South Africa – The Commerce Africa https://thecommerceafrica.com African Reneissance Fri, 08 Mar 2024 06:20:33 +0000 en-US hourly 1 https://wordpress.org/?v=5.9 AfCFTA: Nigeria commences export to S’Africa, others in April https://thecommerceafrica.com/afcfta-nigeria-commences-export-to-safrica-others-in-april/ https://thecommerceafrica.com/afcfta-nigeria-commences-export-to-safrica-others-in-april/#respond Fri, 08 Mar 2024 06:20:32 +0000 https://thecommerceafrica.com/?p=16314 Nigeria is to begin the formal export of locally produced commodities to South Africa, Rwanda, Cameroon and Kenya from next month under the Guided Trade Initiative of the African Continental Free Trade Area, the national centre of AfCFTA announced on Thursday.

Although some businesses in Nigeria currently export products to these countries, they make such exports informally, but beginning April, Nigerian companies would start the official and formal export of commodities to African nations under the AfCFTA treaty.

The African Continental Free Trade Area is a free trade agreement established among 54 of the 55 African Union nations, creating the largest free trade area in the world by the number of participating countries.

Speaking on the sidelines of the Abuja Stakeholders Workshop on the AfCFTA Digital Trade Protocol, on Thursday, the Executive Secretary, National Action Committee on AfCFTA, Olusegun Awolowo, told journalists that though trading under the main AfCFTA had yet to start, the secretariat of the programme had introduced the Guided Trade Initiative.

He said, “We haven’t started trading in AfCFTA, we are duly going through the protocols. But recently the AfCFTA secretariat itself launched what they call the Guided Trade Initiative to get some countries to start trading outside their regional blocks.

“We’ve signed onto it and I think that by the end of April we are taking a few companies, big, medium and small enterprises to actually launch trading in Africa. All we are doing now is that we are going through and signing all the protocols, as well as finding a way on how to implement them.

“So we are now at the stage of implementation. Therefore, trading hasn’t really commenced under AfCFTA. It is not an overnight thing, you have to go through all the protocols, sign them and agree.

“However, we are hoping that we are able to start trading under the GTI, not on the main AfCFTA itself, by the end of April. So it will be on record that Nigeria has now started exporting officially and formally, because, of course, informal trade is going on anyway.”

Asked to name some of the countries that had also signed onto the GTI scheme which Nigeria would formally start exporting products to, Awolowo replied, “We are going to South Africa, Kenya, Cameroon and Rwanda. This is under the Guided Trade Initiative that was brought by AfCFTA, knowing that trade agreements take long.

“In fact, this AfCFTA is the fastest one. How long did it take the World Trade Organisation to get on ground? They are still signing protocols up till today. But this is fastest one and to fast-track it, that is what the GTI is all about.

“It is an initiative that enables countries to chose. Let’s take the companies and let them actually export from the various ports. Then we test the capacities of the ports, test the capacities of the shipments and the capacities of cargoes. Then the private sector can fully buy into it. So that’s what is going to happen.”

Established in March 2018, the AfCFTA became effective on May 30, 2019, with the goal to boost intra-African trade, foster economic development and create a larger, more competitive African market.

The benefits of the agreement include increased trade and investment opportunities, creation of jobs, improved living standards and enhanced economic diversification and transformation.

It, however, has some challenges which include the difficulty in the implementation of trade facilitation measures, addressing infrastructure gaps, and building productive capacity.

Experts say the AfCFTA has the potential to be a game-changer for Africa, but its success will depend on overcoming these challenges and ensuring all member states can participate effectively.

Speaking about the workshop, Awolowo stated that the adoption of the AfCFTA Digital Trade Protocol marked a significant milestone in the journey towards economic integration and digital transformation.

“It signifies our collective commitment to leveraging digital technologies to enhance intra-African trade, foster innovation, and drive sustainable economic growth.

“In the wake of this landmark achievement, it is imperative that we equip ourselves with the requisite knowledge and resources to seize the opportunities that lie ahead. Trade is competitive!

“In this regard, it is imperative that all stakeholders, particularly our esteemed Nigerian youth, embrace the AfCFTA Digital Trade Protocol as a catalyst for job creation, wealth generation, and socio-economic empowerment.

“The digital economy holds unparalleled potential to empower our youth, unleash their entrepreneurial spirit, and facilitate their meaningful participation in the global marketplace.”

On his part, the Senior Special Assistant to the President on Legal, Research and Compliance Matters in the Office of the Vice President, Bashir Maidugu, advised the government to get the youths involved in AfCFTA Digital trade.

“Nigeria is the largest market in Africa and we are leading in the digital e-commerce space, but what the government is advised to do is to encourage the youths and other professional bodies to utilise the opportunity of the AfCFTA to boost the Nigerian economy.

“So the government will have to pay more attention to Nigerian youths, who are already dominating in Africa, for example, Flutterwave, Konga, Jiji and so many other online stores and fintech payment systems.

“The government can be more active in developing the skills of these youths who are the driving force for digital trade. So the attention could be by funding universities and other research institutes and e-learning centres. This is to ensure that we maintain our dominance and add more,” Maidugu stated.

Credit: Okechukwu Nnodium wrote this story for Punch

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AfCFTA: South Africa Unveils Plans to Boost Exports https://thecommerceafrica.com/afcfta-south-africa-unveils-plans-to-boost-exports/ https://thecommerceafrica.com/afcfta-south-africa-unveils-plans-to-boost-exports/#respond Wed, 02 Sep 2020 07:15:01 +0000 http://thecommerceafrica.com/?p=1787 The South African government Tuesday launched a new mechanism to improve the country’s export environment.

According to Lerato Mataboge, the Deputy Director-General of export development of the Trade Department, the newly launched Export Barriers Monitoring Mechanism (EBMM) is designed to help local businesses overcome the barriers to exports more effectively and flexibly. It is expected to make the country more competitive in both the regional and international markets, especially in this tough economic context exacerbated by the covid-19 pandemic.

The implementation of this mechanism is taking place amid the operationalization process of the African Continental Free Trade Area (AfCFTA). Indeed the implementation of the AfCFTA was postponed to next year due to the coronavirus pandemic which has forced countries to close their doors and to set barrier measures, thus disrupting international trade. With the operationalization of the single market, African countries hope to recover more quickly from the crisis thanks in particular to an improvement in intra-continental trade.

“While our priority must be to work progressively to smoothen these barriers, the experience of the last decade of trade has demonstrated that we need to be prepared to manage this growing complexity.

“Increasingly, a key component of global competitiveness will be how we manage a constantly changing global trading environment. Managing this environment will only be possible through a close working partnership between the government and the private sector,” Mataboge said.

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South Africa Gets $4.3bn from IMF to Fight Pandemic, First Funding in 26 years https://thecommerceafrica.com/south-africa-gets-4-3bn-from-imf-to-fight-pandemic-first-funding-in-26-years/ https://thecommerceafrica.com/south-africa-gets-4-3bn-from-imf-to-fight-pandemic-first-funding-in-26-years/#respond Wed, 29 Jul 2020 08:19:03 +0000 http://thecommerceafrica.com/?p=1302 The Executive Board of the International Monetary Fund (IMF) has approved the disbursement of $4.3 billion to help fight the coronavirus pandemic in South Africa. This amount, which represents 100% of South Africa’s quota in the Fund, was granted under the Rapid Financing Instrument to meet the country’s urgent balance of payments needs.

“The pandemic is evolving in South Africa at a challenging time. With severe structural constraints to growth, economic activity has weakened over the last decade despite significant government spending, resulting in high unemployment, poverty, and income inequality,” IMF said in a statement.

This is the first time in 26 years that South Africa, the most diversified economy on the African continent and a member of the G20, has asked the IMF for help. The country has consistently refused to do so in the name of economic sovereignty. With 90% of its public debt owed to domestic creditors and a capital market that weighs 20.7 trillion rands (5 times the size of its economy), several analysts have always considered that going to the IMF is a kind of humiliation.

But the current pandemic context has forced the country to resort to the Washington-based institution. “South Africa’s economy has been severely hit by the COVID-19 crisis, reporting the highest number of cases in sub-Saharan Africa. A deep economic recession is unfolding as the decline in domestic activity and disruptions in the global supply chain resulting from the COVID-19 shock have added to a pre-existing situation of structural constraints, subdued growth, and deteriorating social outcomes,” said Geoffrey Okamoto, IMF’s First Deputy Managing Director, and Acting Chair.

According to many opinion leaders in Africa, the IMF’s structural adjustment programs have contributed to the fragility of the continent. For the current solutions, the institution says it is giving its support without any counterpart. But the last part of its statement sounds like a set of instructions given to South Africa.

The Fund calls on South Africa to urgently strengthen its economic fundamentals and ensure debt sustainability through fiscal consolidation, improved governance and operations of state-owned enterprises, and other growth-enhancing structural reforms. The IMF also suggests that it will be important to preserve the central bank’s mandate to control the level of inflation and to proactively regulate and supervise banks, especially small banks.

These recommendations are different from those implemented in several developed countries, and even in China. Faced with the adverse effects of covid-19 on their economies, central banks have injected massive amounts of money in the form of debt buybacks. In the United States, these operations involved not only government securities but also those issued by certain companies.

Despite criticism, the IMF was approached by several countries around the world. South Africa is not the only country in Africa to have overstepped its principle of no longer soliciting the institution. Nigeria and Ghana have had to ask for their help. A total of 77 countries, before South Africa, sought and received IMF assistance in response to the pandemic.

So far, IMF has approved $83.4 billion, of which about $14.3 billion has been disbursed to Africa to fight the pandemic. Also, 22 African countries have benefited from a debt cancellation amounting to $251.2 million from the international financing body.

(Ecofin Agency)

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AfDB Votes $288mn to Help S/Africa Fight COVID-19 https://thecommerceafrica.com/afdb-votes-288mn-to-help-s-africa-fight-covid-19/ https://thecommerceafrica.com/afdb-votes-288mn-to-help-s-africa-fight-covid-19/#respond Thu, 23 Jul 2020 07:54:47 +0000 http://thecommerceafrica.com/?p=1219 The Board of Directors of the African Development Bank has approved a loan of approximately R5 billion ($288 million) to the government of South Africa, as the country battles one of the largest COVID-19 caseloads in the world.

South Africa confirmed its first case of COVID-19 on 5 March 2020 and is currently the most affected in Africa, and among the top five in the world in terms of confirmed cases (381,798 as at 22 July, with 5,368 deaths).

The loan falls under the Bank’s $10 billion COVID-19 Response Facility and will finance South Africa’s COVID-19 Response Support Program, and represents the Bank’s first ever budget support to the country. The operation is designed as a Crisis Response Budget Support Operation prepared following a request from the government of South Africa.

The purpose of the program is to: (i) protect lives and promote access to essential equipment to prevent infection, such as protective personal equipment, sanitizers and gloves (ii) protect livelihoods by preserving jobs, incomes, food security and access to essential public services (iii) protect firms by supporting enterprises in the formal and informal economy to withstand the impacts of COVID-19 and prepare for economic recovery.

South Africa’s ability to respond to the pandemic has implications for neighbouring countries as well as the continent as a whole, given its position as Africa’s second-largest economy after Nigeria.

Even before the pandemic, South Africa was experiencing an economic slump. In 2019, the country registered GDP growth of 0.2% – the lowest in a decade – and according to Bank estimates it could drop to the worst in 90 years in 2020. Projections show a GDP contraction of 6.3% and 7.5% under baseline and worst-case scenarios, respectively.

These growth forecasts have placed budgetary constraints on the government’s ability to deal with the health crisis.

In order to ensure a complementary intervention, the African Development Bank operation was designed in collaboration with other partners, including the International Monetary Fund, World Bank and the New Development Bank.

South Africa is ranked as the most prepared African country to deal with a pandemic, according to a Global Health Security (GHS) Index. Yet significant challenges remain in the public health sector, including underfunding and human resource shortages. While the private health sector is better equipped, it remains unaffordable to the majority of South Africans.

The COVID-19 outbreak is also likely to adversely affect the gains made in controlling other infectious diseases such as TB and HIV/AIDS. South Africa’s scaling up of mass testing has also put pressure on capacity at public sector laboratories, and concerns have been raised about the rising numbers of infections among health workers.

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Nurse in Tears as Virus Cases Overwhelm South Africa’s Hospitals https://thecommerceafrica.com/nurse-in-tears-as-virus-cases-overwhelm-south-africas-hospitals/ https://thecommerceafrica.com/nurse-in-tears-as-virus-cases-overwhelm-south-africas-hospitals/#respond Fri, 03 Jul 2020 11:48:52 +0000 http://thecommerceafrica.com/?p=845 The nurse started crying when describing her work at a Johannesburg hospital: The ward for coronavirus patients is full, so new arrivals are sent to the general ward, where they wait days for test results. Already 20 of her colleagues have tested positive.

“A lot, a lot, a lot of people are coming in every day. With COVID-19,” said the nurse, who spoke on condition of anonymity because she is not authorized to speak to the media. “Each day, it becomes more difficult to cope.”

South Africa’s reported coronavirus cases more than quadrupled in June — though some of that is due to efforts to clear a testing backlog, the rate of increase of new cases is picking up. Its hospitals are now bracing for an onslaught of patients, setting up temporary wards and hoping advances in treatment will help the country’s health facilities from becoming overwhelmed.

Credit: AP

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