policy brief aligned with Africa’s priorities, including poverty eradication, sustainable development, and global governance reform.

India and Russia set USD 100 billion trade target by 2030, explore EAEU-India Free Trade Area (ANI News)

Prime Minister Narendra Modi and Russian President Vladimir Putin met in Moscow on Tuesday and outlined their goals to eliminate non-tariff trade barriers and achieve a mutual trade volume of over USD 100 billion by 2030. The two leaders also decided to continue dialogue on the liberalization of bilateral trade, including the possibility of establishing the EAEU-India Free Trade Area, according to the Leaders’ Joint Statement released following the meeting.

“Aspiration for elimination of non-tariff trade barriers related to bilateral trade between India and Russia. Continuation of dialogue in the field of liberalization of bilateral trade, including the possibility of the establishment of the EAEU-India Free Trade Area. Achievement of a mutual trade volume more than 100 bln USD by 2030 (as mutually agreed), including increased supplies of goods from India to achieve balanced bilateral trade. Reinvigoration of investment activities of the Parties, i.e. within the framework of the special investment regimes,” the statement read.

They also decided to work on developing a bilateral settlement system using national currencies and the consistent introduction of digital financial instruments for mutual settlements.

They will work to raise the volume of bilateral trade in agricultural products, food, and fertilizers, and maintain an intensive dialogue aimed at removing veterinary, sanitary, and phytosanitary restrictions and prohibitions.

India and Russia will work for “development of cooperation in key energy sectors, including nuclear energy, oil refining and petrochemicals and expanded forms of cooperation and partnership in the field of energy infrastructure, technologies and equipment. Facilitation of mutual and international energy security, i.e. taking into account the prospects of global energy transition.”

Joint Statement following the 22nd India-Russia Annual Summit

Leaders’ Joint Statement on the development of strategic areas of Russia-India economic cooperation for the period up to 2030

DMCC briefs World Trade Organisation on 2024 Future of Trade Report In Geneva (WAM)

DMCC – the world’s flagship free zone and Government of Dubai Authority on commodities trade and enterprise – briefed a select group of trade experts on its latest Future of Trade 2024 report at an event held at the World Trade Organisation headquarters in Geneva, Switzerland. The briefing featured high-level officials and regulators including WTO Director-General Dr. Ngozi Okonjo-Iweala.

The report outlined how a new era of global regionalisation will lead businesses to restructure their supply chains amid escalating geopolitical tensions, conflicts, climate change, economic nationalism and trade protectionism. There will be opportunities to diversify export markets and sourcing networks.

Addressing delegates, Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer, DMCC, said: Through the adoption of the WTO’s Trade Facilitation Agreement, the WTO’s framework has played a strategic role in Dubai’s emergence as a global trade hub and a centre for finance, tourism and logistics, and therefore features prominently in our 2024 Future of Trade report. With over 75 percent of the global goods trade made directly on WTO terms, the world depends on an efficient WTO to ensure a fair trade landscape, especially as businesses contend with new disruptive forces like AI and climate change.

Ngozi Okonjo-Iweala, Director-General of the WTO, said, “The Future of Trade report rightly highlights that amid all the challenges facing global trade in the decade ahead, there are also opportunities. Trade can deliver benefits to people and places that missed out on the recent wave of globalisation. It can be an even stronger force for decarbonising our economies; and for making supply chains more diversified and hence more resilient in our increasingly shock-prone world. At the WTO, we are working and reforming to build the enabling environment for seizing these opportunities.

WTO members discuss efforts to reinvigorate farm trade talks (WTO)

The Chair of the WTO’s agriculture negotiations, Ambassador Alparslan Acarsoy of Türkiye, invited members to share details of their ongoing efforts to reinvigorate talks on agricultural trade at a meeting of the Agriculture Committee on 5 July. He also encouraged them to share their thoughts on how the negotiations can be resumed after the summer break.

The Chair heard members’ key takeaways from the workshop held on 2-3 July, which explored new challenges related to sustainability, food security, and poverty reduction, as well as potential new avenues for ongoing negotiations on agricultural trade rules at the WTO. Reporting on his recent consultations with members, the Chair concluded that future work would be shaped by the outcomes of discussions led by Brazil around its proposed General Council Decision, and by deliberations on a separate proposal by the African Group.

Quick links

‘Excessive’ new EU regulations threaten SA’s citrus export industry — cases taken to the World Trade Organisation (Daily Maverick)

What you should know about Kenya-EU Economic Partnership as it takes effect (TUKO)

Increase exports to actualise budget aspirations (New Vision)

Dig deep to aim high: how to use mining to unlock Mauritania’s potential (AfDB)

Six key highlights from EAC ministerial talks in Zanzibar (The New Times)


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