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How much will poverty rise in Sub-Saharan Africa in 2020? (World Bank)
The ongoing coronavirus pandemic is expected to drastically slow 2020 GDP per capita growth in Sub-Saharan Africa by about 5 percentage points compared to pre-pandemic forecasts. This note presents results from an analysis of a comprehensive database of surveys from 45 of 48 SSA countries to examine the effects of the project fall in growth on poverty in the region. An additional 26 million people in SSA, and as much as 58 million, may fall into extreme poverty defined by the international poverty line of 1.90 US Dollars per day in 2011 PPP. The poverty rate for SSA will likely increase more than two percentage points, setting back poverty reduction in the region by about 5 years. Extract: Figure 3 presents the increase in poverty rates for all countries in the region. Half of the new poor will live in five countries: DRC, Ethiopia, Kenya, Nigeria, South Africa – with Nigeria contributing the most with 6.9 million new poor. Sao Tome and Principe, Zimbabwe, Niger, Republic of Congo, Sierra Leone, and Botswana are expected to see the largest poverty rate increase.
Africa’s finance ministers and Private Sector Group seek to rapidly resolve commercial debt service obligations
The ECA on Monday convened a meeting between African Finance Ministers, the Africa Private Sector Working Group and the AU Special Envoy on COVID-19 as the search continues for solutions to ensure African economies enjoy continued market access and meet their private sector debt service obligations. Discussions focused on ways in which the interests of both African governments and commercial creditors could be aligned to deal with the double crisis of a health pandemic and an economic recession. During the meeting, the Finance Ministers agreed on the importance of maintaining Eurobond coupon payments so as to maintain post-pandemic access to international debt markets for development finance and on having an ongoing coordinated dialogue with creditors.
African regional responses to COVID-19 (ECDPM)
This note summarises and reflects on the different roles played by the African Union and a sample of the continent’s regional organisations in shaping collective, coordinated regional responses. It finds that the AU has played an effective role in communicating about and shaping African responses, with technical legitimacy provided through the Africa CDC. The AU has also been able to inspire collective action in a unified call for international solidarity. At the regional level, responses reflect a spectrum of cooperation and complexity – rising from information sharing; to ‘nudging’ and guiding; to active coordination of state responses, to collective action. Different RECs are managing to operate at different levels, depending on their regional and institutional histories, structural features such as the size and coherence of the REC, as well as the political economy dynamics of the countries in its region. Existing regional response capabilities also partially reflect a problem-driven response to the past West African Ebola crisis. One can expect that the COVID-19 crisis will have a similar effect on regional health cooperation, yet its long term impact on African integration more broadly remains to be seen. [The authors: Alfonso Medinilla, Bruce Byiers, Philomena Apiko]
The impact of COVID-19 on SADC economy (SADC)
This report presents the impact of the COVID-19 Pandemic and implications for SADC Region as monitored by the SADC Macroeconomic Subcommittee, supported by the SADC Secretariat. It provides policy recommendations to Member States.
Extract: Resultantly, SADC regional 2020 economic growth initially forecasted at 3.3% in October 2019, has been revised downwards to a contraction of about 3%. Disruptions of economic activity and the elevated expenditures by Governments coupled with economic packages in response to the pandemic is expected to affect the fiscal positions for SADC member states. Consequently, fiscal deficit is forecasted to widen to 5.7% of GDP in 2020 compared to the previous estimate of 3.0% of GDP. Additionally, debt levels are forecasted to increase beyond the regional threshold of 60% of GDP to 69.8% of GDP in 2020. The estimated regional and global economic contraction coupled with weak demand in commodities are expected to result in a deterioration of the SADC external position with current account deficit forecasted to widen to about 9% of GDP in 2020 from an initial estimate of 4.2% of GDP. The deterioration of the external position together with the increased importation of medication and medical equipment will put pressure on foreign reserves and exchange rates of SADC Member States, which can result in significant exchange rates depreciation across the region in 2020. The longevity of the pandemic will determine the severity of the economic impact.
COVID-19 economic and health impacts on regional food and nutrition security (WFP Regional Bureau for Southern Africa)
National economies in Southern Africa, such as Zimbabwe, Lesotho, Mozambique and Malawi, receive high levels of remittances that are critical for both the monetary system and household consumption. Increased unemployment will reduce the inflows of hard currencies and the ability of households to purchase essential commodities. Many of the countries in the southern Africa region have a high dependence on commodity exports to China, relatively weak sovereign balance sheets, high debt burdens and volatile currencies, and exposure to a number of economic externalities (pdf). Chinese demand underpins the economies of various resource-rich countries on the continent, with a slowdown in China as a result of COVID 19 having a disproportionate impact on trading partners such as Angola, Zambia, Congo Brazzaville and the DRC. Data visualizations of trade flows by country can be found here. Recessionary trends at the global level and the potential for a prolonged reduction of economic growth in China will have direct impacts on commodity exports in the region ranging from copper in Zambia, precious metals in Tanzania, coltan in DRC and petroleum in Angola and the Republic of Congo.
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pdf Bulletin 5: SADC Regional Response to COVID-19 (3.48 MB)
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EALA calls for regional co-ordinated approach to combat COVID-19
Monitoring COVID-19 impacts on firms in Ethiopia: results from a high-frequency phone survey of firms (World Bank)
This note summarizes the results of the first round of the HFPS-F, implemented between 15 April and 5 May in Addis Ababa. The information presented here is based on a sample of 645 firms in the industry and services sector based on a list of registered firms provided by the Ministry of Trade and Industry. On average, firms are young and small. Approximately 13% of firms are new firms (did not exist one year ago), 30% are between 1 and 2 years, and 19% between 3 and 4 years. Only 16% of firms are 10 years or more (Figure 1). The youthfulness of firms in the sample closely matches the data on the population of firms and is a common pattern in most low-income countries. Extracts (pdf):
In the 14 days preceding the survey (between April 1 and May 4, 2020, depending on when the firm was interviewed), 42% of firms in Addis Ababa completely ceased operations (were operational zero days). On the other end, 29% of firms were operational on a full-time basis (between 10 and 14 days in the past 14 days). While there are little differences between sectors, larger firms were more likely to continue operating than smaller ones: 41% of small, medium, and large (SML) firms were operational full-time between 1 April and 21 April, compared to 29% of micro-firms and 24% of own account firms. Own-account and micro-firms were most affected by business closures (Table 2). Despite not being fully operational, only few firms report to have laid-off workers.
Firms’ revenues significantly declined since the onset of COVID-19. A staggering 37% of firms in Addis Ababa earned no revenue in the last completed month (March or April 2020, depending on the time of interview). Micro-firms were particularly hard-hit, with 41% having zero revenues (Table 4). SML enterprises were most likely to still earn revenues, which is consistent with the earlier finding that they were more likely to have remained operational (Table 2).
As a result of the COVID-19 crisis, firms face significant financial stress. The most significant financial problems firms face are paying rent (41%), paying invoices (28%), paying other expenses (27%), and paying staff wages and social security contributions (19%). There are substantial differences across size, with staff wages and social security contributions as the main financial problem for larger firms and rent as the main financial problem for micro-firms (Table 6). [Download the full suite of reports for this project]
Related World Bank analysis: Costs and trade-offs in the fight against the COVID-19 pandemic - a developing country perspective. The Brief argues that, having more limited resources and capabilities but also younger populations, developing countries face different trade-offs in their fight against COVID-19 than advanced countries do. For developing countries, the trade-off is not just between lives and the economy; rather, the challenge is preserving lives and avoiding crushed livelihoods. Different trade-offs call for context-specific strategies. For countries with older populations and higher incomes, more radical suppression measures may be optimal; while for poorer, younger countries, more moderate measures may be best. Having different trade-offs, however, provides no grounds for complacency for developing countries. The Brief concludes that the goal of saving lives and livelihoods is possible with economic and public health policies tailored to the reality of developing countries.
The World Economic Forum’s COVID-19 Risks Outlook report, A preliminary mapping and its implications, is informed by the views of nearly 350 senior risk professionals, identifies the main emerging concerns and fallouts, and analyses the pandemic’s implications and effects. This goes beyond the immediate crisis response, providing insights on the current and future global risk landscape.
WTO Members discuss trade responses to COVID-19 pandemic
At a meeting of the General Council on 15 May, WTO members exchanged views regarding trade responses to the COVID-19 pandemic. Many members said the unprecedented crisis was best addressed through enhanced cooperation and coordination among the international community, including at the WTO. More than 60 member delegations intervened at the meeting to discuss immediate responses to COVID-19 as well as longer-term strategies for addressing the adverse impact of the crisis on national economic and development prospects, as well as on the global economy as a whole. The meeting was held virtually due to continued restrictions on gatherings at WTO headquarters. David Walker, the New Zealand ambassador chairing the General Council, said in conclusion that addressing the health crisis remains the urgent priority, and that many members taking the floor noted the importance of trade in that context – namely, to keep markets open in order to facilitate the flow of essential medical goods as well as agricultural and food products.
In their interventions many members recognized the unique situation governments were currently facing. While recognizing the need to take measures necessary to ensure the supply of essential medicines and medical equipment, they stressed that any such measures must be temporary, targeted, proportional and transparent. Many developing country members that took the floor underlined the importance of flexibilities in the existing WTO agreements to respond to health emergencies, including under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). They also said access to trade finance was a concern for many developing countries as well as the impact of the current crisis on their micro-, small and medium-sized enterprises.
Joint statement by the Heads of the Organisation of African, Caribbean and Pacific States, the Caribbean Community, and the Pacific Islands Forum Secretariat on the COVID-19 pandemic. ”We recognise that while COVID-19 is the most urgent threat facing humanity today, climate change remains the greatest threat in the longer term. We also call on all countries to ensure that the economic recovery measures to tackle COVID-19 align with the goals of the Paris Agreement. The transboundary nature of this pandemic reinforces the importance of multilateralism to address our common challenges. In light of this ongoing crisis and the disproportionate socio-economic effects on countries in Africa, the Caribbean, and the Pacific, we resolve, on behalf of the organisations listed below, to coordinate our efforts and pool available resources, in order to aid our respective Member States to address the challenges posed by the COVID-19 pandemic.”
In brief:
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IFPRI’s James Thurlow: Lockdowns across Africa creating major economic loss
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Supply chain and COVID-19: UN rushes to move vital equipment to frontlines
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tralac’s COVID-19 Resources Page: news and analysis
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African regional responses to COVID-19
There is widespread recognition that the novel coronavirus is a global challenge. In order to contain the virus and address its devastating secondary effects, global collective action will be needed. While the immediate responses in Africa were very much led by national governments, as elsewhere in the world, a key question is whether and how regional responses, and regional organisations, have been able to help address the above challenges and thus their role in the recovery.
COVID-19 has firmly set foot on the African continent, affecting all African countries. Any failure to contain the virus in one country ultimately threatens the safety of others. This ‘weakest link’ characteristic calls for a coordinated response across countries. Yet, the volume of analysis of international and national responses stands in contrast to what has been written or discussed about regional responses, particularly in Africa.
This note summarises and reflects on the different roles played by the African Union and a sample of the continent’s regional organisations in shaping collective, coordinated regional responses. It finds that the AU has played an effective role in communicating about and shaping African responses, with technical legitimacy provided through the Africa CDC. The AU has also been able to inspire collective action in a unified call for international solidarity.
At the regional level, responses reflect a spectrum of cooperation and complexity – rising from information sharing; to ‘nudging’ and guiding; to active coordination of state responses, to collective action. Different RECs are managing to operate at different levels, depending on their regional and institutional histories, structural features such as the size and coherence of the REC, as well as the political economy dynamics of the countries in its region. Existing regional response capabilities also partially reflect a problem-driven response to the past West African Ebola crisis.
One can expect that the COVID-19 crisis will have a similar effect on regional health cooperation, yet its long term impact on African integration more broadly remains to be seen.
This ECDPM Discussion Paper was prepared by Alfonso Medinilla, Bruce Byiers and Philomena Apiko. The views expressed herein are those of the authors.
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Tracking trade during the COVID-19 pandemic
With the current fast-changing developments, policy makers need to know what is happening to the economy in real time, but they often must settle for data telling them what happened many weeks ago. And international trade, which links countries through a complex web of supply chains, is an area where timely information is especially valuable from a global perspective.
Most trade takes place by sea, and – for navigational safety purposes – virtually all cargo ships report their position, speed, and other information many times a day. A new IMF methodology using these data can help better inform us how international trade is affected by the COVID-19 pandemic.
Building on machine-learning techniques, we can provide better answers to simple questions such as: How big is the drop in trade activity? Should it be attributed mostly to exports or to imports?
A new approach
Using over one billion messages from ships over a period of five years, the newly-developed methodology closely replicates official trade statistics for many countries and for the world in aggregate. It is available at a daily frequency in real time, while official statistics are typically delayed by many weeks. At the global level, our indicators built from ships’ radio signals closely approximate monthly official trade statistics (with a correlation of nearly 0.9 in levels, and around 0.4 in quarter-on-quarter growth rates).
The top panel of our Chart of the Week shows a dramatic fall in Chinese exports in the wake of initial lockdown measures to contain the spread of the virus. Exports resumed in early to mid-March, though in late-April the recovery remained incomplete and showed renewed signs of weakness.
The lower two panels show that as China started reopening its economy, world exports initially recovered across the board. In the specific case of oil and related products, the recent export performance is especially strong but is not fully matched by an increase in world imports—in line with reports that crude oil is being stored at sea.
However, more recently, exports of less commoditized goods (those transported in containers, and finished vehicles) appear on course for a second dip. The situation is perhaps best reflected in the very weak readings for vehicle exports and imports as companies across the supply chain halt production and households postpone purchases of durable goods.
Daily monitoring of trade developments in real time will help provide a reliable early warning regarding potential economic contagion effects amid the pandemic.
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Supply Chain and COVID-19: UN rushes to move vital equipment to frontlines
As COVID-19 spreads to countries with poor health systems, the United Nations and its partners are racing against time to ensure that life-saving personal protective equipment and other supplies reach frontline health workers in need.
“There are a lot of pieces of a puzzle that have to be put into place at the same time,” said Paul Molinaro, Chief of Operations Support and Logistics at the World Health Organization (WHO), describing the difficulty of moving supplies to countries hardest hit by the virus.
In normal times, WHO fulfills country requests by placing orders through long-term contracts with vendors who ship cargo via freight forwarders. “The COVID-19 pandemic turned the process upside down,” he said.
Disruptions to manufacturing in China fractured global supply chains, creating shortages as demand soared. Commercial flights were grounded, trade restrictions implemented and market competition increased. These challenges created a whole new level of complexity, he explained.
“We’re sort of sailing the ship while building it at the same time,” said Mr. Molinaro. “Right now, we have a ship, and there’s a lot of holes in it. But we have a ship.”
COVID-19 Supply Chain Taskforce
In early April, the United Nations launched the COVID-19 Supply Chain Taskforce – coordinated by WHO and the World Food Programme (WFP) – to massively scale up the procurement and delivery of personal protective equipment, testing and diagnostics supplies, and biomedical equipment like ventilators and oxygen concentrators.
“Those who have the means – and the means to pay, and the means to pay it very quickly and upfront – benefit the most,” Mr. Molinaro said. Those without means could easily be left out.
The Taskforce, which also includes the World Bank, the Global Fund and others, leverages the expertise of each partner to identify procurement needs and better negotiate with suppliers. Medical supplies are a “global good” that must be accessible, he said.
After allocations are negotiated, the Taskforce puts down a funding guarantee – partly with funds raised by the COVID-19 Solidarity Response Fund for WHO.
WHO’s strength lies in offering expertise on purchasing decisions as to which rapid diagnostic tests perform best, while WFP takes care of logistics, including establishing air routes and global distribution hubs, and chartering aircraft.
The overall supply chain will be spread out across hubs in eight countries: Global hubs in are Guangzhou (China), Dubai (United Arab Emirates) and Liege (Belgium). Regional hubs are in Kuala Lumpur (Malaysia), Addis Ababa (Ethiopia), Panama City (Panama), Accra (Ghana) and Johannesburg (South Africa).
WHO Director-General Tedros Adhanom Ghebreyesus said that each month, WHO would need to ship a minimum of 100 million medical masks and gloves; up to 25 million N95 respirators, gowns and face-shields; and up to 2.5 million diagnostic tests.
Leveraging Comparative Advantage: ‘You need people who can make things move’
Learning from past experiences, World Food Programme staff members Natasha Nadazdin and Aboubacar Koisha attest to the critical importance of moving medical supplies to the frontline quickly.
Ms. Nadazdin, WFP Senior Programmer Adviser for the West Africa region, said the death toll during the 2014 Ebola crisis would have been much higher if WFP had not ventured out of its traditional areas of expertise.
“The initial thinking was: this is a medical crisis, and we cannot cross lines and we shouldn’t be doing things WHO should be doing,” she said. “But when we became aware of the potential dimensions of that crisis, then it became clear that WFP would have to get involved in a very serious way because of our logistics capacity to procure quickly and organise the supply chain.”
Mr. Koisha, WFP Regional Officer in Dakar who focused on monitoring and evaluation during the Ebola outbreak, agreed: “You need people who can make things move,” he says. “This is where WFP has a comparative advantage. We have the logistical skills – we are not doctors but we can help the doctors do their work by facilitating the right environment.”
‘Solidarity Flight’ takes off
COVID-19 presents a unique difficulty in that it has grounded most commercial cargo and passenger flights.
Tackling the problem head-on, the Supply Chain Taskforce facilitated a shipment of WHO medical cargo from Dubai to Addis Ababa by mid-April, thanks to a free flight offered by United Arab Emirates. This cargo, together with medical supplies donated by Ethiopia’s Prime Minister Abiy Ahmed and the Jack Ma Foundation, was then transported on chartered planes to other parts of Africa.
The first cargo flight, which departed Addis Ababa on 14 April, came to be known as the “Solidarity Flight,” as acts of solidarity had made it possible. It was also the first test run of the Addis Ababa hub, Mr. Molinaro said, a crucial hurdle to clear, as estimates project that 300,000 to 3.3 million Africans could perish if proper intervention measures are not taken.
The cargo included one million face masks, face shields, gloves, goggles, gowns, medical aprons – enough to protect health workers treating more than 30,000 patients across the continent. It also included thermometers, ventilators and laboratory supplies to support surveillance and detection.
“When we get the plan together, the stuff shows up, we’re able to put it on, we’re able to move it, we’re able to ship it, and it’s in quantities that make it worthwhile,” Mr. Molinaro said. “It’s fantastic. It’s why we do it.”
Despite ongoing supply chain disruptions, WHO has managed to purchase and ship millions of personal protective gear to 133 countries and diagnostic kits to 126 countries, he said.
Funding still needed
But logistics operations continue to require funding, as the World Food Programme establishes the necessary transport hubs, charters vessels and provides aircraft for cargo, health workers and other essential staff.
On 19 April, the United Nations launched an urgent appeal for $350 million to rapidly scale-up common logistics services. In a letter signed by the heads of various UN bodies, the Office for the Coordination of Humanitarian Affairs (OCHA) called on donors to support the global emergency supply system provided by WFP.
“Without these logistics common services, the global response could stutter to a halt,” they said.
WFP administration officer Chiara Camassa recalled that deploying staff was not difficult during the Ebola outbreak. But COVID-19 presents a new challenge: border closures and movement restrictions. “The effectiveness of our response ultimately depends on our staff,” she said.
By early May, WFP had set up passenger air services for United Nations and non-governmental organization staff working on the COVID-19 response, routing workers and medical cargo to the frontlines with flights to and from hubs, and a fleet of smaller aircraft moving them on to priority countries.
Once this humanitarian air bridge is fully up and running, as many as 350 passenger and cargo flights could fly each month. The United Arab Emirates is helping to advance the cause, announcing that it will dedicate a fleet of three aircraft until the end of the year.
The United Nations Children’s Fund (UNICEF) is also involved, with warehouses and distribution centres around the globe allowing it to coordinate agile responses to emergencies. Its global supply hub in Copenhagen is home to the world’s largest humanitarian warehouse, while regional hubs in Brindisi, Dubai and Panam enable the agency to working around the clock to ensure that supplies reach children in need. (See photo essays from UNICEF.)
Partnering to scale-up local production, increase ‘tech access’
Local production of medical supplies is also an essential piece of the supply chain puzzle.
As demand for medical supplies increases, countries with limited resources are often unable to purchase or produce the tools they need to mount effective responses to COVID-19. Lack of access to technical expertise, training and regulatory frameworks limit local production of essential equipment, particularly for more complex products like ventilators.
To address critical shortages, the Tech Access Partnership was launched on 12 May as part of a coordinated approach to developing countries increase their access to life-saving health technologies.
The partnership – which brings together the United Nations Technology Bank, United Nations Development Programme (UNDP), United Nations Conference on Trade and Development (UNCTAD) and WHO – aims connect manufacturers with critical expertise and emerging manufacturers in developing countries. It will also help countries develop affordable technologies and equipment that meet quality and safety standards.
“By enabling developing countries to produce these technologies themselves, we can help set them on the path to recovery,” said United Nations Technology Bank Managing Director Joshua Setipa.
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WTO Members discuss trade responses to COVID-19 pandemic
At a meeting of the General Council on 15 May, WTO members exchanged views regarding trade responses to the COVID-19 pandemic. Many members said the unprecedented crisis was best addressed through enhanced cooperation and coordination among the international community, including at the WTO.
More than 60 member delegations intervened at the meeting to discuss immediate responses to COVID-19 as well as longer-term strategies for addressing the adverse impact of the crisis on national economic and development prospects, as well as on the global economy as a whole. The meeting was held virtually due to continued restrictions on gatherings at WTO headquarters.
David Walker, the New Zealand ambassador chairing the General Council, said in conclusion that addressing the health crisis remains the urgent priority, and that many members taking the floor noted the importance of trade in that context – namely, to keep markets open in order to facilitate the flow of essential medical goods as well as agricultural and food products.
“Going forward, and as governments consider options for immediate responses to the COVID-19 crisis, as well as long-term ones, our biggest challenge in the trade sphere is to ensure that trade policies, and the work that we do as members of the WTO, are part of the solution to assist and support that recovery.”
Multilateral cooperation “is more important than ever,” he added “As a member-driven organization, there cannot have been a more important moment in our 25 year existence, as one of you put it today, for members to ‘step up and drive’.”
Director-General Roberto Azevêdo also stressed the importance of international cooperation on trade to help lift economies out of the crisis, a message that has been delivered by the G20 as well as various WTO members and groups of members in their declarations, statements and proposals.
“Restarting the global economy and reinstating confidence for businesses and households will depend not only on when the health crisis is contained, but on coordinated, coherent and cooperative international economic policy responses,” he said.
“I call upon all members to resist policies that may further disrupt supply chains and add to the strains on an already fragile global economy. To build more resilient national economies, we must build more resilient international cooperation – and a more resilient and effective multilateral trading system.”
DG Azevêdo described the WTO’s efforts to track members’ COVID-19 related trade measures as part of the organization’s monitoring and transparency mandate. More information is available on the WTO’s dedicated COVID-19 webpage here.
In their interventions many members recognized the unique situation governments were currently facing. While recognizing the need to take measures necessary to ensure the supply of essential medicines and medical equipment, they stressed that any such measures must be temporary, targeted, proportional and transparent.
Many developing country members that took the floor underlined the importance of flexibilities in the existing WTO agreements to respond to health emergencies, including under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). They also said access to trade finance was a concern for many developing countries as well as the impact of the current crisis on their micro-, small and medium-sized enterprises.
A number of members called for re-engaging in negotiations such as fisheries subsidies and cited the importance of getting the WTO back to work in earnest. Many members supported taking a decision soon on the dates and venue for the WTO’s 12th Ministerial Conference, which had been scheduled to take place in June 2020 before being postponed because of the pandemic.
The next regular General Council meeting will take place on 29 May in virtual format.
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The AU has advertised the post of executive director for STATAFRIC, based in Tunis. The closing date for applications is 11 June.
African Business: Africa’s Top 250 Companies in 2020
As African leaders slammed the brakes on economic activities and put their countries or cities into lockdown to block the spread of the coronavirus, businesses and jobs were collapsing into intensive care and could be among the biggest casualties of the health crisis. This year’s Top 250 Companies survey (pdf) highlights the overall carnage in African share valuations in the last few years and even more so in March 2020. The survey ranks African or Africa-focused companies listed on public securities exchanges according to their market valuation, also known as “market capitalisation”.
Total value for all 250 firms on the list this year is $597.7bn, down 20% from last year’s total of $748.2bn. But last year had seen a 16% fall compared to total market capitalisation of $887.1bn in March 2018 and this year’s total value is 37% below peak value of $948.3bn in 2015. The market value of the 250th company – in other words the cut-off market capitalisation to join the Top 250 list – was $195m in 2020, compared to $394m in 2018. [Companion analysis: Africa’s Top 250 Companies by region in 2020]
ICC mobilises Sub-Saharan Africa regional network to fight impact of COVID-19 (ICC)
The virtual meeting, which took place on 14 May, aimed to augment the voice of African business into global discussions, identify ways to build private sector resilience, and pave the way for a sustained economic recovery from the COVID-19 pandemic. Chaired by ICC Secretary General John W.H. Denton AO, the meeting featured speakers Hubert Danso (CEO and chairman of Africa Investors), Kiprono Kittony (vice-chair for Africa of the ICC World Chambers Federation) and Babatunde Savage (ICC Regional Coordinator for Africa). The meeting also saw participation from new ICC Executive Board member Valentina Mintah, CEO of West Blue Consulting and Vice-Chair of ICC Ghana. Discussions centered around the following themes:
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Regional and international instruments to support the private sector in Africa
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Specific mechanisms to build the resilience of micro and small enterprises
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Operationalizing the African Continental Free Trade Area
Dr Robert Mwesigwa Rukaari’s input for the ICC’s virtual meeting: The need to improve Africa’s balance of trade (New Vision)
What then can African countries do? We need to widen our export basket. We shall have to think of producing more than just the agricultural products, the furniture, footwear and garments. This calls for growing our production capacity as Africa and because of our limited resource envelope to achieve this, we shall need Foreign Direct Investment in the industrial sector. More so, Africa is largely well positioned to become the world’s food basket. Many countries on the continent are largely dependent on the sector and with proper planning and investment, they can turn into leading producers and suppliers of food around the world. This desperately needs to be harnessed. [Note: The author is the President of Uganda National Chamber of Trade and Investment]
SADC, World Bank reaffirm commitment to strengthen partnership for regional economic integration despite COVID-19 pandemic (SADC)
Through a virtual consultative meeting held on 12 May, co-chaired by the SADC Executive Secretary, Dr Stergomena Lawrence Tax, and Ms Deborah Wetzel, the Director for Regional Integration for the World Bank Group, the Southern African Development Community and the World Bank recommitted to enhance cooperation on regional economic integration in SADC, and strengthen response to COVID-19. This follows the Bank’s efforts to align its new three-year Regional Integration Strategy to SADC’s regional priorities for the period July 2020 to June 2023. During the meeting, the two parties underscored the need to strengthen collaboration to mitigate the socio-economic impact of COVID-19, which poses a risk to reverse progress made in reducing poverty and inequality. According to the preliminary findings of Secretariat’s analysis of the socio-economic impacts of COVID-19 in the SADC region, the pandemic will have short, medium and long-term negative impacts on all social and economic sectors, given its cross-cutting nature.
Monitoring the impact of COVID-19 on firms in Ethiopia (World Bank)
This document (pdf) describes the sampling design of the High Frequency Phone Survey of Firms (HFPS-F), implemented as a response to COVID-19. The survey aims at assessing the dynamics of the impacts of COVID-19 on establishments in Ethiopia. The HFPM-F will monitor the economic activities and responses to the COVID-19 crisis, particularly its effects on firm operations, revenues and jobs, by calling a sample of establishments every three weeks between mid-April and mid-September 2020 for a total of eight survey rounds. The final dataset will consist of a panel of 800 establishments (500 in Addis Ababa and 300 in four other cities; in the other cities, there will be seven instead of eight rounds).
Companies trading internationally strongly affected by COVID-19: evidence from Benin (ITC)
A survey conducted by the Chamber of Commerce and Industry of Benin reveals substantial effects on the economy. Nearly nine out of every ten enterprises interviewed in the country are affected, though some are more impacted than others are. The nature of the consequences suggests that many enterprises are facing a delicate financial situation. Several of them have already registered a drop of more than 60% in their turnover. The survey highlights the shock companies involved in international trade are facing and the disruption they experience in supply chains:
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None of the surveyed exporting firms was spared, even though impacts range from weak to strong. Conversely, 11% of importing firms and one in five non-trading firms indicated that they did not feel any impact at all.
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Nearly double the percentage of exporting and importing enterprises said they are strongly affected: 69% and 61% respectively said COVID-19 had a strong impact on them, compared to the 37% of enterprises not participating in international trade that said the same. [The author, Raymond Adjakpa Abile, is the Secretary General of the Chamber of Commerce and Industry of Benin]
Rwanda plans life beyond Covid-19 with food reserves (New Times)
Rwanda has drawn up a recovery plan that includes storing up an equivalent of maize and beans for 10 per cent of the population at 2,500 kilocalories per person per day, in a bid to ensure strong food reserves after the pandemic is defeated. “This shall be achieved by increasing resources for National Strategic Reserves to stock food, by supporting the districts to establish their own district food reserves and mobilising farmers to have community stores as well as storage facilities at the household level,” the Economic Recovery Plan says. A fund was also established to support businesses and small, medium enterprises in the sectors hit hardest by the pandemic. These Covid-19-related interventions are estimated to cost Rwf882 billion ($934 million) over the two fiscal years 2019/20 and 2020/21, equivalent to an increase in fiscal deficit of about 4.4 per cent of GDP on average per year according to government.
Kenya predicts 30% EAC export fall on Covid rules (Business Daily)
Kenya is predicting a drop by at least 30% of its exports to the East African markets as the public health measures adopted in the wake of Covid-19 outbreak slow cross-border trade. Kenya, which exported Sh140 billion worth of merchandise to the five EAC market last years, is particularly concerned about the huge number of truck drivers testing positive for Covid-19 at the borders with Uganda and Tanzania. Uganda and Tanzania remained the leading destinations of Kenyan goods accounting for Sh64 billion and Sh33 billion of Kenya’s exports to EAC respectively. “We believe with current delays at the border points, trade volumes will fall by at least 30 percent this year,” EAC and Regional Development Cabinet secretary Adan Mohamed told Citizen TV last week. “Trucks that normally take three days to move from Mombasa to Kampala now take eight days. If this continues for up to six months the drastic will affect the demand side as well.”
India draws 5 markers at WTO: says “no” to using pandemic as portal for trade commitments (Hindu Business Line)
India’s trade envoy JS Deepak on Friday drew five markers for combating Covid-19 at the World Trade Organization, pushing back against egregious efforts by major industrialised countries to extract trade-liberalisation commitments from India and other developing countries by using the pandemic as a portal. In a hard-hitting intervention at the virtual General Council meeting on 15 May. Deepak said: “The economic hardship and other negative repercussions of Covid-19 make carrying on with negotiations in a business-as-usual format untenable.” Deepak drew five markers.
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First, India acknowledges “the importance of coordinating the global response in a way that avoids unnecessary disruption in the flow of vital medical supplies, food and other goods and services across borders.”
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Second, India remains committed to taking emergency measures for combating Covid-19 on a “targeted, proportionate, transparent, and temporary” basis.
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Third, attempts to prohibit the use of export restrictions on medical and agricultural products are untenable because “developing countries being unable to match the deep pockets of buyers in developed countries will see these products vanish in times of shortage.”
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Fourth, “if WTO members are serious about trade-related measures aimed at combating Covid-19, then a useful starting point would be to enable the use of TRIPs (trade-related intellectual properties) flexibilities to ensure access to essential medicines, treatments and vaccines at affordable prices.”
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And fifth, Covid-19 has underlined “the urgent need to build the capacity of developing countries and LDCs in areas like digital skills and broadband infrastructure, rather than negotiating binding rules on e-commerce, which will freeze the non-level playing field against their interests.”
South Africa’s trade envoy Xolelwa-Mlumbi Peter: ”We cannot agree to proposals for global rule-making that limit our policy options to respond to the crisis, enhance our preparedness for future crises and to pursue our plans for economic recovery. It is not advisable to make binding decisions in a policy environment that is manifestly uncertain, including on tariffs and export restrictions which are legal in the WTO rule book.”
The Gambia Systematic Country Diagnostic: Overcoming a no-growth legacy (World Bank)
The Gambia’s small size limits its ability to establish spillover effects from foreign direct investment. Foreign direct investments have played a key role in the economy, representing 33% of GDP in terms of stock in 2016, above Senegal (25%) and the average of ECOWAS countries (29%). However, The Gambia lags behind structural and aspirational peers in terms of FDI flows per capita. During 2012–16, FDI flows represented about $11 per capita, three times lower than the ECOWAS average of $36. FDI flows into The Gambia have been declining since 2007, when they reached $80m, or almost 10% of GDP. Because of the country’s small size, the interaction between foreign and domestic firms may be limited, hindering any positive benefits from FDI. Relative to the number of large enterprises (10 or more paid employees) in The Gambia (707 enterprises), the number of foreign companies is small. Only 24 foreign companies were operational in 2013, as reported by The Gambia Investment and Export Promotion Agency.
Like other small states, The Gambia has had difficulty diversifying its exports beyond a small set of trading partners. It exhibits an open economy with a specialized export structure (pdf). Merchandise exports are concentrated in fewer markets (and products) than most of its structural and aspirational peers. The Hirschman-Herfindahl (HH) Index of export products, a measure of economic diversification, was 0.45 in 2018, which illustrates an elevated level of concentration compared to peers in SSA, including Mauritania (0.31), Rwanda (0.38), Senegal (0.24), and Uganda (0.27).
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SADC, World Bank reaffirm commitment to strengthen partnership for regional economic integration despite COVID-19 pandemic
Through a virtual consultative meeting held on 12 May, 2020, co-chaired by the SADC Executive Secretary, Her Excellency Dr. Stergomena Lawrence Tax, and Ms. Deborah Wetzel, the Director for Regional Integration for the World Bank Group, the Southern African Development Community (SADC) and the World Bank recommitted to enhance cooperation on regional economic integration in SADC, and strengthen response to COVID-19. This follows the Bank’s efforts to align its new three-year Regional Integration Strategy to SADC’s regional priorities for the period July 2020 to June 2023.
During the meeting, the two parties underscored the need to strengthen collaboration to mitigate the socio-economic impact of COVID-19, which poses a risk to reverse progress made in reducing poverty and inequality. According to the preliminary findings of Secretariat’s analysis of the socio-economic impacts of COVID-19 in the SADC region, the pandemic will have short, medium and long-term negative impacts on all social and economic sectors, given its cross-cutting nature. In view of this, SADC informed the meeting that the Region has taken various measures aimed at containing the spread of COVID-19, mitigating socio-economic effects, and ensuring economic recovery and growth at both regional and national levels.
SADC expressed appreciation to the World Bank for its continued support to the SADC region, through various programmes in Member States and at SADC Secretariat and affiliated organizations, adding that the development of the Bank’s Regional Integration Strategy comes at a critical time when the SADC region is developing its Vision 2050 and the new Regional Indicative Strategic Development Plan (RISDP) for the period from 2020 to 2030, and the region would require innovative and practical support/partnership to recover from the devastating effects of the COVID-19 pandemic.
Responding to this, the World Bank indicated that the response of World Bank in relation to the COVID-19 pandemic is focusing on protecting lives, livelihoods and the future, which entail putting in place prevention, detection and treatment of the disease; supporting household incomes and supporting investment in recovery and growth, to create the foundations for the future. The Bank, further highlighted that the development of the Regional Integration Strategy demonstrates the willingness of the Bank to partner with Regional Economic Communities (RECs) such as, SADC in recognition of the need to create linkages between national and regional priorities to realise sustainable economic growth and, ultimately end poverty and inequality in the region.
The meeting noted that the Bank’s Thematic Areas of Connectivity; Trade and Market Integration; Human Capital; and Resilience to support regional integration, are in line with SADC’s priorities as outlined in the SADC Regional Infrastructure Development Master Plan (RIDMP); the Regional Agricultural Investment Plan (RAIP) (2017-2022); the SADC Industrialization Strategy and Roadmap (2015-2063); the draft Regional Indicative Strategic Development Plan (2020-2030), and other strategic frameworks.
Related downloads:
pdf Regional Infrastructure Development Master Plan: Executive Summary (3.93 MB)
pdf SADC Industrialisation Strategy and Roadmap 2015-2063 (2.34 MB)
pdf SADC Revised RISDP 2015-2020: Summary (1.04 MB)
On industrialisation and market integration, SADC highlighted the need to support SADC regional industrialization and market integration through regional value chains, with increased support to sectors such as the pharmaceutical and agro-processing, which should be accompanied by, among others, improved capacity to produce and trade through infrastructure development, especially cross-border transportation and energy as enablers of industrialization and sustainable economic growth.
The meeting further underscored the need for joint actions that foster integration, and linkage between national and regional priorities, recognizing that Member States are the main implementers of programmes for Regional Integration. Support in preparing for pandemics and disease surveillance by putting in place risk reduction and early warning systems for early detection and early response to pandemics and disaster outbreaks, were presented as SADC priorities. The meeting also noted the important role of the private sector in fostering regional economic integration.
The SADC Executive Secretary was joined in the virtual meeting by the Deputy Executive Secretary for Regional Integration, Dr Thembinkosi Mhlongo; Deputy Executive Secretary for Corporate Affairs, Ambassador Joseph Nourrice; Directors and other officials. From the World Bank, Ms. Deborah Wetzel was joined by the Bank’s Country Directors responsible for SADC Member States, and other senior officials.
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ICC mobilises Sub-Saharan Africa regional network to fight impact of COVID-19
ICC convened a landmark Sub-Saharan Africa regional meeting this week bringing together participants from close to 20 African countries.
The virtual meeting, which took place on 14 May, aimed to augment the voice of African business into global discussions, identify ways to build private sector resilience, and pave the way for a sustained economic recovery from the COVID-19 pandemic.
Chaired by ICC Secretary General John W.H. Denton AO, the meeting featured speakers Hubert Danso, CEO and Chairman of Africa Investors, Kiprono Kittony, Vice-Chair for Africa of the ICC World Chambers Federation, and Babatunde Savage, ICC Regional Coordinator for Africa. The meeting also saw participation from new ICC Executive Board member Valentina Mintah, CEO of West Blue Consulting and Vice-Chair of ICC Ghana.
Discussions during the call were centered around the following themes:
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Regional and international instruments to support the private sector in Africa
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Specific mechanisms to build the resilience of micro and small enterprises
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Operationalizing the African Continental Free Trade Area
The outcomes of this meeting and future meetings of the group will be shared with relevant regional institutions, including the African Union and the African Development Bank.
ICC’s unprecedented mobilisation of its network in Sub-Saharan Africa has resulted in engagement by more than 180 chambers in 47 African countries to tackle COVID-19. Outreach has also been facilitated through ICC representative bodies – known as national committees – in Burkina Faso, Ghana, Kenya, Nigeria and South Africa as well as through members in Angola, Benin, Côte d’Ivoire, Ethiopia, Liberia, Madagascar, Mauritius, Senegal, Tanzania, Uganda and Zambia. ICC’s network also includes three transnational chambers. They are the Pan African Chamber of Commerce and Industry (PACCI), the Federation of West African Chambers of Commerce and Industry (FEWACCI) and the Union of Chambers of Commerce and Industry of the Indian Ocean (UCCIOI).
The Sub-Saharan Africa regional meeting was the latest in a series of ICC outreach initiatives aimed at addressing the impact of the COVID crisis on the private sector in Africa.
On 30 April, Mr Denton took part in a historic summit to discuss the impact of COVID-19 on the African Continental Free Trade Area (AfCFTA) which highlighted the urgent need for harmonised regulation to help the African private sector – in particular SMEs – to digitise their businesses to be able to trade and compete in the COVID-19 era.
Mr Denton also participated in an Africa Investor Sovereign Wealth Funds Webinar and the African eTrade and RegTech Innovation Leaders Dialogue. As part of a series of regional outreach engagements with the United Nations to support ICC’s global SaveOurSMEs campaign, Mr Denton has also met virtually with the United Nations Economic Commission for Africa.
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Launching the African Approach on the Regional Consultation on the Global Forum on Migration and Development
The African Union Commission, through the Department of Social Affairs (DSA) and the Directorate of the Citizen and Diaspora Organizations (CIDO), launched the African Meeting of the Regional Consultations on the Global Forum on Migration and Development (GFMD) on 12 May 2020, alongside the United Arab Emirates, the chair of the GFMD for 2020.
The focus of the GFMD 2020 is on labour migration and development, as it transpired from the preliminary vision for the UAE’s 2020 Chairmanship, and from the overarching theme of “The Future of Human Mobility: Innovative Partnerships for Sustainable Development”.
The core objective of the 2020 GFMD is to establish partnerships and cooperation between countries and other stakeholders on the six thematic streams:
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The Governance of Labour Migration in the Context of Changing Employment Landscapes;
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Skilling Migrants for Employment;
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Leveraging New Technologies to Empower Migrants;
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Addressing Gaps in Migrant Protection;
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Discussing Approaches to Prevent Irregular Migration; and
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Fostering Partnerships to Realise Migration-Related Goals in the Sustainable Development Agenda.
The African region opted to organize its consultation on three themes, essential for the continent’s development: The Governance of Labour Migration in the Context of Changing Employment Landscapes; Skilling Migrants for Employment; and Addressing Gaps in Migrant Protection.
On the Governance of Labour Migration, Africa foresees an effective human-centred approach to be the cornerstone of international cooperation on migration and labour migration governance. An effective response to changing employment landscapes requires a whole-of-society and whole-of-government approach. The AU’s approach involves the key stakeholders in all aspects of the labour migration governance, from the policy formulation process to the implementation and monitoring/evaluation.
On Skilling Migrants for Employment. Africa realizes that while many continents continue to have ageing labour populations, its labour force will continue to grow. As it stands Africa has a large proportion of low skilled migrant workers, which necessitates the adoption of the African Continental Qualifications Framework (ACQF) to enable African countries to link their qualifications and enhance comparability and transparency of qualifications, thus building the basis of an effective mobility of skills within the continent, and beyond.
On Addressing Gaps in Migrant Protection; Africa aims is to see better protection of migrants and migrant workers, respecting their rights and informing them on their rights. This necessitates that institutions working on labour migration, and particularly the Private Placement Agencies, to be more regulated and assisted to enforce the regulation.
In the current COVID-19 context, Africa is experiencing a few challenges and foreseeing others. Amongst those challenges is the protection of the vulnerable migrant workers especially undocumented migrants who are subjected to poor living conditions and face difficulties in accessing healthcare, food and medicine. Other challenges manifest themselves in job losses, reduces remittances, forced repatriations, increased discrimination, undue securitization of unarmed irregular migrants and xenophobia against migrant workers.
To achieve the continent’s goals and alleviate the COVID-19 challenges, Africa seeks to optimize the partnerships mechanisms and leverage on the potential of strategic migration management. These will be realized by investing in partnerships with the different stakeholders, represented by the Member States (governments) as well as non-state actors which include Civil Society Organizations, Social partners’ organizations, diaspora organizations representing the 6th Region of Africa employers and workers oragnizations, for a participatory and effective policy dialogue processes.
Guided by the Continental frameworks represented in Agenda 2063; the Migration Policy Framework for Africa (MPFA); the Global African Diaspora Summit (GADS), the Joint Labour Migration Policy framework (JLMP), and the global frameworks represented by the Global Compact for Safe, Orderly and Regular Migration, and the GFMD, Africa will forge ahead in the migration for development discourse into the Africa we want.
Documents from the 2020 GFMD Online Regional Consultations can be found here.
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tralac’s Daily News selection
Updates on the closure of the Nakonde border post, COVID-19 testing for truck drivers
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Zambia reopens border with Tanzania to cargo after COVID-19 closure. ”Trucks from both sides have been moving, starting with those destined for Tanzania,” Malozo Sichone, the minister of Zambia’s Muchinga province, said in response to a request for comment. A mining industry executive said the border had opened for copper exports from noon on Friday. A logistics official said: “We have trucks that have already crossed.”
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Truck drivers will now undergo mandatory Covid-19 tests before they leave the country, The Citizen has learnt. The decision was reached during a meeting that brought together transport operators and officials from the Health ministry. The Tanzania Association of Transporters and Tanzania Truck Owners Association have confirmed the development. “It is true. Beginning on May 18, truck drivers will be tested before picking up cargo from Dar es Salaam port. They will then be issued with a 14-day clearance certificate,” the TAT chief operations officer, Mr Hussein Wandwi, told The Citizen yesterday.
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Foreign Affairs Ministers of Rwanda and Tanzania will today (Friday) hold discussions on the way forward in regard to cross border movement of freight trucks. The development was confirmed by foreign minister and Government Spokesperson Vincent Biruta in a news conference on Friday morning. Currently, over 1000 trucks destined for Rwanda are stuck in the Tanzanian border town of Benako, after some Tanzanian truck drivers protested the requirements by Rwanda to adopt a relay system handing over their trucks to Rwandan drivers.
Updates on African debt relief issues
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Kenya eschews G20 debt relief initiative over restrictive terms. Kenya will not seek a suspension of debt payments under a G20 initiative aimed at helping poor countries weather the COVID-19 pandemic, its finance minister said on Friday, saying the terms of the deal were too restrictive. Minister Ukur Yatani told Reuters in an interview he was also concerned about the impact that debt relief might have on Kenya’s credit rating. But Yatani said he was concerned that terms of the deal limiting countries’ access to international capital markets during the standstill could hinder Kenya’s ability to finance its deficit later in the year. “We fear we might unnecessarily create a crisis,” he said.
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Private creditors establish the Africa Private Creditor Working Group. The Africa Private Creditor Working Group is an initiative to represent the views of international private creditors invested in Africa and to work with countries on their financing needs during the COVID-19 crisis. The AfricaPCWG will provide African Governments, the UNECA, the G20, the IMF and other Multilateral Development Banks a forum through which all stakeholders can engage transparently and constructively with different categories of private international investors in African sovereign and corporate debt to coordinate the resolution of broad issues arising due to the COVID-19 crisis. The AfricaPCWG is coordinating the views of over 25 of the world’s foremost asset managers and financial institutions providing private finance to nations and companies through Eurobonds, syndicated loans, trade finance and other credit structures across the continent of Africa. These investors bring significant expertise and experience in Africa and other Emerging Markets, and represent total assets under management in excess of $9 trillion. Participants in the AfricaPCWG forum have already established a number of core principles of engagement. Upmost amongst these is the belief that a one-size-fits-all solution will be counter-productive for the nations and people of Africa.
COMESA ministers approve harmonized regional trade facilitation guidelines. COMESA will develop an online platform for exchanging information on availability of essential products within the COMESA Member States as part of the response measures to the COVID-19 pandemic. This was among key decisions made by the extra-ordinary meeting of the COMESA Council of Ministers on Thursday. The virtual meeting was convened to approve a harmonized set of regional guidelines developed to facilitate movement of goods and services across the region during the COVID-19 pandemic. It was led by the Minister of Industry and Commerce of Madagascar, Hon Madame Lantosoa Rakotomalala, who is the chairperson of the Council. The new guidelines provide common measures and practices to be applied across the 21 COMESA countries. In developing the guidelines, reference was made to those of the those of the EAC, SADC and the AU to ensure a seamless application of trade facilitation measures in the region.
An interview with AfCFTA Secretariat Secretary General Wamkele Mene: Implementing the AfCFTA is the best stimulus for post-COVID-19 economies (Africa Renewal)
Q: Given the current situation, any idea when free trading can begin? A: We have recommended to the AU Assembly of Heads of State, which is the body with the authority to delay the trading date, that given the current public health crisis and the need for some technical work to be concluded, that we cannot meaningfully trade [under AfCFTA] on 1 July.
Q: Does this mean free trading will not begin until the pandemic is defeated? A: We are exploring other ways of continuing our technical work if the pandemic continues. Trade negotiations are very technical. We negotiate in four languages (English, French, Arabic, Portuguese). We must make provision for the different time zones in Africa. And there are requirements for confidentiality. All these have to be taken into account before we can continue the negotiations, if at all we are able to continue the negotiations on virtual platforms. We would like to resume our work as soon as the pandemic is contained. But if for whatever reason, the pandemic continues, which we hope it will not, we are exploring other ways of advancing our negotiations.
Q: Do you discourage countries from entering into bilateral trade agreements? A: Under the agreement, countries can enter into agreements with third parties provided they give African countries similar or better treatment than they are giving to the third party. So, in terms of AfCFTA law, it is allowed. But as a political objective of integrating and consolidating our market first, it is obviously desirable that countries desist from doing so.
pdf G20 Trade and Investment Ministerial Meeting: statement (131 KB)
We will continue monitoring the situation closely, assessing the impact of the pandemic on trade, and convene again as necessary. We task the G20 Trade and Investment Work Group to continue paying the highest attention to these actions and to provide status updates on the implementation of the agreed actions.
Trade facilitation (extracts):
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Speed up and streamline customs procedures, in line with the WTO Trade Facilitation Agreement and encourage the use of electronic documentation and processes, where possible and practical, including use of smart applications
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Reduce sanitary and technical barriers by encouraging greater use of relevant existing international standards and ensuring access of information on relevant standards is not a barrier to enabling production of PPE and medical supplies
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Share necessary information within the G20 regarding medical suppliers, as appropriate and according with applicable national legislation, so as to facilitate trade deals
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Encourage G20 Digital Ministers to promote the application of online services and e-commerce, in accordance with national laws and regulations, to facilitate the flow of essential goods and services during the pandemic
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Encourage our Governments to facilitate the resumption of essential crossborder travel, in accordance with national laws and regulations, while safeguarding public health in line with our efforts to combat the pandemic as well as to minimize the socio-economic impacts of COVID-19
Support for micro, small, and medium-sized enterprises:
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Call for international organizations to prepare in-depth reports, within their mandates, on the disruption of global value chains caused by the pandemic on MSMEs
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Encourage enhancement of communication channels and networks for MSMEs, including through deepened collaboration with the private sector
Joint statement on micro, small, and medium-sized enterprises: history and latest developments in the Informal Working Group (IISD)
The past four years have seen the subject of micro, small, and medium-sized enterprises grow in profile at the WTO, where a group of its members has been examining what challenges these smaller companies face when engaging in world trade and how these can be alleviated. Heading into the WTO’s Twelfth Ministerial Conference (MC12), an informal working group of over 90 WTO Members dedicated to the issue has been working toward advancing a series of “outcomes” that could be presented at the event, along with pushing to formalize their work at the institution.
These discussions are unusual among WTO Members in that they focus on different categories of businesses, trying to unpack in detail how existing trade policy and practice may have varying effects depending on business size, especially relative to larger actors. A similar effort is underway by various WTO Members and Observers to consider how trade policy and practice affect women differently than men across multiple issue areas. Neither the discussion on MSMEs nor on gender is aiming to negotiate new rules, which is another notable difference in approach from current practice at the WTO. At the time of this writing, the Informal Working Group on MSMEs was still discussing what outcomes they could present for MC12, what form these might take, and whether they will obtain the necessary support ahead of the ministerial to present them as consensus documents.
The brief (pdf) was written primarily for trade negotiators in Geneva and in world capitals, regardless of whether their governments are involved in these MSME discussions. It also briefly considers related developments in regional trade agreements (RTAs) and in non-negotiating international forums that have taken place over the past 15 years, as well as the gender and social inclusion elements that have been raised in MSME-related trade discussions. [WTO: pdf Statement on highlighting the importance of MSMEs in the time of COVID-19 (66 KB) ]
Electronic World Trade Platform Rwanda: rekindling sales for African businesses during COVID-19 (UNECA)
Ms Vera Songwe, Executive Secretary of the Economic Commission for Africa: “COVID-19 is particularly endangering global trade. That is why I am very happy to be part of this Electronic World Trading Platform (eWTP) initiative with the Alibaba business group. Africa, which has already been trading with China, can improve trading at this time based on a number of goods on which it possesses comparative advantage.”Rwanda is already trading its Rwandan chili and Coffee. We hope that with the eWTP, we can put more goods from the continent notably, coffee from Ethiopia, Shear Butter from Mali, white pepper from Cameroon, Vanilla from the Comoros Islands and Saffron from Madagascar, among others, on the platform.”.
Mr Eric Jing, Alibaba Group Director and Executive Chairman of Ant Group: “We want to support SMEs worldwide to recover from the outbreak, resume production and secure orders in their times of need. Through today’s livestream, we look forward to reopening global trade, starting with helping businesses reopen.” First proposed by Alibaba Group founder Jack Ma in 2016, the eWTP has been recognized by the G20 and launched in China, Malaysia, Belgium, Rwanda and Ethiopia. It is a private sector-led, multi-stakeholder initiative offering SMEs easier access to new markets via simple and straightforward regulations. It also offers training and support in areas such as e-commerce, logistics, financing, cloud computing and mobile payments.
pdf Recommendations to leverage e-commerce during the COVID-19 crisis (285 KB) (World Bank)
Public policy can only play an enabling role, tackling market failures and creating an environment in which digital entrepreneurship can thrive. This guidance note highlights 13 key measures that governments can take in the short term to support e-commerce during the ongoing crisis. The first group of measures aims to help more businesses and households to connect to the digital economy during the crisis. The second group of measures aims to ensure that e-commerce can continue to serve the public in a way that is safe, even during the COVID-19 lockdown. The third group of measures aims to ensure that the government’s e-commerce strategy during the crisis is clearly communicated, implemented, and coordinated with other policy measures.
Trade in COVID-19-related medical goods: Issues and challenges for Commonwealth countries (Commonwealth Secretariat)
Overall, there is very low intra-Commonwealth trade in COVID-19-related products (Table A2). However, the pattern is somewhat more promising at the regional level, where there is higher dependence on Commonwealth suppliers in Africa (India, South Africa) and the Pacific (Australia, India, New Zealand). For Commonwealth Africa, India is the leading supplier of COVID-related goods (27%), which is almost three times more than France and Germany. There is some intra-African trade in these products as well, with South Africa providing more than 7% of the region’s overall imports of COVID-19-related goods and a large share of protective gear. The supply of ventilators is more diverse: two EU member countries – Germany and the Netherlands – contribute more than a quarter of imports, whereas the USA and China account for 21% and 14%, respectively. India provides around one third of the region’s PPE imports.
The tariff profile of Commonwealth members prior to the outbreak of the pandemic shows that developing country members levied higher import taxes on future COVID-19 goods compared with the world average (10.7% and 9.2%, respectively) (Figure 5). By comparison, the developed economy members had low tariffs – 3.5%. Some of the medical goods deemed essential for containing the spread of the virus have tariff peaks of more than 10% in Commonwealth developing countries. These include hand soap (17), disinfectants (12.9%) and PPE (around 14%). However, these averages mask wide variations and significant tariff peaks in some member countries, especially LDCs (Box 4). Overall, WTO data suggests most Commonwealth developing countries have retained their existing tariff regime for tackling the pandemic, with only a handful of countries easing import barriers on a temporary basis. By comparison, most developed economy members have further reduced the incidence of tariff protection on COVID-19 goods, which, as demonstrated, is already low. [The authors: Brendan Vickers, Salamat Ali, Collin Zhuawu]
African Energy Ministers agree on common strategy for COVID-19 response and recovery (AU)
The Bureau adopted a declaration calling for various measures to provide energy for critical health facilities and front line services in response to the COVID-19 pandemic. The Declaration expresses the Member States’ commitment to work together to ensure a coordinated continental response to the pandemic and joint strategy for recovery after the crisis. Recognising the critical role of power utilities, the Declaration called on Member States to support them to cope with low demand and reduction in revenues while continuing their mandate of providing electricity services. It further called for the promotion of clean cooking technologies to reduce incidences of indoor air pollution which is responsible for respiratory diseases that could aggravate the impact of COVID-19 in case of infection. The Bureau called for support for energy for water pumping and setting up of potable water stations to promote hygiene measures instituted to fight the spread of the coronavirus.
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COMESA ministers approve harmonized regional trade facilitation guidelines
COMESA will develop an online platform for exchanging information on availability of essential products within the COMESA Member States as part of the response measures to the COVID-19 pandemic. This was among key decisions made by the extra-ordinary meeting of the COMESA Council of Ministers, Thursday, May 14, 2020.
The virtual meeting was convened to approve a harmonized set of regional guidelines developed to facilitate movement of goods and services across the region during the COVID-19 pandemic. It was led by the Minister of Industry and Commerce of Madagascar, Hon. Madame Lantosoa Rakotomalala, who is the chairperson of the Council.
The new guidelines provide common measures and practices to be applied across the 21 COMESA countries. In developing the guidelines, reference was made to those of the those of the East African Community, the Southern African Development Community and the African Union to ensure a seamless application of trade facilitation measures in the region.
The meeting brought together ministers in charge of coordination of COMESA activities at the national level. They underscored the need for an online platform for exchange of information on availability of essential products within the COMESA Member States during and after the COVID-19 pandemic period.
In her statement to the Council, COMESA Secretary General Chileshe Kapwepwe, said the regional guidelines were now critical for a coordinated and harmonized response, to ensure the collective efforts served to reinforce, and not undermine each other.
“The impact of COVID-19 has made it clear that as a region we need to strengthen and integrate regional policies to take into account the adverse social-economic and political impacts and to develop strategies to support and facilitate quick recovery of our economies,” she said.
The Guidelines sees to address disruptions in the regional supply of essential goods, which have been attributed to the diverse COVID-19 measures being applied in Member States. Such disruptions have affected the flow of essential commodities including food and pharmaceuticals.
Under the guidelines, Member States will electronically publish any newly introduced trade and customs-related measures in response to the pandemic and share it periodically with the COMESA Secretariat.
Indicative lists of essential goods, based on the latest Editions of the World Customs Organization (WCO) Harmonized System (HS) classifications, will also be published to facilitate clearance of customs and border requirements.
The guidelines provide common measures and practices to be applied across the COMESA region and covers facilitation of cross-border movement of relief and essential supplies, transportation of goods and cross border freight transport operations, regulation and control of trucks/vehicles, aircraft and vessels carrying essential goods and services.
They also cover trade in services, customs/revenue authorities support to the economy and sustaining of supply chain continuity and monitoring and evaluation mechanism and sharing of best practices.
A socioeconomic study will be conducted by the COMESA Secretariat analyzing the impact of COVID-19 in Member States. The study will inform additional response and mitigation interventions.
In addition, the ministers approved a reduction of 10% of the Secretariat budget following suppressed activities as a result of the COVID-19 pandemic and confer the benefit to the Member States in their annual contributions.
The ministers also agreed on the need to ease export/import restrictions to facilitate movement of pharmaceutical and other essential goods as well as free movement of health professionals across the region.
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Covid-19 and export restrictions: The limits of international trade law and lessons for the AfCFTA
The Economic Commission for Africa (ECA) today released a Policy Brief which provides a preliminary analysis, from an African perspective, of the limits of international trade law in times of crisis such as now and offers powerful policy recommendations for African policy makers to consider.
Following a brief analysis of the law of international trade as it applies to the movement of Covid-19-essential goods, the study concludes that, in times of real emergency such as now, the role of law in assuring access to essential medical supplies on the international market is highly diminished. The impact has been severe especially on those countries that lack sufficient local manufacturing capacity.
In a global economic model in which Africa exports predominantly primary commodities and imports mainly finished products, the crisis has left Africa facing a double whammy: (i) the economic lockdown in much of the world has sent the price of commodities to record lows, thereby causing significant and dramatic declines in much-needed foreign exchange revenues for most resource-dependent African countries; and (ii) when advanced countries with production and supply capacity impose restrictions on the export of essential medical supplies, the inevitable outcome has been a sudden drop in supplies, a jump in prices, and an equally dramatic escalation in import bills for African countries at a time when their already meagre resources are overstretched.
Considering the structural nature of the challenge, there is little that can be done in the short term. As a consequence, much of Africa is once again forced to rely heavily on the charity of others. This is unsustainable. Four major lessons emerge from the analysis.
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Industrialisation: first comes the industrialisation imperative. If the economic case for industrialisation and related diversification in Africa has been compelling for too long, Covid-19 now makes it a matter of survival for the Continent and its citizens.
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Research and Development: then comes the need for an infrastructure of knowledge made up of skilled manpower to maintain a degree of research and development capacity. Africa can succeed in its industrialisation and diversification drive only if it is underpinned by robust R&D strategy and knowledge base.
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Effective multilateralism: not only does industrialisation take time, even an industrialised Africa with a diversified economic base will need to put trade with the rest of the world at the centre of its strategy for supply security in all sectors, enabling African manufacturers to be part of well-functioning regional and global value chains. As such, Africa needs to continue to advocate for effective multilateralism in trade that ensures the rules of the game are tightened and applied by its members in good faith, in the collective interest, and with a sense of solidarity.
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Revisiting the AfCFTA Agreement: finally, learning from the deficiencies of the global trading system exposed by Covid-19, and considering that Covid-19 struck while Africa was preparing to launch the operational phase of the AfCFTA, Africa should use this window of opportunity to revisit the provisions of the AfCFTA Agreement and craft additional rules to guarantee the freest possible flow of trade in essential products at times of difficulty such as this.
Commenting on the Policy Brief, David Luke, Coordinator of ECA's African Trade policy Centre, said: it is clear that trade law cannot guarantee open markets in times of crisis such as the current global pandemic. There is scope for the AfCFTA Secretariat and the Committees on Trade in Goods and Trade in Services, when up and running, to revisit this issue and find creative solutions.
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tralac’s Daily News selection
WTO Director-General Roberto Azevedo plans to depart: The WTO will make an announcement Thursday about its Director-General Roberto Azevedo, a spokesman said, following reports he is planning to step down before his term expires next year. The comment came after Bloomberg reported that Azevedo had told governments he planned to step down before the end of his mandate, with the news agency suggesting he would leave on 1 September.
Covid-19 and export restrictions: The limits of international trade law and lessons for the AfCFTA (ECA)
The Economic Commission for Africa today released a policy brief which provides a preliminary analysis, from an African perspective, of the limits of international trade law in times of crisis such as now and offers powerful policy recommendations for African policy makers to consider. Following a brief analysis of the law of international trade as it applies to the movement of Covid-19-essential goods, the study concludes that, in times of real emergency such as now, the role of law in assuring access to essential medical supplies on the international market is highly diminished. The impact has been severe especially on those countries that lack sufficient local manufacturing capacity. Four major lessons emerge from the analysis:
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Industrialisation: first comes the industrialisation imperative. If the economic case for industrialisation and related diversification in Africa has been compelling for too long, Covid-19 now makes it a matter of survival for the Continent and its citizens.
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Research and Development: then comes the need for an infrastructure of knowledge made up of skilled manpower to maintain a degree of research and development capacity. Africa can succeed in its industrialisation and diversification drive only if it is underpinned by robust R&D strategy and knowledge base.
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Effective multilateralism: not only does industrialisation take time, even an industrialised Africa with a diversified economic base will need to put trade with the rest of the world at the centre of its strategy for supply security in all sectors, enabling African manufacturers to be part of well-functioning regional and global value chains. As such, Africa needs to continue to advocate for effective multilateralism in trade that ensures the rules of the game are tightened and applied by its members in good faith, in the collective interest, and with a sense of solidarity.
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Revisiting the AfCFTA Agreement: finally, learning from the deficiencies of the global trading system exposed by Covid-19, and considering that Covid-19 struck while Africa was preparing to launch the operational phase of the AfCFTA, Africa should use this window of opportunity to revisit the provisions of the AfCFTA Agreement and craft additional rules to guarantee the freest possible flow of trade in essential products at times of difficulty such as this. [COVID-19: Revamping Africa’s telecoms infrastructure crucial for digital health services]
COVID-19 triggers marked decline in global trade, new data shows (UNCTAD)
The coronavirus pandemic cut global trade values by 3% in the first quarter of this year, according to the latest UNCTAD data published in a joint report by 36 international organizations. The downturn is expected to accelerate in the second quarter, with global trade projected to record a quarter-on-quarter decline of 27%, according to the report by the Committee for the Coordination of Statistical Activities. The report is a product of cooperation between the international statistics community and national statistical offices and systems around the world, coordinated by UNCTAD. “Everywhere governments are pressed to make post-COVID-19 recovery decisions with long-lasting consequences,” UNCTAD Secretary-General Mukhisa Kituyi said. “Those decisions should be informed by the best available information and data. I’m proud that UNCTAD has played a central role in bringing so many international organizations together to compile valuable facts and figures to support the response to the pandemic.”
According to the report, the drop in global trade is accompanied by marked decreases in commodity prices, which have fallen precipitously since December last year. Next, UNCTAD will release a new monthly trade nowcast, which will provide quarterly nowcasts for merchandise trade. It is also revamping its existing Trade-in-Services bulletin that monitors the latest trends in global trade in services. Future editions will include a nowcast for the latest quarter.
IMF podcast with Papa N’Diaye (Head of Research in the IMF’s African Department): N’Diaye says by the end of 2020, the region will face income losses of about $200bn relative to what they were expecting 6 months ago.
South Africa and Covid-19: selected postings
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Statement by the Department of Trade, Industry and Competition: The impact of Covid-19 on South Africa’s economy. On 8 May 2020 Minister Patel addressed a meeting of about 100 CEOs convened by BLSA, where he stated that the pandemic was likely to have a devastating effect on the economy, though the extent of the damage was not yet clear; that many firms in South Africa were in difficulty as a result of the current circumstances and millions of workers were without an income. The Department would like to reiterate that Minister Patel has consistently put forward the view on the devastating impact of COVID-19 on the SA economy since the declaration of the national disaster. He pointed out already on 24 March 2020 at a media briefing that the pandemic will put a strain on the economy, including small business owners and ordinary citizens. The Department would also like to put it on record that Minister Patel recognises the very significant impact of the pandemic and the lockdown on the economy. It is imperative that there is a more measured and responsible public commentary during this trying times in our country in particularly and the globe in general, given the enormous consequence on human lives if we get it wrong. [Download: pdf DTIC submission on its Covid-19 response] (879 KB)
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Stats SA’s COVID-19 business impact survey: Nine in ten businesses report reduced turnover. The second survey showed that nine in ten (90%) responding businesses’ turnover was lower than their normal expected range, up from 85% in the first survey. 30% of respondents indicated they can survive less than a month without any turnover, while over half (55%) indicated that they can survive between 1 and 3 months. Only 7% can survive for a period longer than 3 months.
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South Africa’s COVID-19 strategy needs updating: here’s why and how
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Daily Maverick: Unpacking the rationality of South Africa’s lockdown regulations
South Africa: NAAMSA’s Automative Export Manual 2020 (pdf)
The 2020 publication, just as the previous annual publications since 2007, provides a comprehensive guide on the export and import performance of the South African automotive industry under the current Automotive Production Development Programme (APDP). The aim of the manual is to identify and report on the major automotive export destinations, the major countries of origin, the main automotive export trade blocs, the most important automotive products being exported and imported, the top growth markets and products, as well as the impact of the trade arrangements enjoyed by South Africa on automotive trade patterns. Extract:
The automotive sector has been one of the most visible sectors receiving foreign investments, with the seven OEMs investing R7,3bn in 2019, while also making investment commitments of R40bn over the next five years. Concurrently, the component sector invested R3,5bn in 2019, whilst expecting to invest a further R20bn in domestically sourced components over the next five years. Investment at this scale is significant and will promote local value addition, while importantly, technology is also embodied in the investment.
The broader automotive industry’s contribution to the GDP in 2019 stood at 6,4% (4,0% manufacturing and 2,4% retail). As the largest manufacturing sector in the country’s economy, a substantial 27,6% of value addition within the domestic manufacturing output was derived from vehicle and automotive component manufacturing activity, positioning the industry and its broader value chain as a key player within South Africa’s industrialisation landscape. Manufacturing-driven growth has the highest impact on job creation, and with its linkages throughout the economy, the multiplier effects of manufacturing are higher than most other sectors. In 2019, the domestic automotive industry once again excelled on the export side, despite facing domestic and foreign economic headwinds. The export value of vehicles and automotive components comprised a record R201,7bn, equating to 15,5% of South Africa’s total exports. A record 387 125 vehicles worth a record R148,0bn, along with a record R53,7bn in automotive components, were exported to 151 countries in 2019. [Data, graphics pointer in the report: Exports to regions section - from p43 onwards]
Relief as Kenya, Zambia ease border restrictions (The Citizen)
There was some relief yesterday regarding the recent border closures yesterday, with Kenya allowing Tanzanian truck drivers to cross the Namanga entry point after producing Covid-19 test results. Londigo District Commissioner Frank Mwaisumbe said yesterday some of the 300 trucks that were denied entry into Kenya until their drivers had undergone Covid-19 tests, had been allowed to proceed. “We have reached an agreement. One can now test in Tanzania and then produce the results certificate at the border to be allowed by the Kenyan authorities to proceed with the journey,” he said. However, those who tested positive were denied entry into Kenya. So far, Kenya has turned back 25 truck drivers who tested positive for Covid-19 in the last 24 hours at the Namanga border point, the Health ministry said in Nairobi yesterday (Wednesday). The foreigners included 23 Tanzanians, a Ugandan and a Rwandan, Health Chief Administrative Secretary Rashid Aman said.
At the Tunduma-Nakonde border between Tanzania and Zambia, a decision by Zambia to close the entry point has seen both countries feeling the pinch, prompting the latter to consider reviewing its own decision. “We were asked to clear all oil tankers and avert creating a petroleum crisis in Zambia but as clearing agents, we refused. We want the Government of Zambia to allow all vehicles at the border to be cleared,” he said. This, he said, was because 85% of vehicles that were stranded at the border were destined for the DRC. “So we thought the decision to allow only oil tankers was not in good faith rather, it was simply meant to help one country in its petroleum requirements,” he said. It’s estimated that by yesterday evening, 1,500 trucks would’ve been stranded at the Tunduma-Nakonde border.”We have asked Tanzania Revenue Authority to ensure that they do not allow the processing of oil tankers only at the expense of others,” he said. The temporal border closure is also delaying Zambia’s main copper exports via Dar es Salaam, reports say.
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Tanzania Daily News: The government has strongly refuted claims that Zambia has closed the Nakonde border, a frontier between Tanzania and the Zambia
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Coronavirus creeps along East Africa’s trucking corridors: AFP report
Kenya: SGR cargo trains down 50% as pandemic chokes trade (Business Daily)
Pressure on the international trade and more restrictions around port operations have seen the number of cargo trains on the Standard Gauge Railway fall by half in the first four months of the year as the coronavirus continues to bite off a chunk of the economy. Data from Nairobi’s Inland Container Deport (ICD) show that the number of trains transporting cargo from Mombasa to Nairobi dropped to an average of six in April, compared to the average of 10 recorded in the final quarter of 2019. The drop has also been registered in the volume of cargo which also recorded an almost 50% drop on a monthly average between January and March to 267,531 tonnes in the compared to last year’s 515,682 tonnes every month. The ICDN data now contradicts claims by the SGR operator that it was doing an average of 14 freight trains on average in a tweet that depicted even more cargo volumes in April.
Minerals for climate action: The mineral intensity of the clean energy transition (World Bank)
A new World Bank Group report finds that the production of minerals, such as graphite, lithium and cobalt, could increase by nearly 500% by 2050, to meet the growing demand for clean energy technologies. It estimates that over 3 billion tons of minerals and metals will be needed to deploy wind, solar and geothermal power, as well as energy storage, required for achieving a below 2°C future. The report, Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition, also finds that even though clean energy technologies will require more minerals, the carbon footprint of their production—from extraction to end use—will account for only 6% of the greenhouse gas emissions generated by fossil fuel technologies.
Fostering Effective Energy Transition 2020 (WEF)
The coronavirus pandemic risks cancelling out recent progress in transitioning to clean energy, with unprecedented falls in demand, price volatility and pressure to quickly mitigate socioeconomic costs placing the near-term trajectory of the transition in doubt. Policies, roadmaps and governance frameworks for energy transition at national, regional, and global levels need to be more robust and resilient against external shocks, according to the latest edition of World Economic Forum’s Fostering Effective Energy Transition 2020 (pdf) report published today. The report draws on insights from Energy Transition Index (ETI) 2020, which benchmarks 115 economies on the current performance of their energy systems – across economic development and growth, environmental sustainability, and energy security and access indicators - and their readiness for transition to secure, sustainable, affordable, and inclusive energy systems.
Today’s Quick Links:
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COVID-19 triggers marked decline in global trade, new data shows
The coronavirus pandemic led to a 3% drop in global trade values in the first quarter of 2020. The downturn is expected to accelerate in the second quarter, according to UNCTAD forecasts, which project a quarter-on-quarter decline of 27%.
The coronavirus pandemic cut global trade values by 3% in the first quarter of this year, according to the latest UNCTAD data published in a joint report by 36 international organizations.
The downturn is expected to accelerate in the second quarter, with global trade projected to record a quarter-on-quarter decline of 27%, according to the report by the Committee for the Coordination of Statistical Activities (CCSA).
The report is a product of cooperation between the international statistics community and national statistical offices and systems around the world, coordinated by UNCTAD.
“Everywhere governments are pressed to make post-COVID-19 recovery decisions with long-lasting consequences,” UNCTAD Secretary-General Mukhisa Kituyi said.
“Those decisions should be informed by the best available information and data. I’m proud that UNCTAD has played a central role in bringing so many international organizations together to compile valuable facts and figures to support the response to the pandemic.”
Commodity prices falling too
According to the report, the drop in global trade is accompanied by marked decreases in commodity prices, which have fallen precipitously since December last year.
UNCTAD's free market commodity price index (FMCPI), which measures the price movements of primary commodities exported by developing economies, lost 1.2% of its value in January, 8.5% in February and a whopping 20.4% in March.
Plummeting fuel prices were the main driver of the steep decline, plunging 33.2% in March, while prices of minerals, ores, metals, food and agricultural raw materials tumbled by less than 4%.
The more than 20% fall in commodity prices in March was a record in the history of the FMCPI. By comparison, during the global financial crisis of 2008, the maximum month-on-month decrease was 18.6%.
At that time, the descent lasted six months. Worryingly, the duration and overall strength of the current downward trend in commodity prices and global trade remain uncertain.
Before the COVID-19 pandemic sent international commerce into a tailspin, global merchandise trade volumes and values were showing modest signs of recovery since late 2019.
Situation changing rapidly
The UNCTAD nowcasts featured in the report incorporate a wide variety of data sources, capturing diverse determinants and indicators of trade, but the situation is changing rapidly.
“In this time of crisis, we are putting out the facts as we know them today. We’ll continue monitoring the global trade landscape as it evolves,” said UNCTAD's chief statistician, Steve MacFeely.
“I’m delighted the international statistical community could step up, mobilize quickly and publish such a useful and fascinating report. It was a great honour for UNCTAD to lead this endeavour.”
Next, UNCTAD will release a new monthly trade nowcast, which will provide quarterly nowcasts for merchandise trade.
It is also revamping its existing Trade-in-Services bulletin that monitors the latest trends in global trade in services. Future editions will include a nowcast for the latest quarter.
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Trade, Industry and Competition on impact of Coronavirus COVID-19 on economy
The Department of Trade, Industry and Competition (the dtic) has noted with concern a series of recent comments and news articles that give the impression that the Minister of Trade, Industry and Competition, Mr Ebrahim Patel, has underplayed the extent of the costs that COVID-19 and the lockdown will impose on the economy.
This is exactly the opposite of the truth. The impression seems to be based on an interview that Minister Patel conducted with the Sunday Times shortly after he had addressed Members of Parliament regarding COVID-19 in a session that was broadcasted live.
In the address to the Parliamentary Committee, he stated that the pandemic has caused a massive and rapid shock on the economy, starting globally and transmitted rapidly to South Africa and the rest of the continent, with a dual impact on the demand and supply-side of the economy. He also stated that the impact on GDP will be very significant – with a projected recession with severe contraction of the economy in 2020, accompanied by big job losses and firm closures with high levels of social hardship.
Minister Patel told the Parliamentary Committee: “Our work has indicated that the pandemic will affect the South African economy in very deep and significant ways. The estimates of the impact vary. The work is still being done as we see the extent to which different parts of the economy are affected.” He illustrated with estimates from the IMF, SARB and IDC which projected declines in gross domestic product of approximately 6%.
In the interview Minister Patel made the self-evident point that it was too early to get a firm figure of the extent of the damage with a range of projections by different economists, and that one of the numbers in the public domain referred to a lockdown-cost of about R13 billion a day. This he pointed out, was simply based on taking the size of the GDP (about R5 trillion) and dividing it by the number of days in a year. Such a figure is clearly at best a guesstimate of impact since the full extent of the cost would depend on a number of factors; and does not take into account that key sectors were working during the lockdown, including the agriculture and food-processing sectors as well as healthcare and parts of mining.
Unfortunately, the subsequent media story in our view did not contextualise the reply adequately, as it focused on only the Minister Patel’s cautioning of this particular estimate.
On 8 May 2020 Minister Patel addressed a meeting of about 100 CEOs convened by BLSA, where he stated that the pandemic was likely to have a devastating effect on the economy, though the extent of the damage was not yet clear; that many firms in South Africa were in difficulty as a result of the current circumstances and millions of workers were without an income.
The Department would like to reiterate that Minister Patel has consistently put forward the view on the devastating impact of COVID-19 on the SA economy since the declaration of the national disaster. He pointed out already on 24 March 2020 at a media briefing that the pandemic will put a strain on the economy, including small business owners and ordinary citizens. Minister Patel also called for all South Africans and corporates to pull together to ensure that our people and economy come through this challenge with their lives, their jobs, their businesses, their livelihoods and their property intact.
The Department would also like to put it on record that Minister Patel recognises the very significant impact of the pandemic and the lockdown on the economy. It is imperative that there is a more measured and responsible public commentary during this trying times in our country in particularly and the globe in general, given the enormous consequence on human lives if we get it wrong.
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Lauren Johnston: How COVID-19 will change China and Africa’s economic relationship (WEF)
One reason for China’s strictness may be earlier research suggesting that different types of Paris Club relief lead to different economic outcomes. Debt stock relief is found to enhance economic growth and a change to repayment terms to induce greater fiscal prudence and better prospects of long-run debt sustainability. This trade-off may lie at the heart of identifying a balance between the two approaches. Another reason could be that China as creditor is not a single lending agency but in fact something of a labyrinth of lending entities. China may even need something of its own “Dongcheng Club” to instigate greater transparency among and between its own international creditors, with Dongcheng being the Beijing district hosting a cluster of the relevant government agencies.
In other words, China joining the G20’s debt repayment freeze is both consistent with its past practice – in offering a repayment freeze where justifiable; but unique – China seldom participates in multilaterally-agreed sovereign debt discussions. The latter has led to hopes that the extreme circumstances induced by COVID-19 may encourage China to go beyond a freeze on repayments and, Paris Club-style, to more magnanimously offer something closer to a debt write-off. Its past behaviour would suggest that is unlikely.
As China nears its milestone of eradicating absolute poverty by 2021, it is especially timely for China and African countries to proactively work together on ‘innovative and pragmatic’ cooperation. This may include what would be a rare offer by China of significant debt stock write-off. It could also include, at the least, re-equating the terms of China’s existing loan stock with those of equivalent loans from the World Bank or IMF. Prospects for such calls would undoubtedly be aided by elevated prospects for sustainable debt and development in debtor countries – something the Belt and Road Initiative could both serve, and also be served by.
Covid-19: Trade experts says AfCFTA could help Africa bounce back (ECA)
The Director of Regional Integration and Trade at the ECA, Stephen Karingi, told an online group of journalists on 11 May 2020 that the AfCFTA could help African economies recover from the impact of Covid-19. “Boosting intra-African trade can serve as an alternative stimulus package for job creation, foreign exchange, industrial development and economic growth,” said Mr Karingi. He said if Africa had implemented agreements and frameworks such as the AfCFTA, Pharmaceutical Manufacturing Plan for Africa, the Comprehensive Africa Agriculture Development Programme, and the Accelerated Industrial Development for Africa plan, “our economies would have been more diversified, stronger, and less affected by COVID19.” Mr Karingi said Covid-19 also highlighted the importance of digital technologies and that “member states should consider front-loading negotiations on e-commerce to coincide with the closely linked phase II negotiations of the AfCFTA.”
David Luke, Coordinator of the African Trade Policy Centre, reiterated the need for Africa to diversify its sources of supply chain, stating “even developed countries that depended on only one or two countries for critical parts of their supply chain are now talking about localising production.” And: “We need to think creatively about how our existing development frameworks could be adapted to emerging opportunities generated by this crisis.”
COMESA states want a socioeconomic study on the impact on Covid-19
The request was made by Permanent/Principal Secretaries from ministries that coordinate COMESA regional integration programmes during the COMESA Intergovernmental Committee meeting conducted today by video conference. The meeting was called to consider a raft of regional guidelines that will enable a coordinated approach in responding to COVID-19. Currently, intra and extra-COMESA trade has been negatively affected by the measures that countries in the region have put in place, which differ in extent and severity. The delegates acknowledged that some of the measures are not coordinated at a regional level thus seriously limiting regional trade which involves essential commodities that are in critically demand. Hence, the need for a coordinated approach that will ensure that measures individual countries put in place are harmonized across the region to facilitate the flow of essential goods and services. Given the multiple membership of countries to regional economic blocs: COMESA, the East African Community and the Southern African Development Community, the delegates endorsed the development of guidelines that will provide a coordinated approach across the region. [COVID-19 in COMESA: Situational Update #13]
pdf EAC Heads of State consultative meeting: Communiqué: (181 KB) extracts
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The Heads of State decided that partner states adopt a harmonised system for certification and sharing of Covid-19 test results.
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The Heads of State took note of the EAC Regional Covid-19 Response Plan and its key targeted interventions and directed the ministers responsible for health, trade, transport and EAC Affairs to ensure that it complements the partner states’ national Covid-19 response plans.
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The Heads of State noted that information sharing is key during crisis such as the Covid-19 pandemic and directed the ministers responsible for health, trade, transport and EAC Affairs to finalise and adopt an EAC digital surveillance and tracking system for drivers and crew on covid-19 for immediate use by partner states.
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The Heads of State took note of efforts by partner states in undertaking bilateral engagements to address cross-border challenges and the EAC Secretariat mission that assessed the situation on clearance processes at the borders during the pandemic.
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Related: WCO, IRU statement on responding to the impacts of COVID-19 on cross border transport
The impact of COVID-19 on East African economies (Deloitte Kenya)
Due to the fast paced nature of this pandemic and the ensuing government measures and economic impact, we have used available data through 8 May 2020 for the purposes of our analysis in this publication (pdf). In addition to economic outlooks, the publication looks at how governments in each country across the region have responded to the pandemic through social and health-related measures and the fiscal and monetary interventions introduced to safeguard the economy.
In Kenya, projected GDP growth in 2020 now stands at 1% from 5.7% due to the gravity of the pandemic; with the economy seeing a decline in tourism activity, export revenues, and a disruption in the supply chain. In Ethiopia, the country is expected to grapple with high unemployment, and GDP growth has been revised to 3.2% from 6.2% in 2020. Similarly, the outlooks in Tanzania and Uganda show a similar trend with GDP growth being revised to 2% and 3.5% respectively (decline in 3.3% and 1.8% percentage points). Tanzania is showing waning demand for mineral exports considering global supply chain interruptions. The economy in Uganda is also faced with the disruption of supply chains and weakened global demand for goods.
Kenya: Industries shed 30000 in Covid-19 control measures (Business Daily)
More than 30,000 formal jobs have been lost in the manufacturing sector and 80% of the existing jobs are vulnerable as the Covid-19 pandemic continue to bite. Manufacturers now said the job situation remains grim as the stimulus package the government unveiled takes longer to create the desired impact in the disrupted business environment. In a report set to be launched today, the jobs assessment which also contains several recommendations on how to keep one of the key pillars of President Kenyatta’s Big Four agenda alive. The retail, agriculture, beverages and textile sectors create the largest number of jobs and contribute up to 60% of the manufacturing sector gross domestic product. Kenya Association of Manufacturers chairman Sachen Gudka did not readily disclose details of the report he calls, “a feel on the pulse of the sector”. The report that KAM worked out together with audit firm KPMG found that between five and eight out of 10 jobs have been impacted by the pandemic with employees working less, taking pay cuts or on the verge of losing their jobs. [Kenya and the IMF: Request for disbursement under the Rapid Credit Facility]
Mining in Africa: Covid-19 lockdowns lifting, but logistics challenges to persist (Fitch Solutions)
The lockdown of mining activity in Sub-Saharan Africa will continue to ease over the coming weeks, allowing more mines to resume production. Lockdown measures peaked in April, with major markets including South Africa, Namibia and Zimbabwe enforcing various levels of restrictions on mine operations as part of wider national efforts to curb the spread of Covid-19. We expect that economic expediency will be the main factor driving a continued easing of restriction on mining sector activity. Where present, mining generally accounts for a significant portion of GDP in SSA economies, and an even larger proportion of export earnings. This latter point is particularly relevant given the severe depreciatory pressure being placed on emerging market currencies since February. Although mining lockdowns will ease, logistical factors will generally prevent a return to pre-Covid-19 production rates in 2020. This was a key factor underpinning the series of downward revisions we recently made to our mine production forecasts for SSA. The main logistical constraints on production include the following: [Note: The report is available after a quick registration process]
What Zambia border closure means to four countries (The Citizen)
Closure of the Tunduma-Nakonde border in the fight against Covid-19 will deal a heavy blow to the economies of Tanzania, Zambia, the DRC and - partly - Zimbabwe, analysts say, calling on swift resolution. The Tunduma-Nakonde border crossing point is Tanzania’s busiest, as it connects Dar es Salaam, with Lusaka (Zambia), Lubumbashi (DRC) - and, to some extent, Harare in Zimbabwe. Data produced at the launching of the convertibility and repatriation of the Tanzanian shilling and the Zambian kwacha in February this year show that over 70% of goods in transit which are imported through Dar es Salaam port pass across the Tunduma-Nakonde border. On average, the value of cargo passing through the border annually to destinations in Zambia, DRC and Zimbabwe is estimated at $1.5bn. But, this is now disrupted, following the Zambian government decision to close the border with Tanzania ostensibly in efforts to curb further spread of Covid-19. The decision - which became effective yesterday (Monday) came after the Nakonde district recorded 76 new Covid-19 cases on Saturday, its highest single day increase so far.
SADC energy sector braces for Covid-19 impact (SA News Features)
According to SAPP, South Africa, which is the largest producer and consumer of electricity in the region, has experienced a 40% decline in peak system load since it embarked on a coronavirus nationwide lockdown on 27 March. South Africa accounts for more than 70% of the installed electricity generation capacity for the 12 SAPP member countries, according to the 2018 SADC Energy Monitor. Being the largest economy in southern Africa, South Africa also consumes the bulk of the power generated in the region. According to SAPP, Zimbabwe has experienced a reduction of 25% of its system load since the country embarked on a lockdown on 30 March. Other countries with significant demand reductions are Botswana where the Botswana Power Corporation has experienced a 1% decline in system load, while NamPower of Namibia has reported a decrease of 10% for its load. A similar situation has been reported for other SADC member states such as Lesotho, Malawi and Zambia.
Today’s Quick Links:
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IMF executive board approves $2.772bn in emergency support to Egypt
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ILO Blog: Here’s how the construction sector can help lead the economic recovery
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Kenya is set to review her intellectual property laws, through the Intellectual Property Bill 2020
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COMESA Competition Commission strikes down 12 trading agreements
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WTO DDG Alan Wolff: “The time now is for action rather than reflection”
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World Bank: Uganda skills and jobs analysis
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COVID-19: Trade expert says AfCFTA could help Africa bounce back
The director of regional integration and trade at the Economic Commission for Africa (ECA), Stephen Karingi, told an online group of journalists on 11 May 2020 that the African Continental Free Trade Area (AfCFTA) could help African economies recover from the impact of COVID-19.
“Boosting intra-African trade can serve as an alternative stimulus package for job creation, foreign exchange, industrial development and economic growth,” said Mr. Karingi.
He said if Africa had implemented agreements and frameworks such as the AfCFTA, Pharmaceutical Manufacturing Plan for Africa, the Comprehensive Africa Agriculture Development Programme, and the Accelerated Industrial Development for Africa plan, “our economies would have been more diversified, stronger, and less affected by COVID19”.
The trade expert noted, however, that “COVID-19 has proven that African countries can adapt and respond to demand”.
He cited, among others, the examples of South Africa where U-Mask has redirected its production from protective masks for mining and agriculture to that for medical respiratory masks, and Nigeria where the National Agency for Science and Engineering Infrastructure produced made in Nigeria ventilators.
An ECA report on the impact of COVID-19 on Africa states that between 300,000 and 3.3 million Africans could lose their lives as a direct result of the pandemic.
Therefore, given the urgent need for governments to focus efforts on protecting lives from COVID-19, the 1 July 2020 start date for trade under the AfCFTA has been moved to at least 1 January 2021.
Mr. Karingi said such delay offers a window of opportunity for creative thinking on how the AfCFTA can be reconfigured to reflect the new realities and risks of the 21st century, stating “this is needed to better position the African economy in the face of future adverse shocks emanating from novel viruses and climate change, among others.”
He emphasised the need to maintain the AfCFTA momentum and ambition that existed before COVID-19. This, he said, will enable Africa recover and build long-term resilience.
David Luke, Coordinator of the African Trade Policy Centre, reiterated the need for Africa to diversify its sources of supply chain, stating “even developed countries that depended on only one or two countries for critical parts of their supply chain are now talking about localising production.”
He noted that COVID-19 has shed light on the underdeveloped status of African supply and value chains and that supply chain diversification fits very well into the industrialisation agenda that Africa already has.
“We need to think creatively about how our existing development frameworks could be adapted to emerging opportunities generated by this crisis,” he underlined.
Mr. Karingi said COVID-19 has highlighted the importance of digital technologies and that “Member States should consider front-loading negotiations on e-commerce to coincide with the closely linked phase II negotiations of the AfCFTA.”
The webinar was part of a series of virtual press briefings organised by ECA in collaboration with the African Women in Media network to raise awareness on issues contained in a recently launched ECA report titled pdf COVID-19 in Africa: Protecting Lives and Economies (1.36 MB) .
Mr. Karingi told the journalists that they have a responsibility to “always remind our leaders” on continental commitments “so that they don’t remain just as treaties in the books but rather as agreements that are signed, ratified and implemented.”
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COMESA States want a socioeconomic study on the impact on COVID-19
COMESA Member States have asked the Secretariat to conduct a socioeconomic study on the effects of the Coronavirus to inform ongoing COVID-19 containment measures and recovery strategies.
The request was made by Permanent/Principal Secretaries (PSs) from ministries that coordinate COMESA regional integration programmes during the COMESA Intergovernmental Committee meeting conducted today by video conference.
The meeting was called to consider a raft of regional guidelines that will enable a coordinated approach in responding to COVID-19. Currently, Intra and Extra-COMESA trade has been negatively affected by the measures that countries in the region have put in place, which differ in extent and severity.
The delegates acknowledged that some of the measures are not coordinated at a regional level thus seriously limiting regional trade which involves essential commodities that are in critically demand. Hence, the need for a coordinated approach that will ensure that measures individual countries put in place are harmonized across the region to facilitate the flow of essential goods and services.
Given the multiple membership of countries to regional economic blocs: COMESA, the East African Community and the Southern African Development Community, the delegates endorsed the development of guidelines that will provide a coordinated approach across the region.
A draft set of guidelines, which was developed by trade and customs experts from member states was discussed by the PSs for their endorsement before they are presented to the Council of Ministers on Thursday this week for adoption and subsequent implementation.
Addressing the delegates, the Secretary General of COMESA Chileshe Kapwepwe said a cooperative effort on the part of all countries is needed as the world has become interconnected through technology, production and travel.
“In addition to coordinated efforts, a uniform application of measures is paramount at a regional level to ensure continued trade and supply of goods and services while attending to the imperatives of public health,” the Secretary General said.
She told the PSs that regional countries were experiencing mixed fortunes in COVID-19 infections. Some have managed to flatten the curve; others have maintained low rates of infections while the majority are still recording increased numbers.
“Even if the world will eventually succeed to contain this pandemic, tremendous amounts of resources will have been deployed for this purpose and economies will have shrunk owing to subdued activity as countries try to halt the spread of the virus,” the SG said adding that the Secretariat will be coordinating efforts by Member States to develop recovery plans to ensure the gains already made in regional integration are not totally eroded.
During the meeting, the Secretariat presented a proposal to review its budget downwards considering that most of the activities have been scaled down as a result of COVID-19 pandemic. This will translate to less contributions by member states to the annual budget of the Secretariat budget.
The report of the PSs will be presented to the Extra-Ordinary Council of Minister for decision-making on Thursday this week.
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Trade impacts of LDC graduation (WTO)
There are currently 47 LDCs, of which 12 are at different stages of the graduation process. Of these LDCs, seven are WTO members (Angola, Bangladesh, Lao PDR, Myanmar, Nepal, Solomon Islands and Vanuatu) while three are in the process of negotiating their WTO accession (Bhutan, Sao Tome and Principe, and Timor-Leste). The other two LDCs on the graduation path are Kiribati and Tuvalu. The report notes that while graduating LDCs have diverse economic and trade profiles, for most of them the impact of graduation appears limited, with only marginal increases in tariffs due to the loss of preferences. The biggest impact is likely to be confined to a handful of export items (clothing, fish products, footwear) destined for a few developed country markets (Canada, EU, Japan). With a considerable share of graduating LDC exports going to markets covered by regional trade agreements, the impact of graduation is likely to be limited for this trade.
Graduating governments may need to take certain steps to adhere to their new non-LDC obligations, particularly with regards to increased notification requirements, the report notes (pdf). The report explores options for graduating LDCs, including through forging appropriate trade arrangements with their trading partners and seeking recourse to instruments and procedures available under WTO rules that allow them to engage with WTO members should they face difficulties in meeting their commitments. It also identifies potential support measures that graduating LDCs can build on by working hand-in-hand with their development partners to ensure sustainable graduation. The WTO Secretariat intends to undertake a COVID-19 impact analysis for graduating LDCs under the aegis of this project.
Business leaders: COVID-19 shouldn’t derail AfCFTA (New Times)
According to sources, AU Chairperson Cyril Ramaphosa is now consulting member states to make a final decision, either on postponement or starting trading on 1 July. Edem Adzogenu, Co-Chair of the AfroChampions Initiative Executive Committee, noted that modes of communication have evolved over the past century and, to assume that 2021 will be any different won’t be prudent. He stressed: “We can’t anticipate 2021 just as we didn’t anticipate the COVID-19 pandemic. So we must approach this situation as if this is the new normal and find the measures, available technology and resources to proceed with the negotiations.”
Prudence Sebahizi (Chief Technical Advisor on AfCFTA at the AU Commission): “I don’t want to preempt the ongoing consultations with member states. Implementation of AfCFTA depends on member states readiness. We at the AUC can only facilitate the process where possible. If member states commit to start opening their borders on 1 July 2020, well and good. The private sector is waiting impatiently. The AfCFTA implementation can address challenges that are already caused by Covid-19 especially movement of essential products.”
COVID-19: Lockdown exit strategies for Africa (UNECA)
In the new report titled pdf COVID-19: Lockdown exit strategies for Africa (4.51 MB) , the ECA proposes seven exit strategies that provide sustainable, albeit reduced, economic activity. The report sets out some of the exit strategies being proposed and tried around the world and outlines the risks involved for African countries. With the lockdowns came serious challenges for Africa’s economies, including a drop in demand for products and services; lack of operational cash flow; reduction of opportunities to meet new customers; businesses were closed; issues with changing business strategies and offering alternative products and services; a decline in worker production and productivity from working at home; logistics and shipping of products; and difficulties in obtaining supplies of raw materials essential for production. Among the most sensitive issues facing policymakers is the impact of COVID-19 lockdowns on food security. The seven lockdown exit strategies being proposed by the think tank are identified from proposals and trials around the world.
Cesar Augusto Mba Abogo: 3 ways COVID-19 could actually spark a better future for Africa (WEF)
COVID-19 is an existential crisis. It is severely testing Africa’s social, economic and political resilience. In a post-COVID-19 world, the continent’s leaders will have to rethink many prior assumptions and find new balances for individual and collective behaviour. What I am absolutely certain of is that opportunities will emerge. Innovative minds previously imprisoned by institutional inertia and interest groups will rise to the challenges that we collectively face. What will the brave new world post COVID-19 look like in Africa? [Note: The author is Minister of Finance, Economy and Planning, Equatorial Guinea]
A joint consultative meeting of partner states’ Ministers and Cabinet Secretaries responsible for Health, Trade, Transport and EAC Affairs via video conference held on 8 May to discuss a regional approach to COVID-19 further directed partner states to facilitate farmers to continue farming activities during this pandemic and post COVID-19 period. The consultative meeting also directed partner states to support agro-processing and value chains as an import substitution measure. The Ministers requested the Ministries of Finance in the Partner States to establish special purpose financing schemes for small and medium enterprises, to cushion them from the negative effects of the COVID-19 pandemic.
The Ministers gave these directives in response to information availed to them that that the region’s key productive sectors are already experiencing a slowdown as a result of the COVID-19 pandemic, with sectors such as agriculture, trade, manufacturing and industry, tourism, offline retail and catering being the worst affected. Among the negative impacts on the regional economy are a food crisis in East Africa and severe disruptions in manufacturing and industry value chains. On the flipside are beneficial developments such as: increased production of face masks in the region; growing popularity of online retail using e-commerce platforms; growing popularity of online entertainment, and; increased Telecommuting and distance education.
SADC embracing electronic Certificate of Origin (SADC)
Currently, in the region, Botswana, Eswatini, Malawi, Namibia, Tanzania and Zambia have already developed their national module and are working on the component for transmission and receiving (outbound and inbound) of the e-CoO as per the specifications contained in the Framework and they will participate in the pilot phase. SADC Secretariat facilitated the backstopping mission on eCoO in these Member States in order to ascertain their readiness in the pilot exercise. Mauritius has already developed its eCoO module and is currently waiting to exchange with other Member States. It is planned that the e-CoO will go live in May 2020 in six Member States and it will eventually be rolled out regionally afterwards. This will make the SADC be one of the first Regional Economic Communities recognised by the Africa Union to implement the e-CoO regionally for trade facilitation.
Why COVID-19 makes a compelling case for the wider integration of blockchain (WEF)
If there were any lingering doubts over the value of blockchain platforms to improve the transparency of businesses that depend on the seamless integration of disparate networks, COVID-19 has all but wiped them away. We should look at this healthcare crisis as a vital learning curve that can show us how to build transparent, inter-operable and connective networks. Closer to home, it’s keeping economies moving. It’s facilitating cash-flow management for start-ups and ensuring timely payments for their products and pilots. It’s even helping consumers track their home office chair to improve their quality of life under lockdown conditions. The “visibility, traceability, and interoperability” of blockchain platforms to fortify, better connect and improve the resilience of supply chains will also be critical to getting the recovery underway in the world beyond the COVID-19 crisis. [The author, Mariam Obaid AlMuhairi, is attached to the Centre for the Fourth Industrial Revolution UAE at the Dubai Future Foundation]
Kenya: Court allows KRA to acquire new Sh1.2bn clearance system (Daily Nation)
The Kenya Revenue Authority is now free to continue rolling out the controversial Sh1.2 billion electronic customs clearance system after a five-year delay due to a legal battle over procurement. In a judgment issued by the Court of Appeal Nairobi, a three-Judge bench has upheld decisions made by the High Court and the public procurement oversight agency in dismissing a dispute involving the award of the technology advancement tender. The tender was for the supply, installation and commissioning of an integrated customs management system. Switzerland-based Webb Fontaine Group FZ LLC, disputed the procurement process and challenged the same at the Public Procurement and Administrative Review Board and subsequently at the High Court where its claims were dismissed.
Nic JJ Olivier, Sheryl L Hendriks: South Africa needs a national food security council to fend off starvation (Daily Maverick)
How is it that in countries across Africa, food security considerations were not initially considered as part of the precautionary actions taken in the wake of the Covid-19 pandemic? Decision-making in times of crisis is challenging. In the race to save lives, trade-offs have to be made. The sudden onset of the pandemic, its rapid evolution, and the enormous needs to be addressed may have led to Africa’s leaders failing to consider the food security implications of their measures. The suddenness and previously unthinkable extent of the radical curtailments caught ordinary people by surprise too. For millions of poor households across Africa, affected by the lockdowns, the threat of contracting the virus may be more distant than the very real fear of hunger. This is also true for South Africa with its pervasive presence of the triple challenge of deep poverty, persistent inequality and high levels of unemployment. Forced to remain at home by the intangible Covid-19 threat means an immediate loss of income in the short term for those who do have some form of income, with fears of redundancy and unemployment in the long term. And for those without any income (whether in the formal or the informal sector), the situation is at least as bleak as their dependence on a share of the limited income of family members has become a hollow memory.
East Africa: Impact of COVID-19 outbreak on supply chains, regional trade, markets and food security (WFP)
While the number of confirmed COVID-19 cases in East Africa so far is relatively low compared to other regions, disruption in supply chains is already affecting the trade and flow of commodities (pdf). Despite the comfortable stock of cereals in the global market, most countries in East Africa are food deficit and thus likely to face challenges. The pandemic is adding severity to the situation as the region is already facing multiple shocks including severe desert locust infestation and floods since the past few weeks. WFP estimates that 34 to 43 million people, within the nine countries, are likely to be food insecure during the next three months, an increase from 20 million during March-April.
CARE rapid gender analysis for COVID 19 East, Central and Southern Africa
COVID-19 in the ECSA region is a public health crisis, but one compounded with complex social-economic and political challenges and inequalities, particularly around gender. Lack of resources, limited health services, large vulnerable populations and low economic capacity means the impact will be profound. The outbreak will disproportionately affect women and girls in the ECSA region in significant ways, including adverse impacts to their health, education, food security and nutrition, livelihoods and safety and protection. Women are the primary care givers in the family and are also the key frontline responders in the health care system, placing them at increased risk and exposure to infection. The outbreak will also burden women by adding to their existing gendered household and community roles. Recommendations (pdf):
Tanzania: Avocados go from zero to Sh28bn-a-year crop (The Citizen)
Avocados have become Tanzania’s latest green gold, bringing in at least $12m (Sh27.6 billion) annually, up from zero five years ago, a new report reveals. Less than ten years ago, avocado exports never existed. But, data from Tanzania’s private sector horticultural apex body, the Tanzania Horticultural Association, as well as the Avocado Catalogue 2020 report, show that avocado exports jumped from 1,877 tonnes in 2014 to 9,000 tonnes in 2019, fetching the country $12mlast year. Taha’s chief development manager, Mr Anthony Chamanga, said that farm-gate prices also rose from Sh450 per kilogramme in 2014 to Sh1,500 in 2020 courtesy of Taha’s painstaking efforts to develop the avocado value chain in the country.
Kenya: Millers see costly flour on import freeze (Business Daily)
Millers say they will not be importing maize and warn Kenyans should brace for higher prices of flour in the coming days on the account of expensive raw material. The Treasury had granted millers permission to import maize at a lower tariff but declined to extend the duration as requested by millers. The Ministry of Agriculture objected to an extension on fears the imports would coincide with the harvesting of short-rain crop from south rift, impacting negatively on local prices. “We can confirm that no maize will come in. This will give the farmers a good opportunity to hold their maize and demand whatever price they deem fit,” said Cereal Millers Association. “Supply of maize in the market has started tightening and we expect the prices of flour to start going up very soon.”
In brief:
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Tanzania: Imported sugar to solve crisis
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Martin Fregene, Atsuko Toda: Mitigating COVID-19’s impact on Africa’s agri-food systems
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ECA proposes COVID-19 exit strategies to bring African economies back on track
The Economic Commission for Africa (ECA) has released a new report proposing to African nations various coronavirus disease (COVID-19) exit strategies following the imposition of lockdowns that helped suppress the virus but with devastating economic consequences.
At least 42 African countries applied partial or full lockdowns in their quest to curtail the pandemic.
The ECA estimates that a one-month full lockdown across Africa would cost the continent about 2.5 per cent of its annual GDP, equivalent to about $65.7 billion per month. This is separate from and in addition to the wider external impact of COVID-19 on Africa of lower commodity prices and investment flows.
In the new report titled COVID-19: Lockdown exit strategies for Africa, the ECA proposes seven exit strategies that provide sustainable, albeit reduced, economic activity. The report sets out some of the exit strategies being proposed and tried around the world and outlines the risks involved for African countries.
With the lockdowns came serious challenges for Africa’s economies, including a drop in demand for products and services; lack of operational cash flow; reduction of opportunities to meet new customers; businesses were closed; issues with changing business strategies and offering alternative products and services; a decline in worker production and productivity from working at home; logistics and shipping of products; and difficulties in obtaining supplies of raw materials essential for production.
Among the most sensitive issues facing policymakers is the impact of COVID-19 lockdowns on food security.
The seven lockdown exit strategies being proposed by the think tank are identified from proposals and trials around the world. They are assessed with respect to the extent to which each strategy minimizes uncertainty over fatalities. In most cases, countries are applying a combination of several strategies such as testing, contact tracing and gradual segmented reopening.
They are improving testing; lockdown until preventive or curative medicines are developed; contact tracing and mass testing; immunity permits; gradual segmented reopening; adaptive triggering; and mitigation.
Under adaptive triggering nations can ease lockdown once infections decline and re-impose if they begin to rise above intensive-care capacity. These would require regular shutdowns lasting two-thirds of the year, making little difference to permanent lockdown from an economic perspective. African health-care capacity is limited meaning capacity would quickly be exceeded, potentially resulting in fatalities.
Mitigation gradually allows the infection to spread across the population with some social distancing measures in place. It is reportedly working in Sweden, where an estimated 25–40 per cent of Stockholm have contracted COVID-19, but relies on good adherence to basic social distancing measures and strong health-care capacity. This could imply considerable risk in African populations with low health-care access and unknown comorbidities.
Firms surveyed by the ECA reported to be operating at only 43 per cent; 70 per cent of slum dwellers report that they are missing meals or eating less as a result of COVID-19.
Lockdowns, the report notes, forestall severe vulnerabilities, and that testing, contact tracing and easing restrictions may be possible for countries with sufficient public health systems and that have contained COVID-19 transmission, put in place preventive measures, engaged and educated communities, and minimized risks to vulnerable groups.
Gradual segmented reopening may be needed in countries where containment has failed with further measures to suppress the spread of the disease being required where the virus is still spreading, notes the report. The spread of the virus is still accelerating in many African countries on average at 30 percent every week.
Active learning and data collection can help policymakers ascertain risks across the breadth of policy unknowns as they consider recommendations to ease lockdowns and move towards a “new normal”.
The report urges African nations to take advantage of being behind the curve. This may be an opportunity to learn from the experiences of other regions and their experiments in reopening; and to use the “extra time” afforded by the lockdowns to rapidly put in place testing, treatment systems, preventive measures, and carefully design lockdown exit strategies in collaboration with communities and vulnerable groups.