Lack of access to affordable trade finance is holding back the economic and employment potential of African countries, says Standard Bank.
According to the African Development Bank’s recent report on trade finance in Africa, the conservative estimate for the value of unmet demand for bank-intermediated trade finance is between US$110 billion and US$120 billion, which is significantly higher than earlier estimated figures of US$25 billion.
“Imagine the number of jobs that would be created if small and medium enterprises (SMEs) in Africa, could do the cross-border transactions that would have been supported by the unmet gap in demand for trade finance. The gap means there are corporates out there who would have liked to have done that business but just because they could not access trade finance they could not do those trades,” says Vinod Madhavan, Head of Transactional Products and Services at Standard Bank South Africa.
Trade finance has a direct impact on employment and Madhavan, who was recently appointed as member of the Banking Commission Advisory Board to the International Chamber of Commerce (ICC), the largest business organisation in the world, says the African market is clearly underserviced from a trade finance perspective. Read more. Source | New Era
The U.S. Senate on Thursday voted by an overwhelming vote of 97-1 to extend for 10 years the African Growth and Opportunity Act (AGOA), which gives non-reciprocal trade preferences for African countries that meet its eligibility requirements. Republican Senator James Lankford of Oklahoma was the lone “no” vote.
The Senate version requires the Office to the U.S. Trade Representative (USTR) to launch a review of South Africa’s eligibility within 30 days of President Barack Obama signing the renewal bill into law. This language was offered by Sen. Johnny Isakson (R., Ga.) during a Senate Finance Committee mark-up of the bill on April 22 and was approved unanimously by voice vote. Isakson and Sen. Chris Coons (D., Del.) have been instrumental in fighting to ensure that fair trade in all commodities, including chicken, resumes between the United States and South Africa.
National Chicken Council president Mike Brown applauded the work of Isakson and Coons for their leadership in resolving the issue and for their hard work in reauthorizing AGOA. Read more. Source | Feedstuffs
The United States Senate passed legislation to extend duty-free access to the US for African countries, namely the African Growth and Opportunity Act (AGOA), on 14 August.
“I am very glad that we have found a way to get them to this point,” declared US Senate Finance Committee Chairman Orrin Hatch.
AGOA expands upon the US Generalised System of Preferences (GSP), a set of formal exceptions from the WTO’s most-favoured nation (MFN) principle, which allows developed countries to offer developing countries preferential treatment on specific goods. The current version of AGOA is due to expire on 30 September.
The Bill, passed last week with a majority support, includes the renewal of several trade preference programmes: the Generalized System of Preference – which had expired since July 2013 – will now be renewed through 31 December 2017; the AGOA, including the third-country fabric (TCF) provision and preferential duty treatment programme for Haiti, will be extended until 30 September 2025. Read more. Source | Brookings
The Senate voted 97-1 Thursday for a measure to create a trade preference program for sub-Saharan African imports [AGOA], which the Obama administration said it supports. Read more. Source| Bloomberg.
President Obama delivers remarks at the White House global entrepreneurship event in South Court auditorium.
Source: The White House
Africa’s agricultural potential is attracting attention from global investors and policymakers alike. However, closing the gap between the region’s potential and its current low levels of productivity remains a challenge.
According to the African Development Bank (AfDB), agriculture supports 80 percent of livelihoods for Africa’s 1.1 billion population. However, malnutrition and food insecurity remain high, while the sector as a whole only performs at an estimated 40 percent of its potential yield.
AGCO, a leading distributor and manufacturer of agricultural equipment, is looking to change this by supporting sustainable mechanisation across Africa.
“For us, sustainable mechanisation means designing our products with Africa in mind. It means building our products on the continent locally. It means providing education in successful agricultural practices, in training operators, mechanics, and our dealer partners on how to operate, service and maintain our machines. Read more. Source | Daily News
Kenya has for the first time bought more goods from the United States in one year than it did from the whole of Africa, underlining growing commercial ties that are expected to deepen with the recent thawing of relations and President Barack Obama’s visit in July.
US exports to East Africa’s largest economy rose to Sh168 billion last year compared to the Sh146 billion worth of goods and services that came from Africa, according to data from the Kenya National Bureau of Statistics (KNBS). Read more. Source | Business Daily
Security checks were intensified at all airport entries and exits since Saturday, with more GSU personnel deployed. More checks were mounted across the Nairobi City County. Kerry’s jet touched down at the JKIA shortly after 3pm, and he is expected to hold talks with Government, opposition leaders and the civil society until Tuesday. Kerry is visiting the country ahead of US President Barack Obama’s July tour, the first in the country since he (Obama) became president. Kerry will focus on trade and US investment as well as regional security and the threat from Somalia’s Al Shaabab militants. His meetings will focus mainly on how to deal with the funding of Al Shabaab and how to deal with those providing other resources to the terror group. Emphasis will be on the radicalization of Kenyan youth into joining the terror organisation. Read more . Source | Standard Digital
The East African Community countries recently signed a deal with the U.S. in which we committed to reducing trade barriers and to cooperate with the U.S. on customs issues, easing red tape and streamlining trade standards. The U.S. will help with training on food safety, and animal and plant health standards.
U.S. Trade Representative Michael Froman said the agreement was “an important steppingstone for deepening what has already proven itself to be a promising and impactful partnership,” according to the Wall Street Journal. The trade initiative, he added, would be expanded to include other African countries.
The Obama administration has reached out to Africa through the Power Africa and Trade Africa initiatives to encourage trade and investment.
As U.S. ambassador to Uganda, Scott DeLisi has said: “As we look to the future, it is clear that Africa is more important than ever to the prosperity of the international community and to the United States. Africa’s economies are among the fastest growing in the world. Uganda, which has such tremendous potential, is of particular interest, with fertile soils, abundant water, a strategic location in the heart of East Africa, a university recognized across the continent for its excellence, and, most importantly, hardworking people with an entrepreneurial spirit.” Read more. Source | Star Tribune Business
Legislation awaiting renewal in Washington has powered industries, created thousands of jobs and improved labor rights in partnership with Africa.
The AGOA (African Growth and Opportunity Act) Extension and Enhancement Act of 2015 would extend the landmark law — originally enacted in May 2000 — for another 10 years.
“AGOA has provided vital economic opportunities by supporting regional integration, helping African companies become more competitive, and fostering an enabling environment for private sector investment,” Ambassadors Michael Froman and Susan Rice wrote on a White House blog.
“AGOA supports and reflects our shared values by providing incentives to adopt good governance, pro-growth and pro-development policies, including on worker rights and human rights,” they wrote.
Since 2000, AGOA non-oil exports to the United States have more than tripled, supporting 350,000 direct jobs and hundreds of thousands of indirect jobs in Africa. With AGOA, they wrote, “African businesses have sought more U.S. inputs, expertise, and joint partnerships.” Read more. Source | Share America