The East African Business Council (EABC) on Tuesday signed a US$ 3.2 million financing agreement with TradeMark East Africa (TMEA) for support in implementing a three-year programme focused on the simplification and harmonization of trade procedures in the region.
The partnership will support EABC's advocacy efforts of improving coordination, reporting and resolution of non- tariff barriers along the corridors; harmonization and adoption of East African standards or sanitary and phytosanitary (SPS) measures; improve adoption and harmonization of Customs and Domestic Tax-related policies and trade facilitation in the region.
"We will coordinate, set the agenda and facilitate evidence-based research on public-private dialogues to reducing barriers to trade in the EAC region," said Peter Mathuki, the EABC Chief Executive Officer.
"We appreciate this partnership with TradeMark East Africa as it will support EABC to evaluate and monitor EAC policies to ensure they work for businesses at ground level and create momentum to accelerate the needed policy reforms for the business and investment climate in the EAC."
As noted, public-private dialogue plays a crucial role in addressing constraints, providing short-term stimulus with long-term impact and contributing to economic growth and poverty reduction.
The project will enhance advocacy and dialogue on transport and logistics, trade facilitation, customs and tax, standards, and NTBs in a bid to increase trade and investments in the region.
The programme also extends beyond the EAC and incorporates the COMESA, COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) and the Africa Continental Free Trade Area (AfCFTA).
"Inadequate trading regimes restrictions on the export of certain commodities, and lack of product diversification and the existence of NTBs continue to hamper intra-regional trade which is still low at 20 per cent compared to other RECs SADC 40 per cent," said Mathuki.
Barriers to trading across borders such as multiple product standard inspections, bureaucratic trade procedures delay business transactions and increase the cost of doing business. The time it takes to export is at an average of 76 hours, which is too high compared to 12.5 hours in OECD High-Income Economies, according to the World Bank Ease of Doing Business report (2018).
According to the report, the EAC is ranked 149 out of 190 in the ease of trading across borders.
Source: allafrica.com

Zimbabwe's sugar exports are forecast to increase by 21 percent to 145 000 tonnes in 2019, from 120 000 tonnes last year on the back of increased production and large carryover stocks.
The 2017/18 exports were revised downwards to 120 000 tonnes based on the lower than expected sugar production and updated industry data, according to the Global Information Network Report produced by the United States Foreign Agriculture Service.
The main export destinations for Zimbabwe's sugar are the United States, European Union, Botswana, South Africa and Eastern Africa (Kenya). Zimbabwe exported about 17 443 tonnes of raw sugar to the United States to fulfil the 2017/18 Tariff Rate Quotas (TRQ).
The United States allows duty free access for Zimbabwe sugar under the Tariff Rate Quota (TRQ) programme. The total TRQ and re-allocations offered to Zimbabwe average about 12 000 to 14 000 tonnes annually.
The Southern African country usually fully utilizes its sugar quota as the United States market remains attractive compared to other markets such as the EU.
Zimbabwe exports to the European Union (EU) have significantly decreased since 2017, due to unfavourable prices and low returns when compared to other export markets such as East Africa.
The EU changed its domestic sugar policy in 2017 and removed restrictions for domestic sugar beet production. This change is expected to result in an increase in sugar supply and decreases in sugar prices in the EU.
It is also expected that the change in policy will result in a decrease in EU imports from other countries over time.
On the other hand, sugar imports will decrease by 12 percent to 38 000 tonnes in the 2018/19, from 43 000 in the 2017/18. This is due to the adequate sugar supply in the domestic market, and the only imports will be from South Africa and Swaziland who enjoy duty free access into the Zimbabwe market.
Sugar consumption in Zimbabwe is projected to increase by 5 percent to 345 000 tonnes in 2018/19 due to an increase in production, improved market access in the remote areas of the country and the increased uptake from beverage and food manufacturers.
Sugar cane in Zimbabwe is grown under canal irrigation system in the lowveld area of Triangle and Hippo Valley, in the Chiredzi District, Masvingo Province.
About 80 percent of Zimbabwe's sugar cane crop is produced by two large estates, Triangle Sugar and Hippo Valley. Private farmers, including large scale farmers and the newly resettled farmers, produce an estimated 20 percent of the country's sugar cane.
There are two sugar mills in Zimbabwe, the Hippo Valley Estates Ltd and Triangle Sugar Estates Ltd, with a combined sugar production capacity of about 640 000 tonnes and installed milling capacity of 4,8 million tonnes of sugar cane per annum.
Source: allafrica.com

According to Neil Ford, Japan is seeking to diversify the range of its trade partners in Africa and encouraging SMEs and startups to invest in the continent.
On the back of the Tokyo International Conference on African Development (TICAD), Japanese cumulative FDI in Africa increased from $3.9bn in 2007 to $10bn in 2016.
The big challenge will be diversifying the range of the country’s trade partners in Africa beyond the handful of countries that currently dominate Japanese trade relations with the continent – South Africa, Morocco, Kenya, Egypt, Ghana and Nigeria.
In 2017, Japan exported goods worth $7.5bn to Africa, including $2.5bn to South Africa, and imported $8.3bn, of which 57% came from South Africa, including iron ore and platinum.
The two biggest sectors for Japanese investment in Africa are mining and hydrocarbons, particularly in Mozambique, where Mitsui & Co has invested billions of yen in coal and gas projects.
Such investment is backed by the Japan Oil, Gas and Metals National Corporation (JOGMEC), which works to ensure “a stable supply of natural resources to Japan”.
Although commodity investments have become more uncertain since the commodity price downturn of 2014-17, they are still likely to lead the way on Japanese investment in Africa for the foreseeable future.
The most important Japanese exports to Africa over the past decade have been motor vehicles. Toyota and Nissan dominate the roads from Cairo to Cape Town. Japanese electronic goods, particularly TVs are also hugely popular in the continent.
There is also a thriving business in quality second-hand cars, particularly in the countries of Anglophone Africa, which like Japan use right-hand drive vehicles.
In addition, Japan has been the biggest Asian project finance sponsor in Africa over the past five years. M&A activity by Japanese firms in Africa has generally been fairly limited, although Nippon Telegraph and Telephone bought South Africa’s Dimension Data for $3.2bn in 2014.
Tokyo is encouraging the expansion of Japanese SMEs and startups in Africa (see below), but the number of big Japanese firms investing in Africa is also increasing, from NTT in the IT sector to Kansai Paint in the paint and coatings sector.
Toyota Tsusho Corporation has one of the most comprehensive networks on the continent, with a sales network covering 53 African countries and a variety of sectors in addition to the automotive industry.
Japanese firms still tend to be reluctant to invest in a region where they have little experience.
As Katsumi Hirano, executive vice president of the Japan External Trade Organization (JETRO), told the African Law & Business website in March: “[Japan] enjoyed a long historical economic relationship with our neighbour nation countries. So [Japanese companies] see much more potential still in the Asian region. That is one reason why the Japanese commitment in Africa is so low”.
However, in the run-up to TICAD 7 more and more Japanese companies are becoming interested in Africa. The Japan Business Council for Africa has been created as a platform for the private sector.
Made for Africa products
The number of Japanese companies operating in Africa has increased from 520 in 2010 to 796 in 2017, but the Japanese government hopes to greatly increase that figure in the near future.
“There are, of course, Japanese companies that have built up robust business foundations in Africa,” said Hirano in a recent article published by the Association of Japanese Institutes of Strategic Studies. “A distinctive feature of these companies is that they have secured human resources through aggressive M&A. The problem lies in the small number of such global Japanese companies.”
He said that while the number of global Japanese companies dropped off after the resource boom came to an end, “the outcomes of up to 1,000 new investments made in Africa each year greatly impact the level of presence of companies from around the world, and this is where the investment efforts of Japanese companies are vulnerable.” As a result, Tokyo is encouraging Japanese SMEs and startups to invest in Africa.
Some ventures have been launched as development projects with donor support but with the expectation that they will operate commercially in the longer term. For instance, Nippon Biodiesel Fuel, a Japanese startup, last year launched AgriNet in parts of Asia and Africa to connect farmers with banks and a wide range of stakeholders in the agribusiness sector. Farming villages in Mozambique can also secure financing through the website.
The UN’s World Food Programme is investing $3.5m in the project in Mozambique over three years but Nippon Biodiesel expects the venture to be operating commercially after that time.
Farmers within a single village can also band together to sell their crops via the AgriNet platform, once they have established themselves as reliable partners on the website.
Microfinance providers can supply the data needed to establish a potential client’s creditworthiness. Payments are made by money mobile and it is hoped that the income of participating farmers will increase by at least $1,000 a year.
Japanese energy startup WASSHA provides off-grid electricity through solar PV kiosks operated by local partners that allow solar lamps, mobile phones, tablets and radios, among other devices, to be charged for those without access to electricity at home.
The kiosks are equipped with a PV panel, battery, the WASSHA power device with USB ports and a smart phone as a controller. Customers can buy power through mobile money, meaning that no physical money actually changes hands, while agents lease rather than buy kiosks and the associated technology, removing the need for upfront investment.
WASSHA’s technology allows agents to check all transactions, including sales and customer information, via remote management, while the level of charge in the kiosk battery can also be monitored remotely.
Yamaha Motor has developed a water purification system following research and development in Africa and Asia over a decade. The Yamaha Clean Water Supply System requires no replaceable filters, high power consumption or maintenance by skills technicians.
Water is stored in a pre-treatment tank where silt, mud and other debris are removed. A chlorine solution disinfects the water, before metals and bacteria are removed by sand filtration and a microbial biofilm.
The system is already being used in Angola, Cameroon, Democratic Republic of the Congo, Republic of Congo and Ghana. Some of the villages with the system are able to sell their surplus potable water to neighbouring villages.
Major infrastructure projects
At TICAD VI, Tokyo committed to supporting $30bn in public private investment in infrastructure between 2016 and 2018.
Infrastructure projects funded by Japanese aid and undertaken by Japanese companies generally have a reputation for the high quality of the construction and engineering work undertaken.
The transport sector in particular has benefitted from this injection of capital. Last October, the new $140m bridge over the Nile was completed in Jinja, Uganda, with lending from the Japan International Cooperation Agency (JICA).
The bridge is located on the main highway that links inland countries of East Africa such as Uganda, Rwanda, Burundi and eastern Democratic Republic of Congo with the Port of Mombasa in Kenya. Ensuring the bridge’s construction had long been a priority for the government of Uganda, as a lack of capacity on the existing Nalubaale Bridge had caused congestion.
At the opening ceremony, Yutaka Fukase, the chief representative of the JICA Uganda office said that JICA had emphasized safety, the environment and social concerns on the construction project.
A large slice of infrastructure funding has been directed at the port sector. JICA has financed the construction of new container terminals at the ports of Nacala in Mozambique and Mombasa in Kenya in the form of both loans and grants. Japanese interest in Mozambique is partly driven by demand for coal and so port development has been complemented by financing for the associated coal railway.
Two Japanese companies, Penta-Ocean Construction Co Ltd and Toa Corporation, have been awarded a series of contracts to develop the Port of Nacala, including one for Y25.6bn ($232m) last year to dredge the access channel, reclaim land for the new container terminal and provide rail access. Nacala is reputed to have the deepest natural harbour anywhere on the east coast of Africa.
Japanese interest in Southern African coal increased after the 2011 Fukushima nuclear disaster saw nuclear power production fall and coal imports rise as demand for thermal power production increased.
Mozambique is doubly of interest because it will become a globally important liquefied natural gas (LNG) exporter within five years: aside from nuclear power, coal and LNG are the bedrock of the Japanese generation mix.
In 2013, Japan’s Ministry of Economy, Trade and Industry identified Mozambique as one of its most important potential energy suppliers. Apart from the power sector, Brazilian firm Vale’s Moatize mine supplies Nippon Steel & Sumitomo Metal with coking coal for steel production.
Investing in the full food chain
There has been a succession of big agribusiness investments by Japanese companies in Africa over the past few years, often by buying stakes in established operators. They have been attracted by Africa’s increasing population and particularly the growing number of middle-class people. In 2015, Mitsubishi bought a 20% stake in agri-trader Olam International for $1.1bn. The Singapore-based firm, which trades in a wide variety of commodities, including rice, coffee and cocoa, selected Mitsubishi in a competitive bidding process because it hoped that the Japanese company’s processing and manufacturing operations would dovetail with its trading network.
Japan’s Sanyo Foods took a 25.5% stake in Olam’s instant noodles business in 2013, then 25% equity in Olam’s packaged foods business for $187.5m the following year. Its packaged foods operations cover a wide range of goods, including fruit juices, biscuits, tomato puree and seasonings. The two companies are seeking to make use of their respective distribution networks.
In particular, Olam and Sanyo are seeking to build market share in Nigeria. Mahadevan Ramanarayanan, Olam’s president and global head of packaged foods, said: “With Sanyo’s noodle expertise this meant we could grow the instant noodles business at a much faster rate, bringing out new flavours and new products. In particular, we focused on developing flavours that corresponded to well-loved Nigerian local dishes, coming up with innovative formats in the noodle cake and also how we could make the product more convenient given the Nigerian and Sub-Saharan context. “
In March 2018, Mitsui & Co bought a 30% stake in Dubai-based ETG, which trades in agricultural produce, fertilisers, seeds and agricultural chemicals, predominately in East Africa but also more generally on the continent. The $265m acquisition will allow Mitsui to market seeds and fertiliser specifically designed for local soil conditions, as well as its irrigation systems. ETG also has storage, processing and manufacturing operations in 36 countries. Mitsui is attempting to position itself as one of the biggest players in the global agricultural commodity trading sector. It has already bought a 50% stake in US soy company Bluegrass Farms and taken over global vegetable seed firm Top Seeds 2010.
In the same way, Toyota Tsusho completed its first fertiliser blending plant in Kenya in 2016 to produce a balanced blended fertiliser designed for Kenyan soil types to avoid low harvests and the acidification of farmland. Toyota Tsusho Fertilizer Africa worked with Moi University and several NGOs to produce what is now called Baraka Fertilizer. The factory in Eldoret, in western Kenya, is designed to reduce the 600,000 tonnes of fertiliser that the country imports every year, as well as boosting agricultural production. It is now also developing specific fertilisers for sugar cane and legumes, and is seeking to expand its operations in Uganda and Tanzania.
A first for Sumitomo in Africa
Sumitomo Corporation has invested in its first independent power producer (IPP) in Africa – the 350 MW Kpone IPP in Ghana’s biggest port city, Tema. When completed, Kpone will be a combined cycle gas turbine plant accounting for about 10% of total Ghanaian power production, but it could also run on diesel or fuel oil. Ghana’s economy has grown rapidly over the past decade and more generating capacity is needed to ensure that domestic and industrial power supplies are maintained.
Total project costs are put at $903m, although this figure could include transmission infrastructure, out of which the private sector is contributing $685m, including $447m in the form of debt. Sumitomo was the second biggest equity investor with $69.7m, alongside partners Cenpower Holdings, the Africa Finance Corporation, Mercury Power and FMO, which is the Dutch development agency.
Funding for the project also came from two facilities managed by the multi-donor Private Infrastructure Development Group (PIDG): InfraCo Africa and The Emerging Africa Infrastructure Fund (EAIF), plus the Technical Assistance Facility (TAF) Cenpower Generation Company is the special purpose vehicle set up to develop the project. In a statement, Cenpower said: “It will be amongst Ghana’s most fuel-efficient thermal power stations and once in production, the power plant will become a critical base load component in meeting Ghana’s growing electricity demand.”
Construction of what will be the first licensed IPP in Ghana began in 2015 and was originally scheduled for completion in 2017 but a dispute with Group Five Power Projects, which was awarded the engineering, procurement and construction (EPC) contract and claims over contaminated fuel have held up development. The EPC contract was eventually cancelled in December 2018. All output from the plant is to be sold to the Electricity Company of Ghana for nationwide distribution.
At the other end of the scale, Sumitomo Corporation Africa bought an unspecified stake in M-Kopa, a “pay-as-you-go” solar PV business in December 2018. Customer pay a small weekly fee via mobile phone in return for a solar panel, battery and charging connections to provide electricity for light bulbs, mobile phones, radios and laptops. Larger systems can even power fridges and TVs. Electricity has been provided to millions of people living off-grid in rural areas or city suburbs that are unconnected to their national grids, particularly in East Africa.
Source: African Business Magazine

Zimbabwe's cotton output is set to decline by 52 percent this year after a severe drought that was experienced last season, according to Agriculture and Marketing Authority.
Output will be the lowest in two seasons to about 68 000 tones, 142 000 tonnes last year and 74 000 tones in 2017, AMA acting chief executive Ms. Nancy Zitsanza said while giving oral evidence before the Parliamentary Portfolio Committee on Lands, Agriculture, Water, Climate and Rural Resettlement yesterday.
"Production was affected by the drought, which we experienced this past production year," she said.

The drought also affected maize output which dropped by 54 percent to 776 635 tonnes. About 357 000 cotton farmers were registered by six companies that funded production last season. In terms of funding contribution, Cotton, which is administering the Presidential Free Inputs Scheme contributed about 75 percent or $39 million, making it the largest sponsor.
The Government introduced the scheme to save the industry that faced imminent collapse after farmers abandoned cotton production citing poor prices and low levels of funding.
Introduced in 2015, the input scheme has helped production to increase from 28 000 tonnes, the lowest output in nearly two decades to about 142 000 tonnes last season. At peak, Zimbabwe produced 352 000 tonnes of raw cotton in 2012.
Other five players contributed 25 percent of funding, said Ms. Zitsanza. However, she failed to provide proof of inputs procurement the committee had requested.
"You issued the licenses based on what was disbursed . . . but we want to see the proof of procurement," said committee chairman, Cde Justice Mayor Wadyajena, Member of Parliament for Gokwe Nembudziya.
Ms. Zitsanza was latter directed to compile and provide the information to the committee by Wednesday next week.
Speaking before the same committee, Cotton Producers and Marketers' Association chairman Mr. Steward Mubonderi, highlighted some of the challenges affecting the industry. These included the mobile payment system being used to pay the farmers.
He said the punitive rates charged by errant businesses were heavily eroding farmers' earnings. Mr. Mubonderi also appealed that cash be made available to farmers in areas where there is no mobile network.
He also expressed concern over lack of research and development of new seed varieties, arguing this was affecting productivity.
Mr. Mubonderi said the current open pollinated varieties (OPV) were last introduced over a decade ago yet other cotton producing countries have already adopted hybrids varieties with high yields potential. Cottco has since indicated it will, this year, introduce hybrid varieties.
"We need more varieties to suit various regions, rainfall patterns and soils so that production increases," he said.
Further, he suggested that Zimbabwe, should seriously consider producing Genetically Modified Organisms to increase production.
Turning to side marketing, Mr. Mubonderi blamed AMA for lack of proper regulatory controls, warning "this is the (same) cancer" that once killed the industry.
He said there were a lot of loopholes being used by cotton companies to engage in side marketing activities due to lack of proper regulatory enforcement.
On declining production on the back of erratic rains, Mr. Mubonderi said irrigation was the way to go.
Presentations from cotton companies could not be adequately heard after most of them failed to provide documents that the committee had requested. Alliance, Chishawasha and Southern Cotton were asked to submit the documents while Zimbabwe Cotton Consortium was asked to resubmit. China Africa was not represented.
As for Alliance, the committee demanded the chairman of the company attend the next meeting.
"We don't want a one-man show here," Cde Wadyajena told Alliance head of operations Mr. Peter Chapoterera.
"Ask him the date which he is flexible with . . . so that he has no excuse."
Source: The Herald

 

Hon. Professor Palamagamba John Kabudi, Minister of Foreign Affairs and East African Cooperation of the United Republic of Tanzania on 13 August 2019 assumed the Chairpersonship of the Southern African Development Community (SADC) Council of Ministers, taking over from Hon. Netumbo Nandi-Ndaitwah, Deputy Prime Minister and Minister for International Relations and Cooperation of the Republic of Namibia.
In his acceptance speech, Hon. Prof. Kabudi expressed gratitude to Outgoing Chairperson of SADC Council of Ministers for steering activities of SADC over the last one year and pledged to build on the remarkable achievements made under the leadership of the Republic of Namibia.
Hon Prof. Kabudi said, in the course of operationalization of the theme, A Conducive Environment for Inclusive and Sustainable Industrial Development, Increased Intra-Regional Trade and Job Creation, the United Republic of Tanzania will place emphasis on the need to access and improve the region’s investment and business environment in the light of industrialization.
The Outgoing Chairperson, Hon. Netumbo Nandi-Ndaitwah, congratulated Hon. Prof Kabudi on assuming the Chairpersonship of the SADC Council of Ministers and expressed Namibia’s readiness to work with him in steering SADC to greater heights. She also thanked the SADC Secretariat, under the leadership of Her Excellency Dr Stergomena Lawrence Tax for the cooperation and support during her tenure.
She said industrialization remains at the core of the integration agenda of SADC and central to the diversification of regional economic growth and called on the region to prioritise trade facilitation with regard to infrastructure such as roads, rails and harbors, while finding ways of reducing transport costs and transit delays in the region.
She highlighted that, in line with the 38th SADC Summit theme, Promoting Infrastructure Development and Youth Empowerment for Sustainable Development, the Republic of Namibia championed youth empowerment programmes, recognizing that the youth are the most valuable asset needed to drive industrialization in the region. On this note, Hon Nandi-Ndaitwah emphasized the need to implement the SADC Regional Programme on Youth Innovation and Entrepreneurship which seeks to accelerate youth development and empowerment through active youth participation.
On her part, H.E. Dr Tax thanked the Outgoing Chairperson of the SADC Council of Ministers for her guidance and dedication in pushing forward SADC development and integration and for leading the Council of Ministers with passion and sense of purpose during her tenure.
H.E. Dr Tax assured, Hon. Prof. Kabudi, of the Secretariat’s firm commitment and support to facilitate his work during his tenure as the Chairperson of Council. She expressed optimism that the Council of Ministers, under the leadership of Hon. Prof. Kabudi will continue to advance SADC values and principles.
The SADC Executive Secretary underscored that the SADC region will remain seized with the implementation of the SADC Industrialization Strategy and Roadmap, whose milestones in the 2019/2019 financial year include the long-awaited profiling of the regional agro-processing value chains whereby 14 product-specific value chains were selected; the launch of SADC Business Council, development of a Regional Mining Vision and draft Protocol on Industry.
During the opening ceremony, the SADC Council of Ministers and invited guests observed a moment of silence in memory of over 70 people who lost their lives on 10 August 2019 following a tragic fuel tanker accident in Morogoro, the United Republic of Tanzania.
Source: SADC 2019