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South Africa’s FDI inflows increased to R27.2bn in the first quarter (Engineering News)
South Africa recorded foreign direct investment (FDI) inflows of R27.2-billion in the first quarter of 2022, up from R22.7-billion rand in the fourth quarter of 2021, the central bank said on Tuesday. The South African Reserve Bank said in its Quarterly Bulletin that the increase was due to foreign entities increasing equity investments and granting loans to domestic subsidiaries.
Infrastructure delivery key to growing economy, creating local demand (Engineering News)
The construction and development of infrastructure is critical to accelerating demand for associated goods and services, as well as to significantly boost the economy, Infrastructure South Africa investment and unblocking chief director Mashopha Moshoeshoe said earlier this month. Speaking at the Southern Africa France Business Forum on June 22, he explained that the gap in infrastructure required in South Africa was significant, but that, as South Africa emerges from destruction and delays as a result of the Covid-19 pandemic, it was on a path to recovery.
Zim targets US$3,4 trillion bloc (NewsDay)
Industry and Commerce minister Sekai Nzenza believes Zimbabwe has built the foundation to compete in the African Continental Free Trade Area (AfCFTA), a US$3,4 trillion regional bloc that kicked off in 2021. In a paper released during a tour of Gweru-based companies last week, Nzenza said recoveries in firms such as Bata Shoe Company, cement maker Sino Zimbabwe and yeast maker Lessafre showed domestic firms were building the blocks to tackle stiffer competition from bigger African producers as the continent opens up. There have been concerns that lack of capital in Zimbabwe’s manufacturing sector, which says it requires up to US$2 billion to scale up production, would be a stumbling block to trade in a bigger market. And in a recent interview with our sister paper the Zimbabwe Independent, a United Nations Economic Community for Africa (Uneca) executive said a strong Zimbabwean financial system would be a crucial factor in the quest to shore up trade under AfCFTA.
Zimbabwe lobbies to rejoin Commonwealth (The East African)
Zimbabwe at the ongoing Commonwealth summit in Rwanda continued with lobbying for readmission 18 years after it was thrown out of the body over allegations of human rights abuses. President Emmerson Mnangagwa’s government submitted an application on May 15, 2018 to re-join the grouping of 54 countries, a year after the ouster of strongman Robert Mugabe in a military coup. “Zimbabwe is excited to be participating in Commonwealth forums as this presents opportunities to network with the international community taking into account the government of Zimbabwe’s policy of engagement and reengagement,” Zimbabwe’s ambassador to Rwanda Charity Manyeruke said.
Transporters call for level playing field (The Citizen)
Parliament’s Budget Committee yesterday asked the government to introduce charges on commercial vehicles from the Southern African Development Community (SADC) entering Tanzania in response to fees Tanzanian transporters are subjected to when travelling within the bloc. It is estimated that goods destined for neighbouring SADC member states account for up to 75 percent of all transit goods that pass through Tanzania’s ports. The committee recommended the introduction of three different fees to align with charges Tanzanian transporters were subjected to when their vehicles go to any of the other 15 SADC member states. Data shows that the value of cargo passing through Tanzania to Zambia, the Democratic Republic of Congo (DRC) and Zimbabwe is estimated at $1.5 billion annually.
Tanzania needs Sh44 trillion to cut Green House Gas emissions (The Citizen)
As the country is determined to contribute to the global efforts to reduce greenhouse gas (GHG) emissions with a number of interventions being implemented to mitigate the negative impacts of climate change, it needs $19.2 billion (Sh44 trillion) to achieve the goal come the year 2030.Vice President’s Office environment assistant director Catherine Bamwenzaki said the mitigation and adaptation measures include implementation of the Ecosystem-based Adaptation for Rural Resilience (EBARR) in five districts— Kishapu, Mvomero, Mpwapwa, Simanjiro and Kaskazini ‘A’ in Zanzibar.
She said Tanzania’s share of GHG emission is low at 0.36 percent, but the country is vulnerable to climate related disasters such as extreme floods and droughts that affect livelihoods as well as agricultural production, water resources, public health, energy supply, infrastructure, biodiversity and marine and coastal zones.
Kenya Private Sector Alliance position on the Kenya Standard 1515 (Kenya Broadcasting Corporation)
In Kenya, the automotive industry has the potential to significantly contribute to the manufacturing sector’s growth, and the government target to increase its share of the GDP from the current 9.2pc to 15pc by 2022 as part of the Big Four Agenda. This will also be instrumental in achieving the aspirations of Vision 2030, of creating a globally competitive and prosperous country with a high quality of life. Passing the Kenya Standards 1515 which lowers the importation age of trucks, buses, and prime movers is an important incentive to increase the volume of vehicles produced locally hence attracting investment into the Industry.
Uganda U-turn on car imports upsets Kenya vehicle dealers (The East African)
Uganda has made an about-turn and relaxed the tough import conditions it has set for vehicles aged over nine years entering its market from July, dealing a setback to Kenyan dealers who had hoped to benefit from curbs on the sale of such automobiles. The Uganda Revenue Authority (URA) had in April issued a directive that imports of vehicles older than nine years be cleared under the East Africa Community’s Single Customs Territory (SCT)-- which allows members of the bloc to jointly collect customs taxes-- from July 1, 2022.
“Pursuant to section 64 (k) of the East African Customs Management Regulations 2010, the Uganda Revenue Authority wishes to inform the general public that effective July 1, 2022 motor vehicles of nine years old or more from the date of manufacture shall no longer be cleared under the warehousing regime,” URA said in a notice in April. “The customs clearance of such motor vehicles shall be facilitated under the Single Customs Territory arrangement where taxes will be paid upon arrival at the port of entry into the East African Community,” the Ugandan taxman added.
Trades Minister Launches 67 BRCs To Support MSMEs (News Ghana)
Mr Alan Kyerematen, Minister of Trade and Industry, has launched a one-stop enterprise support centre to provide Business Development Service (BDS) to Micro Small Medium Enterprises (MSME) at the district level. With funding mostly from the African Development Bank (AfDB) and the International Fund for Agricultural Development (IFAD), the Ministry under the Rural Enterprise Programme (REP) has established 67 Business Resource Centres (BRC). The core services provided by the BRCs include business opportunity identification; business plan preparation; facilitation of access to finance/credit; business diagnostics and training in management and entrepreneurship.
The Minister, in his remarks at the launch, said the key to transforming the country did not lie in natural resources endowment but taking advantage of the human capital and unleashing of the entrepreneurial spirit of the population. He observed that the transformation of the economy was hindered mainly by unemployment, poor revenue mobilisation and lack of sustained flow of foreign exchange.
Addressing those challenges, he said, would require the transformation of the MSME sector that created jobs and could help the country derive optimum benefit from trade agreements that allowed the country to export its products under free quota and duty free.
New Economic Analysis Calls for Bold Reforms for Malawi’s Macroeconomic Stability and Service Delivery Ambitions (World Bank)
A series of external and domestic shocks are putting acute pressure on Malawi’s macro-economy, increasing the urgency to protect essential services for the vulnerable says the latest World Bank’s Malawi Economic Monitor (MEM).The 15th Edition of the MEM underscores significant deterioration in the government’s finances, with the deficit reaching its highest level in over a decade. For several years, spending has exceeded revenues while the country has imported more than it exports. This has been financed by increased commercial borrowing and Malawi’s debt has now become unsustainable. Malawi’s economic growth is expected to decline further due to these chronic imbalances, which have been heightened by severe weather events. The Ukraine-Russia war has added a new crisis to what was already a challenging economic climate, with rising prices for fuel, fertilizer and other commodities impacting foreign reserves and exerting pressure on inflation.
Sierra Leone continues to pursue its development path amidst continued vulnerability to shocks and capacity needs. Growth is estimated to have recovered moderately in 2021 (about 3 percent) following the COVID shock and is projected to increase to 3½ percent in 2022, reflecting higher iron ore production. However, this is a downward revision relative to the 3 rd/4th review, reflecting a deterioration of the terms of trade and increased uncertainty about global economic prospects. Inflation has been on a rising trend since mid-2021 due to higher international fuel and food prices, and is expected to average about 22 percent this year, exacerbating already-high levels of food insecurity. Over the medium term, the war in Ukraine, and concerns about global growth pose renewed challenges for the outlook. Further increases in already-high fuel, food and fertilizer prices could deteriorate budget and external balances, put debt sustainability at risk, increase costs for businesses, prolong fuel subsidies, and stoke social tensions.
Guinea-Bissau: 2022 Article IV Consultation and Third Review under the Staff-Monitored Program (IMF)
After years of political turmoil and delayed reforms, the authorities started implementing in 2021 an ambitious fiscal consolidation and reform program to ensure debt sustainability, create fiscal space to address developmental needs and strengthen state capacity. A Rapid Credit Facility (RCF) disbursement of SDR 14.2 million (50 percent of quota) was approved in January 2021 to provide urgent financing to support critical spending in health. A 9-month Staff-Monitored Program (SMP) with three quarterly reviews was approved in July 2021 to support the government’s reform program aimed at stabilizing the economy, strengthening governance, and building track record of policy implementation to underpin the authorities’ request for an Extended Credit Facility (ECF) arrangement. The August 2021 SDR 27.2 million allocation and the reforms underpinned by the SMP have helped address the adverse impact of the pandemic, improve government spending transparency, mitigate debt vulnerabilities.
African trade and integration news
AfCFTA as Africa’s Industrialisation Accelerator (This Day)
The African Export and Import Bank (Afreximbank) has affirmed that the African Continental Free Trade Area (AfCFTA) agreement would be the continent’s industrial accelerator. It stated unequivocally that, “AfCFTA will accelerate the growth of labour-intensive manufacturing industries.” The Afreximbank’s affirmation was contained in a report it published in this month, which was titled “Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures.” It said in the report that the AfCFTA agreement would usher in a period of renaissance in African manufacturing sector and become a critical driver of African economic growth in the near-term.
The report identified East and West Africa as the regions manufacturing would play a critical role in sustaining economic growth. “The sustained injection of patient capital and rise of East Africa’s automotive industry is helping to expand opportunities for labour-intensive employment under a proven manufacturing-led growth model and will expand the fiscal space to gradually strengthen the foundation of macroeconomic stability,” the report said.
Africa’s food imports to hit $110 billion in three years - Ofosu-Dorte (BusinessGhana)
The Senior Partner of AB & David law firm, David Ofosu-Dorte, has predicted that Africa’s food import will increase from $35 million to $110 billion in the next three years. “That’s food import and that tells you how much we are sending outside. Mr. Ofosu-Dorte said this when he presented a paper on Africa and the Global Economy; New Realities, New Possibilities” at a Citi Tv event organised in Accra on Monday. In terms of infrastructure development, Mr. Ofosu-Dorte said the continent needed $1.7 trillion in order to fill the infrastructure gaps.
He said fashion, integration, infrastructure, recovery, automation, healthcare and pharmaceuticals, logistics and supply chain, as well as value addition to raw materials were areas Africans needed to direct focus. Among other things, he explained that an area like agri-food where local foods were packaged could change the urban imports and reduce the demand for the dollar. “But there’s something that we overlook. As many as 400 companies of African origin or located in Africa now cross a million dollar. Seven hundred and fifty of them now have more than half a billion dollars in terms of annual turnover,” he said.
Russia-Ukraine conflict could force African countries to become more self-reliant - Ramaphosa (News24)
The Russia-Ukraine conflict could have a silver lining for African countries in the long run, according to President Cyril Ramaphosa, because it forces them to be more self-sufficient as they look to bolster their food supply. He said African countries faced a similar concern during the Covid-19 pandemic when they had no choice but to manufacture their own vaccines.
The president spoke after he took part in a G7 summit meeting in Germany on Monday. He said one of the pertinent engagements between the seven members of the G7 and the five invited non-members - South Africa, Argentina, India, Indonesia and Senegal - was around food security in light of the Russia-Ukraine conflict.
He said they reflected “on the path that we had traversed together with India and many other countries on the issue of the Trade-Related Aspects of Intellectual Property Rights (Trips) waiver to ease access to vaccines for the Global South”.
African officials renew call for financing to deliver climate justice (News Ghana)
The quest for climate justice in Africa will be realized subject to the availability of funds, technology, and capacity building to help the continent withstand extreme weather events like droughts, floods, and cyclones, officials said on Monday.
Jean Paul-Adams, director for technology, climate change, and natural resources management at the United Nations Economic Commission for Africa (UNECA), said the continent’s green and justice transition is possible once the financing gap toward climate mitigation and adaptation is bridged. Paul-Adams called for improved governance, transparency, and monitoring to ensure that adaptation financing benefits local communities bearing the brunt of climate-induced disasters like recurrent droughts and disease outbreaks.
For Africa to overcome poverty and underdevelopment linked to climatic stresses, Mwangi said, the continent should bargain for its fair share of funding from multilateral lenders besides leveraging domestic resources. “Adaptation financing is crucial to help Africa liberate itself from climate emergencies that have led to the loss of lives and livelihoods,” he said.
Africa’s dream of feeding China hits hard reality (Reuters)
Watching workers poke avocados from the treetops in an orchard owned by Kenyan agriculture firm Kakuzi, managing director Chris Flowers revels in the thought some might soon go to the crown jewel of emerging consumer markets: China. Taking advantage of Beijing’s deeper focus on trade with African countries to help reduce gaping deficits, Kenya struck an export deal with China for fresh avocados in January after years of lobbying for market access. Six months later, no shipments have left, Kenya’s avocado society, the East African country’s plant health inspectorate and Kakuzi (KUKZ.NR) told Reuters.
While 10 avocado exporters have passed Kenyan inspections, China now wants to do its own audits and, based on the past experience of some other African fruit producers, it could take a decade to get the green light.
Ramping up agricultural exports, however, is one of the few options many African countries have to rebalance their trade relationships with China and earn the hard currency they need to service mountains of debt, much of it owed to Beijing.
Global economy news
DDG González: “More cooperation on services trade key to building the WTO of tomorrow” (WTO)
To listen to the supply-chain debate these days, services is rarely mentioned. We hear about semiconductors, not ICT services; about vaccines and pharmaceuticals, not health services; and about critical minerals and large capacity batteries, not transport or energy services. And yet, services have become the most dynamic sector of world trade. In fact, just as services have come to dominate many of our national economies, they are playing a bigger role in the global economy too. Which means that it is impossible to understand modern supply chains, let alone where they are heading or how geopolitics will affect them, without understanding trade in services.
WTO issues research papers on small business and international trade on MSMEs Day (WTO)
The WTO has published on the occasion of Micro, Small, and Medium-sized Enterprises Day (27 June) three research papers on the participation of small businesses in international trade and on climate change policies that could help them engage in sustainable practices. The first research paper looks at the participation of small businesses from developed economies in international trade. The second research paper looks into the participation of small businesses in the manufacturing sector in developing countries. The third research note traces connections between international trade policy and climate change and proposes policy interventions that could help small businesses make more rapid progress towards decarbonization.
Bringing sustainable entrepreneurship to the next level (UNCTAD)
Micro, small and medium-sized enterprises (MSMEs), which employ 60% to 70% of workers worldwide and produce 50% of global GDP, were hit hard by COVID-19. They were 2.5 times more likely to go under than larger businesses during the first months of the crisis. And small businesses are less prepared for the impacts of climate change, which could trigger a pandemic-sized shock every decade. To underscore the urgent need to boost support for small businesses around the globe, UNCTAD is organizing for international MSME Day 2022 a joint UN event in New York in collaboration with the Permanent Mission of Argentina to the UN and the International Council for Small Business.
At the start of the COVID-19 pandemic and ensuing global lockdowns that severely affected businesses, UNCTAD quickly reoriented its work priorities on entrepreneurship. UNCTAD now leads the global initiative towards post-COVID-19 resurgence of the MSMEs sector, part of the UN framework for the immediate response to COVID-19. This initiative develops and implements capacity-building tools for governments and MSMEs in developing countries and economies in transition to strengthen their resilience while mitigating the economic and social impact of the crisis. The initiative also facilitates MSMEs’ contribution to the implementation of UN Sustainable Development Goals.
UN report: Reducing trade costs can help drive sustainable development (FAO)
A robust and well-integrated global agrifood system can help all countries withstand unprecedented challenges, as evidenced during the COVID-19 pandemic in early 2020 when global agrifood markets proved to be remarkably resilient. “We are committed to working together”, wrote QU Dongyu, Director-General of the Food and Agriculture Organization of the United Nations (FAO) in the foreword to The State of Agricultural Commodity Markets 2022 (SOCO 2022), an FAO flagship report launched today. The ongoing war in Ukraine, affecting a region of great importance for worldwide food security, is increasing uncertainty, and raising the risk of fragmenting global agrifood markets and magnifying hunger threats, which were already very high because of COVID-19, countries in conflict and humanitarian crises across the world.
The SOCO report, in its new edition, examines how mutually reinforcing multilateral and regional efforts can address the sustainable development challenges of today and those of the future. It does so with an eye to the global agrifood markets, agrifood systems resilience, economic growth, and environmental outcomes, cognizant that trade policies cannot be expected to fully address all the entailed trade-offs and require complementary measures.
In composing the SOCO report, FAO conducted modelling exercises to identify patterns between bilateral trade flows, relative prices and geographic barriers, and to identify key drivers of trade such as comparative advantage and trade costs.
New research shows how disruption in wheat trade can affect food security (Phys.org)
Global supply issues related to the pandemic and war in Ukraine have highlighted yet another global vulnerability: food availability. While international trade allows countries to buffer against domestic food shortfalls and gain access to larger markets, what happens when supplies run short, or the global supply chain slows or even breaks down like it did during the pandemic? A new University of California, Davis, study sheds light on how trade, and centrality in the global wheat trade network, affect food security. The study shows that many countries depend on trade to fulfill their food needs. Further, the global wheat trade is concentrated in a handful of countries whereby disruption in only a few countries would have global impacts, researchers suggest. The study, “Connected and Extracted: Understanding how centrality in the global wheat supply chain affects global hunger using a network approach,” was published in June in the journal PLOS ONE.
Public support for agriculture has reached record levels as governments enacted measures to shield both consumers and producers from the COVID-19 pandemic and other crises, according to a new report from the OECD. Only a small share of this support has been directed at longer-term efforts to combat climate change and other food systems challenges. Agricultural Policy Monitoring and Evaluation 2022 shows that the 54 countries monitored – including all OECD and EU economies, plus 11 key emerging economies – provided on average USD 817 billion of support to agriculture annually over the 2019-21 period, a 13% increase over the USD 720 billion reported for 2018-20. Support has remained substantial among OECD countries, and has increased significantly in the 11 emerging economies.
G7 Should Look to Africa for Lessons in How to Manage Multiple Crises (BusinessGhana)
The G7 will convene shortly to agree on a common response to the multiple crises buffeting our world. War, food shortages, energy shocks and inflation are causing havoc in nations both rich and poor, but Africa has been here many times before. Through long and painful experience, it has learned much about managing crises. What can Africa teach the rest of us? First and foremost, Africa’s new approach is to look beyond immediate crisis to tackle the deeper causes of recurrent catastrophes.
It is a strategy born of necessity. Africa’s best efforts at development have been repeatedly dashed by events beyond our control—with climate change the most destructive force. For a long time, the continent has depended on aid and grants to fight climate impacts. But these are often emergency responses, when what Africa needs is to build long-term resilience to both current and future shocks.
Disinvestment in Fossil Fuels is a Great Threat to Africa, Ramaphosa Says (IT News)
President Cyril Ramaphosa said that cutting investments in fossil fuels is a great threat to Africa. Ramaphosa was speaking at the G7 Summit in Germany. This summit hosted leaders of G7 countries and President Ramaphosa was participating in working sessions where Climate, Energy, Health as well Global Food Security, and Gender Equality were discussed. Ramaphosa cautioned against adverse ramifications of the proposed revision of the European Union Renewable Energy Directive, which is intended to accelerate green hydrogen investments. He highlighted that the proposed regulations have the potential to limit the ability of enterprises to supply key export industries with sustainable energy solutions and impact their global competitiveness.
“As we pursue a just transition, developing economies need development space to address high levels of inequality, unemployment, under-development and the economic impact of the COVID-19 pandemic,” Ramaphosa said. “Abrupt disinvestment from fossil fuels by international financiers poses a great risk to Africa because of the impact on jobs, stranded assets, national economies, energy, and food security,” he added.
FACT SHEET: President Biden and G7 Leaders Announce Further Efforts to Counter Putin’s Attack on Food Security (The White House)
President Biden and G7 leaders will announce that they will contribute over $4.5 billion to address global food security, over half of which will come from the United States. President Biden will announce $2.76 billion in additional U.S. Government funding commitments to help protect the world’s most vulnerable populations and mitigate the impacts of Russia’s unprovoked and unjustified war in Ukraine on growing food insecurity and malnutrition. These new investments will support efforts in over 47 countries and regional organizations, to support regional plans to address increasing needs.
The Great Finance Divide (UN DESA)
Over the last two years, the world economy has been rocked by multiple non-economic shocks, from the COVID-19 pandemic to the war in Ukraine. Climate-related disasters continue to increase in frequency and severity. Together, these events have had enormous socio-economic consequences due to the interrelated nature of economic, social and environmental risks. But not all countries and people have been impacted in the same way, in part because a financing divide is sharply curtailing the ability of many developing countries to respond to shocks and invest in recovery. The outbreak of COVID-19 delivered a seismic shock to the global economy, but developed countries were able to respond with aggressive macroeconomic policies. They financed massive response packages (worth 18 percentage points of GDP) at very low interest rates, stabilizing household incomes and financial markets. Developing countries lacked the resources for a response at similar scale, despite international support. Middle-income countries generally had supportive fiscal policy, but at a smaller scale than in developed countries. The poorest countries, most of whom were shut out of markets or faced very high borrowing costs, were forced to cut spending in areas critical to the SDGs, including education and infrastructure, as they faced shortfalls in revenues at a time of greater needs. On the monetary policy side, while many developing country central banks lowered interest rates and reserve requirements, their interventions were smaller in scale and shorter in duration, due to concerns over currency depreciations, inflation and capital outflows.
Urban resilience: Addressing an old challenge with renewed urgency (UNDP)
Incredibly, over half of humanity already lives in urban settings. With this figure projected to rise to two thirds by 2050, the need for development action in cities can no longer be overlooked. Urban resilience – the ability of city dwellers to withstand economic, social, health, environmental, disaster and climate related risks – has assumed renewed urgency and has become central to our development discourse. We know that the impact of COVID-19 has been predominantly urban (nearly 90 percent of people affected, according to a UNSDG Policy Brief), and most significant socio-economic disruption has occurred in cities. The pandemic has exposed the “soft underbelly” of our urban development, governance and risk management systems.
More than ever before, a multitude of risks are manifesting themselves with higher frequency, greater magnitude and cascading impacts in cities. According to UNDRR, nearly 84 percent of the fastest growing cities face extreme climate and disaster risks; the vast majority of which are in Asia and Africa. This disconcerting scenario is compounded by the location of many high-risk cities in challenging development contexts such as least developed countries (LDCs), low-income countries (LICs) and Small Island Developing States (SIDs), coupled with considerable governance deficits and resource constraints. In fact, the World Bank projects that COVID-19 may have pushed an additional 88 million to 115 million people into extreme poverty, with a majority engaged in informal services and living in congested urban settings.
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Government asks cement producers for ‘no price increases’ (Moneyweb)
Minister of Trade, Industry and Competition Ebrahim Patel has reportedly asked South Africa’s cement producers to commit to “no price increases” in return for government approval of “safeguard action” against cheap cement imports, particularly from China and Vietnam. This has raised serious doubts about the success of the application by several cement producers to the International Trade Administration Commission (Itac) for “safeguard action”.
Electronic customs system to reduce cost of business in Kenya (The East African)
Importers and exporters in Kenya are set to benefit from increased competitiveness and reduced cost of doing business from reduced shipment delays and demurrage charges after President Uhuru Kenyatta assented to the National Electronic Single Window System Bill, 2021, on June 21.The Bill empowers Kenya Trade Network Agency (KenTrade) to operate autonomously without the Exchequer’s funding. KenTrade facilitates cross-border trade. KenTrade CEO Amos Wangora said; “The law will enhance the use of Single Window System by helping protect data,” stem fraud and exploitation in the logistics coordination system often faced by importers and exporters using the platform. Mr Wangora said the law makes KenTrade a one-stop Customs release centre and offers electronic trade transactions.
The law comes two months after KenTrade launched the Africa e-trade platform to handle the exchange of commercial documents. The platform is integrated in 22 countries, which are members of the African Alliance for Electronic Commerce.
Clerics push for govt to correct underinvestment in inequality (IPPMedia)
Speaking during the launch of a report titled ‘Leaving no one behind: Policy Interventions and Approaches to Fight Inequality in Tanzania and SADC region’ over the weekend in Dar es Salaam, Chairman of Interfaith Standing Committee on Economic Justice and Integrity of Creation (ISCEJIC) and Bishop at Tanzania Menonite Church Nelson Kisare said although Tanzania ranks 5th out of 15th in SADC and 39th globally, there some areas that require significant improvement especially regressive Value Added Tax (VAT) and poor tax collection. Bishop Kisare said Tanzania collects only 22 per cent of the tax it should, the top personal income tax rate is too low, and the VAT is high and doesn’t exempt basic foodstuffs.
Tanzania hits traders with nearly double export fees (Business Daily)
Tanzania has doubled the cost of export permits by 93 percent, a move likely to open another round of trade dispute between Nairobi and Dar es Salaam. The authorities in Tanzania have increased the cost of acquiring export permits from the previous Sh27,000 per truck to Sh52,000, according to border officials. The move caused a huge snarl-up of trucks moving to Kenya in the last one week as traders and truckers were caught off guard by the new requirement. “Tanzania has increased the charges that it levies on export permit to Sh52,000 per truck creating confusion at the border but activities are slowly coming back to normal,” said an officer of the Kenya Revenue Authority (KRA)
Hundreds of trucks were left stranded at the border the whole of last week as truck owners updated their export permits to meet the new requirements. However, officials from the Kenya Bureau of Standards (Kebs) told the Business Daily that they resumed the clearing of trucks last week.
Budget: Key projects to be financed next fiscal year (The New Times)
The Government has proposed to spend Rwf4,658.4 billion (over Rwf4.6 trillion) in the next fiscal year – 2022/23 which will start on July 1, representing an increase of Rwf217.8 billion or 5 per cent compared to the over Rwf4.4 trillion revised budget for the current fiscal year. Finance and Economic Planning minister Uzziel Ndagijimana told lawmakers on Thursday, June 23, that the proposed national financial plan will strengthen the ongoing economic recovery efforts as well as finance medium term development objectives planned for in the National Strategy for Transformation.
In the transport sector, the mobile bridge procurement project will be financed with Rwf1.5 billion. Such movable bridges are used to ease the movements of people and goods in case floods and landslides damage roads and static bridges. In the maritime transport component, the project for the development of water transport infrastructure was allotted Rwf13.8 billion.
Stakeholders hold expo to prepare Nigerian engineers for AfCFTA (Punch Newspapers)
Engineering and construction giants will converge on July 5 in Lagos for Elan Expo which will discuss the way forward for these professions and prepare them for the African Continental Free Trade Area. The three-day expo, which is tagged ‘the Biggest Construction and Engineering Show in West Africa’, is expected to open its doors to over 5000 engineers, architects, builders, manufacturers, and importers as over 150 brands who will showcase their products in sectors such as wastewater, water treatment, ceramics and sanitary wares, as well as building construction materials and machinery. The Chief Executive Officer, Elan Exhibition West Africa, Mr Jude Chime, noted in a press conference in Abuja that the expo, the sixth in the series, would also serve as a platform to harmonise various efforts of stakeholders in construction, engineering, and commerce, especially with the opportunities provided by the African Continental Free Trade Area, which would give them access to over 1.4 billion population.
Agricultural productivity in Ghana grows 72% within 9 years – AfDB (Myjoyonline)
Agricultural productivity in Ghana grew from $1,863 in 2012 to $3,208 in 2021, the African Development Bank has revealed. These improvements, the Bank said have increased food security, as shown by the prevalence of stunting among children under the age of five, falling from 22.8% in 2012 to 17.5% in 2021.Although Ghana outperformed other African Development Fund countries on nutrition, AfDB said in its country brief on Ghana that undernourishment remains a concern.
The report further said Ghana is in the process of developing more advanced food systems, having more than tripled its exports of processed commodities from $302 million in 2012 to $1.1 billion in 2021. This results principally from processing more cocoa, which has allowed the country to capture more value in the sector.
Shippers Authority sensitizes Exporters on AFCFTA (BusinessGhana)
The Ghana Shippers Authority has organized a sensitisation workshop for members of the Eastern Regional Shippers Committee (ERSC) on how to take full advantage of the African Continental Free Trade Area (AFCFTA). The members were taken through the requirements for registration and approved exportable products under the AfCFTA and benefits of some government policies in the export and import sector, including the benchmark reversal policy. Mr Jonathan Debra, a senior officer of the Ghana Revenue Authority (GRA-Customs division) explained that the 30 per cent discount was to cushion businesses, adding that every importer was entitled to that facility and, therefore, had the right to appeal as part of the clearing process.
On Wednesday, 22 June, the Board of Directors of the African Development Bank approved a €39.62 million loan to Cameroon to improve road access to the industrial and port areas of Kribi, in the south of the country. Designed for implementation of the second phase of the Kribi Industrial and Port Area Access Roads Development Project, the funds will complement the €114.33-million loan granted in October 2021 for the first phase. The Cameroonian Government built a deep-water port backing onto an industrial zone called ‘Kribi Industrial and Port Complex’ to address congestion in the port of Douala, which cannot accommodate deep-draft vessels, due to its proximity to the coastal town of Kribi. The complex is equipped with ultra-modern machinery and large storage and work areas. Access roads to the complex have deteriorated over time due to increasing usage by heavy-duty vehicles amid increased industrial activity at the site.
African trade and integration news
How AU platform can free Africa trade from shackles of US dollar (Business Daily)
Intra-Africa trade remains low at 13 percent compared other regions of the world. One of the factors hindering trade is reliance on third currencies - US dollars, Euros and the British Pound - for the clearing and settlement of cross-border payments and transactions, which in turn leads to high costs and long transaction times. Just recently, on his State visit to Kenya, President Hakainde Hichilema captured the impact of this obstacle aptly.”…how strange it is that sometimes we (Zambia) trade in goods from Kenya through Europe and vice versa. Really? Does that make sense? Absolutely not,” he told guests at State House during a state banquet hosted by President Uhuru Kenyatta recently.
The Pan-African Payment and Settlement System (Papss) is tipped to reduce transaction costs through more efficient direct rates and faster transfers, the Africa Export-Import Bank (Afreximbank), the platform’s developer says. That way, it notes, Africa will reduce dependency on the US dollar and other hard currencies, a situation that has particularly left Kenya facing external shocks that have weakened it, and choked supply chains.
The Eight (8th) Regional Meeting on the Trade in Services Protocol under the African Continental Free Trade Area (AfCFTA) was held virtually on 17th June 2022. The Regional meeting was preceded by a 3-day ECOWAS Commission Internal Technical Working Group (TWG) meeting on Trade in Services to consider the AfCFTA verification reports for ECOWAS Members States and provide proposals for their consideration. On behalf of Mr. Tèi KONZI, ECOWAS Commissioner for Trade, Customs & Free Movement, Mr. Kolawole SOFOLA, Acting Director of Trade, recalled the support provided by the ECOWAS Commission to Member States as part of effort at ensuring that the regional offer is in line with negotiation modalities as well as the regional integration agenda. He added that the recent bilateral sessions organized by the ECOWAS Commission with Member States, provided an opportunity to discuss issues raised from the verification reports. He concluded on the importance of submitting a regional Schedule of Specific Commitments for consideration by the AfCFTA Senior Officials for onward transmission to AfCFTA Council of Ministers.
The meeting committed to finalizing the outstanding issues in the respective national Offers and resubmit to the ECOWAS Commission for consolidating into the Regional Schedule for onward submission to the AfCFTA Secretariat.
ECOWAS sensitises member states on new regional infrastructure masterplan (ECOWAS)
Concerned by the increasing infrastructure deficit and the need to address the financing challenge of regional infrastructure projects, The ECOWAS Commission through the ECOWAS Project Preparation & Development Unit (PPDU), and the sector Departments of Transport, Telecommunication, Energy and Water Resources, has held a sensitization meeting on the recently developed ECOWAS Regional Infrastructure Masterplan. The event was held from 23rd to 24th June 2022 at the Alisa Hotel, Accra, Ghana. The objective of the meeting on one hand was to present the newly approved Masterplan to the Ministries in charge of National Planning from Member States, and on the other hand to ECOWAS Institutions (Parliament, Court of Justice and EBID) and Development Partners,
E Africa debates Kenyan prez candidate proposal to ban mitumba imports (Fibre2Fashion)
A proposal by Kenyan presidential candidate Raila Odinga in his manifesto to phase out trade of second-hand clothes (mitumba) in the country has sparked a debate on the future of the trade. The East African Community has since 2016 pushed member states to buy clothes and footwear made in the region to boost local manufacturing and help the economies. Kenya, Uganda, Tanzania, Rwanda and Burundi were to phase out mitumba trade by 2019 but only Rwanda has implemented the plan, introducing high taxes on mitumba imports to deter their imports. Now the private sector in the region says import of used clothes should be phased out gradually to allow focus on growth of the local textiles and apparel sector, according to newspaper reports from the region.
African ministers speak out on impact of global food crisis (AfDB)
African ministers on Friday outlined the impact that the global food crisis is having on their countries and added their voices to calls for action. The ministers made the call to action at a ministerial conference in Berlin, convened by the German government, as current head of the G7 group. The conference highlighted the impact of soaring food prices, brought on by the Russia-Ukraine war. As a result of the conflict, the African Development Bank estimates that the continent faces a deficit of at least 30 million metric tons of food, especially wheat, maize, and soybeans imported from the two European countries. The Bank has responded with a $1.5 billion food facility. The main goal of the conference was to coordinate responses to the global food crisis. It brought together ministers from the G7 wealthiest nations and Champions of the UN Secretary General’s Global Crisis Response Group, as well as the most vulnerable and most affected countries, among others.
African Development Bank Group urges G7 countries to support Africa’s emergency food production plan (AfDB)
The African Development Bank’s Board of Directors has approved the establishment of the African Pharmaceutical Technology Foundation, a new groundbreaking institution that will significantly enhance Africa’s access to the technologies that underpin the manufacture of medicines, vaccines, and other pharmaceutical products. African Development Bank Group President, Dr. Akinwumi Adesina said: “This is a great development for Africa. Africa must have a health defense system, which must include three major areas: revamping Africa’s pharmaceutical industry, building Africa’s vaccine manufacturing capacity, and building Africa’s quality healthcare infrastructure.”
Global economy news
DDG Ellard addresses the role of multilateralism in a world of polycrisis (WTO)
There are years in which decades happen. Indeed, the past few years have changed the world and the global economic outlook. We are living through a global pandemic, the war in Europe, rampant inflation, widespread food insecurity in the developing world. And we are facing the existential threat of climate change, extreme weather events, and environmental degradation. I use the word “polycrisis” to refer to these multiple and overlapping crises of our time. This Greek term was made famous by Jean-Claude Juncker, a former President of the European Commission, in the context of the European crises of the past decade. It is also suitable to describe today’s world more broadly. We live in the world of polycrisis.
In many ways, not enough globalization — or multilateralism — has resulted in the world’s uneven, fragmented response to the pandemic, worsening its effects. And vaccine protectionism has led to inadequate attempts to vaccinate people in developing countries, risking the emergence of new, vaccine-resistant variants threatening the world. In short, the pandemic has shown that when a global threat is mismatched with a deglobalized response, a crisis is likely.
The WTO’s multilateral approach has a tremendous role to play in solving all of these problems, to harness the best parts of globalization. It brings all 164 Members to the table and gives each of them a voice. Consensus is very difficult to achieve and negotiating international agreements is the long game. But once consensus, is achieved, it means that there is buy-in from all WTO Members, that they “own” the Agreement, and will be likely to respect it. It’s not a “majority rules” outcome.
UK to consult with WTO members on tariffs protecting steel (Engineering News)
The UK government said it will consult with other countries at the World Trade Organization on its plan to extend steel tariffs, after prime minister Boris Johnson said it was “reasonable” to use them to protect Britain’s domestic industry. “No decision has yet been taken,” Johnson’s spokesman Jamie Davies said to reporters on Monday, ahead of a June 30 deadline when some of the tariffs will expire. The decision “will balance our international obligations and the national interest.” The UK has proposed to extend safeguard tariffs and quotas on certain steel products for a further two years, after International Trade Secretary Anne-Marie Trevelyan said that ending them may cause “serious injury” to British producers. On Sunday, Johnson said UK steel ought to enjoy the “same protections” as in other European economies.
Decision on LDC trade benefit extension may come next year (The Daily Star)
The next WTO Ministerial Conference (MC) in December 2023 might have a decision on the extension of trade benefits for least developed countries (LDCs) which are due to make the United Nations status graduation to a developing one. This was stated by Senior Commerce Secretary Tapan Kanti Ghosh at a press conference in the commerce ministry in Dhaka yesterday on the outcomes of a recently concluded World Trade Organization (WTO) MC12. The WTO members countries at the MC12 held in Geneva last week reached consensus that they would extend the benefits for a certain period for a smooth graduation. However, leaders of the countries did not particularly state when and for how long the benefits would be extended.
COVID-19 recovery a chance to remake society for a better future (UNCTAD)
While the COVID-19 pandemic is not yet over, it offers valuable lessons that can help the world respond better to other crises, says UNCTAD’s COVID Report 2022 published on 24 June. Drawing on all its analyses since the beginning of the pandemic, UNCTAD says this may be a once-in-a-lifetime opportunity to remake society for a better future. The report details how the pandemic has exposed the weaknesses in the structure of the international social and economic order. At the same time, it finds remarkable resilience in various areas, but only some people have benefited from this, leaving many behind. COVID-19 has shown that only the state has the capacity to deal with systemic shocks and that responses cannot be left to the markets. The pandemic has underlined that building the resilience of the global system to shocks and protecting the most vulnerable is a shared responsibility and the only feasible way forward.
The report says the pandemic has not only shown how interconnected the world is but also revealed the deep inequalities that exist between countries in many dimensions.
CHOGM 2022 Communiqué, Leaders Statement and Declarations on Delivering a Common Future (The Commonwealth)
On the final day of the Commonwealth Heads of Government Meeting 2022 (CHOGM 2022), leaders met today in Kigali, under the theme of ‘Delivering a Common Future: Connecting, Innovating, Transforming’. Heads underscored the importance of connecting, innovating, and transforming in order to facilitate a full recovery from the COVID-19 pandemic, achieve the 2030 Agenda, and to respond to conflicts and crises in ways that increase resilience and progress in delivering a common future, underpinned by sustainability, peace and prosperity, to improve the lives of all the people of the Commonwealth.
Gabon and Togo join the Commonwealth (The Commonwealth)
The Commonwealth has admitted Gabon and Togo as its 55th and 56th members respectively. Both countries are former French colonies. Leaders accepted applications by the two west African countries at the closing session of the Commonwealth Heads of Government Meeting in Kigali, Rwanda. It follows formal expressions of interest by Gabon and Togo and consultation with member countries. Rwanda was the last country to join the Commonwealth, in 2009. Gabon is a sparsely populated country of two million people, bordering Cameroon – also a member of the Commonwealth – and Equatorial Guinea, and the Republic of Congo. Togo is bordered by Ghana – a Commonwealth member – and Benin and Burkina Faso. It has a population of approximately 7.8 million people.
Countries must not become protectionist: Singapore PM (Borneo Bulletin)
Countries must be wary of turning to protectionism, Singapore Prime Minister Lee Hsien Loong said on Friday, warning that it was “impossible” for any one nation to produce everything it needs by itself. This comes as the pandemic exposed the complexity and weakness of global supply chains, he said, pointing to how supplies of gloves, personal protective equipment, and ingredients for tests and vaccines were sometimes disrupted and interdicted. “Faced with an emergency, some governments intervened to override the normal operation of the free market,” he said, recalling how suppliers could not fulfil promised deliveries. Lee was speaking at the Commonwealth Heads of Government Meeting (CHOGM), held in Kigali, Rwanda, on post-COVID recovery.
The supply chain shocks caused by COVID-19 led to an “unhappy experience” for countries and shook their confidence in globalisation, Lee said. “Countries are now emphasising self-sufficiency, moving from just-in-time production to just-in-case precautions,” he said.
Commonwealth’s rich nations take heat for failing to help small states (The East African)
Rich and influential Commonwealth countries — including the UK, Canada and Australia — have been put on the spot for failing to help low-income and small member states in their hour of need at the height of the global pandemic. They also happen to be members of the elite G7 or G20 in the case of Australia, while on the other end of the spectrum, the Commonwealth has 13 Least Developed Countries and 32 small states. The Commonwealth is supposed to be an important “collective voice” and a vehicle to potentially provide leverage for global positions but influential and rich members remain lukewarm and pursue national interests, to the detriment of the majority of Club members who happen to be developing countries.
Trade policy can have a significant impact in making fisheries and aquaculture more sustainable. However, trade policy can also provide both positive and negative incentives to stocks conservation if not designed responsibly. Developing Oceans Economy and Trade Strategies (OETS) at the national level can frame sound ocean economic governance and provide an enabling environment for ocean-based value chains seeking sustainability. At the same time, addressing negative public incentives such as harmful fisheries subsidies need a clear and immediate multilateral response in the form of a Fisheries Subsidies Agreement under the World Trade Organization (WTO) with urgency. Seafood Interactive Maps (SIMs) can show a new path and ways for producers globally to learn, connect to markets, find technology solutions, and understand investment opportunities in sustainable seafood harvesting and farming. New risk assessment methodologies for aquaculture under the One Health Approach (OHA) can assist in understanding and mitigating impacts from the intensive use of antibiotics, including challenges with antimicrobial resistance that has broad implications for people and sustainability. This event will introduce how new and diverse partnerships, approaches and recommendations can maximize outcomes for fast-tracking the implementation of targets 1, 4, 6 and b of SDG 14.
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Local news
South Africa is making a big localisation push – and has stopped using some international products: Ramaphosa (BusinessTech)
Answering a recent parliamentary Q&A, Ramaphosa said localisation is one of several tools in the economic reconstruction and recovery plan to improve the dynamism of the economy, promote investment, develop new markets, transform the economy, promote equitable spatial development and contribute to the development of a capable state. “Localisation is pivotal in stimulating growth and transformation. It is about creating an enabling environment for inclusive growth, deepening the country’s industrialisation base and creating targeted transformation measures,” he said. “It seeks to expand the economy to include more participants and to ensure that more parts of the population, including women, young people, black South Africans and the rural poor, can contribute to and benefit from growth.”
Mutually respectful, beneficial foreign investments key – Bonakele (Engineering News)
South Africa needs “very predictable, clear regulatory systems” as it seeks mutually respectful and mutually beneficial foreign investment, South African Competition Commission Commissioner Tembinkosi Bonakele said at the Southern Africa France Business Forum on June 22. Hosted by Business France, French Foreign Trade Advisors and the French South African Chamber of Commerce and Industry, the forum sought to strengthen business ties between France and South Africa.
Stabilisation to growth: Policy reforms bear fruit as imports substitution gain ... (Chronicle)
ZIMBABWE’S economy has transitioned from stabilisation to growth as policy reforms being spearheaded by the Second Republic continue to register positive results as evidenced by the increase in capacity utilisation and the shift towards import substitution, President Mnangagwa said yesterday. Despite persistent speculative exchange rate distortions and the recent global supply chain disruptions linked to Covid-19 and the ongoing Russia-Ukraine conflict, which have induced inflationary shocks, the President said the country’s economic transformation journey remains on track. Zimbabwe’s export earnings hit the highest levels in history last year, driven by the growth in the manufacturing sector which has seen capacity utilisation increasing to above 60 percent as at December 2021, according to ZimStat. This is a huge increase when compared to 47 percent in 2020 and about 36 percent in 2019, economic experts have said.
Maize flour to remain costly on expensive imports (Business Daily)
Expensive imports have dampened hopes for cheaper flour as the cost of transporting maize from the source markets has shot by 150 percent. Transporters are charging the equivalent of Sh1,500 for a single bag of maize transported from either Malawi or Zambia from Sh600 previously, pushing the landing cost of a 90-kilo bag to Sh6,000 when it lands in Nairobi. The price of flour in the country has been on an upward trend since the beginning of the year and this week it crossed the Sh200 mark, a first in Kenya’s history as the shortage of the staple food persisted. Animal feeds manufacturers, who are also importing the same standard maize for feeds say the high cost has curtailed most of their members from shipping in the produce.
World Bank shields Kenya from costly foreign debt (Business Daily)
Kenya has relied heavily on the World Bank Group for foreign funding since January on the back of a relatively high-interest international market that saw the Treasury shun expensively-priced commercial loans. The latest Treasury data on external borrowing shows the stock of debt from rich countries (bilateral) as well as commercial lenders — banks and Eurobond — fell in the four months ended April. Loans from multilateral lenders, however, increased Sh95.71 billion on net borrowing basis — driven by World Bank’s International Development Association (IDA) and Asian Development Bank/Asian Development Fund (ADB/ADF).The two multilateral financiers, whose loans come on concessional terms as low as 0.5 percent interest and a longer repayment period with a generous grace period, accounted for nearly three-quarters of the growth in multilateral debt and 95.5 percent of the net external debt.
Manufacturers hit lenders with Sh21bn defaults in months (Business Daily)
The manufacturing sector accounted for nearly half of loan defaults in the first quarter of the year on the back of high input costs, according to the Central Bank of Kenya. The sector’s non-performing loans climbed to Sh77.8 billion by March from Sh57 billion three months earlier, the highest quarterly growth in value on record. The Sh20.8 billion jump came at a time the sector complained of the high cost of shipping and challenges in accessing adequate stocks of dollars to pay suppliers on time amid increased competition for raw materials in the global markets.
The Kenya Association of Manufacturers blames the default in servicing loans on high cost of doing business as a result of “global increase in commodity prices and the weakening of the Kenyan shilling”. “All importers of raw materials for production have been affected by these challenges from global economic crisis which have greatly disrupted global supply chains for imported goods,” KAM’s head of policy and research Job Wanjohi said on Thursday.
British firms blame corruption for low investments in Kenya (Business Daily)
British firms have blamed corruption as an impediment in the country’s business environment, but they maintain Kenya remains an investment hotspot in Africa for profitable investments. The firms under their business lobby say they will back the private sector’s fight against graft as part of the business reforms they hope to achieve. This is after Kenya signed a Memorandum of Understanding (MoU) with the British Chamber of Commerce Kenya (BCCK) to promote Kenya’s business climate reforms agenda.
Speaking during the signing of the MoU, Principal Secretary, State Department for East African Community in the Ministry of East African Community and Regional Development Dr Kevit Desai, said that business integrity is the foundation of international trade. “While corruption is a global issue, it is a concern that has been raised in our discussions with businesses and international investors,” he said. “This MoU will create a platform to reaffirm Kenya’s commitment to strengthening the business climate. It will also build private sector participation in the digitisation and automation of government services in procurement, revenue collection and cross-border trade.”
African trade and integration news
More Education Is Needed On PAPSS – GITFIC (News Ghana)
The Ghana International Trade and Finance Conference (GITFIC) at their sixth annual conference recommended the upscaling of education on the Pan African Payment and settlement systems (PAPSS). The key players, they suggested would be the PAPSS Council, GITFIC secretariat, WAMI and the African Continental Free Trade Area (AfCFTA) secretariat who would target Traders’ Unions, Industry players, Exporters, Financial Watchers and Analysts. In doing so, the stakeholders must identify and seek collaboration with existing mobile money platforms for seamless interoperability and Signatories to AfCFTA must harmonise local financial rules with AfCFTA protocols.
Speaking on high cost and bureaucratic systems of doing business in many African countries, Mr Ackom called for the creation of an African business regulatory database, which would be accessible to investors and traders and recommended the development of the opening of a, common platform describing all business rules for investors, traders in goods.
He said in the trade and finance ecosystem within Africa to address some of the key challenges affecting implementation of the AfCFTA, the GITFIC would continue to engage the key stakeholders to facilitate the execution of the proposed action points.
Adopt common approaches to tackle economic challenges: Dr Bawumia urges African countries (BusinessGhana)
The Vice-President, Dr Mahamudu Bawumia, has urged African countries to adopt common regional and continental approaches to navigate the present global economic challenges. Such measures, he said, would help the continent exploit synergies to speed up their integration into the global economy. “Regional and economic integration will not only help our countries access the expanded regional markets within but also facilitate their global competitiveness,” added. Addressing the 22nd annual general meeting (AGM) of the African Trade Insurance (ATI) Agency in Accra yesterday[June 23, 2022], the Vice-President further said Africa needed to play increasing roles in the global market to maximise opportunities available in the interconnected world economy.
Dr Bawumia also called for closer cooperation between the AfCFTA Secretariat and the ATI to speed up the implementation of the free trade area. He said if Africa worked together in that direction, “we will gain more time and mileage in reducing reliance on external markets and enhance value addition of our resources for our socio-economic development”.
The Southern African Railway Association (Sara) says improved rail infrastructure and co-operation between neighbouring southern African countries will help to boost the economies of these countries.
Sara president Sizakele Mzimela, who is also the Transnet Freight Rail chief executive, was speaking at a media briefing in Durban yesterday. The event was also attended by Babe Botana, Sara’s executive director.
“We know rail transport is crucial for rebuilding our economy. As we and our SADC countries’ economies have still been recovering from the Covid-19 pandemic, we look to rail transport between our countries to rebuild our economies.” Mzimela said the damage to infrastructure affects the rail transport industry and the economy as a whole.
East African court delivers verdict on Gatuna border closure (Independent)
The closure of the Gatuna border by Rwanda was illegal and contravened the East African Community Treaty, the East African Court of Justice has ruled. A panel of three Judges of the East African Court of Justice comprising Monica Mugenyi from Uganda, Audace Ngiye from Burundi, and Dr. Charles Nyawello from South Sudan delivered the verdict read in a zoom court session on Thursday. The judges noted that the actions of the Rwandan government contravened provisions of the EAC treaty including Article 5, which lays down the objectives of the community, Article 6 on fundamental principles of the Community, and Article 7 which provides for the operational principles of the Community. In February 2019, Rwanda closed the Gatuna border, blocking the movement of people and goods from Uganda and Rwanda.
EAC unveils Regional Bioeconomy Strategy 2021/22-2031/32 (EAC)
The East African Community has unveiled the Regional Bioeconomy Strategy 2021/22-2031/3 at the EAC Headquarters in Arusha, Tanzania. The strategy will offer an opportunity for Partners States to achieve their individual aspirations, making use of the region’s abundant natural resources, including underutilized agricultural waste materials, to produce value-added products with applications in many sectors including food, health, energy and industrial goods. Among the key interventions proposed in the strategy that was unveiled by the EAC Deputy Secretary General in charge of Planning and Infrastructure, Eng. Steven Mlote, on behalf of the Secretary General, is the creation of new forms of sustainable bioenergy, and the conversion of waste materials to useful products.
The strategy further seeks to ensure the transformation of economies and place innovation in bio-based products and processes at the centre, with a bio-based circular economy as the organising framework.
An Africa-G7 energy food and security grand bargain (UNECA)
Europe, the US, and Africa are all reeling from the prolonged Russia/Ukraine crisis. They need to forge a new grand bargain that holds out the promise of shared energy security, food security, job creation and long-term green growth and prosperity, argues Vera Songwe. This grand bargain offers a three-pronged deal to the G7.
The EU gets short to medium-term access to energy, stability of supply, and acceleration of the transition as well as new and stronger trade and geopolitical partnerships. Africa gets a surge in investment into food and energy systems and investment for its youth who number seven times as many as European youth and for whom migration seems to be the only attraction.
The African Development Bank, Africa50, and Africa Sovereign Investors Forum (ASIF), have signed a letter of intent to collaborate on developing green and climate resilient infrastructure projects across Africa. The three entities will work together to galvanize financing and to drive the development of skills and expertise within the infrastructure sector. The signing took place on 20 June 2022 in Rabat, Morocco, during an event to launch the Africa Sovereign Investors Forum. Under the high patronage of His Majesty King Mohammed VI of the Kingdom of Morocco, 10 African sovereign investors agreed to set up the Forum. The newly formed platform will accelerate coordination to mobilize patient capital for the continent’s development.
Africa50 CEO Alain Ebobissé said: “this is an important step to building strong collaboration between the right stakeholders to meet the substantial infrastructure financing needs of Africa. We must make key regional infrastructure projects attractive and bankable for both global and African private investors and today’s signing will go a long way to address the continent’s infrastructure deficit. It is therefore important that we leverage the strength of the African sovereign wealth funds on the continent, who manage significant domestic savings, to drive the growth of Africa’s economies through the development and successful implementation of strategic infrastructure”.
Firms from rich countries are taking factories home: what this means for Africa (The Conversation)
There is no doubt that globalisation has benefited Africa greatly. This includes job creation, innovation, increased productivity and foreign direct investment. But global value chains are shifting in the wake of the COVID pandemic and Russia’s ongoing invasion of Ukraine. These changes are informed by the decisions of various companies to shift or move their manufacturing or supply chain networks closer to their home country. These decisions are being driven by a number of factors. They include a race to reduce exposure to disruptions, increase proximity and reduce vulnerability to external shocks. In light of this, Africa’s current benefits from globalisation will be jeopardised. Can African countries build a resilient economic future post-COVID-19 that is less reliant on the current uncertain global value chain?
To maximise the advantages of regional growth and markets, Africa must look inward and perhaps consider how to establish its own internal and national value chains.
Now is the time for African countries to start looking for African value chains or alternatives to the global value chain. Of course, this presents a myriad of challenges. Most African nations still don’t have the necessary transportation and road infrastructure to support logistical operations in regional markets. Consequently, significant investment is required for this to work.
European Parliament advocates equalizing EU trade relations with Africa (DW)
The European Parliament on Thursday backed a report advocating the use of trade policy to equalize relations between African countries and the European Union. “For too long, Africa has been reduced to a supplier of raw materials, with the result that the continent’s immense economic potential remains untapped,” Kathleen Van Brempt, a Belgian Social Democrat member of the European Parliament, said in a statement. The 27-country bloc should focus on five strategic areas as set out in the report, according to fellow Belgian MEP Saskia Bricmont of the Green Party: efficient infrastructure, food security, civil society, fair-trade agreements and sustainable economic development.
In the European Parliament report on the future of African trade relations, one major issue highlighted is how the majority of goods imported into the EU from Africa are cheaper primary goods such as food, drink and energy, while the EU ships mostly higher-value manufactured items the other direction, such as machinery and pharmaceutical products.
“Due to the continued direction of trade from colonial times, wealth is being transferred continuously from the African periphery to the industrialized and increasingly digitized centers,” the report states.
The EU therefore ought to share more of its technical knowledge with Africa to encourage on-the-ground manufacturing, Van Brempt told journalists in a briefing.
More African Central Banks Are Exploring Digital Currencies (IMF Blog)
Several sub-Saharan African central banks are exploring or in the pilot phase of a digital currency, following Nigeria’s October introduction of e-Naira. Nigeria was the second country after the Bahamas to roll out a CBDC.
CBDCs are digital versions of cash that are more secure and less volatile than crypto assets because they are issued and regulated by central banks. Countries have different motives for issuing CBDCs but for the region there are some potentially important benefits. The first is promoting financial inclusion. They can also facilitate cross-border transfers and payments.
Sub-Saharan Africa Reveals Lessons for Governance (IMF)
Countries in the region have made important strides in tackling corruption, with some outperforming emerging market and even advanced economies. A new book by the IMF, Good Governance in Sub-Saharan Africa features three countries—Botswana, Rwanda and Seychelles—that are leading in the effort to improve governance.
The most successful countries usually have five key elements in place. First, a high level of political commitment to good governance and transparency. Second, respect for the rule of law and property rights. The third element is ensuring efficiency, transparency, and public oversight of investments. Fourth, access to information. And finally, innovation and technology, which we believe can play a big role in helping governments deliver on these priorities.
Global economy news
14th BRICS Summit Beijing Declaration (China.org.cn)
Recalling the BRICS Joint Statement on Strengthening and Reforming the Multilateral System adopted by our Foreign Ministers in 2021 and the principles outlined therein, we agree that the task of strengthening and reforming multilateral system encompasses the following:-Making instruments of global governance more inclusive, representative and participatory to facilitate greater and more meaningful participation of developing and least developed countries, especially in Africa, in global decision-making processes and structures and make it better attuned to contemporary realities;
Using innovative and inclusive solutions, including digital and technological tools to promote sustainable development and facilitate affordable and equitable access to global public goods for all;
We reaffirm our support for an open, transparent, inclusive, non-discriminatory and rules-based multilateral trading system, as embodied in the World Trade Organization(WTO). We will engage constructively to pursue the necessary WTO reform to build an open world economy that supports trade and development, preserve the pre-eminent role of the WTO for setting global trade rules and governance, supporting inclusive development and promoting the rights and interests of its members, including developing members and LDCs.
We note that the COVID-19 pandemic has caused serious shock and hardship to humanity, unbalanced recovery is aggravating inequality across the world, the global growth momentum has weakened, and the economic prospects have declined. We are concerned that global development is suffering from severe disruption, including the widening North-South development gap, divergent recovery trajectories, pre-existing developmental fault-lines and a technological divide. This is posing huge challenges to the implementation of the 2030 Agenda for Sustainable Development as economic and health scarring, particularly for EMDCs, is projected to persist beyond the current pandemic. We urge major developed countries to adopt responsible economic policies, while managing policy spillovers, to avoid severe impacts on developing countries. We encourage multilateral financial institutions and international organizations to play a constructive role in building global consensus on economic policies and preventing systemic risks of economic disruption and financial fragmentation.
Commonwealth Heads of Government Meeting opens in Kigali (The Commonwealth)
Leaders of more than fifty Commonwealth nations gathered in the Rwandan capital, Kigali, today for the official opening of the 2022 Commonwealth Heads of Government Meeting (CHOGM), held under the theme, ‘Delivering a Common Future: Connecting, Innovating, Transforming’.
This morning, His Royal Highness The Prince of Wales, representing Her Majesty Queen Elizabeth II as Head of the Commonwealth, emphasised the great value she has placed on the common friendship, humanities and values of the Commonwealth. He said: “As we build back from the pandemic that has devastated so many lives, as we respond to climate change and biodiversity loss that threatens our very existence, as we see lives destroyed by the unattenuated aggression from violent forces, such friendships are more important than ever. “The Commonwealth we need is on the frontlines of global challenges not on the peripheries watching events unfold. Our special strength is to bring issues into focus that might otherwise be overlooked.”
Rwanda to feature in UK’s new preferential trade system (The New Times)
British Prime Minister Boris Johnson has said that Rwanda is among countries expected to feature in the United Kingdom’s preferential trade system. Johnson was speaking at the closing of the Commonwealth Business Forum which concluded on Thursday in Kigali. He said that the United Kingdom would on July 6 announce countries to feature in their new preferential trade system which among other things removes tariffs when exporting to the UK. Rwanda and the United Kingdom have been negotiating the trade deal over recent months to establish future trade relations between the two countries.
The preferential system is likely to see Rwanda access the UK market without tariffs consequently reducing cost of doing business. This could have impacts such as increased production and value addition locally.
Statement By His Excellency Yoweri Kaguta Museveni at CHOGM Business Forum (Uganda Media Centre)
In the Global value chain, we see a full range of activities (design, production, marketing, distribution and support to the final consumer, etc.) that are divided among multiple firms and workers across geographic spaces to bring a product from its conception to its end use and beyond. Cross-border production has been made possible by the liberalization of trade and investment, lower transport costs, advances in information and communication technology, and innovations in logistics (e.g. containerization). Covid-19 pandemic, however, disrupted the GVC, adversely affecting the World economy and reversing the hard earned economic gains.
Uganda as a country realized the need to be creative and innovative. Uganda started efforts to produce her own Vaccine. But in this process, we found the Global value chains were not helpful.
The persistent uncertainty related to the shift of the epicentre of the pandemic from region to region, and the parallel instability affecting production costs, further exacerbated the situation, making it difficult to resume business on a global scale, leading many firms to reduce or stall their production activities.
At the same time, temporary surges of demand for certain critical commodities have not been met by increased supply since, under the current model, dramatic changes in the scale of production might not be easily absorbed after a return to normality.
GVCs have proven resilient and will play a significant role in the recovery. In addition, they have played a vital role in producing personal protective equipment and vaccine components as COVID-19 recedes. But shall require a fit-for-purpose re-modification to bring about the prosperity of those countries in most need without leaving anyone behind.
PM speech at the Commonwealth Business Forum (GOV.UK)
This is a very very timely meeting, as Jonathan has just said we’ve all come out of the misery of the covid lockdowns and look at what is going on in the world today – unfortunately we still see economic pressures. And we’re seeing spikes in the cost of energy, spikes in the cost of food, and of fertiliser.
I massively support that new Africa free trade area, we’re backing the new secretariat in Accra, and as African countries remove trade barriers from their borders, we’re making it easier to sell to the UK because on 6th July we’re launching a new preferential trade system for 65 developing countries, including Rwanda and 17 other Commonwealth members. liberalising our tariffs, getting rid of those pointless tariffs that are totally vexatious, that cost more to collect than the revenues you get from them abolishing the nuisance tariffs – they exist and improving our rules of origin to make it easier for all our countries to benefit. And what I feel so strongly about the Commonwealth is it’s not just about imports and exports – it’s about the partnerships we build
Members laud Ministerial Declaration addressing food safety, animal, plant health challenges (WTO)
The Sanitary and Phytosanitary Declaration for the 12th Ministerial Conference: Responding to Modern SPS Challenges acknowledges that the global agricultural landscape has evolved since the SPS Agreement was adopted in 1995. It instructs the SPS Committee to launch a work programme, open to all members and observers, that would further enhance how the SPS Agreement is implemented. This work programme would consist of new efforts to identify challenges in the implementation of the SPS Agreement and the mechanisms available to address them as well as the impacts of emerging challenges on the application of the SPS Agreement.
Members took the floor to underline that the principles and obligations of the SPS Agreement remain as relevant today as ever. They commended the process to achieve consensus on the Declaration, which they said could be used as a template for work in other areas. Many delegations noted that members had driven the talks leading to this outcome, with key proponents of the initiative listening to views expressed by other members and responding to questions and concerns in a constructive manner.
Commodity losses strip emerging markets of their lone attraction (BusinessTech)
The most popular trade in emerging markets this year – betting on commodity-exporting nations – is losing its appeal. The currencies and bonds of Brazil to Mexico and South Africa were the best performers among developing-nation peers in the first five months of 2022 as commodity prices skyrocketed following Russia’s invasion of Ukraine.
“We are closer to the end of the emerging-market commodity boom than the beginning or even the middle,” said Todd Schubert, head of fixed-income research at Bank of Singapore. “The rising risk of a severe economic downtown will further sap demand for a broad swath of commodities.”
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Local news
Opportunities abound in transport, logistics if challenges can be addressed (Engineering News)
There are considerable challenges facing the country’s commuter transport, freight and logistics sectors, which are impeding economic growth; however, there are signs of improvement. This was a key message from speakers during a transport and logistics panel discussion, on day two of the Manufacturing Indaba on June 22.
Innovation key for SEZs to support post-pandemic recovery (Engineering News)
There is a role for SEZs to play in the country’s post-pandemic recovery, however, this will require changes to certain approaches, speakers indicated during a ‘Growing Industrial Development Zones and SEZs’ panel discussion, as part of day two of the Manufacturing Indaba. Coega Development Corporation investment promotion manager Vuyokazi Gwabeni emphasised that, despite the challenges and impacts of the pandemic, the world is now moving towards a more environmentally conscious, sustainable approach, and that, for SEZs to contribute meaningfully to the country’s post-pandemic recovery, they must align to this as well.
Kenya to Increase Sugar Imports to Meet Local Demand (Krishi Jagran)
The Sugar Directorate of Kenya’s Agriculture and Food Authority set an annual limit of 180,000 MT for raw sugar imports from all countries in 2022. The issuance of import permits enforces this ceiling.
Sugar production in Kenya is expected to fall by 4% to 660,000 MT in MY 2022/23, owing to lower sugarcane yields caused by higher fertilizer prices, which are expected to limit fertiliser application.
Sugar has become a more appealing option than maize for many farmers in these areas due to lower labour requirements and guaranteed farmgate prices and sales through mill contracts. According to a GAIN report, USAID notes that private mills, which account for nearly 80% of total sugar production in the country, are expanding into zones previously reserved for state-owned operations. In the long run, this will almost certainly increase Kenya’s sugarcane yields and processing efficiency.
Firms in digital race to stave off supply chain disruptions (Business Daily)
The Covid-19 pandemic has come with many lessons for businesses. It has been a learning curve but Kenyan manufacturers and processing companies are fast tapping into technology to address supply chain hiccups that resulted from lockdowns and restricted movement in 2020.For close to two years, these companies were unable to source raw materials to manufacture different products. Warehouse fees went up at ports and the cost of importing materials rose. A 2022 report by South African business management software provider SYSPRO, indicates that 70 percent of businesses experienced material handling and supply chain disruptions while 60 percent were unable to engage with customers and suppliers. To solve the problem, industry players have committed to digital transformation initiatives, with 69 percent building digitisation strategies.
Ministry hosts Agoa capacity-building workshops (The Namibian)
THE Ministry of Industrialisation and Trade and the United States Agency for International Development (Usaid) Trade Hub held two African Growth Opportunity Act (Agoa) capacity-building workshops in Windhoek on 8 and 15 June. The purpose of the workshops was to provide an overview of Agoa key principles, export opportunities, and of the requirements to successfully export to the United States (US) market. The workshops came on the heels of the Namibia-US trade forum, which the ministry held in Windhoek early this month.
Agoa is a non-reciprocal unilateral US trade law providing eligible products from sub-Saharan African countries duty-free access to the US market. After its initial 15-year period of validity, Agoa was extended in 2015 by 10 years to September 2025. “The workshop on 8 June provided participants with relevant information on the overview of market entry requirements for Agoa, with discussions focused on the Food and Drug Administration Act with regards to compliance, food safety and standards,” said the statement.
The workshop on 15 June provided participants with appropriate facts on export procedures to the US through dual expositions made by Namibia’s customs experts and the US Customs and Border Protection, respectively.
TZ, China bolster diplomatic, trade ties (Dailynews)
AS trade relations between Tanzania and China continue to grow, the former is planning to open up another consulate in China’s financial hub-Shanghai. Already, Tanzania has a consulate in Guangzhou, which is operating under the coordination of the Embassy situated in Beijing which is the administrative capital of China. This was revealed yesterday by the Director General of African Affairs in the China Ministry of Foreign Affairs, Wu Peng during an exclusive interview with the ‘Daily News’. He said, successful completion of the move will significantly boost the economic and trade cooperation between the two countries that has seen a steady growth despite the eruption of Covid-19 pandemic. “It’s gratifying to see that our economic cooperation withstood the test of the Covid-19 pandemic, the bilateral trade continued to expand with the volume in 2020 and 2021 growing respectively by 9.5 per cent and 47 per cent to 6.74 billion US dollars,” he said.
Mozambique Country Economic Memorandum: Mozambique Needs a New Growth Model for Sustained, Inclusive Development (World Bank)
Mozambique has experienced rapid growth for more than two decades. Growth accelerated remarkably following the end of the civil war, averaging 7.9% between 1993 and 2015—among the highest in sub-Saharan Africa (SSA). However, growth decelerated sharply following the hidden debt crisis in 2016. The revelation of undisclosed debts led to a crisis of economic governance and a protracted economic slowdown, with growth falling to 3% in 2016-2019. The slowdown has been exacerbated by the natural disasters in 2019, the escalation of insurgency in Northern Mozambique since 2017, and the pandemic since 2020. Mozambique’s growth strategy has been limited in its capacity to generate productive jobs and support accelerated poverty reduction. Nearly two-thirds of the population lives in poverty and the country is among the most unequal in SSA. This partly resulted from Mozambique’s increased dependence on large extractive projects, with limited linkages with the rest of the economy, and low-productivity agriculture.
The discovery of some of the largest natural gas (LNG) reserves in the world is expected to provide Mozambique with a transformative opportunity for sustained and inclusive growth. However, making the most of the anticipated LNG resources and bringing growth closer to the poor will require a new ambitious growth model that goes beyond the extractives.
Togo: Sustainable and inclusive growth will depend on agricultural productivity and trade (World Bank)
While Togo has made undeniable progress in certain areas, the West African nation is yet to take full advantage of its potential to achieve sustainable and inclusive growth, the World Bank said today in its latest Togo Country Economic Memorandum. The Bank’s study entitled “Towards sustainable and inclusive growth” shows Togo could increase agricultural productivity and trade competitiveness as well as its participation in global value chains, and harness urban economic opportunities to achieve inclusive growth. The report pointed at low agricultural productivity, untapped economic potential of cities, and low levels of trade competitiveness and participation in global value chains, as the main contributing factors.
African trade and development news
Kenya to lose highest revenue in continental trade agreement – research (Monitor)
New research by the Economic Policy Research Center (EPRC) at Makerere University shows that the African Continental Free Trade Agreement will mostly inflict revenue loss on Kenya in the East African region. “Kenya will incur the largest loss at $14.2 million, followed by Uganda at $13.5 million. Tanzania is estimated to register revenue loss of $5.3million, Burundi $4.3million and Rwanda $ 3.9,” the research shows. Considering proportional tariff revenue losses, Burundi is expected to incur the biggest at 30 percent, followed by Uganda at 7.6 percent, Rwanda 5.5 percent, Kenya 4 percent and Tanzania 3.7 percent. “The overall result is that each EAC partner state will incur losses but at varying levels and proportions,” researchers observed. These custom revenue losses for the EAC member countries are trade trends in the rest of Africa where tariff revenue has significantly reduced.
Trade among African countries way to go - survey (The Star)
Africa’s reliance on external markets instead of promoting intra-Africa trade has shrank its economy and pushed up inflation, according to a new trade report .The survey by the Pan African Trade and Investment Committee (PAFTRAC) projects that the continent’s GDP growth will shrink by 0.7 percent while inflation will rise by 2.2 per cent. It attributes this to the Ukraine war which it says will push more people into food insecurity and poverty .This, at a time when the continent is still recovering from the effects of the Covid-19 pandemic which disrupted the global supply chain. According to the survey Africa imports around $40 billion (Sh4.69 trillion) worth of food annually and the soaring wheat and sunflower prices in the wake of the Ukraine crisis threatens food security in the region.
African governments must take industrialization seriously – Gabby Otchere-Darko (GhanaWeb)
Chairperson of the Advisory Board of the Commonwealth Enterprise and Investment Council (CWEIC), Gabby Asare Otchere-Darko, has stated that African governments have the potential to take advantage of industrialization on the continent. He noted that this will help the continent to gain influence on the global market. According to him, even though the African Continental Free Trade Area (AfCFTA) has been implemented, Africans have to do more to reap its benefits.
Speaking at the commonwealth business forum in Rwanda, he said, “In order for Africa to gain leverage in global trade or even trade within the continent governments across Africa need to take industrialization seriously because really even without us industrializing as much as we should, about 66% or so intra-African trade is in manufactured goods.”
Otchere-Darko added, “So it tells you the potential if we do more and I will use Ghana as an example; over the last five years a government set up “One District One Factory”, essential it means is that they identify the area that the district may have a sort of advantage … and then help fund to build a factory there.”
Côte d’Ivoire – Ghana : Will AfCFTA offer cocoa farmers a solution? (The Africa Report)
Alex Assanvo, the executive secretary of the Côte d’Ivoire-Ghana Cocoa Initiative, believes the African Continental Free Trade Agreement (AfCFTA) could offer solutions.
“It is my big dream,” Assanvo says, to push cocoa as a pilot project and show how the AfCFTA can be deployed to encourage more processing of raw commodities on the continent. “This is probably one of the best tools we have to start promoting local processing. We need to bring it to a level where processing becomes cheaper in Africa.”
Russia-Ukraine conflict hurting East Africa’s business community (The Statesman)
The Russia-Ukraine conflict is hurting the performance of East Africa’s business community due to the rising prices of key commodities, the regional apex lobby has said. John Bosco Kalisa, the chief executive officer of the East African Business Council (EABC), told journalists in Nairobi, the capital of Kenya, that the crisis has disrupted global supply chains and has been devastating given the substantial amount of products that are imported from the two nations, Xinhua news agency reported. “The financial performance of businesses has been negatively affected given that we are net importers of wheat and edible oils from Russia and Ukraine which are key inputs for businesses,” Kalisa said during the EABC-Trade Mark East Africa regional private sector consultative meeting on the African Continental Free Trade Area (AfCFTA) and Tripartite Free Trade Area (TFTA).
He observed that the transmission mechanism of the impact of the Russia-Ukraine crisis has manifested in the form of skyrocketing prices of most household and commercial goods.
Africa must end food, pharma import dependence, AfDB president says (Reuters)
Africa must wean itself off dependence on food and medicine imports, the president of the African Development Bank (AfDB) said, as the institution approved creation of a pharmaceutical tech foundation and began processing requests for food relief. Africa was hit hard by the economic fallout from the coronavirus pandemic. Now, as many countries are still struggling to rebound, they are facing rising inflation and food shortages aggravated by the war in Ukraine. “Africa should not allow itself to be vulnerable in excessively depending on others, whether it is for vaccines or whether it is for food,” AfDB president Akinwumi Adesina told Reuters on the sidelines of a meeting of Commonwealth leaders in Kigali.
Sub-Saharan Africa: Potential and Challenges in Textiles & Apparel Industry (Fibre2Fashion)
Sub-Saharan Africa is a diverse region with an abundance of human and natural resources and a great potential to be competitive in cotton production and achieve inclusive growth. Its textile and apparel industry has major importance in terms of job creation and income generation. In recent years, Sub-Saharan African countries have attracted the attention of textile companies globally and have become a budding destination for textile and apparel sourcing. This sector is witnessing a remarkable growth for which the key reasons are foreign investments, investor confidence in the continent’s manufacturing and design capability, and the rising cotton industry. In 2021, the textile and apparel exports from Sub-Saharan African countries increased by 25 per cent to $5.14 billion, compared to exports of $4.11 billion in 2020.
Call for innovative approaches to boost food security (The New Times)
Africa should not be relying on foreign countries such as Russia and Ukraine for food supplies, rather it should invest in enough resources, including technologies in the production of enough food and offset its imports, officials have said. They made the observations on Tuesday, June 21, during the “Innovating for Resilient and Inclusive Food Systems Think Tank” session which is part of the CHOGM2022 underway in Kigali.
Agnes Kalibata, President of the Alliance for a Green Revolution in Africa (AGRA), said that the agriculture sector in some places, especially in developing countries of the Commonwealth is heavily underinvested, calling for adequate funding to boost the sector productivity, strengthen its resilience and deal with climate change, as well as create jobs. “And the opportunity is very clear with us. We have a market but we have successfully isolated smallholder farmers in these markets. They are not part of these markets,” she said.
According to “the Impact on Trade and Development of the War in Ukraine,” a rapid assessment by the United Nations Conference on Trade and Development (UNCTAD) of March 2022; in 2018–2020, Africa imported $3.7 billion worth of wheat from the Russian Federation and another $1.4 billion from Ukraine.
Shift Towards Domestic Tourism a Game Changer in Post-Covid-19 Recovery (Africa.com)
For decades, tourism has remained a major contributor to the GDP of African economies. In 2019, the industry accounted for about seven percent of Africa’s GDP and contributed $169 billion to its economy—about the size of Côte d’Ivoire’s and Kenya’s combined GDP. But the advent of the Covid-19 pandemic changed all that. In July 2020, the African Union estimated that Africa lost nearly $55 billion in travel and tourism revenues and two million jobs in only the first three months of the pandemic. The International Monetary Fund (IMF) predicted that real GDP among African countries dependent on tourism shrunk by 12 percent in 2020. However, as Covid-19 restrictions ease, tapping domestic tourism demand has offered the sector some respite, as a growing middle class and young population show more interest in domestic tourism.
According to the World Travel &Tourism Council (WTTC), domestic tourism accounted for 55 per cent of travel and tourism spending in Africa in 2019, below the contribution of local tourism in North America (83 per cent), Europe (64 per cent) and Asia-Pacific (74 per cent). Domestic tourism accounted for 73 per cent of the total global tourism spending in 2017. Africa’s growing middle class and population of young travellers hungry for adventure, and the recently launched African Continental Free Trade Area (AfCFTA), the world’s largest free trade area by the number of participating countries, are among the pillars seen supporting the future growth of domestic and regional tourism in the continent.
With the sustained strain on economies and livelihoods due to the COVID-19 pandemic, and exacerbated by the Russia-Ukraine conflict, the African Union continues to engage among its Member States on ways to enhance the resilience of African economies to withstand such unprecedented events which have profoundly affected growth prospects of the continent, leaving little fiscal room for Member States to satisfy the needs of their population and meet their financial obligations to the Union.
At the just concluded African Union High Level meeting of the Committee of Fifteen Finance Ministers, also known as the F15, Amb. Ukur Yatani, Kenya’s Cabinet Secretary, National Treasury and Planning, chairing the meeting on behalf of Mr. Tahir Ngulin, Chairperson of the F15 and Minister of Finance and Budget of the Republic of Chad, underlined the significance of efforts by the continent’s leadership to reduce dependence on external resources; enhance predictability of revenues from Member States; and continue reforms towards greater accountability and transparency in the management of African Union resources.
He stated, “in this reform journey, this Committee of Fifteen Ministers of Finance has been accorded a salient role of participating in the preparation and oversight of the annual budget of the Union. This mandate provides us with the opportunity to contribute to the desire of AU Member States to achieve a financially autonomous and self-reliant African Union. I am happy that the F15 Committee has made useful input in this regard…However, a lot of work lies ahead of us to not only sustain the gains made so far, but also entrench the principles and culture necessary for efficient and effective budget making and implementation in the Union.”
UK appoints new trade commissioner to lead UK-Africa trade and investment relationship (GOV.UK)
International Trade Secretary Anne-Marie Trevelyan today (23 June 2022) appointed John Humphrey as Her Majesty’s Trade Commissioner (HMTC) to Africa. The appointment comes as the Prime Minister attends the Commonwealth Heads of Government Meeting (CHOGM) this week to further strengthen ties with Commonwealth nations – 19 of which are in Africa.
As the new Trade Commissioner for Africa, John will generate business opportunities for the UK while contributing to the growth of sustainable, resilient, and productive economies across the African continent.
With a growing population and economy worth $2.4 trillion, a thriving trade and investment relationship between the UK and Africa presents huge opportunities across a variety of sectors including tech, transport, clean energy, sustainable infrastructure and Agri-Tech.
How significant is Africa to the West, to the world? (BusinessAMLive)
The global economic growth and growing affluence are resting on Africa’s prop. The major drivers of current and possibly future economic growth will remain the unsung Africa, for a number of reasons, some of which are under consideration here. Unfortunately, for the world, keeping Africa perpetually backward is one way of holding back the development of the entire world. This is because various mechanisms in place, designed to make Africa – a major source of the engine that keeps the world economy going – continually depend on those countries that depend on commodities imported from Africa for their own survival, will also be negatively affected, albeit indirectly. Evidence abounds. Global disruption in the supply chain during the COVID-19 lockdown created huge shocks within the manufacturing sector in the West and, in particular, China that has come to assume the status of global manufacturing powerhouse. Although the impacts were widespread, the industrialised countries experienced huge shocks from the supply chain disruptions as raw material exports were truncated while the lockdown lasted.
Africa’s raw materials are needed cheaply if the economies of the industrialised countries are to continue to run well. The very day the raw material exporting countries of Africa begin to process locally and send finished products to the world market is when the yoke of dominance of the raw material importing countries is broken. It looks like a dreaded prospect for many industrial countries, particularly in the West.
Global economy news
BRICS valuable platform to tackle global challenges: President Ramaphosa (SAnews)
The BRICS response to the COVID-19 pandemic demonstrated what can be achieved when nations work together in the spirit of friendship, solidarity and responsibility, says President Cyril Ramaphosa. President Ramaphosa said the COVID-19 pandemic continues to have a devastating impact on human life, livelihoods, economies and communities around the world. He was delivering his opening remarks during the virtual 14th BRICS Heads of State Summit on Thursday. “We are here as members of BRICS to affirm our shared desire for a world in which all people have a meaningful stake, in which all have equal opportunity, and from which all can benefit,” the President said. He said that the launch of the BRICS [Brazil, Russia, India, China and South Africa] Vaccine Research and Development Centre, in March this year, will strengthen international health and science cooperation to prepare for future crises. The President said it is cause for great concern that the rest of the global community has not sustained the principles of solidarity and cooperation when it comes to equitable access to vaccines.
“We need to realise the great potential of our economic partnership to strengthen intra-BRICS trade, investment and tourism. Our combined economic strength should be a catalyst for sustainable global economic recovery,” he said.
BRICS partnership stands strong amid global challenges (Cyprus Mail)
The 14th summit of BRICS, an emerging-market group that includes Brazil, Russia, India, China and South Africa, will be held this week in virtual format under the theme of “Foster High-quality BRICS Partnership, Usher in a New Era for Global Development” under China’s chairmanship.
BRICS countries are an important driving force for regional and global economic and trade growth. Despite the prolonged impact of COVID-19, the total volume of trade in goods of BRICS countries reached nearly US$8.55 trillion in 2021, a year-on-year increase of 33.4 percent, official data shows.
Meanwhile, China’s bilateral trade with other BRICS countries totaled US$490.42 billion, up 39.2 percent year on year and higher than the overall growth of China’s foreign trade in the same period. Worldwide, BRICS countries account for 18 percent of trade in goods and 25 percent of foreign investment, statistics show.
The achievement of BRICS cooperation has not only enhanced the say of emerging markets and developing countries in the world, but also made BRICS an important platform for promoting South-South cooperation.
Commonwealth must leave no one behind – Kagame (The New Times)
President Paul Kagame has said that Commonwealth countries need to continuously engage and find out what they can do to bring a balance to ensure that everyone in the 54-nation community feels included. Kagame said this at the opening of the Commonwealth Business Forum on Tuesday, June 21, in Kigali, drawing more than 1,000 delegates. The forum is one of the events taking place in the Rwandan capital as part of the 26th edition of the Commonwealth Heads of Government (CHOGM). “With the Commonwealth, we already have many things in common indeed. Be it the language, be it the different systems, financial systems, that would enable us to make investments, trade with each other all together,” the Rwandan leader said during a panel discussion.
He said there is a starting point that is more or less good enough, but “we need to make it better.”
Whether it is trade and business, investments, or other issues such as health, Kagame said, “the pace at which things move needs to be increased, so that we give more value to the Commonwealth and the feelings of the people of the Commonwealth.”
Barometer indicates continued services trade recovery despite Ukraine conflict (WTO)
World services trade continued to grow into the second quarter of 2022, indicating resilience to the conflict in Ukraine according to the WTO’s Services Trade Barometer, released on 23 June 2022. The latest reading of 105.5 is firmly above the previous reading of 102.5 in September 2021 and comfortably over the baseline value of 100 for the index, signalling that services trade is likely to post sustained gains in the second quarter once official statistics for the period are available.
Development Committee welcomes MC12 decision on e-commerce work programme (WTO)
WTO members welcomed at a meeting of the Committee on Trade and Development on 20 June the decision taken by the 12th Ministerial Conference (MC12) to reinvigorate activities under the Work Programme on E-Commerce, with the aim of increasing the participation of developing countries and least-developed countries (LDCs) in digital trade. The Committee also received updates on initiatives to increase capacity-building training activities in these countries and on the preferential treatment extended to LDC exports.
STDF Annual Report shows strong partnerships keep safe trade flowing (WTO)
The latest Annual Report from the Standards and Trade Development Facility (STDF), launched on 22 June, spotlights how ongoing dialogue and cooperation among partners have helped developing and least-developed countries (LDCs) strengthen their food safety, animal and plant health capacity and facilitate safe trade despite the ongoing pandemic.
Policy Brief: How Can the WTO Continue Delivering Good Outcomes on Food Security? (IISD)
A few years ago, trade negotiators pacing the corridors of the World Trade Organization (WTO) would not have expected a war in Europe, a global pandemic, and a global food crisis to dominate discussions at a WTO Ministerial Conference. In fact, the Food and Agriculture Organization of the UN (FAO) has reported that world hunger increased in 2020 under the shadow of COVID-19 pandemic. Zooming into the Black Sea, the closure of Ukrainian ports amidst the Russian invasion does not bode well for net food importing countries across the globe. In June 2022, trade ministers from more than 100 WTO members gathered in Geneva to discuss international trade rules, including those on trade in food and agriculture. The Twelfth Ministerial Conference of the WTO (MC12) delivered a first important outcome on food security: a Ministerial Decision on World Food Programme (WFP) Food Purchases Exemption from Export Prohibitions or Restrictions – the WFP exemption.
The WFP exemption is a symbolically important outcome that showcases the political will of WTO members to tackle the ongoing food crisis. The WFP exemption could save time and ensure critical relief reaches the most vulnerable, as underlined by the World Food Programme. Importantly, by agreeing the WFP exemption, WTO members have demonstrated that the WTO is a forum where non-trade concerns such as food security can be progressed.
The so-called ‘Geneva package’ of MC12 outcomes also includes a Ministerial Declaration on the Emergency Response to Food Insecurity (WTO Food Security Declaration). This is a welcome development. The WTO Food Security Declaration underscores the need for agricultural trade to flow and reaffirms the importance of not imposing export restrictions or prohibitions in a manner inconsistent with relevant WTO provisions (paragraph 4). Notably, it features a commitment to having a dedicated work programme in the WTO Committee on Agriculture (CoA) to operationalize the Marrakesh Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries (paragraph 8).
How investing in trade finance can be profitable and help SMEs thrive (WEF)
Trade constitutes the backbone of every economy and 80-90% of global trade requires financing. Small and medium-sized enterprises (SMEs) account for around 90% of companies and more than half of the jobs worldwide according to the World Bank. It’s often those SMEs that are underserved and lack access to affordable trade finance.
The Asian Development Bank found that SMEs are disproportionately affected by the $1.7 trillion trade finance gap – the difference between the number of applications to finance companies’ participation in international operations and the number of approvals. SMEs account for 40% of such rejections, much higher than their share of applications.
Trade finance therefore has all the components that investors look for. It is a multi-trillion dollar asset class based on the flow of physical goods and services, making it less susceptible to financial market volatility. Default rates for trade finance products are generally lower and the time to recovery in case of default tends to be shorter than for other credit products.
But why is it that trade finance is the only asset class that doesn’t get distributed from banks’ balance sheets?
Global port leaders highlight advantages of digitalisation in crises (Daily Cargo News)
PORT leaders from around the world who met under the remit of the United Nations Conference on Trade and Development have highlighted the role of technology in safeguarding ports against challenging global events. UNCTAD’s TrainForTrade Port Management Week was held in Las Palmas de Gran Canaria, Spain last month. It provided a platform for 100 port leaders to discuss building port resilience against current and future crises. Aurelio Martínez, president of Spain’s Valencia Port Authority, said crisis such as the pandemic have reminded society of the importance of port-based logistics for the safety and security of global wellbeing. “More than ever, and bearing in mind the growing risks linked to the climate change evolution, ports should become key resilient partners for supply chain managers,” he said.
According to UNCTAD, port managers agreed that advancements in digitalisation and cybersecurity are vital to improving port resilience. It said digital technologies allow ports to minimise human interaction while remaining operational during pandemic situations. “COVID-19 showed us the importance of having reached at least a certain level of digitalisation,” Ghana Port Authority director general, Michael Luguje said. “Otherwise, many ports would have been shut down and the economy would have suffered even more.”
Global remittances flows expected to reach US$5.4 trillion by 2030 spurred on by digitalization (IFAD)
Global remittances, the hard-earned money sent by migrant workers to their family members in low- and middle-income countries (LMICs), grew by 8.6 per cent in 2021. Despite predictions that the COVID-19 pandemic would reduce remittance flows, the momentum was sustained due to a 48 per cent increase in money sent through mobile channels, according to the report MobileRemit Africa launched today by the International Fund for Agricultural Development (IFAD).
“The digitalization of remittances, particularly through mobile channels, is a great opportunity to boost rural development as over half of these funds go to rural areas. Digitalization reduces fees and other transactions costs like travel time, making the process more convenient and safer while promoting digital and financial inclusion,” said Gilbert F. Houngbo, President of IFAD, speaking on the International Day of Family Remittances.
Roundtable Considers Links of Digitization and E-Commerce to Inequality (IISD)
A roundtable, convened by the International Institute for Sustainable Development (IISD) and CUTS International, Geneva, as a part of IISD’s second Trade and Sustainability Hub, discussed the digital divide’s relationship to inequality and the impacts of e-commerce development and governance.
Torbjorn Fredriksson, Head of the E-commerce and Digital Economy Branch, UN Conference on Trade and Development (UNCTAD), outlined how the COVID-19 pandemic has accelerated digital use and e-commerce, while simultaneously deepening the digital divide between men and women, and rural and urban populations, and revealing digital skills gaps and inadequate legal and regulatory frameworks. He noted that South and Southeast Asia experienced the largest surge in e-commerce, while e-commerce in Africa plummeted, illustrating the digital divide between different regions and countries. Power imbalances intensified for digital platforms as well, with the largest online platforms experiencing extreme growth during the pandemic while smaller platforms saw more marginal growth.
Fredriksson stated that data is a “cross-cutting issue that no single ministry can handle on its own.” He suggested governments aid small startups joining the digital space, include e-commerce in “more powerful national ministries,” and consider factors like human rights and health in their e-commerce policies.
UNCTAD launches fourth edition of SDG Pulse (UNCTAD)
The purpose of this report is to: provide an update on the evolution of a selection of official SDG indicators and complementary data and statistics; provide an update on progress in the development of new concepts and methodologies for SDG indicators for which UNCTAD is a global custodian agency; and to showcase how UNCTAD is supporting member States in the implementation of the 2030 Agenda. The report also investigates thematic issues of relevance to the 2030 Agenda – this year, the report discusses, as In-Focus topic, the issue of inclusive growth with particular emphasis on gender equality and environmental sustainability, assessing progress and challenges in these areas. Over the last decades, rising inequality as well as climate change have indeed questioned the ability of economic growth to continue to play its historical role as the driver of development. To support the SDGs, growth needs to be inclusive and sustainable. The report is arranged in a way that it can be read by theme, and by goal and indicator.
the indicators are browsable by the three themes to which UNCTADs work contributes: multilateralism for trade & development; productive growth; and structural transformation. Through this thematic lens, progress towards a wide range of SDG indicators is discussed, including recent trends in trade, including barriers to trade, and policies to promote trade; financial resource mobilization, investment, debt sustainability.
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S. Africa eyes more benefits from BRICS (China Daily)
South Africa has benefited from increased trade with other countries in the BRICS grouping and the synergies that come with joint efforts against the pandemic, South African President Cyril Ramaphosa said in highlighting the opportunities created by greater cooperation. Ramaphosa will join the leaders of the other emerging economies-Brazil, Russia, India and China-that make up the grouping at the 14th BRICS Summit to be hosted by China on Thursday. In a statement on Monday, he said the five countries have embraced the BRICS economic partnership, which enables increased market access while promoting broader mutual trade and investment benefits as part of an overall business-friendly environment. “An important part of this strategy, particularly for South Africa, is to diversify trade so that more manufactured goods, rather than raw commodities, are traded,” the South African president said.
Fellow BRICS nations have become increasingly important partners for South Africa. Last year, imports from the other four countries accounted for 29 percent of South Africa’s imports, while exports to them made up 17 percent of the country’s total, he said. Ramaphosa said South Africa’s trade within the grouping jumped from about $30 billion in 2017 to $44 billion last year.
He said that BRICS membership will help the country to further improve its competitiveness, trade linkages and economic growth. South Africa is reforming large areas of its economy, including in the energy, telecommunications and transport sectors, Ramaphosa said. It is also seeking to boost investments in infrastructure and reduce red tape. Tourism is another sector in policymakers’ sights.
He said the BRICS Business Council and the BRICS Women’s Business Alliance have been tapped to build ties in sectors including agribusiness, aviation, financial services and energy. These initiatives have also helped to improve the regulatory environment and boost skills.
Ramaphosa notes that the summit will discuss the reform of the multilateral system, including the United Nations, as well as efforts to promote sustainable, fair and inclusive economic growth. In doing so, the gathering of leaders will discuss how to build a better world, he added.
South Africa on weak footing amid global recession fears (Mail & Guardian)
Talk of an impending global recession is difficult to avoid these days, especially as central banks appear determined to tame runaway inflation in the face of weaker economic growth. If a global recession does unfold, it will be the fourth in three decades, each of which rippled through South Africa’s economy. Another downturn will be no different — and may be even more difficult to recover from than the last, the pandemic-driven recession.
Patel says ‘pragmatic solution’ to be found to localisation-linked renewables delays (Engineering News)
Trade, Industry and Competition Minister Ebrahim Patel reports that government is working to find a “pragmatic solution” to the problem where local-content requirements contained in government’s electricity procurement programmes are delaying the construction of utility scale renewable-energy projects. “I’ve asked the Department of Trade, Industry and Competition (DTIC) team to meet with the energy team to see how we can ensure that our localisation goals don’t retard the development of green energy, and that we find ways to speed up processes,” Patel said in response to a question posed by Engineering News on the side-lines of the Manufacturing Indaba.
R6bn plan to overhaul SA’s busiest border posts (Moneyweb)
The Department of Home Affairs plans to issue a public request for proposals “in a few months’ time” for an ambitious R6 billion project to completely overhaul and rebuild South Africa’s six busiest border posts, Minister of Home Affairs Aaron Motsoaledi has confirmed. Responding to a Moneyweb question during a joint briefing with Transport Minister Fikile Mbalula on Monday related to addressing trucking blockades, Dr Motsoaledi said the planned border post upgrade project is linked to the African Continental Free Trade Area (AfCFTA) agreement and is to ensure the border posts have appropriate infrastructure.
Final Just Energy Transition Partnership Investment Plan expected by November (Engineering News)
A Just Energy Transition Partnership Investment Plan (JETP-IP), which will seek to unlock $8.5-billion in concessional climate finance to accelerate South Africa’s transition from coal to renewables and support workers and communities currently reliant on the coal value chain, is expected to be finalised by October for sign-off during the COP27 climate talks in Egypt in November. The JETP-IP, a first draft and revision of which are expected in July and September respectively, is viewed as the crucial next step in the conversion of a Political Declaration signed at the COP26 climate talks in Glasgow, Scotland, last year between South Africa, and the International Partners Group (IPG) of France, Germany, the UK, the US, and the European Union.
‘Jackpot’ oil discoveries may help Namibia double GDP by 2040 (Engineering News)
Namibia expects its biggest oil discoveries since independence to help double its economy by 2040, Jennifer Comalie, chairperson of National Petroleum Corp of Namibia, said in a Bloomberg TV interview. TotalEnergies in February said it had made a “significant” oil discovery off the coast of Namibia, three weeks after Shell announced a find off the southwest African nation. Explorers have drilled more than a dozen exploration wells in search of oil and gas. Consultants Wood Mackenzie estimated the combined recoverable finds at almost four-billion barrels.
Beitbridge border automation excites freight, customs agents (Chronicle)
CUSTOMS clearing and freight forwarding agents have hailed the Government for fully implementing the US$300 million Beitbridge Border Post transformation project that will among other things see services and operations being automated. In separate interviews they said the new state of affairs will enhance efficiencies and improve the speedy flow of human traffic and cargo.
Delays in the movement of goods have been a perennial headache at the country’s busiest inland port of entry until the New Dispensation, in partnership with the Zimborders Consortium, moved in in 2018. Chairperson of the border project subcommittee on ICT, Mr Shami Moyo, said the automation of the modernised border post will involve the use of cameras and more paperless transactions.
“The idea is to go hi-tech and use more of the prepayments and pre-clearance systems. People must spend as little time as possible to go through this port of entry,” said Mr Moyo.
“Where the clearance of cargo used to take days, we are now seeing the same process being done within a few hours due to changes at the border,” said Mr Itayi Misihayirambwi of Cutting Lyne Investments
Another freight forwarder, Mr Martin Dube said the border automation has led to efficiency, and that the flow of trucks north and south-bound is now clear and more defined. He said a number of loopholes and bottlenecks affecting revenue collection had been addressed under the new systems.
Gov’t launches Kenya’s eTrade Readiness Assessment (Kenya News Agency)
The government is developing a national E-Commerce Strategy (ECS) to boost Kenya’s economic opportunities that are supportive to the country’s strategic goals and Vision 2030. Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina said the State is cognizant that e-commerce that is driven by enhanced digital skills and innovative entrepreneurs is the foundation of economic growth. “Historically, the country’s export has been relying on narrow products and export destinations. E-Commerce will therefore be critical in steering the country to increase its products exports and expand export destinations,” said Maina.
Kenya exporters protest expensive Chinese vetting (Business Daily)
Kenyan exporters have raised concerns of high demurrage charges and loss of their agricultural produce over food certification required by China, making it difficult to trade. The Asian country on January 1 implemented new registration requirements for companies that export food to China. According to the regulations, all overseas manufacturers of foods that export to China are required to register with the General Administration of Customs China), a move that has led to products being confiscated and spoiled. Some of the exports affected include macadamia nuts, vegetables, fruits, tea and coffee.
BOT increases monetary policy objectives targets for 2022/2023 (IPPMedia)
The monetary policy statement for June 2022 indicates that the monetary targets for reserve money, extended broad money and growth of credit to private sector for 2022/2023 were increased against targets for 2021/2022. The three indicators are important components to keep the economy running, in a time when there is a huge supply chain disruptions caused by ongoing Russia-Ukraine war, as they are main stimulants to growth of economic activities and job creation. The monetary policy statement published last week says during 2022/2023, BOT is targeting an annual growth of reserve money of 11.4 percent against targeted 9.9 percent in 2021/2022.
However, the import cover will be lower than EAC benchmarks of at least 4.5 months and the SADC benchmark of at least 6 months of imports.
Economy recovers as URA gets sh133b revenue surplus (New Vision)
Uganda’s economy is steadily recovering from the shocks of COVID-19, evidenced by the improved revenue collections. According to the latest performance of the economy report, which the finance ministry released on Friday, Uganda Revenue Authority (URA) achieved its revenue collection target for last month. URA has been registering revenue shortfalls in the previous months since the financial year started in July 2021. Huge revenue shortfalls of sh3 trillion and sh2 trillion were registered in the 2019/2020 and 2020/2021 financial years, respectively, mainly due to the effects of COVID-19 on the economy.
The report indicates that domestic revenue collections in May 2022 were to the tune of sh1.75 trillion, which is much higher than the month’s revenue collection target of sh1.62 trillion. This implies that in May 2022, the Government realized a revenue surplus of sh133.2b. Of the total revenue collection of sh1.75 trillion, sh1,649.60b were tax collections, while sh106.94b were non-tax collections.
Surplus collections on international trade and transactions were registered mainly on account of higher than planned collections on petroleum duty, import duty and VAT on imports during the month.
Nigeria adopts WTO stance on e-commerce, others (Daily Trust)
The federal government has joined other countries to adopt the 10 ministerial resolutions of the World Trade Organisation (WTO) on food security, e-commerce among others.
Trade ministers from member countries adopted these at the 12th Ministerial Conference in Geneva, Switzerland, which ended at the weekend. Speaking, the Minister of State for Industry, Trade and Investment, Amb. Mariam Katagum, who led the Nigerian delegation, said it was important for Nigeria to synergise with other countries of the world to promote economic prosperity.
She called on trade ministers “to develop an institutional framework that would foster discussions towards the delivery of outcomes that would address the needs of members while adhering to WTO principles of transparency, inclusiveness, fairness and equity within the balance of the rights and obligations of all members under the covered agreements.”
Mozambique’s insecurity endangers cross-border trade (Anadolu Agency)
A violent insurgency in Mozambique’s Cabo Delgado province has shattered informal cross-border trade with Tanzania which has for many years been the mainstay of the local economy as terrorists continue to wreak havoc, dashing hopes for improved livelihoods, according to local residents. The region’s insecurity is an obstacle to cross-border trade, affecting the flow of manufactured goods and agricultural products, including maize and cashews, along with trade in livestock and timber as well as fishing activities, they said.
In October 2020, militants launched a deadly attack on a village near Tanzania’s port of Mtwara, a major oil and gas logistics base, after crossing the border from Cabo Delgado. The attack signaled a worrying trend and expansion of terrorism, raising security concerns for people engaging in informal cross-border businesses, said local analysts.
Jehonaness Aikaeli, an economist from the University of Dar es Salaam, said informal cross-border trade is a major feature in the region’s economic and social landscape, supporting livelihoods and reducing poverty and food insecurity. “The ongoing terrorism in Mozambique is a serious setback to transboundary trade with the potential to affect local livelihoods,” she told Anadolu Agency.
A spot check by Anadolu Agency revealed that informal business through porous border routes goes on unabated in some areas thanks to strong networks and relationships that persist without the knowledge of the authorities.
However, ever since Tanzania imposed a ban on the entry of its food products into the Mozambican territory through the Namoto border due to the conflict in Cabo Delgado, some traders in neighboring towns have suffered, said local residents.
UAE to build Red Sea port in Sudan in $6 billion investment package (Reuters)
The United Arab Emirates will build a new Red Sea port in Sudan as part of a $6 billion investment package, DAL group chairman Osama Daoud Abdellatif, a partner in the deal, told Reuters. Abdellatif said the package includes a free trade zone, a large agricultural project and an imminent $300 million deposit to Sudan’s central bank, which would be the first such deposit since an October military takeover. Western donors suspended billions in aid and investment to Sudan after the coup, plunging an economy that was already struggling into further turmoil and depriving the government of much needed foreign currency.
Ibrahim told Reuters on Wednesday that a memorandum of understanding had been signed with the UAE for a port and agricultural project, but the details have not previously been reported.
AfDB-supported 4th Cabo Verde Investment Forum successfully ended in Sal Island (Devdiscourse)
The fourth edition of the Cabo Verde Investment Forum has successfully ended in Sal Island, with active support from the African Development Bank. The Forum, held from 16-17 June 2022, was set up to accelerate private and public financial sector investments to drive sustainable economic growth and job creation in Cabo Verde. The island nation’s prime minister, Dr. Ulisses Correia e Silva, who presided over the two-day event, noted that it offers the island nation new avenues to mobilize partners and resources for local economic diversification and private sector investment. The Forum’s goal for this year was to mobilize €2 billion in financing for projects in the tourism, agriculture, fishery, energy, digital, transport, youth, and SME sectors.
African trade and development news
Russians must take advantage of the African Continental Free Trade Area (Modern Ghana)
Russians have to consider seriously the mutual benefits while taking advantage of the African Continental Free Trade Area (AfCFTA), which was signed in March 2018, and came into force on January 1, 2021. The AfCFTA provides a unique and valuable platform for businesses to access an integrated African market of over 1.3 billion people. The growing middle class, among other factors, constitutes a huge market potential in Africa.
In order to have an in-depth understanding of these, Russians must at least invest in initial market research and development (R&D) collaborations, as the basis for designing entry strategies, with their African partners. The call was made at the Russia-Africa Business Dialogue held on June 16.
Sadc harmonises SPS measures to boost regional trade (Chronicle)
SMALL-SCALE farmers and private sector players in the Southern African Development Community (Sadc) are being capacitated on how to comply with sanitary and phytosanitary (SPS) measures in an effort to protect the health and welfare of human, plant, and animal life in the region and beyond.
SPS measures are bio-security actions applied to protect human, animal or plant life or health from risks arising from the entry, establishment and spread of plant pests and animal diseases as well as from risks arising from additives, toxins and contaminants in food and feed. If poorly applied, experts say SPS measures could result in the emergence of non-tariff barriers (NTBs) to trade.
In a latest update, Sadc said the capacity building programme is being done under the Trade Facilitation Programme (TFP), which the bloc is implementing with support from the European Union (EU) to enable the region to further integrate in various areas of economic development. While Sadc has committed to removing NTBs in order to improve regional trade, the bloc says it recognises that imported agricultural products, which include plants, animals, and food products, could carry or contain harmful pests or contaminants. “One of the failures in trade among member States, which contributes to low intra-Sadc trade is the non-recognition of conformity assessment results between member States. “This stems from the lack of trust in each other’s national conformity assessment regimes, hence the need for a common framework for the mutual recognition of same,” said Sadc.
The EAC Post Tax And Budget Dialogue for FY 2022/23 (Uganda Media Centre)
EAC Post Tax and Budget Dialogue for FY 2022/23 is held under the theme; “Accelerating Economic Recovery and Enhancing Productive Sectors for Improved Livelihood in the EAC Region: Defining Joint Strategies for a Faster Recovery.”
2022 shall be remembered as a phenomenal year for the EAC following the admission of the Democratic Republic of Congo into the EAC bloc in April. EAC now has seven-member states including Uganda, Tanzania, Kenya, Rwanda, Burundi, South Sudan and DR Congo. I would like to reiterate that the Budget is an important tool because through the Budget, Uganda and the rest of the EAC governments can influence income distribution, provide services to its citizens, and transform the country through strategic investments.
It is also worth noting that the East African Community (EAC) member states agreed in 2007 to harmonize their budget reading as part of efforts towards harmonizing their taxation regimes. This is particularly important because when the budgets are read on the same day, it reduces the risk of policy leaks and unfair business practices. Yet again, EAC member states (except Kenya) read their respective national budgets for FY 2022/23 on June 14. For FY 2022/23 Budget, EAC Partner States also agreed on a common theme; “Accelerating economic recovery and enhancing productive sectors for improved livelihood”. Throughout the FY 2022/23, the EAC member states will continue with the implementation of the economic policies and practices for the realization of inclusive and equitable post COVID-19 economic recovery and EAC regional integration that works for everyone.
Trade with DR Congo will double exports, open new markets (Monitor)
The DRC economy is begging for regional trade in East Africa, with Uganda being the most advantaged, given its proximity. According to a survey conducted by Prosper magazine in the DRC, it did not take too long to establish that 90 percent of what is on their supermarket shelves are imports from all over the world except Africa and curiously East Africa, which by virtue of its proximity should have taken that space. The aforementioned statistic was corroborated by the SMEs sector players in Congo. This was during the Uganda DR-Congo Business Summit fact finding mission, where it emerged that DRC is a virgin economy and efforts are in place to wrestle that huge untapped market from foreign imports. During the summit, Mr Stephen Asiimwe, the chief executive officer for Private Sector Foundation Uganda (PSFU), said the Ugandan delegation of 200 people, visited DRC to market Ugandan products, to engage with business people in Congo, and to buy or sell goods and services.
sector players from Uganda are discussing with the government of Congo and the business people, to create means through which goods from Uganda can reach a particular place, so that business people can access a variety of merchandise. “Uganda is largely an agricultural country. We hope and believe we can get good clean, reliable and sustainable commodities that can be picked up from the collection centres,” Mr Asiimwe said. Despite the abundant opportunities in DR-Congo, there are other teething issues that deserve attention.
The transformation of the DR - Congo into a dollar economy according to economic analysts and sector players, poses limitations on potential investors, which limitation is bound to increase the cost of doing business.
Digital transformation of agri sector could address sub-Saharan Africa’s food insecurity: UN Report (Down to Earth Magazine)
Digital transformation of the agriculture sector could address food insecurity in sub-Saharan Africa, paving the way for prosperity in the region, a recently released report by the United Nations Food and Agriculture Organization (FAO) has said.
Saharan Africa has the largest area of arable uncultivated land in the world. It also has a youthful population and vast natural resources. It is thus uniquely positioned to double or even triple its current agricultural productivity, according to the report. Such an increase in agricultural productivity would help lift more than 400 million people in sub-Saharan Africa who live on $1.9 or less a day, out of poverty. It would also improve the livelihood of approximately 250 million smallholder farmers and pastoralists in the region, the report said.
A comprehensive approach of digital technology and policy reform could increase crop production by more than 500 per cent in some countries across the region, with positive results for food security and livelihoods, according to a separate study published by the Global Challenges Research Fund Programme. But for that, a digital transformation of the food and agriculture sector was needed. The FAO report assessed the region’s digital agriculture landscape through six key themes: Infrastructure; Digital penetration; Policy and regulation; Business environment ;Human capital and Agro-innovation
Domestic tourism low hanging fruit Africa must pluck (Business Daily)
Tourism is a major contributor to the GDP of African economies. In 2019, the industry accounted for about seven percent of Africa’s GDP and contributed $169 billion to its economy — about the size of Côte d’Ivoire’s and Kenya’s combined GDP. But Covid-19 changed all that. In July 2020, the African Union estimated that Africa lost nearly $55 billion in travel and tourism revenues and two million jobs in the first three months of the pandemic. The International Monetary Fund (IMF) predicted that real GDP among African countries dependent on tourism dropped by 12 percent in 2020.However, as Covid-19 restrictions ease, tapping domestic tourism demand has offered the sector some respite, as a growing middle class and young population shows more interest in travel.
Africa’s growing middle class and population of young travellers hungry for adventure, and the recently launched African Continental Free Trade Area (AfCFTA), the world’s largest free trade area by the number of participating countries, are among the pillars seen supporting the future growth of domestic and regional tourism on the continent. This, therefore, calls for a rethink of strategy, especially in terms of building a domestic client base to match or even exceed the international base.
But a shift to domestic tourism requires capacity-building for service providers on leveraging digital technologies for product development and marketing.
Global economy news
DDG González: “Now more than ever, business needs the WTO” (WTO)
DDG González highlighted that businesses everywhere face growing uncertainty in global trade due to continued supply chain disruptions, the COVID-19 pandemic, climate change, trade tensions, war, a looming food crisis and galloping inflation. “But this is also a time of opportunity, and businesses that are nimble, flexible and imaginative will be in a strong position to reap the gains from a rapidly changing trade landscape”, she said.
World Trade Organization steps back from the brink of irrelevance – but it’s not fixed yet (The Conversation)
After decades of conflict that has neutered its work, the World Trade Organization looks to be back in business. Its highest decision-making body – a conference of ministers from the organisation’s 164 member nations – has just met for the first time since 2017. None of what the ministerial conference (dubbed MC12 due to being the 12th such meeting) agreed on was particularly groundbreaking. But the fact there was agreement at all – on areas such as agriculture, fishing, intellectual property, e-commerce and food insecurity – was itself a milestone.
The question is what happens now, with considerable challenges ahead for the WTO and its role in promoting and protecting a global rules-based trading system.
Inclusive growth remains elusive as inequality persists globally (UNCTAD)
The fourth edition of UNCTAD’s SDG Pulse released on 21 June shows that the world is highly unequal in living conditions, with development opportunities beyond the reach of many. The report introduces an index measuring inclusive growth, defined as equal and non-discriminatory opportunities for everyone to participate in, and benefit from, economic development. The Inclusive Growth Index (IGI) analyses countries’ ability to achieve such growth, with a focus on gender equality and environmental sustainability.
The SDG Pulse – an online statistical report updated annually – indicates uneven global progress and, for too many countries and goals, even reversion in accomplishing the 2030 Agenda for Sustainable Development. It shows that progress has deteriorated under the compounding effects of the COVID-19 pandemic, the war in Ukraine and the rising costs of climate change. The analysis is based on a range of Sustainable Development Goals (SDGs) indicators and official statistics relevant to trade, investment, financing for development, transport, technology and transition towards greener and higher value-added economy.
The index’s top 30 performers are all developed economies, with Luxembourg, Iceland and Norway leading the global ranking. In contrast, developing countries in Africa have the lowest IGI scores.
The SDG Pulse shows that developed countries generate twice as much waste per capita as developing countries. Developing nations in Africa are responsible for the least waste per capita, but often face challenges in waste management, for instance due to limited institutional and organizational capacity.
Clean and affordable energy top of mind in road towards COP27 (ESI Africa)
As the world inches closer to COP27, top of discussions is ensuring clean and affordable energy for all, especially Africa. One such initiative that will could have a positive effect on the continent is the new Climate Finance and Energy Innovation Hub that will launch at COP27. The Hub will accelerate access to clean and affordable energy throughout the global South. The OPEC Fund for International Development has partnered with the UN Capital Development Fund (UNCDF) and Sustainable Energy for All (SEforALL) to design and deliver a new Climate Finance and Energy Innovation Hub.
Food security: EU to step up its support to African, Caribbean and Pacific countries in response to Russia’s invasion of Ukraine (European Commission)
The European Commission adopted today a proposal to mobilise €600 million from the reserves of the European Development Fund to address the current food security crisis aggravated by Russia’s invasion of Ukraine. These funds will support African, Caribbean and Pacific (ACP) countries to cope with the dire situation, through humanitarian assistance (€150 million), sustainable production and resilience of food systems (€350 million) and macro-economic support (€100 million).
Announcing the new support measure at the 2022 European Development Days in Brussels, President of the European Commission, Ursula von der Leyen, said: “Russia’s war of aggression is taking a heavy and senseless toll, not only on the Ukrainian population, but also those most vulnerable around the world. Russia is still blocking millions of tonnes of desperately needed grain. To help our partners we will mobilise an additional 600 million euros to avoid a food crisis and an economic shock.”
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South Africa Renews Bid to Stem Blockades on Key Trade Routes (Bloomberg)
South Africa’s government has signed an agreement with trucking associations to end frequent blockades of key trade routes that are estimated to have cost the economy millions of dollars. Truckers regularly block major arterial roads in protest of the hiring of foreigners as drivers, including last week when a key route to South Africa’s biggest port and commercial hub of Johannesburg was disrupted. The blockades will stop while a taskforce develops a plan to address truckers’ concerns, particularly around the hiring of foreigners, according to the terms of a deal signed on Monday.
Uganda: Ditch Europe, Start Importing Milk From Uganda, Museveni Woos Algeria (allAfrica.com)
President Yoweri Kaguta Museveni has met and held discussions with a Special Envoy from Algeria, Ramtane Lamamra who is also the North African country’s Minister for Foreign Affairs. The meeting that took place at Museveni’s country home in Rwakitura was also attended by the State Minister of Foreign Affairs of Uganda, John Mulimba. The president and his guest discussed bilateral cooperation between the two sister countries of Uganda and Algeria in the fields of trade, agriculture and security, among others. Museveni used this opportunity to lobby the Algerians to invest in Uganda especially in agricultural value addition but also asked the North African country to start importing milk from Uganda.
Voluntary local reviews gain traction in Uganda’s national SDG reporting process after ECA’s support (UNECA)
The Government of Uganda has scaled up the practice of voluntary local reviews – which monitor progress made by local governments towards the Sustainable Development Goals (SDGs) – and is bringing their outcomes to the forefront of its national SDG reporting process. This development builds on the country’s first voluntary local review of the SDGs and African Union’s Agenda 2063, which was conducted for Uganda’s eastern district of Ngora in 2019 with support from the United Nations Economic Commission for Africa (ECA).
“Local communities are at the heart of our shared drive to achieve the SDGs. There is no aspect of the SDGs or the Agenda 2063 where local governments do not play a central role. Without the local ownership and action, the achievement of the SDGs at the national, regional and global levels during this Decade of Action is not possible – and that has been the focus of ECA’s work,” she said.
Export strategy sector committee inaugurated html (Graphic Online)
A governance structure in the form of a sector committee to guide the successful implementation of the National Export Development Strategy (NEDS) has been inaugurated in Accra.
The NEDS sector committee which comprises stakeholder groups of all the product sectors of the Ghana Export Promotion Authority (GEPA) is expected to assist the NEDS secretariat to facilitate effective implementation of the NEDS to promote Ghana’s value-added products for export.
A media release issued in Accra on June 16, 2022 said that the NEDS, spanning 10 years (2020-2029), sought to diversify and grow the Non-Traditional Export (NTE) sector of the economy and employ a private-sector-driven approach.
Opportunity Cost of Nigeria’s Trade and Industrial Protectionist Policies (This Day)
The World Bank in its latest report on Nigeria Development Update argued that the country’s protectionist trade policy is counterproductive, writes Dike Onwuamaeze Nigeria’s trade protectionist policy, ostensibly conceived to protect Nigerian local manufacturing industry, is counterproductive. This is the verdict of the World Bank in its latest report titled, “Nigeria Development Update June 2022.” The report said that Nigeria’s trade policy is costing the country more public revenue and pushing its citizens into poverty.
One, the country’s trade policy since the inception of President Muhammadu Buhari’s administration in 2015 has been remarkably moving further in a protectionist direction and yielding several unintended consequences, including high levels of tariff evasion accounting for the loss of $1.8 billion annually in public revenue. This is estimated to be 0.4 percent of GDP. The report also asserted that the country’s increasing trade protectionist stance is constraining the efficiency and competitiveness of its domestic firms. The third assertion made in the report is that import restrictions are pushing millions of Nigerians into poverty as “distortionary trade policies can decrease overall purchasing power and, in turn, increase poverty.”
Stakeholders Advocate Stronger Bargain for Nigeria’s Bi-lateral Trade Agreements (This Day)
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoye yesterday called for better negotiation skills in dealing with expiring international trade agreements as well as in establishing new ones. He spoke at a two-day workshop on mitigating illicit financial flows with the theme: “Capacity Building for Nigeria’s Negotiators for Improved Terms of Engagement with the Rest of the World,” which kicked off at the commission’s headquarters in Abuja. In his paper titled “From Gunboat Diplomacy to the Negotiation Table,” Owasanoye stated that globalisation made interactions with diverse global communities inevitable. He, however, noted that the rules of engagement were more often than not unfavorable to poor economies of the global south, who lack the development and technological advancements of the global north.
Why Nigeria needs to improve negotiations to curb IFFs – ICPC chair (Premium Times)
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Bolaji Owasanoye, has called for better negotiation skills in dealing with expiring international trade agreements as well as in establishing new ones. Mr Owasanoye, a professor and senior advocate, made this call in his opening remarks Monday at a two-day workshop on mitigating illicit financial flows in Abuja. The event was themed, ‘Capacity Building for Nigeria’s Negotiators for Improved Terms of Engagement with the Rest of the World’, according a statement by ICPC spokesperson, Azuka Ogugwa. In his paper titled, ‘From Gunboat Diplomacy to the Negotiation Table’, Mr Owasanoye said, although globalisation has made interactions with various global communities inevitable, the rules of engagement are frequently unfavourable to developing and technologically backward economies in the global south. “This has often led to poorly constructed trade agreements which have ultimately been disadvantageous to the growth of the country and also opened loopholes to encourage illicit financial flow,” he said.
Nigeria seeks ILO support to achieve SDGs (Tribune Online)
The Nigerian government has called for support of the International Labour Organisation (ILO) to achieve the Sustainable Development Goals (SDGs) by 2030. The Minister of Labour and Employment, Sen. Chris Ngige, said this at the ongoing 110th session of the International Labour Conference in Geneva, Switzerland. He was responding to the report of the Director-General of the ILO, Mr Guy Ryder on the Least Developed Countries (LDCs) -Crisis, structural transformation and the future of work.
Ngige, represented by Daju Kachollom, Permanent Secretary in the Ministry, said the support was imperative due to the current state of growing inequality gap. “We consider that the achievement of the SDGs by 2030 is at a great risk. If the goal of “not leaving any one behind” is ever to be realised, urgent effort, support and contribution will be required by all in a renewed commitment to multilateralism and international cooperation,” he said.
Trade Policy Review: Ghana (WTO)
The Secretariat and Government reports are discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB). A policy statement by the government of the member under review.
Ethiopia secures US$23 mln concessional loan for agro-industrial park development (Ecofin Agency)
Ethiopia wants to modernize its agriculture and industrialize its rural areas. To this end, authorities have launched a project (with backing from several international partners) to develop agro-industrial parks in four regions. Ethiopia recently secured a €22 million loan from Italy for the development of agro-industrial parks in the country. The loan agreement was announced by the Ministry of Finance in a release published on its website, Monday, June 13. The loan will help build the capacity of national and regional industrial park development companies, farmers’ organizations, and private investors. It will also facilitate innovative contractual arrangements aimed at connecting farmers’ organizations with agro-processors.
According to the release published by the Ministry of Finance, the project aims to “create jobs in the rural areas of the country, increase farmers’ incomes, generate export revenues, substitute imports of agro-processed goods and contribute to economic growth and structural transformation.”
“The intervention will improve the involvement of private sectors in the Integrated Agro-Industrial Parks and Rural Transformation Centers, and their competitiveness in the internal and international market, which is in line with the Home-Grown Economic Reform agenda and the 10 years development plan of Ethiopia,” it adds.
The African Development Bank will join the Gabonese Government to host national consultations on the Country Diagnostic Note and Country Strategy Paper for the 2016-2022 period in Libreville, from 21 to 24 June. Key stakeholders in the discussions will include the Ministry of Recovery and Economy, technical departments of sectoral ministries, financial partners, civil society, academics and the private sector. “The Country Diagnostic Note provides the analytical basis for preparing the Country Strategy Paper, the strategic and programming tool for the Bank’s operations in Gabon, for the 2023-2027 period, “ says Nouridine Kane Dia, African Development Bank Country Manager in Gabon. The Country Diagnostic Note identified seven priority areas of intervention to propel Gabon’s sustainable development and these will be scrutinized during the national consultations. In addition to improving governance, the draft note also explores ways to enhance the business climate by developing the private sector, diversifying investment in agriculture and promoting agro-industry, and deepening the country’s industrialization process in timber, mining and hydrocarbons.
Mauritania Economic Update 2022: The private sector at the center of economic transformation and job creation (World Bank)
According to the fifth edition of the World Bank’s Report on the Economic Situation in Mauritania, the country’s economic recovery in 2021 was robust but below pre-COVID-19 levels and growth potential. Growth is estimated to have rebounded by 2.4% in 2021 thanks to an increase in private consumption and investment, as well as an improvement in the performance of the services sector. Likewise, the negative impact of the pandemic on human, economic and social activities decreased significantly in 2021, reflecting the recovery in growth and the effectiveness of the mitigation measures put in place by the government. The report notes that Mauritania has presented positive recent economic developments, including a surplus budget balance, a reduction in the total public debt-to-GDP ratio and a monetary policy favorable to the return of growth. With successful COVID-19 vaccination campaigns, a thriving extractive sector and an expected increase in public sector contribution, the country looks set for a more optimistic growth in 2022.
Finance minister presides over launching of ASYCUDA World System (The Point)
In his official launching statement, Mr. Keita said the launching of this new system was indeed a “great milestone” in the government’s effort to improve efficiency and effectiveness in the customs clearance process. “This state of the system, which will replace the current ASYCUDA++ system, will digitalise the entire customs clearance process, thus eliminating the need for human intervention.” “The implementation of this new system has the potential to enhance administrative efficiency, and improve the quality of international trade data,” he added. “With the introduction of the AFCFTA and its potential to improve intra-Africa trade, the Ministry of Finance aims to position The Gambia to reap the gains envisaged under the AFCFTA.”
African trade and development news
Afreximbank launches the African Trade Report 2022 (Afreximbank)
Africa’s trade grew significantly as the world gradually recovered from the COVID-19 pandemic, Professor Benedict Oramah, President and Chairman of the Board of Directors of African Export-Import Bank (Afreximbank), said in Cairo. Launching the African Trade Report along with H.E. Mr Lai Mohammed, Minister of Information, Culture and Tourism of the Federal Republic of Nigeria, at the 29th Afreximbank Annual Meetings (AAM2022), Professor Oramah said that Africa showed resilience during the COVID-19 pandemic, contracting by only 1.6% in its first recession in 25 years and rebounding strongly with GDP expanding by about 6.9% in 2021. “African trade grew significantly just as the world was gradually recovering from the COVID-19 pandemic,” he said, adding that intra-African trade was resilient, notwithstanding the restrictions imposed by COVID-19.
Dr Hippolyte Fofack, Afreximbank’s Chief Economist, noted however that despite the increasing resilience of African economies, the region remained a peripheral contributor to global trade and growth, accounting for 2.6% of global trade and less than 3% of the world’s GDP.
In order to increase its share of global growth and trade and to foster its integration into the global economy, Africa must use the AfCFTA, which has been touted as a game changer, to accelerate the process of structural transformation and growth, he quoted the report as recommending.
The 9th meeting of the Committee on Trade in Goods of the AfCFTA was held from 6 to 10 June 2022 to consider the Reports of Sub-Committees under the Committee on Trade in Goods. This covered such vital work as the Sub-Committee on Rules of Origin reports, the finalisation of the drafting the AfCFTA Rules of origin Manual and the AfCFTA Regulation on the treatment of Special Economic Zones (SEZ) in accordance with Decision 70 of the 8th Meeting of the Council of Ministers.
The meeting adopted the draft AfCFTA Manual on Rules of Origin with amendments for onward submission to the Committee of Senior Trade Official and ultimately to the AfCFTA Council of Ministers responsible for trade. The delegates had discussions on the draft Regulations on Special Economic Zones but could not reach a consensus and, therefore, recommended that the Committee seek policy guidance from high AfCFTA negotiation structures. In addition, the delegates worked on outstanding textiles and sugar issues. They had an in-depth discussion of these HS headings but could not agree on the rules of origin. These outstanding HS headings will be submitted to the higher AfCFTA structures for further guidance.
AfCFTA protocol on women and youth in trade in the offing - Wamkele Mene (Ghanaian Times)
The African Continental Free Trade Area (AfCFTA) is developing a protocol for women and youth in trade to place them at the centre of its activities, Wamkele Mene, Secretary-General, AfCFTA has announced. The move, according to him, was to ensure that women and youth had access to and derive the intended benefits from the continental trade arrangements. Speaking at a plenary session on the topic: Making the AfCFTA work for Africa we want’ at the ongoing Afreximbank annual general meetings in Cairo, Egypt, Mr Mene said “We intend to foster a favourable environment for young Africans to competitively engage in cross-border trade in goods and services, in the context of the AfCFTA,” Themed “Realising the AfCFTA Potential in the post-COVID-19 Era—Leveraging the power of the youth”, the Afreximbank annual meetings includes Advisory Group Meetings and the Annual General Meeting of Shareholders, complemented by seminars and plenaries.
AfCFTA Suffers Setback As Benin Republic Slams CFA9m On Nigeria-bound Transit Cargoes (Leadership News)
The African Continental Free Trade Agreement (AfCFTA), may have suffered setback over huge tariffs and checkpoints delaying smooth movement of transit cargoes along the West African corridor. The AfCFTA is an ambitious trade pact to form the world’s largest free trade area by connecting almost 1.3bn people across the 54 African countries. The agreement aims to create a single market for goods and services in order to deepen the economic integration of Africa.
As of 10 February 2022, 41 of the 54 signatories had deposited their instruments of ratification with the chair of the African Union Commission, making them state parties to the agreement. But, despite the ambiguous and inherent potentials in the agreement, it seems it has hit a snag as checkpoints, tariff hinder movement of goods and trade facilitation. It was gathered that the imposition of the Cfa9 million levy was a result of a retaliatory policy by the Benin authorities to express their anger over Nigeria’s decision to shut its land borders against the West African neighbours.
Speaking, chairman of Association of Nigeria Licensed Customs Agents (ANLCA) at Seme Border, Mr Onyekachi Ojinma, lamented that transit goods are being asked to pay Cfa9million instead of 0.3percent they are supposed to pay on transit. According to him, these goods are manufactured from ECOWAS region, not in Cotonou, they are not supposed to open that cargo but the Cotonou government would collect duty.
Financing Africa’s transformation requires bigger banks – Afreximbank panellists (BusinessGhana)
Panellists at the ongoing 29th Annual General Meetings of Afreximbank in Cairo, Egypt, have called on African leaders to strongly consider establishing stronger banks to fund the continent’s development needs. They unanimously agreed that small banks and microfinance institutions were useful, but they were incapable of financing Africa’s infrastructure deficit. Speaking on the topic: “Africa under the storm of external shocks and internal challenges” Mr Arnold Ekpe, former Chief Executive Officer, Ecobank Group, said financing infrastructure projects such as roads, railways, power stations, factories and large commercial operations necessary for economic development could only be financed by larger banks.
The African continent he said, must rely less on foreign funding and pay its own way for economic development. He said the current externally focused model of African economic development was not working. Mr Ekpe said by continuing to be overly reliant on developed market models of economic development, Africa would not be able to realise its full growth potential.
Investment programme aims to empower regional value chains in mining (Mining Weekly)
The Secretariat of the Southern African Development Community (SADC) has appointed globally active engineering services and consulting company DMT Group to lead the delivery of an investment programme that will empower regional value chains in copper, battery storage and mining inputs. The SADC ‘Regional Study and Project Viability Scan’ will identify investment opportunities for building local content capacity in what are noted as three critical areas for economic activity and value addition in Southern Africa. The project’s findings are intended to spur a rush of new investment activity. The SADC project will be led with the support of a range of sector experts.
Africa’s industrialization hinges on fixing logistics (Quartz)
The African Continental Free Trade Area promises to open up the continent’s market of 1.2 billion people, and improve the circumstances that currently keep intra-Africa trade around 17%, versus 68% in Europe, 59% in Asia, and 55% in America. Industrialization is the next necessary step, and the key to improved industrialization is improved logistics. That was one of the key insights to emerge from a panel at this year’s Africa CEO Forum, the largest annual gathering of Africa’s private sector. The event in Abidjan brought together close to 2,000 political, business, and thought leaders. The session on how the health crisis is revolutionizing African logistics featured speakers like Ahmed Bennis, group business development director at Tanger Med in Morocco, Africa’s biggest port complex; and Portia Derby, CEO of Transnet, one of the continent’s largest rail, port, and pipeline companies. The panelists noted that industrialization will enable Africa to create jobs for the 8-9 million Africans joining the labor force annually, and allow the continent to capture a larger value of global commodities markets. At present, Africa mostly exports raw materials, leaving greater economic benefits to other countries that add value through processing. That’s because processing on the continent is more expensive, and that is because of high energy costs and poor infrastructure.
MAN president seeks collaborations among African manufacturers (Businessamlive)
Mansur Ahmed, president of the Manufacturers Association of Nigeria (MAN) and the interim chairman of the Pan African Manufacturers Association (PAMA), has called on members of PAMA to work together and collaborate to empower the private sector and create a system of interaction that will act as a catalyst to the growth of investments in Africa. Ahmed said the major imports of countries in Africa are manufactured goods and that about two percent of the intra-African trade is in manufactured goods and emphasised on the reasons behind the formation of PAMA. According to him, with the establishment of PAMA and the AfCFTA, he said that the widening gap between imported products and those manufactured within would be bridged. Mansur, however, stated that the economies of the continent should be focused mainly on manufacturing, and to create capacity, expand the scope for value addition, and integrate Africa’s manufacturing so that Africa can achieve economies of scale. He enjoined manufacturers to ensure they prioritise the areas of comparative advantage to achieve the required industrial transformation.
African countries’ requests for information for tax collection purposes rose 26% over the previous year, signaling continued progress toward tax transparency in spite of a challenging environment, according to a report by The Africa Initiative, launched on Tuesday in Nairobi. The Tax Transparency in Africa 2022 report, which covers 38 countries, documents Africa’s progress in tackling tax evasion and other illicit financial flows (IFFs) through transparency and exchange of information (EOI) for tax purposes. The Africa Initiative is a partnership of the Global Forum on Transparency and Exchange of Information for Tax Purposes (The Global Forum), 33 African countries and 16 partners, including the African Development Bank, the African Union Commission, the European Union and the governments of Switzerland and the UK. Five non-member countries participated in the study for the report.
Protectionism as setback for Africa’s aviation (New Telegraph)
Africa is considered a growing aviation market with the International Air Transport Association (IATA) forecasting a 5.9 per cent year-on-year growth in African aviation over the next 20 years, with passenger numbers expected to increase from 100 million to over 300 million by 2026 and SAATM is a way to tap into this market. The benefits of SAATM to African countries include job creation, growth in trade resulting in growth in GDP and lower travel costs resulting in high numbers of passengers. However, is Africa ready for a Single African Air Transport Market? That is a huge question, considering the fact that if all the necessary issues are not resolved, it may go the way of the Yamoussoukro Decision (YD), which never saw the light of the day more than 30 years after the idea was set in motion.
The failure of YD gave rise to the SAATM, with a solemn declaration by about 35 African nations to forge ahead with the air transport liberalisation in the continent because of the exponential benefits it brings to Africa.
At the weeklong FAAN National Aviation Conference (FNAC) held in Abuja last week, some were of the view that the SAATM initiative was good, but hinted that the African Civil Aviation Commission (AFCAC) must come up with a regulatory framework that would see to the speedy implementation or operatability of the Africa Union Agenda.
East Africa wrestles with proposals to ban imports of used clothes (The East African)
A proposal by Kenyan presidential candidate Raila Odinga in his manifesto to phase out trade of second-hand clothes, popularly called mitumba in Kenya, has sparked a debate on the future of the trade, with opinion divided on whether time has come to ban used clothes imports in the region. The East African Community has since 2016 pushed member states to buy clothes and shoes made in the region to boost local manufacturing, help the economies and shore up the local textile industry. Kenya, Uganda, Tanzania, Rwanda and Burundi were to phase out the second-hand clothes trade by 2019 but only Rwanda has implemented the plan, introducing high taxes on mitumba imports to deter trade.
Now the private sector in the region says importation of used clothes should be phased out gradually to allow focus on growth of the local textiles and apparel sector.
Stakeholders in Africa strategise on sustainable fish production (Tribune Online)
AS Africa looks forward to end hunger by 2025, stakeholders in the fisheries sector in the African continent have converged in Abuja to chart way forward in closing the deficit in fish production. The meeting also sought to review the progress made at the Fisheries Governance project phase 1 and develop work plan for the phase 2 of the project. The Director African Union – Interafrican Bureau for Animal Resources (AU-IBAR) Dr. Nick Nwankpa in his address, said the Regional Economic Communities (the RECs) are strategic regional institutions with the political mandate for regional integration agenda, enhancing regional cooperation and fostering regional policy coherence. He said the Fisheries Governance project (FishGov) Phase 2 project therefore considered the RECs as important partners in facilitating the implementation of the Project at regional and national levels.
West African decision-makers meet to discuss economic recovery in a region destabilised by conflict, covid-19 and hunger crises (UN World Food Programme)
The United Nations Economic Commission for Africa (UNECA) in partnership with the Economic Community for West African States (ECOWAS), the United Nations World Food Programme (WFP), and the Senegalese Ministry of Economy, Plan and Cooperation, today launched the annual forum of intergovernmental organisations from West Africa, to examine and address the impact of emerging risks and challenges associated with the COVID-19 pandemic and the unfolding crisis in Ukraine. During the two-day forum in Dakar held on 21 and 22 June 2022, participants will address sustainable development issues, identify and discuss policy directions and actions needed to strengthen the resilience and recovery of West African economies. They will also lay the groundwork for policy responses to emerging development challenges in West Africa, including growing levels of food insecurity, the climate challenge, extreme violence, and the breakdown of social cohesion. The socioeconomic fallout from the COVID-19 pandemic and the ripple effect of the conflict in Ukraine have led to increased costs of food, fuel, and agricultural inputs - particularly fertilizer - in the region according to the joint studies conducted by ECOWAS, UNECA, FAO and WFP.
These studies revealed that West African countries are highly dependent on food imports – with the region spending US$ 4.5 billion in 2019 on cereal imports. Dependence on wheat imports is particularly acute in Mali, Senegal, Guinea, and Benin, where just over half of the wheat consumed comes from Russia. This situation poses a threat to the region due to the unprecedented rise in food prices witnessed in February-March 2022, with the FAO Food Price Index reaching its highest level on record in March 2022.
Expert committee meets in preparation for launching of ECO (The Point)
The activity is organised by the West African Monetary Agency (WAMA) in collaboration with the Central Bank of The Gambia and it seeks to provide the opportunity to practitioners in the banking and microfinance space of ECOWAS to harmonise their respective acts in preparation for the launching of ECO. Dr. Olorunsola E. Olowofeso, director general of West Africa Monetary Institute (WAMI), expressed delight over the state of the operations of WAMI since its establishment in 2001 which they were highly commended. This includes facilitating the integration of banking and non-banking sectors of the West African monetary zone (WAMZ).
He said WAMI is currently at an advanced stage in drafting a model act for non-bank financial institutions and non-bank financial holding companies of the WAMZ.
Summary Readout of Deputy Secretary Graves’ Travel to West Africa (U.S. Department of Commerce)
On Saturday, Deputy Secretary Don Graves concluded his travels to West Africa, where he met with representatives from the governments of Côte d’Ivoire & Ghana, participated in key commercial forums driving investment and creating opportunities for U.S. businesses across Africa, and engaged with private sector and NGO representatives.
“The Biden Administration places tremendous importance on developing deeper relationships with African countries that are based on mutual respect, which enables us to work together to overcome short-term challenges while building towards long-term economic resiliency and prosperity,” said Deputy Secretary Graves. “I look forward to continuing the collaborations that have been underway for decades, including advancing new means of partnership and identifying additional areas of collaboration in the future. Finally, I would like to commend President Ouattara, Prime Minister Achi, President Akufo-Addo, and Vice President Bawumia, along with my Ivoirian and Ghanaian counterparts and our private sector partners for an excellent series of meetings on my first of what I hope will be many trips to the continent.”
Egypt will host a critical meeting in September aimed at rallying African leaders for a single voice on Nationally Determined Contributions to cut emissions and adapt to climate change ahead of the world’s premier climate conference, COP27. Egypt will host COP 27 this November. This is the first time in six years that the global event will take place on African soil. It comes as the continent faces a growing climate threat and a huge resource deficit—of $1.6 trillion in climate finance over the next decade, according to the African Development Bank—to address the risks to lives and livelihoods. Senior Egyptian officials met with African Development Bank senior management in Abidjan on 14 June to discuss their individual and collective agendas in the run-up to the all-important climate summit. The parties also discussed how best the Bank can generally support Egypt, one of the institution’s major shareholders. Egypt’s Minister for International Cooperation, Dr. Rania Almashat—who led her country’s delegation—said the discussions would take place during the Egypt International Cooperation Forum, to be held in the North African country in September, two months before COP 27.
The 44th Ordinary Session of the Permanent Representatives’ Committee (PRC) kicked off (AU)
The 44th Ordinary Session of the Permanent Representatives’ Committee (PRC) kicked off on 20 June 2022, in preparation for 41st Ordinary Session of the Executive Council of the AU and the 4th Mid-Year Coordination Meeting of the African Union (AU) and the Regional Economic Communities (RECS) to be held in Lusaka, Zambia, from the 14-17 July 2022. Addressing the ambassadors in his opening remarks, the Chairperson of the AU Commission, Moussa Faki Mahamat underscored the importance of the session. “This 44th Session of the PRC, is held in a particularly difficult context, marked by the persistent challenges, in particular the control of the ravages of the COVID-19 pandemic, the post-COVID economic recovery, the problems of insecurity linked to the expansion of terrorism and the resurgence of the Unconstitutional Changes of Government on the Continent, the negative effects of Climate Change, the problem of refugees and Internally Displaced Persons,” said Mr. Moussa Faki Mahamat.
China Seeks to Expand Africa Trade Dominance With Role as Peace Mediator (WSJ)
China offered to mediate disputes across the troubled Horn of Africa at its first regional peace conference, the latest sign Beijing is expanding decades of economic diplomacy into matters of war and peace. Delegates from six countries gathered in Addis Ababa, Ethiopia, to hear China’s newly appointed special envoy for the region, Xue Bing, pledge that Beijing was best placed to restore stability to Ethiopia, Sudan, Somalia and other countries across the strategically important Horn of Africa, which is perched on some of the world’s key shipping lanes.
Global economy news
‘BRICS partnership has great value for SA’ (Moneyweb)
The value of South Africa’s membership of BRICS has grown substantially since we joined this group of emerging economies 12 years ago. As we work to rebuild our country in the wake of the COVID-19 pandemic, there is much to be gained from our participation in BRICS and the relationships we have established with other member countries. At the outset, BRICS countries identified the strengthening of economic and financial ties as one of the key pillars of its cooperation. The countries have adopted the Strategy for BRICS Economic Partnership to increase access to each other’s markets, promote mutual trade and investment and create a business-friendly environment for investors in all BRICS countries. An important part of this strategy, particularly for South Africa, is to diversify trade so that more manufactured goods, rather than raw commodities, are traded. Last year, over 17% of South Africa’s exports were destined for other BRICS countries, while over 29% of our total imports came from these countries. These countries are therefore significant trading partners, and the value of this trade is continuing to grow. Total South African trade with other BRICS countries reached R702 billion in 2021 up from R487 billion in 2017.
Commonwealth seeks to grow trade by $6.5 trillion in five years (The East African)
Intra-Commonwealth trade is expected to expand by $6.5 trillion in the next five years from the current $13 trillion, as the group seeks to strengthen both trade and investment ties between the 54 member countries. Figures by the Commonwealth Secretariat show that trade costs within the Commonwealth are on average 21 percent lower, while investment flows are 27 percent higher than those between other country pairs. The combined GDP of Commonwealth countries is now around $13 trillion and is estimated to reach $19.5 trillion in 2027. The population of the Commonwealth is over 2.4 billion. “At the heart of our mission is trade - the lifeblood of economic activity, and the arteries of the economic relationships between our Commonwealth member countries. The Commonwealth advantage…,” Baroness Patricia Scotland, the Commonwealth Secretary-General, said during the opening ceremony of the 2022 Commonwealth Business Forum (CBF 2022) in Kigali on Tuesday. She added that the Commonwealth’s ambition is to facilitate trading within countries.
New Word Bank research tells us how to make Global Value Chains more resilient (Trade for Development News)
The past two decades have seen the share of global exports from low- and middle-income countries almost doubling to 30% and the world’s population living in extreme poverty falling from 36% to 9%. These dramatic expansions in trade, productivity and economic growth were propelled by the emergence of Global Value Chains (GVCs). GVCs also enabled an international division of labour, increasing efficiencies and economies of scale. Firms in low- and middle-income countries now can supply intermediate inputs to global production networks, benefiting from the industrial bases of other states. They can also import cheaper and better inputs, technologies, and improved management practices. This allows them to grow faster and create better, higher-paying jobs.
Policies to maintain trade flows can limit and overcome global shocks. A crisis is a bad time to raise trade barriers, as the need for imports may increase, and exports are an important stabilizer and a source of jobs and incomes. Trade policy reforms, such as tariff reductions, cut the cost and improve the availability of essential goods and services. In so doing, they help restrain inflationary pressures, once again with positive distributional consequences for poorer households and workers. Trade reforms also reduce tax and administrative burdens and support eventual economic recovery and improved resilience through greater diversification of imports and exports.
EU to provide vulnerable countries $633M to address food crisis (Anadolu Ajansı)
The European Union will support vulnerable countries with an additional €600 million ($633 million) to face the food crisis aggravated by Russia’s war on Ukraine. “To help our partners we will mobilize an additional 600 million euros to avoid a food crisis and an economic shock,” Ursula von der Leyen, president of the European Commission, announced at the 2022 European Development Days conference in Brussels on Tuesday. She said the war that began in February is taking a “heavy and senseless toll,” not only on the Ukrainian population but also on those most vulnerable around the world. “Russia is still blocking millions of tons of desperately needed grain,” she added.
With the additional funds, “we will strengthen our support to address the crisis, while contributing to sustainable and resilient food systems,” said European Commissioner for International Partnerships Jutta Urpilainen.
Island nations urge Commonwealth leaders to bolster ocean climate action (The Commonwealth)
Small island nations are calling for strengthened global support for ocean and climate change action, just days before Commonwealth leaders convene in Kigali, Rwanda, to decide on the group’s priorities for the next two years. In their executive sessions later this week, heads of government are expected to discuss issues such as shared climate ambitions, financing climate and ocean action, and rebuilding sustainable green and blue economies in the wake of the COVID-19 pandemic, among other key items on the agenda. During a breakfast meeting co-hosted today by the Commonwealth Secretariat and the Fiji Government in the margins of the summit, High Commissioner Jitoko Tikolevu addressed an audience of mainly envoys from fellow island nations, from Tuvalu to Cyprus to The Bahamas. He said: “The ocean and climate are inextricably inter-connected and the health of our oceans dictate the livelihoods of millions of people around the world, from the Pacific to the Atlantic... The challenges facing our oceans and its resources are diverse and complex and yet our answer is simple, we need action!”
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Local news
N3 protest: Supply chain under attack, cost to economy more than R300m (Engineering News)
The Road Freight Association wrote to President Cyril Ramaphosa on Thursday to ask him to to urgently intervene in an ongoing blockade of key cargo routes across the country. In an open letter, Road Freight Association CEO Gavin Kelly told Ramaphosa road freight companies were being targeted and that the entire supply chain was under attack.
“The economic impact – initially felt and carried/absorbed by all the transporters stuck on the various routes – is not only enormous (we have already lost around R25 million in truck operating costs), but will cripple many of our smaller operators (88% of our members are SMMEs), will have a knock-on effect on all other industry sectors (from manufacturing to retail), [and] will result in penalties for late delivery, damaged goods, contract breach and even loss of business and thereby, unemployment,” Kelly said.
“Ships will sail past to other ports – they will not wait for us to ‘get our act together’. We will lose trade and business to and through South Africa. Our ports will become ghost towns – and the surrounding businesses relating to those activities of trade and support will close.
SA invests in youth empowerment (SAnews)
Minister in the Presidency, Mondli Gungubele, has encouraged the youth to utilise all opportunities presented to them by government to grow and create their own businesses.
“The youth are the future of this country and therefore, government remains resolute in creating a favourable and supportive environment for youth to become successful entrepreneurs and leaders. “The youth of 2022 is called upon to help us build a better tomorrow for everyone. Young people become agents of change, embrace the opportunities provided and rise to the challenge of leading South Africa’s post-COVID-19 recovery,” Gungubele said.
According to the Government Communication and Information System (GCIS), government is creating favourable conditions for youth-owned businesses to thrive through Presidential youth employment intervention programmes like the Youth Employment Stimulus and the Social Employment Fund.
Experts say that Rwanda’s AfCFTA strategy places the country on a firm footing (UNECA)
Trade Experts, members of the private sector and officials of the UN Economic Commission for Africa (ECA) met to discuss and validate the African Continental Free Trade Area (AfCFTA) National Implementation strategy. The validated strategy will serve as a blueprint to identify key products and services as well as markets that Rwanda will prioritize to tap into the opportunities provided by the agreement.
ECA estimates large gains for Eastern Africa, including an increase in intra-African exports by over US$ 1 billion and the creation of over 2 million new jobs.
The National AfCFTA Implementation Strategy highlights that Rwanda is expected to gain from sectors with strong potential for increased industrialisation such as agro processing of food products, mining and mineral processing of high-value extracts like coltan, tantalum and cobalt, construction materials like cement, iron, steel and ceramics, light manufacturing of textiles, leather products, pharmaceuticals, electronic equipment.
Tanzania joins a growing number of African countries imposing digital tax on big global tech firms (Business Insider Africa)
According to local media reports, the taxation will take effect from next month, following anticipated approval from the Tanzanian parliament. Business Insider Africa understands that lawmakers are scheduled to vote on the matter any moment from now. “Tanzania Revenue Authority shall establish a simplified registration process to accommodate digital economy operators who have no presence in Tanzania. This measure is intended to keep pace with rapid growth in the digital economy,” the Finance Minister was quoted to have said. Tanzania joins a growing list of African countries that have so far introduced various forms of digital taxation aimed specifically at big global tech companies that make money across Africa. Just last week, a Nigerian regulatory agency announced a code of conduct that would, among other things, require such companies to pay taxes.
M23 clash: DRC now suspends bilateral trade agreements with Rwanda (The East African)
The Democratic Republic of Congo is suspending all agreements with Rwanda, which it accuses of supporting the M23 rebels, even though Kigali denies the charge. After a meeting which ended late in the night on Wednesday, June 15, Patrick Muyaya, the government spokesman, announced several resolutions by President Félix Tshisekedi and the High Council of Defence.
The agreements include a commercial deal signed in June 2021 between President Tshisekedi and his Rwandan counterpart Paul Kagame on exploiting gold to ensure its traceability in DR Congo. The aim was to control the value chain from extraction by Sakima and refining by Dither in Rwanda.
The two neighbouring countries also had an agreement on the prevention of tax evasion and double taxation and another on the promotion and protection of investments.
Ghana, US trade to double in two years …US Department of Commerce projects (Ghanaian Times)
The United States (US) Department of Commerce has projected the value of trade between Ghana and US to double in the next two years. Currently, the value of trade between Ghana and U.S stands at $2.7 billion. “We have a strong commercial relations. I’m hoping that we can take that $2.7 billion or somewhere around that range, and double it in just a matter of two or three years and then double it again in just a few years after that,” the Deputy Secretary of the US Department of Commerce, Don Graves said at the US-Ghana Business forum in Accra on Thursday.
The forum, organised by the US Chamber of Commerce and the American Chamber of Commerce Ghana, was the 3rd High-Level meeting between US and Ghanaian government officials and businesses on the official visit of Mr Graves.
With a globe recovering from the shocks of the COVID-19 pandemic, he said US President Biden was committed to supporting agricultural investment, increased fertiliser, and energy production to meet the challenges of both countries.
He said there was a need for the two countries to find ways to work together and invest in more resilient supply chains and cooperate to reduce inflation as a key driver toward recovery.
Nigeria’s controversial fuel subsidies: A major focus for the new administration (Nairametrics)
Speaking at the hybrid launch of the World Bank’s Nigeria Development Update titled: “The Urgency for Business Unusual”, held in Abuja this week, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed expressed concerns about the federal government’s continuous retention of the controversial fuel subsidy regime, which is currently hurting Nigeria’s ability to service its debts.
For several months, Nigeria has failed to meet its OPEC quota, blaming massive oil theft, the inability to restart oil wells shut down in the wake of the Covid-19 pandemic, lack of investments as well as community issues. There has been a continuous fall in production volumes throughout the year. In an interview with Reuters, Zainab Ahmed noted that low crude oil production means Nigeria can barely cover the cost of imported petrol from its oil and gas revenue.
The country is at a crossroads, and we believe the subject of subsidy will be the starting point for the incoming administration. It is not hearsay that Nigeria has not derived what it should from the current high crude oil prices, rather rising crude oil prices are posing significant fiscal challenges to our economy. The perennial issues limiting production amidst increasing subsidy payments (with increasing global PMS prices) means we are better off with lower oil prices.
Administration of the Kenya Sugar Safeguard in Focus (COMESA)
The Fifth Meeting of the COMESA Sub-Committee on the Kenya Sugar Safeguard conducted a virtual two-day meeting 15-16 June 2022 to consider issues relating to the implementation of the Safeguard. Over the years, Kenya has been granted safeguards by the COMESA Council of Ministers to enable it undertake measures to re-structure its domestic sugar sector to attain competitiveness and become a profitable sector. The Committee oversees implementation of Kenya sugar safeguard measures and address challenges that may arise therefrom. Key issues in the agenda were deliberations on the progress report on implementation of the Kenya sugar safeguard measures and review of the implementation of the country’s sugar recovery plan. The Committee also considered proposals related to administration of the quotas allocated to member countries that export sugar to Kenya, which has been a key issue.
COMESA Assistant Secretary General in charge of programs, Dr Kipyego Cheluget said: “The modalities for the administration of the safeguard measures have so far been stable and serve all parties fairly under the circumstances. My plea to all of us is to avoid introducing drastic changes in the modalities which may bring discomfort or dissatisfaction to some members or section of Member States given that the diversity of sugar production regimes in the entire region.”
Cargo delays hit Mombasa port over payment dispute (Business Daily)
Importers using Mombasa port are experiencing delays in cargo delivery and collection following a payment dispute pitting Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC-SGR) against shipping lines. The Business Daily has learnt that several containers are stuck at different port facilities in Mombasa and Nairobi after KPA, which is owed substantial amounts of money by KRC and shipping lines, suspended the release of cargo until the debts are cleared.
In correspondences, KPA has been writing to shipping lines which use SGR to ferry cargo to Nairobi and Mombasa to clear their arrears in vain, forcing them to take action.
One of the notices dated June 10 2022 added: “For invoice under disputes should be paid in full pending resolution of the disputes and where credit notes are subsequently issued, they will be used to offset subsequent invoices.”
Tanzania grain stuck at Kenya border due to new export requirement (The East African)
Tanzania has imposed a new requirement on grain traders to get an export permit before shipping maize out of the country, in a policy shift that has locked already bought stocks of grain by Kenyan millers at the border. Kenyan millers say the new requirement could paralyse their operations at a time scarcity of grain and other costs of production have conspired to push the price of flour towards Ksh200 ($1.70) for a two-kilo packet. Millers say the requirement was not there before after the two countries resolved their trade dispute last year. This has seen hundreds of trucks stuck at the Namanga border post, cutting the supply of grain to Kenya given that Tanzania is the only source of maize where processors are getting grain from at the moment after local stocks fizzled out. “Our tracks have been stopped from proceeding to Kenya and we are currently incurring more cost on delay charges even as our milling plants have grounded to a halt for lack of stock to process,” said John Gathogo, the publicity secretary of animal feeds manufacturers.
New regional digital plan to bridge data gaps in food stocks (Business Daily)
Kenya is among 27 countries that will soon have a digital system that will play a key role in giving real-time estimates on the availability of food stocks in the region. Alliance for Green Revolution in Africa (AGRA) and Common Market for Eastern and Southern Africa (Comesa) are leading the efforts to develop a digital Regional Food Balance Sheet (RFBS) that uses data from a variety of public and private sources to develop the system. Once fully developed and operational, the RFBS will inform data-driven decisions around production support, trade policy, and stock management by governments, business decision-making and investment by the private sector. So far six countries including Kenya, Rwanda, Malawi, Uganda, Zambia and Tanzania have been involved in the pilot phase.
Gambia’s performance in third Biennial Report reviewed (The Point)
The African Union Commission initiated a comprehensive Africa Agriculture Development Programme (CAADP) Biennial Review Report which is the main mutual accountability tool to track the progress of the African Union (AU) member states in implementing the Malabo Declaration of 2014 focusing on Agricultural growth and poverty reduction based on its seven commitments. The Gambia as a signatory to the Malabo declaration submitted its Third Biennial Report to the African Union through the Regional Economic Community (REC).
Agriculture is limited with funding gaps even though it is a productive sector, Francis Mendy, Director of Planning at the Department of Planning Services, Ministry of Agriculture, stated, adding that a lot of resources is needed to support a productive sector. He also described agriculture as a risk enterprise, saying limited funds allocated to agriculture make it very difficult to implement most of the activities under the sector.
Mombasa, Dar ports behind global rivals in efficiency (The East African)
East African ports are trailing their global peers in operations through red tape and underperformance, a global report says. The region’s busiest ports by cargo handled — Mombasa and Dar es Salaam — are still a far cry from gateways in the Middle East, for example. They are ranked 293 and 362, respectively, out of 370 in the global Container Port Performance Index (CPPI).The latest report for 2021, released last week, shows that the two ports were bogged down by shipment delays, supply chain disruptions, additional costs, and reduced competitiveness resulting in inefficiencies.
“Poorly performing ports are characterised by limitations in spatial and operating efficiency, limitations in maritime and landside access. Inadequate oversight and poor co-ordination between the public agencies involved results in lack of predictability and reliability,” the index reads.
Egypt Adapts to Climate Change (IMF)
Higher temperatures and extreme weather have inflicted crippling losses in countries across the Middle East and Central Asia. Egypt is highly vulnerable to water scarcity, droughts, rising sea levels, and other adverse impacts of climate change. Without adaptation, agriculture, tourism, and coastal communities will be at particular risk.
To support the move to a greener, climate-resilient economy, the Egyptian government recently launched the National Climate Change Strategy. The private sector is scaling up adaptation efforts and will play a key role in this transition. To develop the green finance market, Egypt has also issued the region’s first sovereign green bond to finance projects in clean transportation and sustainable water management. As host of COP27, Egypt is also coordinating global action on climate adaptation, mitigation, and finance.
IMF Executive Board Concludes 2022 Article IV Consultation with Côte d’Ivoire (IMF)
Supported by solid macroeconomic stability, the Ivorian economy proved resilient to the COVID-19 pandemic thanks to the authorities’ effective policy response. COVID-related fatalities remain at low levels by international standards. Vaccination efforts continue and about 70 percent of the target population has already received a first dose.
The economy recovered strongly in 2021 , with growth estimated at 7 percent (from 2 percent in 2020), while annual inflation rose to 4.2 percent due to external and supply shocks. The overall fiscal deficit reached 5.1 percent of GDP, lower than anticipated, mainly due to improvements in customs collection and tax administration which offset higher security spending.
African trade and integration news
AfCFTA seen achieving early positive effect on intra-Africa trade levels (Businessamlive)
The African Continental Free Trade Area (AfCFTA) agreement will have an early positive effect on intra-African trade levels, according to the latest Africa CEO Trade Survey Report. The report, which was based on a survey of over 800 executives from 46 countries in Africa who are active in the continent, shows that the positive effect of the AfCFTA will be felt as early as 2022-23.
Speaking on the survey results, Pat Utomi, chairman of PAFTRAC, said the “survey clearly shows that the vast majority of African CEOs believe that the implementation of the AfCFTA will have a positive effect on levels of intra-African trade, even as early as 2022-23”.
“Just 4 percent of participants believe that the AfCFTA will have, or has already had, a negative impact on their businesses,” he said. While intra-African trade and the AfCFTA play a big part in the report, the survey also highlighted how African businesses see opportunities in external markets.
“African companies do not seem to greatly favour exporting to any one region of the world over another. However, the survey showed while Europe appears to be the favoured export destination, the Middle East is an increasingly popular destination given growing trade and investment ties with Africa,” Utomi said.
The African Trade Report is the annual flagship report of the African Export-Import Bank (Afreximbank). The combined 2021-2022 edition of the report focuses on “Leveraging the Power of Culture and Creative Industries in Africa”
Ukraine crises: Afreximbank establishes $4bn Adjustment Trade Finance Programme for Africa - Ghanaian Times (Ghanaian Times)
The ongoing Ukraine crisis presents new challenges to Africa as it is hindering access to grains, fertilisers and petroleum products, Professor Benedict Oramah, President and Chairman of the Board of Directors of African Export-Import Bank (Afreximbank) has said.
He said the crises have led to galloping inflation in many African countries, which were only beginning to recover from the COVID-19 pandemic. Addressing participants at the official opening of the 29th Afreximbank Annual Meetings (AAM2022) in Cairo, Egypt yesterday, he said “Mindful that Africa’s problems are for Africans to solve, Afreximbank has once again stepped in with the launch of a 4 billion dollar Ukraine Crisis Adjustment Trade Finance Programme for Africa (UKAFPA) to help countries to contain the short-term impacts of the crisis.”
Themed “Realising the AfCFTA Potential in the post-COVID-19 Era—Leveraging the power of the youth”, the Afreximbank annual meetings includes Advisory Group Meetings and the Annual General Meeting of shareholders, complemented by seminars and plenaries.
North African conference on labor, entrepreneurship and MSMEs concludes with the “Rabat Declaration” (AfDB)
“The post-Covid-19 world is opening up new avenues and opportunities. All public and private actors have a role to play in making themselves even more accessible to entrepreneurs. This will only be possible if a new impetus is given to entrepreneurship and MSMEs, with a synergy of all programs, public and private, which will have to be scaled up, have greater capacity, and be seamlessly interwoven.” This was the conclusion of a regional conference held on 7 and 8 June in Rabat, Morocco, on the future of labor and the role of entrepreneurship and MSMEs.
The Rabat Declaration calls for new political awareness and a change of paradigm. It establishes convergence around the need for a new job creation model that is nurtured by entrepreneurship.
Eight specific action points were identified, including: improving regulatory frameworks, investing in high-potential value chains, creating public-private partnerships to leverage investment funding, providing targeted support for entrepreneurs and helping them technically and financially.
Top 10 most-innovative economies in Africa (Business Insider Africa)
Data from the report found that Sub-Saharan Africa has the highest number of economies performing above expectations in the GII. Here are the top 10 most-innovative economies in Africa, according to the 2021 Global Innovation Index:
- Mauritius
- South Africa
- Kenya
- Cabo Verde
- Tanzania
- Namibia
- Rwanda
- Senegal
- Botswana
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Malawi
Africa could earn billions in unpaid taxes (DW)
Every year, African countries miss out on vast sums of taxpayers’ money due to a lack of logistical support for business transactions and monitoring systems. However, the real problem is that much of the working population is employed in the informal sector: on markets, in agriculture, the arts and craft industry, in the construction sector, or in transport. Moreover, many small, independent businesses are not registered — self-employed people often pay neither taxes nor social security contributions.
If they were collected, more tax revenues could significantly improve health and education, expand infrastructure, and contribute to other urgently needed development projects in many African countries.
Professor John Gartchie Gatsi, a finance and economy lecturer at Cape Coast University in Ghana, told DW that it would make sense to incorporate the informal sector into the overarching “normal” scheme for taxes: ”If we grow the informal sector and formalize it through various policy interventions, we will gradually move a chunk of the informal sector into the formal sector,” he said. But he added that Africa faced several hurdles along the way. “We have identified digitilization, electronic and automation of systems, but we have not been consistent.”
The 2nd Extraordinary Session of the African Union Specialized Technical Committee on Transport, Transcontinental and Interregional Infrastructure, and Energy (STC-TTIIE) that convened from June 14-16 virtually came to a close after making crucial decisions regarding the Russia-Ukraine crisis, the Common African Position Paper on Energy Access and Just Transition in Africa to be presented at COP27, the SAATM Dispute Settlement Mechanism and the revised African Civil Aviation Policy, among others.
During the opening of the ministerial session, the Chair of the STC-TTIIE Hon. Tsoeu Mokeretla, Minister of Transport of the Kingdom of Lesotho said the ongoing Russia-Ukraine Crisis is already taking its toll on Africa and it is time to collectively as a continent find ways of mitigating the impacts on the energy and infrastructure sectors thereby addressing the knock-on effects on other sectors. African Union Commissioner for Infrastructure and Energy, Dr. Amani Abou-Zeid, calls the situation ‘a double crisis’ as it came at a time when African economies strive to recuperate from the global covid-19 pandemic, adding that the crisis has contributed to soaring prices of energy and high cost of transport in Africa which has negatively impacted agriculture, industry, trade, tourism, and many other socio-economic sectors in addition to important pressures on the public budgets of African countries.
Commissioner Abou-Zeid emphasizes the need to rapidly adapt to the existing situations and devise innovative ways to seize possible opportunities that may arise. “Africa can step in as an alternative source energy market through its number of projects under the Programme for Infrastructure Development in Africa (PIDA) and other similar initiatives like the African Single Electricity Market (AfSEM) that can be expedited to first address Africa’s energy needs and export to other regions,” underscores the Commissioner.
Global economy news
WTO members secure unprecedented package of trade outcomes at MC12 (WTO)
WTO members successfully concluded the 12th Ministerial Conference (MC12) in Geneva on 17 June, securing multilaterally negotiated outcomes on a series of key trade initiatives. The “Geneva Package” confirms the historical importance of the multilateral trading system and underlines the important role of the WTO in addressing the world’s most pressing issues, especially at a time when global solutions are critical.
Round-the-clock negotiations among delegations produced the "Geneva Package", which contains a series of unprecedented decisions on fisheries subsidies, WTO response to emergencies, including a waiver of certain requirements concerning compulsory licensing for COVID-19 vaccines, food safety and agriculture, and WTO reform.
5 critical policy agendas for economic recovery in developing countries (UNCTAD)
The financing needs of developing countries have significantly expanded in recent years, reflected in increased debt accumulation throughout the 2010-2020 period.
This pre-COVID-19 trend placed a major constraint on government responses to confront the urgency of the pandemic and, in the medium-term, restricts their capacity to recover in the face of emerging shocks such as climate disasters and those associated with the conflict in Ukraine.
During a recent workshop held by UNCTAD and the Economic Commission for Latin America and the Caribbean (ECLAC), experts and policymakers identified five critical policy agendas to support economic recovery across developing regions in 2022.
- Re-channel unused special drawing rights and initiate a new allocation
- Expand state-contingent debt instruments
- Establish a multilateral credit rating agency
- Increase South-South learning from development banks
-
Deploy capital flow management
Climate change: Green energy ‘stagnates’ as fossil fuels dominate (BBC News)
“The share of renewable energy has moved in the last decade from 10.6% to 11.7%, but fossil fuels, all coal and gas have moved from 80.1% to 79.6%. So, it’s stagnating,” said Rana Adib, the executive director of REN21.
Targeted Financing Crucial for Ocean Health and Achieving SDGs, New Report Shows (WEF)
A new white paper, published on World Ocean Day by the World Economic Forum, outlines critical steps to channel funding to support the health of the ocean and those who depend on it.
SDG14 Financing Landscape Scan: Tracking funds to realize sustainable outcomes for the ocean highlights the fragmented nature of current data on ocean financing and points to the need for innovative tools to track commitments towards and investment in the Sustainable Development Goal for the ocean, SDG14, with better traceability and granularity of information on financial commitments for the ocean.
Challenge for 2023: Guaranteeing Sufficient Food Production (Inter Press Service)
If the war in Ukraine and other conflicts around the world continue, the challenge for 2022 will be to guarantee greater access to existing food supplies, and sufficient food production by 2023. As we approach four months since the start of the war, data continues to show a trend of rising food prices, particularly in the poorest countries, while concern grows about the possible effects of these increases. It will be the most fragile countries in Africa and Asia that will pay the highest price, even though many European countries are 100% dependent on Russian fertilizers, the world’s leading exporter.
The potential shortages of some commodities may generate internal instability in many countries, increasing internal and external migratory flows.
Related News
WTO members secure unprecedented package of trade outcomes at MC12
WTO members successfully concluded the 12th Ministerial Conference (MC12) in Geneva on 17 June, securing multilaterally negotiated outcomes on a series of key trade initiatives. The “Geneva Package” confirms the historical importance of the multilateral trading system and underlines the important role of the WTO in addressing the world’s most pressing issues, especially at a time when global solutions are critical.
Round-the-clock negotiations among delegations produced the "Geneva Package", which contains a series of unprecedented decisions on fisheries subsidies, WTO response to emergencies, including a waiver of certain requirements concerning compulsory licensing for COVID-19 vaccines, food safety and agriculture, and WTO reform.
"The package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time," said WTO Director-General Ngozi Okonjo-Iweala. "They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic competition will be able to exist alongside growing strategic cooperation."
DG Okonjo-Iweala expressed her conviction that "trade is part of the solution to the crises of our time" and noted that the WTO "can and must do more to help the world respond to the pandemic, tackle environmental challenges and foster greater socio-economic inclusion."
The package adopted by members include:
-
a package on WTO response to emergencies, comprising:
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pdf Decision on the E-commerce Moratorium and Work Programme (61 KB)
In addition, ministers adopted two decisions – on the pdf Work Programme on Small Economies (61 KB) and on the pdf TRIPS non-violation and situation complaints (52 KB) – and a pdf Sanitary and Phytosanitary Declaration for the Twelfth WTO Ministerial Conference: Responding to Modern SPS Challenges (82 KB) .
Ministers also agreed on a process for addressing longstanding calls for reform of the WTO. The Ministerial Declaration commits members to an open, transparent and inclusive process overseen by the WTO's General Council, which will consider decisions on reform for submission to the 13th Ministerial Conference (MC13).
All documents can be found here.
Acknowledging the "vital importance of agriculture," DG Okonjo-Iweala noted that differences on some issues, including public stockholding for food security purposes, domestic support, cotton and market access "meant that we could not achieve consensus on a new roadmap for future work." However, she added, "members found a renewed sense of purpose: they are determined to keep at it on the basis of existing mandates, with a view to reaching positive outcomes at MC13."
Her full remarks are here.
The WTO's 12th Ministerial Conference was held in Geneva, Switzerland, from 12 to 17 June 2022. Initially scheduled to end on 15 June, the ministerial gathering was extended by two days to allow more time for negotiations and reaching agreements. Co-hosted by Kazakhstan, the Conference was chaired by Timur Suleimenov, First Deputy Chief of Staff of the Kazakh President.
In his closing remarks, Mr Suleimenov thanked the DG for never giving up. "Her determination, her leadership, her perseverance made all the difference. Dr Ngozi, the WTO owes you a great debt."
He told members: "This week, you have all contributed to making what seemed impossible come to fruition. We have all engaged in frank and sometimes very difficult conversations. We may have not achieved everything that we set out for, but we have delivered, and this is something that all of us should be proud of."
"Congratulations to you all. Congratulations on going beyond your national interests and looking to the common good that the WTO embodies, and in doing so, carrying out our shared responsibility to restore confidence in this organization. It is so much needed in these difficult times," he added.
MC13
The Ministerial Conference requested the General Council to hold consultations with a view to deciding on the date and venue of the 13th WTO Ministerial Conference (MC13). The Chair recalled that the Decision on the Work Programme on Electronic Commerce contains an understanding that MC13 should ordinarily be held by 31 December 2023. Two proposals – by Cameroon and the United Arab Emirates - have been received to host the ministerial gathering.
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Local news
South Africa Ponders Buying Russian Oil, Signifying Potential Win for Putin (Newsweek)
South African officials are openly considering importing Russian oil to ease record fuel prices, a move that would help Moscow sidestep sanctions imposed by Westerns powers for its invasion of Ukraine. Gwede Mantashe, minister of Mineral Resources and Energy, said during a parliamentary debate Wednesday that it was time for South Africa to turn to Russia for its fuel needs. Mantashe’s remarks, which were met with applause, point to possible limits of efforts to economically squeeze as fuel prices continue to soar. “We should consider importing crude oil from Russia at a low price because it is not sanctioned,” said Mantashe. Mondli Gungubele, South Africa’s minister in the presidency, told reporters last week that the government hadn’t ruled out purchasing oil from Russia if it could lower fuel prices, reports fin24.
Namibia mulls developing poultry industry standards (News Ghana)
Namibia plans to develop poultry industry standards to boost sectoral growth, an official said Wednesday. The standards will serve as a structured guide for poultry production to tackle bottlenecks that have hindered market access to local producers, said Rebekka Shiimi, promotion officer at the Ministry of Industrialization and Trade. “The country does not have standards for poultry production and its products. As a result, local producers cannot export products due to the absence of such, which limits them to the domestic market,” she said. The standards will address issues of safety, quality assurance, supply chain processes, and other aspects, Shiimi said.
National treasury to progressively eliminate fuel subsidy (Kenya News Agency)
The government is mulling a plan to gradually adjust domestic fuel prices saying that the move is necessary in order to progressively eliminate the need for the fuel subsidy, possibly within the next Financial Year. National Treasury and Planning Cabinet Secretary (CS) Ukur Yatani said that this will then create the fiscal space necessary for the government to support targeted public spending on productive sectors that support the most vulnerable, such as fertilizer subsidies, universal health coverage, and subsidized primary and secondary education, among others.
Kenya eyes open skies in deal with eight countries (Business Daily)
The Ministry of Transport has tabled bilateral air service agreements between Kenya and eight countries that will see national career Kenya Airways expand its routes network to new markets. The Transport Ministry said Kenya had air agreements with the Czech Republic, Cyprus, Chile, Belize, Suriname, Austria, Tanzania and Barbados. Transport Cabinet Secretary James Macharia told Parliament the bilateral air services agreements will enable airlines to expand their existing route networks by directly operating scheduled services to other markets. “Bilateral air services agreements between Kenya and the various countries are established to enable Kenyan air operators such as Kenya Airways to provide scheduled air services and expand their existing route networks,” Mr Macharia said in a report to Parliament. “In addition, the agreements allow foreign careers to access the Kenyan market.”
He said where airlines are unable to offer services, the agreement allows them to enter into commercial arrangements such as codeshare agreements, which allow airlines to grow the demand in other markets by putting their code on other carriers thereby offering seamless connectivity to the travelling public.
Millers to import 1.5m bags of wheat (Business Daily)
Millers will be shipping in at least 1.5 million 90-kilo bags of wheat in the next 10 days as they rush to replenish the diminishing stocks amid poor crops locally from the current season. According to the Port of Mombasa, four ships carrying bulk wheat will be docking at the harbor by Sunday next week. They will be among the 35 vessels that are expected to dock at the port between 13 and 25 June with different cargo. Kenya is grappling with a shortage of wheat following disruption at the source markets of Ukraine and Russia in the wake of the conflict between these two countries which has cut the supply of the grain. “Local wheat production for the current season was lower at 1.2 million 90 kg bags compared to 1.8 million last season,” says Agriculture and Food Authority (AFA).
The shortage of grain in the local market has seen the price of wheat flour steadily rise to now hit Sh212 for a two kilogramme packet up from Sh200 last month. Total wheat imports for the current season stood at 1.5 million tonnes by April 2022 against a total allocation of 2.7 million tonnes that millers were permitted to ship in.
US starts resetting trade ties with Kenya to reflect Biden priorities (Business Daily)
The US government on Monday started reshaping trade deals with Kenya to reflect the priorities of the Joe Biden administration, American officials said. The US and Kenya agreed to discuss an “ambitious” trade arrangement with “high-standard commitments” in key areas including agriculture, digital trade and climate change, the Office of the United States Trade Representative (USTR) announced on Monday. The USTR stated this after the US Trade Representative Katherine Tai and Kenya’s Trade Cabinet Secretary Betty Maina met on Monday on the margins of the ongoing World Trade Organization’s 12th Ministerial at WTO headquarters in Geneva, Switzerland.
“They discussed a number of issues where the United States and Kenya could develop an ambitious roadmap for enhanced cooperation and, where appropriate, explore negotiating high-standard commitments,” a statement from Ms Tai’s office said without divulging additional details.
“As a next step, the two countries will work to finalize a list of areas for cooperation to deepen economic engagement, and the two ministers agreed to meet again in the coming weeks to announce the next steps,” the USTR said.
Kenya, Zambia agree to remove barriers hindering trade (Kenya Broadcasting Corporation)
Kenya and Zambia have agreed to work together towards removing barriers that hinder trade and investment between the people of the two countries. President Kenyatta said his discussions with visiting Zambian President Hakainde Hichilema on Wednesday focused on opportunities to harness the strong bonds of friendship as well as the business and economic ties including the removal of obstacles to trade.
“In this context, we have agreed to address the prevailing bottlenecks, including addressing ourselves to a few tariff and non-tariff barriers that bar our people from enjoying the freedom of trade amongst themselves,” President Kenyatta said.
Budget: Tanzania’s new tax targets Google, Facebook (The East African)
Tanzania will introduce a digital tax this year, the country’s finance minister said, in a move targeting global internet giants offering services in the country. The two percent tax will come into effect in July and follows similar attempts by other countries to force US multinational tech companies to pay at least a portion of their revenues in local tax. Tanzania’s Minister for Finance and Planning, Mwigulu Nchemba, announced the measure on Tuesday as he presented the national budget.
RRA increases taxes for imported goods manufactured in EAC (The New Times)
Importers of products such as construction materials, furniture, wine, beauty and makeup products to the East African Community are set to pay more taxes as new EAC directive comes into force. Effective July 1, a 35% tax rate will be charged on products that are imported from outside the East African Community yet they are manufactured within the community. In a communique issued by Rwanda Revenue Authority last week, the new tax rate will affect commodities such as construction materials including tiles, steel bars and barbed wires.
Other products to be taxed include mattresses, packaging, soap, beverages, toilet paper, footwear, vegetables, fruits, coffee, tea, dairy and meat products. The new tax rate is for the fourth band of the EAC’s Common External Tariff (CET). Common External Tariff is a uniform tariff rate adopted by a customs union or common market, such as the East African Community, to imports from countries outside the community.
Uganda Budget Offers Distant Hope Rather than Instant Relief (East African Business Week)
In recent years, it has become the norm for the finance ministry to come up with a breathless theme to pivot the annual budget presentation. This year was no exception. The government is proposing to spend UGX48.1 trillion ($12.8 billion) for financial year 2022/23 under the theme, ‘Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access’. Of the projected total expenditure, UGX 30,797.3 billion is to be raised through domestic revenue sources specifically UGX23,754.9 billion as tax revenue and UGX1,795.9 billion from Non-Tax Revenue.
Launching into his budget speech with a determined air, the Minister of Finance Planning and Economic Development, Matia Kasaijja said, “The theme is in line with that of the East African Community which is ‘accelerating economic recovery and enhancing productive sectors for improved livelihood’.” He spelt out the government goals in the coming year and the medium term. These are to kick-start the process of getting the households still engaged in subsistence into the money economy. Support businesses and the overall economy to recover from the impact of the Covid-19 pandemic and restore the lost jobs and livelihoods as well as protect households from the rising prices of food, fuel, and other essential commodities using prudent economic policies.
He said the size of the economy is projected to expand to UGX162.1 trillion for the financial year ending 30th June 2022.”This is equivalent to $45.7 billion. Economic activity has been more buoyant at the growth rate of 4.6 percent per annum this financial year, up from 3.5 percent of last year. This shows that the economy is on a path to full recovery from the Covid-19 disruptions,” he said.
Leveraging Non-oil Exports for Nigeria’s Export Diversification Agenda (This Day)
One of the biggest challenges facing policymakers across the globe is how to reinvigorate their economies following the COVID-19 pandemic, which disrupted global supply chains and decimated demand leading to losses across various economic sectors. Consequently, policymakers have had to leverage fiscal and monetary tools to stimulate growth. The programmes and initiatives deployed in each economy depend on the needs, challenges, and dynamics at play. For Nigeria, expanding non-oil export has remained a matter of strategic economic importance requiring continual intervention. The impact of the pandemic on oil demand and, by extension, the price of crude oil in the international commodities market further exposed Nigeria’s over-dependency on crude oil earnings and its susceptibility to oil-related vagaries. The events that characterised the pandemic also highlighted the limited range of the country’s exports to foreign markets. While non-oil export is increasingly becoming a major source of foreign exchange earnings for Nigeria, accounting for 11.32 per cent of total exports in 2021, oil still contributes about 76 per cent of the country’s total exports, according to the National Bureau of Statistics (NBS).
The expectation is that export diversification programmes and initiatives will intensify as Nigeria continues to re-orient its export profile and boost foreign currency earnings. In 2020, the Federal Government rolled out an NGN50 billion Export Expansion Facility Programme (EEFP) under the NGN2.3 trillion National Economic Sustainability Plan. The programme is designed to increase Nigeria’s export capacity in the near term and export volumes in the medium term by supporting exporters, especially micro, small and medium entrepreneurs (MSMEs). The EEFP targets sixteen programmes in five areas, including capacity building, financing, market development, infrastructure, and institutional strengthening, and will be implemented by the Nigerian Export Promotion Council (NEPC).
LCCI to leverage Lagos international trade fair for SME devt (The Guardian Nigeria)
The Lagos Chamber of Commerce and Industry (LCCI) has announced plans to drive Small and Medium Enterprise (SME) development in the country. The move, according to the Chamber, is due to the fact that SMEs are veritable tools for economic growth and development. The Vice president and Chairman, Trade Promotion Board, LCCI, Leye Kupoluyi, stated that the Chamber’s goal is to see today’s SMEs grow to become multinationals leveraging the Lagos International Trade Fair (LITF).
“We will continue with our generic theme, “Connecting Businesses, Creating Value”. The aim of this media parley is to continue the excellent relationship existing between the LCCI and the media. We intend to improve on the support and interaction with all our media partners for mutual benefits. This parley will also give us an opportunity to clarify issues on LITF,” he said.
Liberia: Commerce Minister Reaffirms Support for WTO Declaration on Public Health (Liberian Observer)
The Minister of Commerce and Industry, Mawine Diggs, has reaffirmed Liberia’s commitment to the WTO Doha Declaration and supports the current African group position for TRIPS Waiver on health-related products including vaccines. Speaking at the World Trade Organization in Geneva, Switzerland, Minister Diggs further called on her colleagues to demonstrate the true purpose of the work they were called to do by building consensus and delivering a win for the equitable health of the world. Chairing the G7+ WTO Accessions Group – 2nd ministerial meeting on the margins of the conference, Minister Diggs, outlined the core values of the group which aims at forging pathways out of fragility and achieving resilience. She named advocates for the integration of fragile and conflict-affected states (FCS) into the multilateral trading system through alignment with WTO rules and the domestication of WTO-related reforms as a catalyst to transition countries from fragility to peace and sustainable development as the group’s major objective.
Minister Diggs highlighted the need for continuous cooperation among member-states and the Secretariat in supporting acceding countries like Ethiopia, Comoros, Sudan, Somalia, South Sudan, and Timor Leste to meet their objective of integrating in trade multilateralism and acknowledged the WTO Accession Division’s dedication in advancing the negotiations of the above countries in spite of the challenges imposed by the covid-19 pandemic.
World Bank Report: With Peace and Accountability, Oil and Agriculture Can Support Early Recovery in South Sudan (World Bank)
Economic recovery has stalled in South Sudan amid a multitude of crises, including the COVID-19 pandemic, climate shocks and dwindling oil production, and most recently, the adverse effect of the broad-based rise in commodity prices brought on by the war in Ukraine. The latest World Bank economic analysis for South Sudan, Directions for Reform: A Country Economic Memorandum (CEM) for Recovery and Resilience, highlights the need for the country to leverage its natural capital in the agriculture and oil sectors to support recovery and resilience. Oil and agriculture are the most important sectors of South Sudan’s economy, with oil contributing to 90 percent of revenue and almost all exports, while agriculture remains the primary source of livelihood for more than four in five households. Thus, the report suggests a focus on the country’s use of its main endowments of natural capital—oil and arable land—is warranted in the early stages of recovery.
Cameroon triples its price support budget for basic necessities – (Journal du Cameroun)
In the ordinance amending and supplementing certain provisions of the 2022 finance law, currently being ratified by parliament, the provision for ‘supporting essential prices’ has been increased to 40 billion FCFA, is provided for in the initial finance law.
The government explains that this increase is aimed at fighting inflation. But it does not indicate how the money will be used to achieve this end or which products are concerned. It is however certain that fuels are not concerned. An amount of 480 billion F has already been budgeted to subsidise these products.
In order to stabilise the general level of prices, if not to reverse the trend, the National Institute of Statistics (NIS) suggested to the government, in a report published last May, to implement “additional support measures for businesses and households, both comprehensive and targeted”.
African trade and integration news
African Youths Are Catalytic Force to Propel AfCFTA, Says Afreximbank Boss (This Day)
The President of the African Export and Import Bank (Afreximbank), Prof. Okey Oramah has identified African youths as the catalytic force that would propel the realisation of the African Continental Free Trade Area (AfCFTA) initiative. Oramah said this yesterday in his opening address to the Afreximbank 2022 Annual Meetings in Cairo, Egypt, where he declared that Afreximbank Central Bank Deposit Programme (ACBDP) had mobilised $35 billion and attracted 50 participants since its inception in 2019. The theme of the annual meetings is “Realising the AfCFTA Potential in the Post COVID-19 Era: Leveraging the Power of the Youths.”
He also used the address to counter the conclusions of The Economist Magazine in an article titled “Africa’s Ambitious Trade Plan: Need to Speed Up,” which stated that continued political wrangling among Africa’s leaders might squander the promise of freer trade.
Oramah said: “A youth powered AfCFTA will trigger a continental economic expansion; and whether the next decade will become lost decade for Africa will depend on how we creatively deploy the energies and tenacity of our youth to implement the AfCFTA agreement.
“As the youths are technologically savvy, and we believe that it is technology that will bring down the borders, Afreximbank and the AfCFTA secretariat have started to implement a digital AfCFTA called the Africa Trrade Gateway. This will offer the opportunity for the youths to access African market, access payment services and access credit.
East Africa’s private sector wants rules of origin finalised (The Citizen)
The private sector in the East African region wants finalisation of Rules of Origin under the African Continental Free Trade Area (AfCFTA) speeded up.The call was made early this week in Nairobi by the business leaders during a consultative meeting organised on AfCFTA and Tripartite Free Trade Area (TFTA). It emerged at the forum co-organised by the East African Business Council (EABC) and Trade Mark East Africa (TMEA) that 43 out of 55 African countries have ratified the AfCFTA agreement.
Forty five countries have already submitted the schedule of liberalisation plus 87 percent of Rules of Origin for products that have been agreed upon. However, according to Mr Prudence Sebahizi, the chief technical advisor on the AfCFTA at the African Union (AU) Commission, the process is yet to be finalised.
He said products such as textiles and clothing products alone compose 10.5 percent of the outstanding Rules of Origin yet to be finalised under the AfCFTA trade arrangement. Motor vehicle parts and accessories compose 1.4 percent of the outstanding Rules of Origin while tobacco and tobacco substitutes and fish and others compose one percent.
“It is crucial because the outstanding products are central in the East African Community (EAC) regional value chains and job creation,” he said.
Egypt has become symbol of growth resilience in Africa: Afreximbank (Daily News Egypt)
As the only one of the three Africa largest economies (the others are Nigeria and South Africa) where GDP growth expanded strongly even at the peak of the pandemic downturn (3.3%), Egypt has become the symbol of growth resilience for the continent, according to the African Export-Import Bank (Afreximbank).
Afreximbank’s report “Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures” highlighted that Egypt is projected to account for 17% of Africa’s combined output expansion in 2022, up from 16% in 2021. The two largest economies, Nigeria and South Africa, are expected to account for 17% and 15%, respectively of aggregate output of the region.
Mombasa Port On Course To Become Africa’s Trade Hub (Kenya News Agency)
Recent mega infrastructure projects by the government, aims to transform the Port of Mombasa into the most efficient and modern port in the region. Mombasa port is the gateway for landlocked countries such as Uganda, Rwanda, Burundi and South Sudan, and has lately witnessed major improvement through multi-billion infrastructural, technology and modern equipment investment.
The new port infrastructure developments are envisaged to firmly consolidate the new era of the port as a critical transport and logistics hub in the region. The port expansion projects seek to transform the Mombasa port, the gateway to East and Central Africa, into the most efficient, competitive, modern and safe port in Africa.
Zambia President says Africa buying its goods through Europe (The East African)
Zambian President Hakainde Hichilema says trade barriers between African countries are stifling the movement of goods to the extent that countries find it easier to buy African products through Europe.On his State visit to Kenya, President Hichilema said the continent must open its borders, implement the African Continental Free Trade Area (AfCFTA) to correct the anomaly, and ease trading between countries instead of using third parties.
Both countries belong to the Common Market for Eastern and Southern Africa (Comesa), a 21-member trading bloc that includes countries as diverse as Tunisia and eSwatini, but all of which belong to the African Union.
Since last year in March, African countries have been implementing the AfCFTA, which is seen as an ultimate solution to gradually eliminate trade barriers and make it easier to move goods between member states, and hopefully raise intra-African trade from the current 14 percent.
“I want to assure you that the Kenya Government will continue to work with its partners in Zambia and across the African continent to continuously remove barriers to trade, continue to improve the ease of doing business, continue to open our borders to our brothers and sisters across the continent,” the President Kenyatta said at the reception. In this context, we have agreed to address the prevailing bottlenecks, including addressing ourselves to a few tariff and non-tariff barriers that bar our people from enjoying the freedom of trade amongst themselves.”
What is the future of Africa’s automotive industry? (The New Times)
Experts argue that the automotive industry can leverage the African Continental Free Trade Area (AfCFTA) to scrape the continent off the tagline of being the ‘dumping site’ of old used vehicles. The long-term impact is quite sobering where EAC has a trade deficit of $2.8billion per year, only for the automotive sector.
“We have been flooded with used old vehicles and there is not a large enough market so that local supply can be viable…if you want to have a good production capacity, you need to have a strong local demand as well as external demand,” Serge Kamuhinda, CEO of Volkswagen Mobility Solutions Rwanda, claimed.
“We need to look at electric and connected vehicles if we want to participate in the continental value chain that is able to be viable within the global value chain of the automotive industry,” Kamuhinda noted.
The CEO said they are working closely with the African Association of the Automotive Manufacturers to build regional hubs, in a sense that one hub in East Africa will be producing one model of vehicles and another hub in West Africa for another kind of model. The end goal is to have cars sold on the continent with enough market size. He added that there is work in progress to have 40 percent of rules of origin under the AfCFTA, meaning vehicles produced on the continent will have 40 per cent local value addition. “Otherwise, there are not enough incentives for the industry to make investments.”
ECOWAS Postpones Plans to Launch Single Currency to 2027 (Business Post Nigeria)
Pan-African multilateral finance institution, the African Export-Import Bank (Afreximbank), has called for an increase in intra-African trade and financing on the back of the continent’s youth and technology resources. Speaking during the 29th Annual Meetings of Afreximbank on Wednesday in Cairo, Mr Benedict Okechukwu Oramah, President and Chairman of the Board of Directors, made a strong case for increasing intra-African trade, providing insight into the challenges restricting trade and providing clear solutions as to how the continent can resolve them. Mr Oramah’s suggestions come at a time when Africa is well-positioned to become a highly competitive trade hub.
A year on, the continent has been slow to unlock the full potential of this agreement, leading to an accelerated push by the Afreximbank to promote intra-African trade and finance in Africa. “While the problem was identified decades ago, it is only now that Africa can boast of possessing a combination of factors that can resolve it. These consist of visionary and committed leadership, the youth, and digital technology. “Our leadership has done the courageous work of giving us the AfCFTA. A lot now hinges on our youth. It is for this reason that Afreximbank dedicated this year’s Annual Meeting to the theme, Realizing the AfCFTA Potential in the Post-COVID-19 Era: Leveraging the Power of The Youth, stated Mr Oramah in his opening remarks.
Burundi, the Democratic Republic of Congo (DRC), and neighboring countries within the Great Lakes Region of Eastern Africa are set to benefit from the new Great Lakes Trade Facilitation and Integration Project approved on June 9, 2022, by the World Bank’s Board of Executive Directors. The $250 million International Development Association (IDA*) financing aims to facilitate cross-border trade and enhance the commercialization of selected value chains, primarily targeting small-scale and women traders in the borderlands of the Great Lakes region. “Local cross-border trade, if properly facilitated, can be an important way to address poverty, food insecurity, conflict, and other socioeconomic vulnerabilities that populations in the border areas face,” said Dr. Chris Onyango, Director of Customs and Trade of the Common Market for Eastern and Southern Africa (COMESA). “We seek to reduce the cost and time to trade and improve the volume and quality of goods that are traded to boost incomes, prosperity, and stability in Burundi, the DRC, and the wider region.”
Africa’s energy transition calls for pragmatic measures to keep the continent competitive (UNECA)
During the United Nations High Level Dialogue in Energy in September 2021 – the first such dialogue in over forty years, the UN Secretary-General – H.E. Antonio Guterres – in his address urged countries to take urgent measures towards the rapid phase out of coal power capacity in OECD countries by 2030 and in the rest of the world by 2040. Mr Guterres noted that efforts must be made to ensure that “…no one is left behind in the race to a net zero future…” and that “…the global energy transition must be just, inclusive, and equitable…”, while recognizing that “…no two national energy transition pathways will be identical…” While Africa’s climate ambition and the drive towards net zero emissions must be relentless, the continent’s energy transition cannot be identical to the rest of the world and needs pragmatic solutions.
The current geopolitical shock arising from the crisis in Ukraine has compounded the severe impacts already being felt by African countries because of the socio-economic impacts increasing climate change and the COVID-19 pandemic. In particular, the war in Ukraine has shifted forward the gear for countries to step up efforts towards the clean energy transition away from fossil fuels to renewable and cleaner energy forms. European countries are rethinking their energy plans and policies. And there is increasing possibility of the use of more coal-fired power plants in Europe, thereby impacting on climate goals. But most importantly, the crisis is causing sharp rises in fuel and food prices globally, with huge impacts on African countries. The crisis has caused European countries to rethink their energy strategy and seek new sources of oil and gas to replace Russian supplies. Meanwhile, the prices of renewable energy technologies have seen sharp increases, after many years of costs declines, at a time when African countries need more deployment of these technologies. This situation calls for renewed thinking on Africa’s energy access, mix and green transition approach, including the role of natural gas in this process.
Gender, Poverty and Environmental Indicators on African Countries 2022 (AfDB)
This is the twenty-second volume of the publication on Indicators on Gender, Poverty, the Environment and Progress towards the Sustainable Development Goals in African Countries by the Statistics Department of the African Development Bank Group. The publication provides information on the broad development trends relating to gender, poverty, environmental issues and the SDGs in the 54 African countries.
The AfDB Statistics Pocketbook 2022 (AfDB)
The AfDB Statistics Pocketbook presents summary economic and social data on regional member countries and operational activities of the African Development Bank Group. Most of the indicators shown are selected from other Bank publications, namely: Compendium of Statistics on Bank Group Operations; Indicators on Gender, Poverty, the Environment, and Progress towards the Sustainable Development Goals in African Countries; and African Statistical Yearbook which contain more detailed information.
Standard Chartered Accelerates Sustainability Commitment In Africa Through Partnership With UNECA and FSD Africa (Africa.com)
In line with Standard Chartered’s vision to be the most sustainable and responsible bank in the world, the Bank today announced its partnership with Ghana’s Ministry of Environment, Science, Technology & Innovation (MESTI), and the UK-funded financial sector development agency FSD Africa as founding members of the African Natural Capital Alliance (ANCA). The Alliance, in partnership with the United Nations Economic Commission for Africa (UNECA), will act as an African-led collaborative forum for mobilizing the financial community’s response to nature-related risks and opportunities across the continent. The ultimate aim of ANCA is to help grow and protect Africa’s natural capital by shifting financial flows from destructive activities for short-term gain to long-term stewardship of nature for sustainable economic growth.
Africa continues to be among the worst hit by the consequences of climate change, despite emitting the lowest levels of greenhouse gases that are driving its impacts. Standard Chartered is committed to shifting capital towards sustainable finance to areas where impact is needed most, with the Bank’s Opportunity 2030 study also showing an investment opportunity of $197 billion being present in funding Africa’s achievement of the United Nations’ Sustainable Development Goals.
Is it Africa’s time, or has the continent’s race been run? (BusinessLIVE)
Is Africa still stretching on the sidelines, or is the continent finally out of the starting blocks in the race to shape the global economy? Many hope the African Continental Free Trade Agreement (AfCFTA) has fired the starter’s gun, but sceptics say this ambitious trade pact may mark more false hope, perpetuating a decades-old replay of Groundhog Day. Is that true, or are the signs more promising than that?
Referencing the late Harvard professor Calestous Juma at a recent Dunning Africa Centre (DAC) webinar at Henley Business School, Francis Mangeni, senior fellow at the Nelson Mandela School of Public Governance and an acknowledged expert on AfCFTA, said: “When it comes to trade, Africa should be one country.” If this is to be the case, the AfCFTA will have to be a game-changer for the continent. To date, political buy-in has been high, with the agreement having been ratified by 42 countries, and there is a solid economic case for what so far has been a legally sound project.
But sceptics will argue that Africa has tried for many years to integrate itself to become a pan-African continent, so what is different now? Some of the common themes around why AfCFTA is doomed to a false start include the often repeated mantra that intra-Africa trade is limited to just 15% of Africa’s total trade. Weak infrastructure criss-crosses the continent, and there is a severe infrastructure deficit among nations. Varying levels of development, and diverse cultures and languages, mean trade-aligned integration is challenging, and the synchronisation of regulations is inharmonious at best. Furthermore, prohibitive bureaucracy continues to pothole border crossings with time-consuming delays and paperwork.
One of the biggest hurdles for Africa is the restricted access to finance. According to Andrew Mold of the UN Economic Commission for Africa, who was also an invited panellist at the DAC webinar, banks are a major block here. Interest rates are high, meaning borrowing is costly and exclusive to a higher-income base. This is out of touch with the majority of Africans and starves entrepreneurial green shoots from the sunshine needed to grow.
Morocco Hosts the 14th US-Africa Business Summit (Modern Diplomacy)
After several negotiations, the Corporate Council on Africa (CCA) has finally launched its 14th US-Africa Business Summit from July 19 to July 22 under the theme ‘Building Forward Together’ and will be held in Marrakech (Morocco) in partnership with Africa50 (the pan-African infrastructure investment platform) and the Kingdom of Morocco.
United States investors are looking forward to exploring several opportunities in the African Continental Free Trade Area (AfCFTA), a policy signed by African countries to make the continent a single market. The market, with estimated 1.3 billion population, requires all kinds of consumable products and new legislations stipulate localizing production inside Africa. Thus the summit will further explore a renewed commitment by both public and private sector stakeholders to building stronger United States and Africa trade, investment, and commercial ties, emerging from unprecedented health and economic challenges for the past two years.
Global economy news
Director-General Ngozi Okonjo-Iweala called today (14 June) on members to go the extra mile to find convergence on the various issues at stake at the 12th Ministerial Conference (MC12) and to be mindful that time is running out to conclude meaningful agreements. On the third day of the ministerial gathering, WTO members continued efforts towards reaching a long-awaited agreement on curbing harmful fisheries subsidies and reaffirmed their intention to pursue convergence on texts related to agriculture.
The DG noted that some delegations approached her to suggest that MC12 could go on for an extra day. “They feel that we really can cross the line on some of these things if we gave it a bit more time, so I just throw that out there for your consideration. We can all sleep over it and perhaps we will take the pulse tomorrow to see if that is needed or not,” she added.
Subsequently, MC12 has been extended by one day until Thursday, 16 June 2022, to facilitate outcomes on the main issues under discussion.
DG Okonjo-Iweala receives priorities for MC12 from business community, briefs civil society (WTO)
The Director-General briefed close to 80 representatives from a wide array of civil society groups on the ongoing negotiations and potential deliverables on the WTO response to the pandemic, including the TRIPS waiver, food security, fisheries subsidies, agriculture, WTO reform and the moratorium on imposing customs duties on cross-border electronic transmissions. “The good news is that work is going on across the board,” she said, describing members’ intensive negotiations aimed at resolving differences to arrive at consensus at MC12. “The bad news is that we are running out of time.” DG Okonjo-Iweala said: “Achieving results at MC12 is important for the credibility of the multilateral trading system.” She highlighted the importance of decision-making through multilateral consensus at the WTO, particularly because it gives developing country members a clear voice in the negotiations. For this reason, she said, it was important for members to reach multilateral agreements – to demonstrate that the multilateral instrument can deliver results.
pdf MC12 International Chamber of Commerce (ICC) Statement (282 KB) - June 2022
Rocky path to Geneva: WTO ministerial is taking place amid low expectations for a successful outcome (The Financial Express)
All bets are off whether the World Trade Organisation’s 12th Ministerial Conference (MC 12), held in Geneva from June 12-15, delivered a successful outcome for India and developing countries. Ministerial deliberations are being extended by a day to cobble up deliverables if compromises are made at the eleventh hour. Since its inception 27 years ago, WTO has managed only one update on trading rules with respect to trade facilitation, which came into force five years ago. This highest decision-making body seeks to address the challenges of making a rules-based multilateral trading system more relevant in a world where the devastation wrought by Covid-19, climate change, and geopolitical tensions have upset global trade.
MC 12’s deliberations were broadly around four main pillars plus, notably, WTO’s response to the pandemic, fisheries, agriculture, WTO reform plus other issues. These four pillars are critical issues on which India and developing countries have major stakes. It says a lot about the extremely low expectations around MC 12 when the WTO Director-General, Ngozi Okonjo-Iweala, stated that “even landing one or two (deliverables) will not be an easy road.”
Civil society organisations urge trade ministers to demand ‘real TRIPS waiver’ (Hindustan Times)
India’s position on patent waivers at the World Trade Organization (WTO) to cover Covid-19 vaccines, diagnostics and therapeutics got an unexpected boost on Wednesday with a group of more than 150 civil society organisations, including Doctors Without Borders and Oxfam urging trade ministers not to accept the current negotiating text. Doctors Without Borders or Médecins Sans Frontières (MSF), The People’s Vaccine Alliance, Oxfam, Section27 of South Africa and the other organisations have called on trade ministers at the WTO to demand a real waiver.
The group of civil society organisations sent a letter to trade minsters negotiating the draft ministerial decision on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement at WTO’s conference in Geneva, urging them “not to accept the current negotiating text, which represents backsliding that could set a negative precedent for access to medicines and medical tools”. The group asked governments to adopt a “real TRIPS waiver that will adequately address intellectual property on all essential Covid-19 medical technologies, including treatments, tests, and vaccines during the ongoing pandemic that has claimed more than 15 million lives”, according to a joint statement.
pdf MC12 WTO CSOs call on ministers to reject current draft of TRIPS Decision: Press release (43 KB) - 16 June 2022
Customs Matters: Strengthening Customs Administration in a Changing World (IMF)
Customs administrations around the world face new challenges: an increasing volume of international trade, a revolution in new technologies, and fundamental changes in business models. The benefits of a well-performing customs administration are clear, as is the need to develop efficient, effective, fair, and modern customs administrations. Customs Matters analyzes the many changes and challenges customs administrations face and pro-poses ways to address them. By offering a cross-sectional view of the main aspects of customs ad-ministration, the book guides policymakers and customs officials as they evaluate the current state of their customs system with a view to developing, reinforcing, or relaunching their own roadmaps for customs modernization.
Russia’s War in Ukraine Is Taking a Toll on Africa (United States Institute of Peace)
Speaking at the U.S. Institute of Peace on June 14, Eziakonwa, who serves as the U.N. Development Programme’s assistant administrator and regional director for Africa, said the war has put households, communities and countries across Africa in a “very precarious situation.” Joseph Sany, vice president of the Africa Center at USIP, said: “The critical question before us today is: How can African countries and their partners leverage their abundant resources and human capabilities to address the short-term impact of Russia’s invasion in Ukraine and advance their long-term development and security needs?”
In response to the pandemic, African countries put in place effective macroeconomic policies, made strategic investments and boosted COVID-19 vaccine production and rollout. “While multilateralism appeared to be shrinking in the rest of the world, it was expanding in Africa,” Eziakonwa said. By the end of 2021, Africa exceeded expectations of a 3.7 percent GDP growth, recording a 4.5 percent growth and “showing its resilience and its muscle to bounce back,” Eziakonwa said.
On February 24, Russia invaded Ukraine in an unprovoked act of aggression. The aftershocks of the ongoing war are being felt around the world, including in Africa. While the level of trade between the African continent as a whole and Russia and Ukraine is insignificant, some African countries rely heavily on these two countries for critical imports, particularly wheat, fertilizers and steel. A disruption in these imports could adversely impact African countries.
Conference on the Promotion of Good Governance and Fight against Corruption (AU)
On June 13-14, 2022, the IMF’s Africa Training Institute (ATI) and the Department of the Economic Development, Trade, Tourism, Industry, and Minerals (ETTIM) of the African Union Commission (AUC) organized a high-level conference in Gaborone on the promotion of good governance and the fight against corruption within the context of the COVID-19 pandemic and multiple crises. The conference helped to build consensus about good governance as a critical enabler for macroeconomic stability in Africa. Welcoming the delegates to the conference, the Minister of Finance Hon Peggry Serame, in a speech delivered on her behalf by the Secretary for Development and Budget, Mr Olesitse H Masimega highlighted that weak governance and corruption impose a burden on the government budget due to continuous and elevated public expenditure on programmes that fail to deliver the expected outcomes. Opening the conference, IMF Deputy Managing Director Antoinette M. Sayeh said “Countries that have strong economic institutions respond more effectively to crises and are better prepared for a resilient recovery. And that is true across any level of development.” The importance of reforms in this regard has proven true during the pandemic where countries with stronger institutions have been able to mount more effective responses.
Countries step up efforts to close wheat supply gap (The New Times)
Other countries like Argentina, Brazil, India, have stepped in to fill the global wheat supply gap that was created by the Russia-Ukraine war, The New Times has learnt. Russia and Ukraine have been major players in the global wheat market, but the war waged by the former on the latter has disrupted the supply of this staple cereal worldwide.
Faradjallah Ndagano, Company Relations Affairs Manager at Bakhresa Grain Milling Rwanda Ltd/AZAM – a major wheat processor in the country – said that the firm buys wheat from the international commodity markets where the cereal from various countries is traded. “There is no shortage of wheat supply. The global market is not dormant, they [players in it] are dynamic as they look for other places to source the cereal such that their customers do not lack wheat,” he told The New Times.
Ndagano said countries like Argentina, Brazil, India, and [some countries in] Europe have started supplying wheat to the global market. “It depends on the [wheat] produce they have got. Once they have met their food needs, they take the surplus to the international market,” he said.
Commenting on prices, he said they keep changing as a result of different factors including the wheat output, and challenges of the day, but indicated that of course, the war somehow contributed to the prices.
Meanwhile, The New Times observed that even the traders that did not increase the price of bread and other wheat flour derived products, reduced their size as an attempt to prevent incurring losses from the rising wheat costs.
Climate change: More fossil fuel investment, just ‘delusional’, warns Guterres (UN News)
António Guterres was speaking at the Sixth Austrian World Summit on the climate crisis, convened by the Austrian Government and former Governor of California and Hollywood actor turned climate activist, Arnold Schwarzenegger. Mr. Guterres repeated his call for G20 leading economies to “dismantle coal infrastructure, with a full phase-out by 2030 for OECD countries and 2040 for all others.”
He said renewable energy was “the peace plan of the 21st century” and called on fossil fuel finance to be abandoned wholesale, in favour of the green alternative. “The only true path to energy security, stable power prices, prosperity and a liveable planet lies in abandoning polluting fossil fuels, especially coal, and accelerating the renewables-based energy transition”, he declared.
The African Development Bank Group hosted a workshop to explore securing a just transition in the developing world. The session, which took place during the World Bank’s Innovate4Climate Conference, highlighted the importance of South-South cooperation .
Innovate4Climate 2022, organized by the World Bank, took place over three days, from 24-26 May and featured plenaries and workshops. The event provided a forum for practitioners to demonstrate how to achieve a resilient and low-carbon future.
With a large oil-and-gas sector, the country has many workers that the transition will negatively impact. To mitigate these impacts, the government has incorporated renewable energy into energy efficiency technology to ease the transition for existing workers and create career opportunities. “We are not implementing a climate change or energy-only approach, but a holistic approach to transition toward a global paradigm shift, “ Kishan Kumarish, Head of the Minister of External Affairs Unit in the Trinidad and Tobago Ministry of Planning and Development said.
BRICS meet: NSAs discuss new threats and challenges to national security (Business Standard)
Top security officials of the BRICS countries have held an in-depth exchange of views and reached a consensus on issues such as strengthening multilateralism and global governance and responding to new threats and challenges to national security.
National Security Advisor Ajit Doval on Wednesday attended via video link the 12th Meeting of BRICS (Brazil, Russia, India, China and South Africa) National Security Advisers and High Representatives on National Security. The meeting also discussed strengthening and improving governance in new frontiers, the state-run Xinhua news agency reported.
In his address, Yang Jiechi, the director of the Office of the Foreign Affairs Commission of the Communist Party of China (CPC), said the BRICS was born in the historical tide of the collective rise of emerging markets and developing countries and represents the direction of the evolution and adjustment of the world pattern and international order. He called on the five countries to follow the trend of times, respond to changes of the times and inject more stability and positive energy into the turbulent international situation.
Related News
DG Okonjo-Iweala: Time is running out to reach credible outcomes at MC12
Director-General Ngozi Okonjo-Iweala called today (14 June) on members to go the extra mile to find convergence on the various issues at stake at the 12th Ministerial Conference (MC12) and to be mindful that time is running out to conclude meaningful agreements. On the third day of the ministerial gathering, WTO members continued efforts towards reaching a long-awaited agreement on curbing harmful fisheries subsidies and reaffirmed their intention to pursue convergence on texts related to agriculture.
With less than 24 hours left before the scheduled closing of MC12, the DG told members at a meeting of Heads of Delegations (HoDs) that a great amount of hard work has been going on in each and every negotiating process but that more time might be needed in order to come to a conclusion.
“It requires that we work harder and work nights, whatever it takes to be able to do it. The good news is … that progress is being made but it needs a little more work and more time,” said DG Okonjo-Iweala. “The not so good news is that we are running out of time, so I think it is really time for ministers to make the requisite decisions that need to be made.”
The DG noted that some delegations approached her to suggest that MC12 could go on for an extra day. “They feel that we really can cross the line on some of these things if we gave it a bit more time, so I just throw that out there for your consideration. We can all sleep over it and perhaps we will take the pulse tomorrow to see if that is needed or not,” she added.
Timur Suleimenov, First Deputy Chief of Staff of the President of Kazakhstan and MC12 Chair, said: “I think this is something that we need to consider, and we will come back to this issue tomorrow.”
UPDATE: MC12 has been extended by one day until Thursday, 16 June 2022, to facilitate outcomes on the main issues under discussion
Mr Suleimenov stressed that additional meetings will continue in various configurations and reiterated the sense of urgency. “This is crunch time obviously. And regardless of whether we will have an extra day or not, we need to utilize the time remaining to the fullest extent,” he added.
The MC12 Chair reported on the thematic sessions that took place today — on fisheries subsidies and agriculture — where, he said, he did not witness the same flexibility and self-restraint expressed by members in the thematic sessions of the previous day on the WTO response to the pandemic, including the intellectual property (IP) response, and on trade and food security. “WTO members' positions were not as flexible as I would have wished them to be at this point,” he said.
Echoing the statement by the Director-General, Mr Suleimenov indicated that members know by now what is doable, what needs more time for discussion and what is not possible. “Any attempt to backload the final 22 hours of this conference only increases the chance that all of us will go home empty handed. And I know that this is contrary to what the world expects from us,” he added.
He made an appeal to “start blessing outcomes” to ensure the success of MC12. “With your collective will, we should be able to close those issues. In other areas where there is no agreement, there is a need to intensify efforts to bridge gaps and provide much needed ministerial guidance.”
The meeting of the Heads of Delegation was preceded by a morning thematic session on fisheries subsidies, facilitated by Damien O'Connor, Minister of Trade and Export Growth of New Zealand, and an afternoon thematic session on agriculture, facilitated by Betty Maina, Cabinet Secretary for Industrialization, Trade and Enterprise Development of Kenya.
Minister O'Connor said that overwhelmingly statements made by members stressed the need to conclude an agreement after more than 20 years of discussions. “I am, as always, optimistic about what I have heard today and that we can get to agreement,” said Minister O'Connor, who together with the chair of the fisheries subsidies negotiations, Ambassador Santiago Wills of Colombia, will continue to consult and meet with members in different configurations to reach an outcome.
“It's also clear that for most of you the differences are not that big, and that they are within the ranges of the draft text. Having said that, it's clear that there are some members that are outside the ranges that we have talked about. I'm not questioning the reasoning behind these positions, but I would note that they do not seem to have attracted convergence or consensus,” he added.
A total of 67 members took the floor during the fisheries thematic session, which was preceded by a press conference to introduce the fisheries funding mechanism.
On agriculture, Cabinet Secretary Betty Maina also noted the overwhelming majority in support of continuing the discussions, even having expressed the view that the text on the WTO agriculture negotiations may not represent the full extent of the ambition some members would have liked to see for such an important subject. “Nevertheless, there is an indication of commitment to continue discussing all the specific concerns of different countries after MC12, and hopefully approach MC13 with some greater progress.”
She thanked members who expressed readiness to restrain themselves from amending the existing language so that a decision can be reached before the end of the Conference. “For those who still have concerns, I hope I can persuade you that we can work on a work programme to address the concerns that you still have after this meeting so long as we can reach a decision to continue the discussion,” she said.
Jerome Walcott, Minister of Foreign Affairs and Foreign Trade of Barbados, updated members on the negotiations for a WTO response to the pandemic, including the TRIPS waiver. Keisal Peters, Minister of State with Responsibility for Foreign Affairs and Foreign Trade of Saint Vincent and the Grenadines, outlined the work done on the e-commerce work programme and moratorium.
Kamina Johnson Smith, Minister of Foreign Affairs and Foreign Trade of Jamaica and facilitator on WTO reform, said that members made progress but have not managed to bridge the remaining gaps and narrow the differences to reach convergence on the forum for reform. “Today's conversations have reconfirmed that we all agree on the need to reform and it's in this context that I urge you all to agree that we commence this crucially important conversation, post MC12,” she said.
Minister Johnson Smith will update members at the thematic session on this issue on 15 June, where she will present a report on the intensive consultations that she has been conducting in various configurations over the past few days.
Finally, the MC12 Chair told members about his efforts related to some outstanding matters in the MC12 outcome document. His consultations focused on the three paragraphs that are still bracketed, indicating lack of consensus, and presented separately at the end of the text, as put forward by proponents.
These are related to women's economic empowerment, micro, small and medium-sized enterprises (MSMEs), and environment. “I understand that there is large support to remove the brackets around these paragraphs, but so far, regrettably, no consensus has emerged,” he said.
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Progress made in Port of Durban repairs (SAnews)
The Department of Public Enterprises (DPE) has hailed Transnet Freight Rail (TFR) for the “significant progress” made in repairs to its Durban Rail and Ports following the heavy rains and flooding in that area in April. The Port of Durban is one of South Africa's most important freight ports and serves as a gateway to Gauteng.
“The recovery from the damage caused by the flooding in KwaZulu-Natal will enable exporters and importers that utilise the Port of Durban to return to normality and Transnet will endeavour that all shipping lines continue to service the Port of Durban.
“Much work still needs to be done in the south basin area and Transnet continues to work with the province, municipality and other stakeholders in that area to ensure that work is concluded speedily,” the department said in a statement.
Positive perceptions of South Africa as an EU investment destination, but challenges remain (Engineering News)
There are positive perceptions from potential investors to South Africa, and continued interest among existing investors in the country, despite impacts such as the Covid-19 pandemic and the July 2021 civil unrest; however, it is critical that challenges be addressed to engender even more interest. This was highlighted by European Union (EU) Chamber of Commerce and Industry of Southern Africa chairperson Rui Marto on June 14, presenting the key findings of two studies undertaken by the chamber between November 2021 and March this year.
New Financing Agreement to Boost South Africa’s COVID-19 Vaccination Program and Health System (World Bank)
Today, the World Bank Group Board of Executive Directors approved a 454.4 million euro (ZAR 7.6 billion or $480 million) loan for South Africa’s COVID-19 Emergency Response Project. The loan comes following a request by the Government of South Africa (GoSA) for assistance in financing vaccine procurement contracts. Specifically, this project will retroactively finance the procurement of 47 million COVID-19 vaccine doses by the GoSA. South Africa is the epicenter of the COVID-19 pandemic in Africa, with the highest cumulative numbers of infections and deaths. By supporting the country’s COVID-19 vaccination program, the project will help the government better cope with the pandemic, as the country experiences its fifth wave, and support the GoSA to create the fiscal space needed to strengthen its health system and ensure financial and institutional sustainability.
Uhuru roots for better ties between Kenya, Barbados (The Standard)
President Uhuru Kenyatta has emphasised the need to enhance transport connectivity between Kenya and Barbados to boost the mutually beneficial ties the two countries enjoy. The president said that the two countries possessed great potential that could be harnessed for the benefit of their citizens if transport hurdles that are an impediment to trade and interpersonal interactions were addressed. The transport impediments include lack of direct flights to and from the Caribbean nation.
Noting that Kenya is a big agricultural producer while Barbados boasts of being a strong financial hub, Uhuru said increased people-to-people interaction through improved transport connectivity will accelerate economic growth and create jobs for the youth of the two countries.
Kenya, US revisit trade talks, agree to expedite process (The Star, Kenya)
Kenya and the US have revisited trade talks between the two countries as ministers meet at the World Trade Organization's 12th Ministerial Conference in Geneva. As a next step, the two countries have agreed to work to finalise a list of areas for cooperation to deepen economic engagement. This was during an engagement between the US Trade Representative ambassador Katherine Tai and Kenya’s Industrialization, Trade and Enterprise Development Cabinet Secretary Betty Maina. The two have agreed to meet again in the coming weeks to announce next steps before end of next month (July).It will build on the successful consultative meeting of experts from the two countries held in Kenya in May 2022.In a statement yesterday, the US said ambassador Tai and CS Maina agreed to explore pathways towards a deeper bilateral trade and economic relationship that promotes sustainable and inclusive economic growth.
They are also keen on a deal that benefits workers, consumers, and businesses (including Micro, Small and Medium-sized Enterprises),and one that supports African regional economic integration.
Uganda faces storm in a coffee cup (African Business)
Coffee has rarely been out of the headlines in Uganda this year. In February the finance ministry signed an agreement with the Uganda Vinci Coffee Company – a mysterious firm, led by an Italian businesswoman, which promised to build a factory processing 60,000 tonnes of coffee annually. The deal sparked outrage, not least because it gave Vinci huge tax breaks and priority supply. In May a parliamentary inquiry found that the deal was “unconstitutional, illegal, void and unenforceable”, and parliament voted to terminate it.
In June, in his state of the nation address, President Yoweri Museveni hit back. “The continued export of raw materials by Africa is the new form of slavery,” he said, explaining why he was willing to offer such generous incentives for the processing factory. “The farmers are now cheated because the biggest beneficiaries from our coffee are the external roasters, grinders and packers of coffee.” Although there was suspicion about the president’s real motives, few could dispute the point he was making. Uganda is Africa’s largest coffee exporter by volume, which earned it $627m in 2020/21. Yet most of the value is captured elsewhere, in an international market dominated by European and American traders.
Exports value of Tanzania's manufactured goods hits 1.3tr/- in April (IPPMedia)
The Bank of Tanzania (BOT) and Tanzania Revenue Authority (TRA) data show the value of manufactured goods increased by a third to 1.3tr/- during the year ending April 2022, higher than 1trn/- recorded in April last year. The amount is nearly half of total value of gold exports of 2.7trn/ recorded during the year ending April, 2022 or the total value of traditional exports, horticultural products and cereals combined. The sharp rise of manufactured goods according to BOT and TRA data were on textiles, cereals, paper and paper products, iron and steel. Most of the manufacturing activities in Tanzania centered on simple consumer products such as foods, beverages, tobacco, textiles, chemicals, plastic, wood and steel allied products. This has also increased the value and volume of industrial supplies imports, as the report shows they increased by 39 percent to $3.8 billion during the year ending April, 2022 from $2.7 billion recorded in 2021.
Nigeria is in a paradoxical situation: growth prospects have improved compared to six months ago but inflationary and fiscal pressures have increased considerably, leaving the economy much more vulnerable, highlights the latest World Bank Nigeria Development Update (NDU).The report, titled “The Continuing Urgency of Business Unusual,” says that inflation in Nigeria, already one of the highest in the world before the war in Ukraine, is likely to increase further as a result of the rise in global fuel and food prices caused by the war. And that, the World Bank estimates, is likely to push an additional one million Nigerians into poverty by the end of 2022, on top of the 6 million Nigerians that were already predicted to fall into poverty this year because of the rise in prices, particularly food prices.
African trade and integration news
Long-awaited Africa free trade area takeoff delayed by six states (The East African)
Six countries drawn from three regional economic blocs are yet to ratify the African Continental Free Trade Area (AfCFTA), delaying its implementation more than a year after it was formally launched in January 2021. The AfCFTA, a brainchild of the African Union’s integration and prosperity Agenda 2063, was supposed to create one large market for its member states. But more than a year after inception, some countries are still dragging feet in adopting its legal framework in domestic laws. In the East African Community (EAC), South Sudan is yet to ratify the AfCFTA and in Southern African Customs Union (SACU), Botswana is yet to ratify and deposit its instrument of ratification.
A second coordination meeting of the Heads of Regional Economic Communities held in Arusha on June 7 also revealed that Benin, Guinea Bissau and Liberia, members of the Economic Community of West African States (Ecowas), are yet to become State Parties.
“While it is now possible for State Parties whose Customs procedures are ready to trade under the AfCFTA preferential terms, no trade is taking place. There remain a few outstanding issues hampering our collective efforts to facilitate effective trading under the AfCFTA preferential trading regime,” said Wamkele Mene, Secretary-General of the AfCFTA at the meeting in Arusha.
Africa CEO Forum: Artificial intelligence, taxation, AfCFTA – the tools of independence (The Africa Report)
"How do we want to be remembered in history? As simple consumers? Or as transformers of our potential and resources?" With this question, Kate Fotso, the boss of Cameroon's Telcar Cocoa, sums up the challenge that Africa must take up to build its economic independence. This debate, at the heart of the Africa CEO Forum held in Abidjan, was discussed during a round table on 13 June. The starting point is clear: Africa’s dependence on the outside world is greater than that of other continents, with 84% of its trade being with the rest of the world. “It is no coincidence that Africa, the continent that trades the least internally, is also the poorest,” pointed out Ghana’s President Nana Akufo-Addo, seeing the development of the African Continental Free Trade Area (AfCFTA) as the only way out for African countries. A few moments earlier, at the opening ceremony, Côte d’Ivoire’s President Alassane Ouattara said much the same thing. “The current crisis has revealed the vulnerabilities [of globalisation] and marks a calling into question of international trade. This is very disturbing for developing countries,” the Ivorian head of state warned.
7 ways to accelerate implementation of the AfCFTA (Brookings)
Despite the groundswell of popular support expressed for the African Continental Free Trade Area (AfCFTA), concerns have grown about the slow progress of its implementation in recent months. Contrary to expectations, 2021 did not start with a bang, but with skepticism among senior trade officials, which also spilled over to the private sector. Trading was put on hold as negotiations dragged on, particularly on rules of origin and tariff schedules—an indictment that technical level processes had not kept pace with the political decisions. What, then, should happen to take the AfCFTA to the next stage to become a functional agreement? We propose the following:
1. Don’t wait for the conclusion of the negotiations.
2. Focus initially on the largest continental traders.
3. Prioritize the elimination of barriers to imports.
15 most underdeveloped countries in Africa, based on UN's Human Development Index (Business Insider South Africa)
Over the years, the United Nation's Human Development Index (HDI) has become the most widely used and universally agreed tool for gauging countries' developing status.
Some of the key indicators tracked by the HDI are: life expectancy rate, adult literacy rate, gross national income per capita, access to the internet, etc. Business Insider Africa understands that these indicators are all compiled into a number between 0.00 and 1.00. Countries that score very low on these indicators (0-0.55) are classified as having low human development ratio.
Here are Africa's least-developed countries - Niger: Has a human development index of 0.394. Central African Republic: Has a human development index of 0.397. Chad: Has a human development index of 0.398. South Sudan: Has a human development index of 0.433. Burundi: Has a human development index of 0.433. Mali: Has a human development index of 0.434. Sierra-Leone: Has a human development index of 0.452. Burkina-Faso: Has a human development index of 0.452. Mozambique: Has a human development index of 0.456. Eritrea: Has a human development index of 0.459. Guinea: Has a human development index of 0.477. Liberia: Has a human development index of 0.480. Guinea-Bissau: Has a human development index of 0.480. Democratic Republic of Congo: Has a human development index of 0.480. Malawi: Has a human development index of 0.483.
The African Union Commission (AUC) is set to convene the 2nd Extraordinary Session of the Specialized Technical Committee on Transport, Transcontinental, and Interregional Infrastructure, and Energy (STC-TTIIE) from June 14th -16th to consider pressing issues pertaining to the Russia-Ukraine Crisis, CoP27 and pending decisions under the transport sector.
The meeting scheduled to take place via video conference is expected to discuss the impacts of the Russia-Ukraine Crisis on Africa’s energy and infrastructure sectors whose knock-on effects transcend across many sectors. The session is especially expected to review a paper titled ‘Implications of the Russia-Ukraine Crisis on the African Energy and Infrastructure Sectors’ that aims at proposing imperative actions to mitigate the impacts and, support Member States to manage arising risks. Another critical topic to be tabled before the 2 nd extraordinary session of the STC-TTIIE is a paper on Common African Position on Energy Access and Transition to be presented for the CoP27 set to happen in Egypt in November this year. The paper highlights Africa’s short, medium and long-term priorities for energy transition while devising an apt approach to address the huge energy access gap in the continent compared to other regions despite the resource abundance.
H.E. Dr. Amani Abou-Zeid, African Union, Commissioner for Infrastructure and Energy, says Africa has great expectations from the COP27 which is happening on its soil for the fifth time. The Common Position is thus meant to clearly put Africa’s expectations, pathways, and demands on the global climate agenda considering its strides to achieve the Universal Energy Access stipulated under goal 7 of the SDGs. “The COP in Sharm El-Sheikh is very critical for the continent as we seek to speak in one voice regarding our priorities on energy access and transition, and push for the outcomes to recognize and embrace Africa’s unique realities,” added the Commissioner.
The 2nd STC-TTIIE is also expected to consider and adopt agenda items under the transport sector including the Dispute Settlement Mechanism for the Single African Air Transport Market (SAATM), policy guidelines for negotiation of air services agreements between African countries and other countries and regions as well as the final report of the study on African Road Safety Observatory (ARSO).
Digital rights forum calls for more digital transparency & protection across Africa (Technology Zimbabwe)
While many governments in Africa have made welcome progress toward digital transformation in the last year, more work needs to be done towards offering transparency, digital inclusion, and the protection of digital rights to citizens across the continent. This was the main finding of the Londa report, launched recently at the Digital Rights and Inclusion Forum (DRIF) 2022.
The Londa report features contributions from digital rights and inclusion experts from 22 African countries, and its findings are a timely assessment of the state of digital rights and inclusion in Africa. It provides recommendations on what each country must do to move towards realising the huge gains that rights-respecting and inclusive digital policies and practices bring. Furthermore, it calls on governments to set policies ensuring a free and open Internet, which is safe for all, while working with relevant stakeholders to eliminate online violence, bullying, hate speech and misinformation.
The report states that there have been some notable positive developments in the last year. Rwanda and Zambia’s governments, for example, have enacted legislation concerning data protection and privacy.
Stakeholders in Africa strategise on sustainable fish production in continent (Nigerian Tribune)
As Africa looks forward to end hunger by 2025, stakeholders in the fisheries sector in the African continent have converged in Abuja to chart way forward in closing the deficit in fish production. The meeting also sought to review the progress made at the Fisheries Governance project phase 1 and develop work plan for the phase 2 of the project. The Director African Union – Interafrican Bureau for Animal Resources (AU-IBAR), Dr Nick Nwankpa in his address, said the Regional Economic Communities (the RECs) are strategic regional institutions with the political mandate for regional integration agenda, enhancing regional cooperation and fostering regional policy coherence. He said the Fisheries Governance project (FishGov) Phase 2 project therefore considered the RECs as important partners in facilitating the implementation of the Project at regional and national levels.
Dr Nwankpa said the project would leverage on their unique mandates to promote regional cooperation on issues of fisheries and aquaculture to gain political commitments and facilitate the implementation of activities that are regional in nature.
“The African Fisheries Reform Mechanism and the policy framework and reform strategy for fisheries and aquaculture in Africa underscored the importance of regional collaboration, coordination and coherence in the governance of the African fisheries and aquaculture sector.
AFF calls for enhanced integration of nature-based solutions for climate resilience in Africa (Myjoyonline)
The African Forest Forum has called for enhanced integration of nature-based solutions for climate resilience in Africa. Nature-based solutions have been recognised as important elements in forest conservation, sustainable use, and restoration to address climate change mitigation and adaptation.
An AFF hybrid side event titled “Strengthening forest management for enhanced livelihoods and resilience in a changing environment in Africa,” which took place, in Seoul, South Korea, last month examined the continent’s transition to a green and resilient future, as well as other crucial challenges.
Executive Secretary of the African Forest Forum (AFF), Prof. Godwin Kowero, stated that while international forest policy dialogue had aided in the development of a green and resilient agenda for the African continent, more work was needed to improve synergies across related agreements and processes.
According to him, the frequently difficult and complex challenges associated with implementing these processes necessitated a comprehensive reassessment of the continent’s prevailing policy approaches.
ECOWAS Court laments poor law application by member states (Daily News Egypt)
ECOWAS Court of Justice has complained about the poor application of community law by the national courts of member states. The court stated that this impacts negatively on the growth of the law and the region’s integration project. “In twenty years of operation, the Court has never been seized of a referral by a national court”, said Vice President Justice Gberi-be Ouatttara. Ouatttara spoke at the opening of the first ordinary session of the 2022 ECOWAS Parliament.
The judge expressed concern about the absence of nationally designated focal points for the execution of the court’s decisions in many member states. He further lamented that states were taking too long to trigger the procedure for the domestication of the instruments and urged them to make amends.
Global economy news
Twelfth WTO Ministerial Conference – Geneva: Resource page (tralac)
The WTO’s 12th Ministerial Conference (MC12) is taking place on 12-15 June 2022 at WTO headquarters in Geneva, Switzerland. Ministers from across the world will have the opportunity to review the functioning of the multilateral trading system, to make general statements and to take action on the future work of the WTO. Originally scheduled to be hosted by Kazakhstan in June 2020, the Conference was postponed due to the COVID-19 pandemic. tralac is carefully monitoring this process.
WTO response to the pandemic, trade and food security take centre stage at MC12 (WTO)
The thematic sessions were followed at the end of the day by a meeting of Heads of Delegations, where the WTO Director-General Ngozi Okonjo-Iweala said she is hopeful that members “will be gaveling agreements as quickly as possible to close on those areas where we have been able to converge and find landing zones”. DG Okonjo-Iweala noted that the thematic sessions “provided a glimpse of where we could be a day from now or two days from now.”
Beyond ODA and Aid for Trade: The critical value of alternative trade funding (Trade for Development News)
Least Developed Countries (LDCs) have continued to struggle with the challenges that led to the development of the category over 50 years ago. Periods of economic growth have been generally insufficient to address the challenges of long-term income divergence with the rest of the world. With a share of global trade which continues to hover around 1 per cent, the economic effects of the COVID-19 pandemic have further dampened prospects for some convergence with the rest of the world. The added challenge of the climate crisis has amplified vulnerabilities for many LDCs that are at the intersection of climate and economic impacts.
Official Development Assistance (ODA) has remained a key source of financing for many LDCs rising to about USD 33 billion in 2021 according to preliminary data from the OECD. One of the key ways ODA is channelled to LDCs is through Aid for Trade. OECD statistics on Aid for Trade drawn from the Creditor Reporting System (CRS) shows Aid for Trade disbursements increased on an average of 6.6% per year since 2006. Support to LDCs has also grown at a sustained pace of around 8.2% to 8.4% per year. Most recent developments such as global conflicts may have impacts on Aid for Trade, preliminary indications also point to a re-alignment of priorities that might have implications on Aid for Trade disbursements in the short to medium term at least.
WTO goes green as climate change impacts trade (EURACTIV)
The World Trade Organisation’s boss insisted Monday (13 June) that turning trade green was now urgent business, with the WTO putting climate change at the heart of its negotiations. The WTO is staging its first meeting of trade ministers in nearly five years and environmental issues are rocketing up the agenda at the global trade body.
“Greening trade is urgent: climate change isn’t waiting,” WTO chief Ngozi Okonjo-Iweala said after attending the new coalition’s launch on day two of the WTO ministerial conference in Geneva. EU trade commissioner Valdis Dombrovskis said the new group would try to tackle the climate crisis in a fair manner through trade policy. “Trade has to be part of the solution. It is an engine of growth that can create new green jobs, reduce poverty and support the transition to climate-neutral economies,” he told the group’s launch.
WTO, UN-OHRLLS sign pact to better engage LDCs in global trade (Fibre2fashion.com)
World Trade Organisation (WTO) director general Ngozi Okonjo-Iweala and Sandagdorj Erdenebileg of the UN High Representative for Least Developed Countries (LDCs) recently signed a partnership agreement in Geneva aimed at strengthening cooperation to boost participation of LDCs in the global trading system. It was signed on the eve of the 12th Ministerial Conference (MC12). Trade ministers and WTO ambassadors from over 40 LDCs attended the ceremony.
“LDCs have a special place in the multilateral trading system. Over the last decade, our members have provided increased trade opportunities to expand LDC exports and the WTO remains the main forum to achieve the Doha Programme of Action targets in the area of trade,” Okonjo-Iweala said.
Strengthening pandemic defenses will require deeper cooperation on trade (World Bank Blog)
The COVID-19 pandemic has exposed the upsides and downsides of international trade in medical goods and services. Although global trade was a critical component in addressing the pandemic, it fell short in important ways. A new joint report from the World Bank and World Trade Organization draws lessons from the pandemic experience and proposes steps to better prepare for the next emergency.
Deepening international cooperation on trade will be critical to that effort. Key steps include negotiating tariff reductions on medical goods and greater market access in services; harmonizing national health regulations or creating international standards; and agreeing on a crisis rulebook to be deployed during an emergency. Open trade will be increasingly important to meet growing demand for health-related goods and services, support innovation, and contain costs. Global health spending is expected to surge amid emergent infectious diseases (Figure 1), income convergence, and increasing life expectancy. Technological improvements and digitalization will make the delivery of medical products even more international, and increasingly complex global value chains will be crucial to innovation and production.
World FZO and UNCTAD launch the Global Alliance for Special Economic Zones Conference at AICE 2022 (ZAWYA)
The World Free Zones Organization (World FZO) announced the Global Alliance for Special Economic Zones Conference (GASEZ) at its eighth Annual International Conference (AICE). The conference is taking place in Montego Bay, St. James, Jamaica from June 13 - 17 and features world-class speakers, senior policymakers, academics, multilateral organizations, and global business leaders from over 100 countries. The first annual Global Alliance for Special Economic Zones conference was launched during AICE under the theme ‘Zones, your partner for Resilience, Sustainability, and Prosperity,’ in partnership with the United Nations Conference on Trade and Development (UNCTAD).
The alliance aims to address the most prominent and emerging issues related to the special economic zones and highlights the role of partnerships in enabling the exchange of experiences in the post-pandemic recovery phase. The alliance also seeks to develop global partnerships to facilitate cross-border and cross-sectoral cooperation in the areas of trade, investments and achieving the United Nations Sustainable Development Goals. It also helps in promoting policies to develop frameworks to enable special economic zones at the local, regional and global levels.
IMO takes baby steps to increase ambition, but immediate action still missing (Hellenic Shipping News Worldwide)
More countries than ever before agree that the global shipping industry must step up action to tackle its impacts on the climate. A clear majority of delegates intervening at the International Maritime Organization (IMO) climate talks last week (MEPC 78) were in favour of revising the IMO’s current climate strategy to decarbonise shipping by 2050 – moving the sector much closer to the Paris Agreement’s goal of keeping global heating below 1.5°C. Although long-overdue, this is an encouraging development and makes the IMO’s adoption of greater ambition more likely. However, achieving the Paris Agreement’s goal requires immediate action to halve emissions by 2030 and reach zero emissions by 2040. IMO member states have a clear duty as well as the necessary tools already at their disposal, both nationally and internationally, to bring down shipping emissions today. These include:
Time for open data in fibre infrastructure (Business Daily)
Open data standards for transparency have proven to be an effective approach to creating high-trust collaboration among multiple stakeholders for sharing data. Open data ensures that information is available to all on an equal basis and that there are common mechanisms for describing and sharing. Today, as the world pursues more open data standards through initiatives like open contracting, which is about transparency in public contracting and Open Ownership, another aspect of open standard that has been given less importance is open data for fibre networks despite being in the digital evolution era. The telecoms sector is increasingly underpinning every aspect of our lives, from education to commerce, access to government services to family life. This is more prominent during the Covid-19 where due to the lockdowns most of our daily activities were shifted to virtual and access to communication. Yet, there is little information about the physical infrastructure that carries the information highway. And the lack of transparency is holding back efforts to grow connections.
Commonwealth Business Forum: what is on agenda? (The New Times)
The Commonwealth Business Forum (CBF) is around the corner. As the public and private sector gears up to leverage the opportunities it presents, here is what you need to know about what is on the agenda. The CBF is one of four special forums that will be held during the Commonwealth Heads of Government Meeting (CHOGM), slated to take place in Kigali from June 21 to 23. It will bring together government leaders, captains of industry and business executives, leaders of global and regional development institutions, young entrepreneurs and representatives of trade and investment organizations from across the Commonwealth.
Discussions and initiatives will address the theme: "Delivering a Common Future: Connecting, Innovating, and Transforming." As such, the CBF is expected to address key topics like connecting the Commonwealth in terms of trade and regional integration, bridging the digital divide, and improving ecosystems and global value chains. The participants will explore topics such as financing future growth, trade and regional integration, and the future of work.
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Localisation strategies must identify, remove constraints for local producers (Engineering News)
Effective localisation strategies must start by identifying the constraints on local producers that make it harder for them to compete with foreign suppliers, a report issued by economic research firm Trade and Industrial Policy Strategies (Tips) on June 10 states. Tips identified several constraints to localisation, such as inadequate information about market opportunities; high-cost or poor-quality infrastructure, inputs and skills; lack of access to markets locally and abroad – for instance because they cannot get into the relevant retail chains – and prohibitive initial investment costs.
Transport and logistics on the mend, but load shedding, inflation still hurting economy (The Citizen)
The transport and logistics sector is picking up but still has a long road to recovery ahead, after the floods in KwaZulu-Natal which devastated the Durban-South area, causing major disruption in the Port of Durban, the fourth largest in the Southern African Development Community (SADC) region. The overall Ctrack Transport and Freight Index for April 2022 declined by 0.4% compared to March, but was still up by 8.6% compared to a year ago, although this represents a setback compared to March’s strong 12.4% year on year increase, says Hein Jordt, CEO of Ctrack.
According to the Index, three of the six sectors it measures declined in April, with the biggest contractions in sea freight and rail, both particularly hard hit by the floods as it also affected surrounding roads, forcing activities to a halt for a few days.
RMB says Rail Policy White Paper lays foundation for private investment (Engineering News)
Financial services provider Rand Merchant Bank (RMB) says the private sector stands ready to invest in South Africa’s rail industry, in partnership with government. Referring to the recently released National Rail Policy White Paper, RMB infrastructure finance public-private partnerships and concessions head Siyanda Mflathelwa says the paper reveals a much-needed localisation strategy for South Africa and an opportunity to strengthen manufacturing and export industries – one that the private sector can gladly get behind. The policy will serve as a starting point to facilitate private sector involvement in the rail sector.
“Regulation is a key determinant of the degree of openness of a railway market to private investment,” she notes, adding that in South Africa’s case, the regulation should create transparency.
Lesotho Revenue Authority (LRA) Launches E-Customs Tariff (African Business)
Delays in obtaining information on goods classification, applicable duties and taxes will now be a thing of the past. This, follows the government’s decision to launch the e-Customs Tariff, the launch was held in Maseru on Friday. On behalf of the Minister of Trade and Industry, the Deputy Principal Secretary (DPS), Mrs. Tšireletso Mojela said trade and customs play an interlinked and critical role in creating conditions for economic development across frontiers. She said both the Ministry of Finance through the Lesotho Revenue Authority (LRA) and the Ministry of Trade and Industry have a huge responsibility to facilitate trade hence making a real difference in people’s lives by helping to deliver jobs, growth and development that trade supports. She said the government of Lesotho undertook accession to the Trade Facilitation Agreement in 2016, saying LRA remains an integral arm for the country to implement the agreement as Lesotho is an inevitable partner in this journey.
Moreover, Mrs. Mojela said WCO through the Revised Kyoto Convention forms the basis for several provisions of the World Trade Organisation (WTO), Trade Facilitation Agreement (TFA), saying the organization provides support to the technical assistance agenda on trade facilitation, through the agreement the Mercator Program and several other instruments.
Kenya fresh tax on Uganda eggs sets stage for trade war (Business Daily)
Kenya and Uganda are staring at another round of trade wars after Nairobi reintroduced a levy on eggs imported from the neighbouring country. Uganda says Kenya is now taxing its eggs at a rate of Sh72 a tray, bringing back a levy that had been suspended last December following bilateral talks between Kampala and Nairobi. Ugandan traders have protested the move, saying it does not augur well for trade between the two countries. “The implementation of levies on Ugandan eggs by Kenya is a bad policy and in violation of the East African Community policy of free movement of goods and services originating from the member states,” Godfrey Oundo Ogwabe, the chairperson Uganda National Cross-Border Trade told the Daily Monitor. Livestock PS Harry Kimtai said the charges could be a normal levy that is imposed on imports.
Leveraging digital tech to combat counterfeits (Business Daily)
In July 2018, Kenya formed a multi-Agency team to combat illicit trade estimated to be at KES 826 billion at the time, a 12 percent increase from the previous year, and subsequently unveiled the National Action Plan and Implementation Framework. Moreover, a report by the Anti-counterfeit Agency ranked counterfeiting and piracy highly with 71 percent of complaints reported by Kenya government agencies being counterfeit products between 2016 and 2018.Globally, counterfeiting has been recognised as a dire activity that has a substantial economic and social impact. This negative impact is felt across the entire economic system — consumers who buy counterfeit products end up paying huge amounts for defective and sometimes harmful products, manufacturing companies lose their credibility, and the government misses out on tax revenues, which are instrumental for sustainable growth. That said, the safety and risk factors pose a challenge, especially with electrical products such as those that Eaton Electric provides, which require systematic assembling and have specific usage parameters.
Kenya asked to post tax officials to Tanzania to pre-clear goods (The Star, Kenya)
The East Africa Business Council wants Kenya Revenue Authority (KRA) officials to be posted to the key cities in Tanzania to facilitate the pre-arrival clearances to reduce traffic queues at border points. EABC chief executive officer John Bosco Kalisa said Kenya doing destination clearance of goods at Horohoro-Lunga Lunga One-stop Stop Border Point leads to delays and long queues of cargo trucks to Kenya. Kalisa spoke at the EABC Trade Facilitation Forum at Horohoro-Lunga Lunga OSBP. Tanzania has already posted Tanzania Revenue Authority (TRA) officials in Mombasa and Nairobi to facilitate the pre-arrival clearance of goods under the Single Customs Territory framework. Kenya’s exports to Tanzania for the first quarter January-March 2022 stood at $139.42 million while imports at $118.6 million.
The Africa Fertilizer Financing Mechanism (AFFM) will extend a $2 million partial trade credit guarantee to ETG Inputs Ghana Limited to support delivery of fertilizer to 200,000 smallholder farmers in Ghana’s Upper East, Savannah, Northeast, and Northern Regions. The move will ease the current shortages in supply and boost yields, food security, and incomes of farmers in the designated regions. Under the agreement ETG Inputs Ghana Limited, a subsidiary of agricultural conglomerate ETG, will enable delivery of 10,000 metric tons of fertilizer to wholesalers who will distribute it, via retailers, to farmers in the regions. The credit enhancement mechanism is expected to reduce risks associated with suppliers selling fertilizer to wholesalers on credit, which can result in farmers having limited access to good quality fertilizer.
The war in Ukraine has contributed to fertilizer shortages, driving prices higher, and reducing supplies. In Ghana, the fertilizer shortage has now affected 60% of the supply. The country has seen the cost of a 50kg bag of a commonly used nitrogen-, phosphorus- and potassium-based fertilizer skyrocket from $26 in November 2021 to $46 in April 2022, according to the Africa Fertilizer initiative, which compiles data, statistics, and information on fertilizers in Africa.
The trend is threatening agricultural production just as many countries head into the planting season. At the same time, imports of food staples into Africa, such as wheat and oilseed, are also being disrupted by the war.
LCCI seeks integration, bilateral trade to improve 12% Africa’s GDP (New Telegraph Newspaper)
The Lagos Chamber of Commerce and Industry (LCCI) has said that only the economic integration and bilateral trade among Nigeria and other countries could improve the abysmal 12 per cent Africa’s Gross Domestic Product (GDP). It noted that economic integration would play a vital role in the realisation of the Africa Continental Free Trade Area (AfCFTA) agreement initiative in the continent.
The Director-General of LCCI, Dr. Chinyere Almona, said in an interview on the upcoming 2022 Lagos International Trade Fair (LITF) in Lagos that AfCFTA was a key trade agreement the chamber would be exploring to bring together various exhibitors and investors within the continent to boost trade and GDP despite the challenges trailing the protocols agreements. She stressed that the chamber was not satisfied with the penetration of trade among the African countries, which had been responsible for the 12 per cent continental GDP trade, saying that LCCI was looking forward on the benefits of AfCFTA that could only be achieved via trade and economic ties.
Debt Servicing: Nigeria paid $156.29m to China, others in Q1 (New Telegraph Newspaper)
The Federal Government spent a total sum of $156.29million on servicing the debts owed to the Exim Bank of China, the World Bank and other International Financial Institutions (IFIs), in the first quarter of this year, latest data released by the Debt Management Office (DMO) shows.
According to the actual external debt service payments data for January –March 2022, published by the DMO last week, the country spent the sum of $67.91million servicing its bilateral debt during the period with $66.90million of the amount going to the Exim Bank of China.
Similarly, the data shows that the Federal Government spent the sum of $88.38million to service multilateral debt during the period under review, with payments to the World Bank’s International Development Association (IDA), amounting to $45.24million. This means that the nation spent the total sum of $156.29million to service its bilateral and multilateral debts in the first three months of this year.
Will Egypt be the locomotive of the African economy? (ZAWYA)
There is a necessity and utmost importance to enhance cooperation between Egypt and its brothers in the African continent in all fields, especially economy and development. This is to complete its active role in its regional environment, achieve African integration, revitalize trade between the countries of the brown continent, and integrate it into the global trade system. Egypt seeks to become the locomotive of the African economy. It operates on two levels; the first is to localize and develop basic industries, and the second is expanding into new markets. Therefore, Egypt currently seeks to expand its exports into the African market, through the application of a package of logistical facilities and shipping procedures, especially with the promising opportunities that the African market enjoys.
African trade and integration news
Akufo-Addo urges Africa to trade more with itself as AfCFTA is a game-changer (Ghana Business News)
African countries trade least among themselves, and trade more with countries on other continents, and President Nana Akufo-Addo says it is therefore not an accident that Africa being the continent that trades least with itself is the poorest. The President was speaking during a panel discussion at the opening of the Africa CEO Forum in Abidjan, Cote d’Ivoire, June 13, 2022. He pointed out that the African Continental Free Trade Area (AfCFTA) is a game-changer for the continent, and urged improvement in the quality of cooperation among African states. He said there must be linkages in the private sector and education, and called on African countries to align their thinking.
PPP, game changer for cross-border infrastructure development for AfCFTA (Ghana Business News)
Professor Festus Ebo Turkson, a Development Economist, says, Africa has the potential to build a strong infrastructure base through Public Private Partnerships (PPPs) to enhance cross-border trade on the Continent. Prof Turkson pointed out that there were deficits in both soft and hard infrastructure on the continent, a major bottleneck to the implementation of the AfCFTA. The hard infrastructure included ports, railways, roads, and airports, while the soft infrastructure was excessive checkpoints, burdensome administrative procedures, and inefficient processing at border crossings. However, these challenges could be addressed by harnessing opportunities PPPs offered to the continent to facilitate cross-border trade, thereby, encouraging investments to increase economic integration and cooperation among Africans, he said.
DRC to deposit EAC admission instruments this week: Mathuki (The East African)
The East African Community’s (EAC) newly admitted member, Democratic Republic of Congo (DRC), has completed internal processes of ratifying the EAC treaty it signed in April and will now deposit instruments of that approval to the Secretary-General this week.
After DRC signed the Accession treaty of the EAC on April 8, becoming the seventh member of the bloc, the country was given five months to complete the process, which would see it integrated into the region. Some of these processes included approval by Kinshasa’s parliament, and having its ministries and internal organs aligned with requirements of the EAC pillars such as the Customs Union and the Common Market Protocol.
Paris conference calls for African production network (New Business Ethiopia)
At the Africa Forum held in Paris, France, African and international leaders call for boosting Africa’s regional production networks to create more jobs The COVID-19 pandemic has derailed progress on Africa’s development efforts and pushed more than 29 million people into extreme poverty. Fast and challenging mutations in the global economy are reshaping the context for Africa’s economic transformation. The consequences of the Russia-Ukraine conflict has exacerbated food insecurity and instability; and could weaken Africa’s recovery.
Meanwhile, it is urgent to maintain open markets, refraining from export restrictions, and allowing grain and fertilizers to reach the countries in need. These measures must go hand in hand with actions to reduce the vulnerabilities of African economies. In particular, investing in local production and empowering SMEs in the transformation of African agriculture and industry is crucial to build resilience and generate decent, quality jobs for a young, fast expanding population.
“Stronger investment and trade links within Africa can drive production transformation, growth and employment generation: they should be a priority of the continent’s evolving international partnerships”, reaffirmed Ragnheiður Elín Árnadóttir, Director of the OECD Development Centre, welcoming the strong and expanding cooperation with the African Union and its member countries.
To achieve a fast, sustainable and job-rich recovery, the continent needs stronger networks of African firms that buy goods from regional suppliers and re-export higher value-added products, in the context of the African Continental Free Trade Area (AfCFTA).
Africa Needs Structural Change To Develop - Prof. Ackah (Peace FM Online)
An Associate Professor of the Institute of Statistical, Social and Economic Research, Professor Charles Godfred Ackah, has said that Africa needs accelerated growth and structural change in order to develop. That, he said, would be by creating decent jobs to deliver the people from poverty. He said structural change was the process of reallocation of economic activity across the sectors of agriculture, manufacturing and services. Prof. Ackah said this when he delivered a paper on “Promoting Structural Transformation through IntraAfrica Trade” at the Ghana Academy of Arts and Sciences public forum in Accra last Monday. The event, held in collaboration with UMB, was dubbed: “African Continental Free Trade Area (AfCFTA): Challenges and Prospects”.
Prof. Ackah said the main determinants of the nature of structural transformation were the industrial and trade policies implemented by the various governments, and that “the importance of industrial development in bringing about the needed structural transformation of African economies cannot be overemphasised”.
African economy upbeat despite pressures – Afreximbank (Vanguard)
Ahead of next week’s Annual Meetings of the African Import-Export Bank (Afreximbank), the institution has assured that the region’s economy would be on upbeat in 2022, despite pressures. The bank identified the post-COVID-19 and current Russian invasion of Ukraine as factors that would put a lot of pressures on the economies of African countries.
However, the regional body said in the report authored by the Chief Economist and Director of Research, Dr. Hypolite Fofack, that the region would witness a positive growth, with 16 countries (30%) expected to grow at more than 5 per cent.
The report was titled, ‘Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures’.
African ministers of finance set to tackle new risks, challenges (African Business)
African ministers of finance, planning and economic development called for the reform of the international financial architecture to allow African countries to access resources more easily and at a lower cost from multilateral and regional financial institutions. In the final communique wrapping up the 54th UNECA conference held in Dakar, they commended the ECA, African finance ministers and the IMF for facilitating the establishment of a high-level working group towards this end. This came out of the final communique issued at the end of a week’s deliberations on the need for higher levels of financing for the post-Covid-19 pandemic recovery and to achieve the 2030 Agenda for Sustainable Development and goals of Agenda 2063, which have suffered significant setbacks from the pandemic. The group cited the impact of the Russian war with Ukraine, highlighting the impact it was having on prices of key commodities.
President Macky Sall calls for a better deal for Africa (African Business)
In a fiery speech in which he criticised international organisations for giving Africa a bad deal, Macky Sall, President of Senegal and current Chairman of the African Union, also recognised the leading role played by the African Development Bank and Afreximbank in supporting development. However, Sall argued that the current deal for Africa in the international system is a handbrake on its development. “The rules are unfair, outdated, and need to be disputed,” he told delegates attending the ECA’s Conference of African Ministers of Finance, Planning and Economic Development in Dakar’s plush conference centre yesterday.
Calls for reform of international system to better respond to crises (African Business)
Africa was a victim of global events in which it had no part, said Vera Songwe, ECA Secretary General and UN Under Secretary General. Speaking at the opening session of the Council of Ministers 2022 meting in Dakar, she said the continent was fighting many wars – against climate change, against poor governance, terrorism and on other fronts. “Ministers of finance have been at the forefront of many of these and have shown “legendary resilience”. She referred to the different crises which the continent now found itself facing. “We though it {Covid-19} was just a pandemic but then realised we also had an economic crisis.” Coupled with a new crisis – Russia’s invasion of Ukraine and the attendant effect on prices of key commodities – was affecting countries’ ability to plan and by extension, their trajectory towards growth and prosperity. “We are facing several exogenous shocks and because of them, we are going to have to see how we can reorient our course.”
Solutions included examining how the financial system can change. One area that needed to be tackled more decisively was the search for ways to strengthen domestic resources. “We have spoken about it a lot but have not even got to 30% of internal revenue mobilisation.”
Economic sovereignty important but Africa needs to collaborate more internationally – Osinbajo (Daily Trust)
Africa’s developmental aspirations can be actualised by deepening cooperation and collaboration with the rest of the world, according to Vice President Yemi Osinbajo, SAN. But the imperative of Africa’s economic sovereignty also exists as there are areas where public and private sector leaders must continue to strive for it. Osinbajo stated this while speaking at the opening panel of the ongoing Africa CEO Forum holding in the Ivorian city of Abidjan. The panel was themed- “Economic Sovereignty: From Ambition to Action.”
Africa loses more than $84bn in illicit financial flows annually (African Business)
UNECA estimates that more than $84bn is lost in illicit financial flows from Africa each year. “This is more than the annual health financing gap, twice the needs of the education finance gap and it is almost equal to the amount Africa receives in remittances each year,” said Hanan Morsy, Deputy Executive Secretary at UNECA. She was speaking at the panel Illicit Financial Flows in Africa: Regional Efforts to track, recover and return assets. However, efforts to curb the illicit practice continue to yield muted results, underscoring the need for a collaborative and comprehensive approach. Corporations and government officials, both local and international, are the main channels for the leakages that result in a significant portion of Africa’s wealth being smuggled out of Africa each year which makes it especially hard to crack down on illegal practices.
African Businesses Lose $5bn To Intra-African Trade Bottlenecks Annually (Leadership News)
The chief executive officer (CEO), Pan African Payment and Settlement System (PAPSS), Afreximbank, Mr. Mike Ogbalu, has stated that, African businesses lose over $5 billion every year to charges, payments and other related costs to intra-African trade barriers. He stated this at the breakfast meeting of the Nigerian American Chamber of Commerce (NACC) themed ‘1 year of AfCFTA (Opportunities, challenges and the Nigerian-American partnership)’ in Lagos. According to him, 80 per cent of payments that are destined for somewhere else on the continent, first of all has to travel somewhere else before getting to its final destination, saying, this is the reason why intra-African trade is still low at 15 to 18 per cent. He added that Africa trade more with rest of the world than it trade with itself. In his words: “If payment still needs to fly half way around the world to somewhere else around the globe before coming back to the continent, then we are not going to support intra-African trade.
Entrepreneurs seek new funding model for African SMEs (Businessday)
The All Africa Association for Small and Medium Enterprises (AAASME) has called for the introduction of an alternative finance model to enable 80 million small and medium enterprises (SMEs) to access finance in Africa. Ebiekure Jasper Eradiri, secretary-general of AAASME, said the Afrocentric Alternative Finance Model for SMEs has the capacity to uplift small businesses within the continent by improving their access to finance. Eradiri stated this at a stakeholder meeting on the African SME development platform held at the African Union Secretariat in Addis Ababa, Ethiopia. In a statement signed by Eradiri and made available to BusinessDay in Yenagoa, he lauded the efforts of the African Union Economic Affairs, Trade, Tourism, Industry and Mines for the growth of SMEs in the continent. He said the AU is poised at leveraging its convening power to engage member states, RECs and critical stakeholders in re-examining how to strengthen SMEs.
According to him, the AU move would also reinvigorate SMEs to achieve set goals as well as support the creation of an enabling environment for the development of SMEs.
Banks, fintechs partnership key to financial inclusion – eTranzact CEO (The Business & Financial Times)
Banks and fintechs should collaborate more to accelerate financial inclusion, says John Apea, Chief Executive Officer of eTranzact Ghana. He said by working together, traditional financial institutions and financial technology firms (fintechs) can leverage their unique capabilities to ensure that majority of Ghanaians are brought within the financially included bracket.
An effective collaboration between the two will also build solid foundation and systems that are relevant to the Ghanaian market. “Previously, we had a lot of unbanked people who couldn’t do transactions online, but what fintechs have been able to do is that they have been able to short-circuit us by enabling us to do what was previously not available. So your phone can be your bank; you can do transfers quickly.
“So fintechs have made the world much smaller in terms of including people who previously were financially excluded,” Mr. Apea told the B&FT.
No West African Country yet to meet ‘Eco’ currency requirement (Myjoyonline)
None of the 15 ECOWAS member states is yet to meet the primary convergence criteria for the adoption of the single common currency for the sub region. This is as a result of inadequate funding and other geopolitical factors identified as a setback for the adoption of the common currency. Speaking at a technical committee meeting on the ‘Eco’ in Nigeria, Commissioner for Macroeconomic Policy and Economic Research for ECOWAS, Dr. Kofi Konadu Apraku, said the criteria which was missed by all ECOWAS member states include annual average inflation rate of less than 10% and gross external reserves of more than 3.0 months of imports cover. He is however confident that since real GDP growth in ECOWAS improved to 4.2% in 2021, from -0.7 per cent in 2020, the ECOWAS economies can do better and meet the criteria in the future.
New cement production capacity in Africa might be preferable to high transport costs (Engineering News)
The rapidly rising cost of transport means that adding additional cement production capacity in Africa might be worth considering going forward. Before the outbreak of Covid-19, a long-term decline in shipping costs and the relative price of imported cement, which was also expected to gradually fall, had eroded the rationale for adding more cement production capacity in Africa, Gordon Institute of Business Science Centre for Africa markets and management research associate Francois Fouche said at the African Smart Cities Summit, in Midrand, on June 8.
Addressing unfair trade key to transforming African food systems (Chronicle)
UNFAIR trading practices have continued to characterize African agriculture and food systems for decades. Determining and setting prices for agricultural commodities remains a big challenge in most African countries including local markets where the majority of farmers, traders and consumers depend for their food and income. There have not been convincing answers to questions like: Who determines pricing, packaging, measurement and supply of commodities in food markets?
From a recent survey conducted by eMKambo in Uganda and Zimbabwe mass food markets, most farmers and traders indicated that setting a uniform price for agricultural commodities for the whole country is a recipe for unfair trading because production practices are not standard in different production zones.
Principles of fair pricing are often lacking because the majority of farmers and consumers cannot tell the difference between a fair price and an unfair one due to information asymmetry, among other push factors.
If the cost of getting reliable market information becomes too high for the majority of farmers, it contributes to unfair trading practices as those with information on prevailing market prices end up setting rules of the game for everyone.
Development of a Regional Food Balance Sheet at Advanced Stage (COMESA)
The Alliance for Green Revolution in Africa (AGRA) and COMESA are leading an effort to develop a digital Regional Food Balance Sheet (RFBS) that uses data from a variety of public and private sources to develop near real-time and forward-looking food balance estimates. Once fully developed and operational, the RFBS will inform data-driven decisions around production support, trade policy, and stock management by governments, business decision-making and investment by the private sector, and food assistance by donors and emergency response organizations. Six countries are so far involved in the pilot phase: Kenya, Rwanda, Malawi, Uganda, Zambia and Tanzania. This initiative was in response to the lack of reliable, timely, and accurate data for food and nutrition security related decision-making in many Sub Sahara Africa countries, a situation that was exposed by the COVID-19 pandemic. In recognition of these data gaps and needs, COMESA Council of Ministers, in 2020 directed COMESA Secretariat, to implement a COMESA-wide RFBS initiative.
Why EAC needs enhanced gender equality in food nutrition security (The New Times)
The East African Legislative Assembly has a given a nod to a motion by MP Françoise Uwumukiza urging Ministers in charge of EAC Affairs to recommend partner states to enhance gender equality in access to food nutrition security in the six-member bloc. While justifying her motion on Thursday, June 9, the Rwandan legislator noted that it was part of the commitment she made during a training on ”Achieving Gender Equality in Climate Change and Food Systems: Actions of Parliamentarians and Policy-makers,” from April 24 to May 6. “I’m moving this motion to call upon the Council of Ministers to address the observed gender inequalities in respect of food and nutrition security in the EAC,” she said. “Food insecurity and malnutrition give rise to many consequences for health and development with mothers and children being the most vulnerable to the devastating effects.”
West Africa Food Systems Resilience Program Launched (News Ghana)
ECOWAS, CILSS and CORAF launched the Food Systems Resilience Programme which aims to sustainably reduce food insecurity in West Africa with the financial support of the World Bank and other development partners, including the Kingdom of the Netherlands, the Global Agriculture & Food Security Programme (GAFSP) and the Global Risk Financing Facility (GRiF). Led by the Economic Community of West African States (ECOWAS), the Permanent Interstate Committee for Drought Control in the Sahel (CILSS) and the West and Central African Council for Agricultural Research (CORAF), FSRP aims to increase regional preparedness against food insecurity by pursuing a systemic regional-level approach. The innovative program will simultaneously increase agricultural productivity through climate-smart agriculture, promote intraregional value chains and trade, and build regional capacity to manage agricultural risk. The first phase of the program (2022-2026), which will be implemented by the three regional organizations and Burkina Faso, Mali, Niger, and Togo, amounts to more than USD$400 million.
Storm cooking over edible oil, dollar shortage in East Africa (The East African)
East Africa is facing a shortage of raw materials to manufacture cooking oil, soaps and cosmetics, with no clear signs of availability of such commodities in the next 10 days even as prices soar, adding to consumers’ pain. But it is the high prices and shortage of edible oil that is cooking up a storm across the region. Data available to The EastAfrican shows that no edible oil-related imports are expected in Kenya this month. According to the Mombasa port ship schedule, more than a dozen vessels are expected to dock laden with different products except for palm and vegetable oil, which are key ingredients in the manufacture of such products.
Consumers have endured rising prices of cooking oil, blamed on Covid-19, the ongoing conflict in Ukraine and a deficiency of dollars, which has seen at least two Kenyan oil manufacturers reduce operations due to the inability to pay suppliers and get raw materials.
How can Africa’s energy sector attract more investment? (African Business)
The announcement of a new African Energy Transition Bank in mid-May has highlighted the problems facing energy financing on the continent. The bank’s two backers, the African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organisation (APPO) said they had been forced to establish the new institution because of “the co-ordinated withdrawal of international trade and project financing” for Africa’s oil and gas industry.
The significance of the announcement lies less in the arrival of a new lender, which may take some time to create, than in the recognition that financing hydrocarbon development in African countries is becoming increasingly difficult.
To date, the largest African exporters of LNG have been Nigeria and Algeria, followed by Egypt, Angola, and Equatorial Guinea. Recent discoveries may now bring Mozambique, Tanzania, Senegal, Mauritania, and South Africa into the game. Late last year, before the Russian invasion, the outlook for these fields might have been marginal, given the global policy move to cut carbon emissions. Europe’s push to diversify supplies has changed that calculus completely. Nonetheless, it is accurate to say that an increasing number of investors are moving out of hydrocarbon development. That does not, however, mean they are turning their backs on Africa. Rather, they are agnostic about where they seek new opportunities. This could be a boon for Africa or, alternatively, the continent could miss the boat.
Learning from Morocco: Funding green energy (African Business)
If Africa wants to build back better from the Covid-19 pandemic, it must significantly ramp up investments in energy – particularly green energy – said Jean Paul Adam, Director, Climate Change, Natural Resource Management and Technology at UNECA. “We have around 600 million Africans who don’t have access to electricity, so we have to significantly increase investments in energy projects to make sure that we meet the sustainable development goals (SDGs),” he said. One of the main barriers to investment is the undeveloped nature of Africa’s capital markets, preventing companies and sovereigns from easily raising capital. On the international markets, governments struggle to access affordable financing due to a risk premium attached to African debt.
Governance and Accountability in Africa: Progress and Road Ahead (IMF)
The issue of good governance and transparency is more than just about wasted money – it is about the erosion of a social contract and the corrosion of the government’s ability to grow the economy in a way that benefits all citizens. Of course, corruption has long been an issue. But today, as we face multiple crises at once – the COVID-19 pandemic, the war in Ukraine, and the ongoing challenges of climate change and the security situation in the Sahel – the need for good governance has only become more urgent.
These multiple crises have made it very clear that countries that have strong economic institutions could respond more effectively to these challenges and better prepare for a resilient recovery — and that is true across any level of development. We also recognize that addressing corruption is an international issue, given the role of professions that enable corruption and jurisdictions that provide safe harbor for the proceeds of corruption.
The 2022 U.S.-Africa Business Summit is Coming to Marrakech, Morocco (The Guardian Nigeria)
The Corporate Council on Africa (CCA) has officially launched the 2022 U.S. – Africa Business Summit website which is now open for registration. The Summit, themed ‘Building Forward Together,’ will be held in Marrakech, Morocco on July 19 – 22, 2022 in partnership with the Kingdom of Morocco and Africa50 (the pan-African infrastructure investment platform). The Summit will explore a renewed commitment by both public and private sector stakeholders to building stronger U.S. and Africa trade, investment, and commercial ties as we emerge from unprecedented health and economic challenges. The U.S.-Africa Business Summit is the first major in-person U.S.-Africa conference that meets the pent-up demand for countries and companies to re-engage and collaborate since the start of the COVID-19 pandemic. CCA has an exciting line-up of high level and panel discussions, networking opportunities, and activities that will allow attendees to meet face-to face to engage on key U.S.-Africa economic issues and re-establish important business contacts that were not possible over the past 2 years.
This year’s Summit will host African Heads of State, U.S. Government & African Officials, top CEO’s and Senior Executives from U.S. and African companies operating in sectors contributing to Africa’s economic growth and relaunch including infrastructure, ICT, health, energy, mining, and creative industries.
African Union is India’s 4th largest trading partner (Millennium Post)
The African Union is India’s fourth largest trading partner after the United States, China and the United Arab Emirates, propped up by diversification in Indian exports to the continent, a senior State Bank of India official has said at a seminar here. With a share of 8.52 per cent in global trade, India’s total trade with Africa in 2019-20 was valued at $68.33 billion. India has a negative trade balance with Africa, implying a dominance of imports over exports. In 2019-20, India’s trade deficit with Africa was valued at $9.1 billion, which accounted for nearly 6 per cent of India’s total trade deficit in the case of trade in goods, Syam Prasad, CEO of State Bank of India in South Africa said on Wednesday. In terms of bilateral trade, the African Union is one of India’s largest trading partners after the US, China, and the UAE, he explained.
India’s trade with Africa has been diversified from exporting mainly textile yarns to petroleum products, pharmaceutical products, chemicals and manufactured products, he asserted. At the same time, India’s import basket, though dominated by primary products and natural resources, is still diverse given the wide natural resource base in Africa, he said.
Russia preparing for second Africa Summit to build closer ties as it pivots away from the West
Russia is preparing for the second Russia-Africa summit, scheduled for October-November 2022 in Addis Ababa, Ethiopia, as it steps up its campaign to move closer to the African countries and pivot away from the West due to the latter’s extreme sanctions imposed after the start of the war in Ukraine. Russia was already heavily invested in Africa as part of President Vladimir Putin’s policy of fostering ties with the non-aligned nations of the developing world ever since relations with the West soured following Russia’s annexation of Crimea in 2014. But the need to develop deep trade and investment ties in Africa has been given a new urgency since the West has broken off almost all business ties with Russia this year. This year’s summit will be even more important as Russia looks for new markets and to expand existing ones after the West imposed extreme sanction on Russia following its invasion of Ukraine at the end of February.
Meeting today in Paris, in the margins of the Meeting of the OECD Council at the Ministerial Level (MCM), the Deputy Chairperson of the African Union Commission (AUC), Dr. Monique Nsanzabaganwa, and the Secretary-General of the OECD, Mathias Cormann, announced that the two institutions intend to scale-up their collaboration to address the most pressing global challenges through a strong and equal partnership based on trust and mutual understanding. The partnership will be developed following this week’s Meeting of the OECD Council at the Ministerial Level (MCM). The AUC and the OECD announced their intent to establish a mechanism for institutional coordination, including focal points to start in-depth consultations aimed at specifying the partnership’s strategic goals and its main areas of work.
Global economy news
Nigeria makes case for developing countries, least developed countries at ILC (Daily Sun)
Nigeria has raised the alert that achieving the SDG 2030 in developing countries and least developed countries (LDCs) is at great risk without the support of international agencies.
Addressing the plenary of the 110th International Labour Conference (ILC), Minister of Labour and Employment, Senator Chris Ngige, who was represented by the permanent secretary of the ministry, Kachollom Daju, said, with the state of growing gap of inequality in the world, Nigeria considers that the achievement of the SDGs by 2030 is at great risk.
“If the goal of ‘not leaving any one behind’ is ever to be realised, urgent effort, support and contribution will be required by all, in a renewed commitment to multilateralism and international cooperation,” the minister said.
Noting that the report of the director-general on the LDCs – crisis, structural transformation and the future of work is very appropriate for debate in view of the multiple implication of current global challenges, Ngige said just as in previous reports, the focus on LDCs is of concern to all as poverty anywhere constitutes a danger to prosperity everywhere.
Draft texts seek entry of private sector in WTO Talks (Economic Times)
The draft outcome documents issued by the World Trade Organization (WTO) seek to pave the way for the formal entry of the private sector in multilateral trade talks, as proposed by the European Union last year. Draft texts on WTO reform and pandemic response highlight the role of international organisations, much to the alarm of developing countries - including India and South Africa - since they would allow private companies a high seat at the WTO negotiating table and allow them to influence processes and outcome. The draft outcome text on pandemic response takes note of the work “undertaken by the WTO Secretariat, including in collaboration with other international organisations” such as analysis, including mapping of supply and demand regarding trade in vaccines, therapeutics, diagnostics and other essential medical goods and services as related to Covid-19. “These international organisations refer to the private sector. EU has been trying to get private companies a say in multilateral negotiations and the WTO Secretariat,” said an official, who did not wish to be identified.
Freedom and fairness more important than ever, Trade Secretary tells WTO (GOV.UK)
Freedom and fairness should be front and centre of the global trade agenda to ensure communities at home and around the world benefit from the power of free trade, the International Trade Secretary says today. Anne-Marie Trevelyan issued the clarion call as she prepares to lead a UK delegation attending the 12th World Trade Organization Ministerial Conference (MC12). While there, she will urge united global action to show solidarity with Ukraine, demonstrate Russia’s illegal assault will not undermine or weaken the rules-based international system, and push for reforms that will reduce our economic dependency on aggressors. UK will use the high-level WTO meeting to secure meaningful progress on long-standing global issues, including food security, over-fishing and tariff-free electronic trade, and drive forward international efforts to cope with the fallout from Russia’s actions and the Covid-19 pandemic.
Big week for the digital economy as world body meets to try not ‘break the internet’ (BusinessTech)
For the past quarter-century, the meteoric rise of the digital economy has been exempt from the kind of tariffs that apply to trade in physical goods. That era may come to a screeching halt this week as a handful of nations threaten to scrap an international ban on digital duties in a game-changing bid to draw more revenue from the global e-commerce market that the United Nations estimated at $26.7 trillion. If governments fail to reauthorise the World Trade Organisation’s e-commerce moratorium, it could open a new regulatory can of worms that could increase consumer prices for cross-border Amazon.com purchases, Netflix movies, Apple music, and Sony PlayStation games.
“Absent decisive action in the coming days, trade diplomats may inadvertently ‘break the internet’ as we know it today,” International Chamber of Commerce secretary-general John Denton wrote in a Hill opinion piece published last week.
some nations like India and South Africa argue that the growth of the internet justifies a rethink about whether the WTO’s e-commerce moratorium remains in their economic interests. In 2020, they introduced a paper that said the moratorium prevents developing countries from gaining tariff revenue from transformative technologies like 3D printing, big-data analytics, and artificial intelligence. While nations could draw somewhere between $280 million and $8.2 billion in annual customs revenue, new digital tariffs would also harm global growth by reducing economic output and productivity, according to the Paris-based Organisation for Economic Cooperation and Development.
WTO Have Let People Of Least Developing Nations Down: Piyush Goyal (Outlook India)
Reform World Trade Organisation to make it responsive - Alan Kyerematen (Myjoyonline)
Egypt submits draft resolution to WTO for enhancing response to food security challenges (Ahram Online)
Commonwealth Secretariat and WTO strengthen efforts to boost trade capacity of Commonwealth members (The Commonwealth)
Non-contributing countries seek ban on export curbs on World Food Programme (Mint)
While nearly 81 World Trade Organisation member countries led by Singapore are seeking a ban on export restrictions for the World Food Programme at the ongoing ministerial meeting taking place in Geneva, data shows that most of them have not contributed to the United Nation’s programme.
Although India has been opposing such a move to restrict its policy space to ensure domestic food security, it contributes to the WFP, and in fact was the highest contributor in 2015. Thirty-three countries have never contributed to the WFP, including Singapore, New Zealand, Albania, Bahrain, Brunei Darussalam, Chile, and Taiwan. It is suspected that traders in some of these countries are pressing for the ban on export restrictions, as these lead to price increases.
Beyond the Pandemic: Commonwealth Trade and Investment Prospects (Commonwealth Secretariat)
By June 2022, it will be nearly two and a half years since the outbreak of COVID-19. The impact of the pandemic on global trade and investment flows, including among the Commonwealth’s 54 member countries, is now becoming clearer. The trade collapse in 2020 was deeper than previously estimated (Commonwealth Secretariat, 2021). Collectively, Commonwealth countries’ exports fell by US$475 billion compared to 2019 and included an almost $100 billion drop in intra-Commonwealth trade. This was the result of economic recession in several major markets and severe disruptions to production and supply chains. Global trade rebounded in 2021 as many developed countries started to reopen their economies, facilitated by national vaccination efforts and stimulus spending. However, most developing and low-income countries lack equitable and affordable access to vaccines and other vital medical supplies, delaying recovery efforts.
Russia intends to remain in global food market as major exporter: Russian Minister at WTO (Republic World)
World’s major global food exporter, Russia, plans to remain in the global food market and does not intend to abandon it, Deputy Economic Development Minister Vladimir Ilyichev told TASS in an interview aired on Sunday. Speaking at the 12th ministerial conference of the World Trade Organization (WTO) that began in Geneva on June 12, Ilyichev said Moscow plans to discuss the issue of the food supplies and global crisis at length during the WTO conference. However, he reiterated that the views on what caused the staggering food crisis and critical shortage worldwide “differs significantly,” according to Russian state-affiliated news outlet Tass.
“As a major supplier of food on the world market, we intend to remain there, to supply our products to partners, our traditional consumers, and we are ready to take all the actions available to us to that end, which we have repeatedly stated,” Russia’s Ilyichev said. “But in order for the system to work, it’s necessary for all participants in the process to strive for results.”
Participants at the hybrid 114th Session of the Council of Ministers of the Organisation of African, Caribbean and Pacific States (OACPS), held from 8-9 June 2022, deliberated eleven Decisions and one Resolution arising from the Meeting, which took place at the Brussels-based Headquarters of the OACPS.
Ministers with responsibility for OACPS affairs discussed, inter alia, the finalisation of the new OACPS-EU Partnership Agreement; the EU list of non-cooperative tax jurisdiction and that of third countries regarding anti-money laundering and countering the financing of terrorism (AML/CFT), projects being undertaken by the five departments of the OACPS in the areas of trade, fisheries and aquaculture, as well as the upcoming 10th Summit of OACPS Heads of State and Government, to take place in Luanda, Angola in December 2022.
Ministers expressed serious concern about the delay in signing the new OACPS-EU Agreement as a result of EU internal procedures that require unanimity for entering into international agreements. They took note of the proposed 12-month extension of the transition measures to allow the continued application of the provision of the Cotonou Partnership Agreement pending the signing of the new Agreement. Ministers further urged the concerned EU Member State(s) blocking approval of the new Agreement to positively consider facilitating the normal functioning of the relations, such as the holding of regular joint meetings, as foreseen in the new OACPS-EU Partnership Agreement.
Reigniting Old Flames: The Liberalisation of Trade in Environmental Goods and Services (Commonwealth Secretariat)
This study traces the evolution of the World Trade Organization (WTO) negotiations on liberalising trade in Environmental Goods and Services (EGS). It explores the challenges and opportunities faced by Commonwealth small states and countries in Sub Saharan Africa (SSA) in participating in EGS discussions. Small states and SSA countries have been primarily absent from the multilateral discussions on EGS for reasons that include insufficient trade-related interests in environmental goods. Notwithstanding, these countries should partake in these discussions especially amid the changing economic and trading landscape of the 21st century and concomitant changes in the environment. International trade is not as it was in 2001 when these negotiations began and likewise environmental concerns like climate change now pose an existential threat to mankind. The study begins by mapping the progression of the EGS negotiations at the WTO including attempts at establishing a plurilateral environment goods agreement. Thereafter, the paper analyses the trade-related interests of Commonwealth small states and SSA countries in EGS. The challenges and opportunities they face in participating in negotiations on liberalising trade in EGS are then highlighted. The paper concludes by identifying the priorities that these countries might consider should they decide to participate in the WTO EGS discussions.
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Twelfth WTO Ministerial Conference – Geneva: Resource page
WTO members secure unprecedented package of trade outcomes at MC12
WTO members successfully concluded the 12th Ministerial Conference (MC12), co-hosted by Kazakhstan, in Geneva on 17 June, securing multilaterally negotiated outcomes on a series of key trade initiatives. MC12 was originally scheduled to take place in June 2020 but the conference was postponed due to the COVID-19 pandemic. The package of outcomes confirms the historical importance of the multilateral trading system and underlines the important role of the WTO in addressing the world’s most pressing issues, especially at a time when global solutions are critical.
In welcoming the final “Geneva Package” delivered after five and a half days of marathon talks, the Director-General said the deal showed to the world that “WTO members can come together, across geopolitical fault lines to address problems of the global commons, and to reinforce and reinvigorate this institution.”
“The package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time,” said WTO Director-General Ngozi Okonjo-Iweala. “They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic competition will be able to exist alongside growing strategic cooperation.”
On this page:
Director-General’s Opening Remarks
WTO members were urged at the opening session of the 12th WTO Ministerial Conference in Geneva on 12 June 2022 to demonstrate that the WTO can deliver for the international community and the people it serves. As the world grapples with uncertainty and crises on multiple fronts, this is a time to show that multilateralism works, said WTO Director-General Ngozi Okonjo-Iweala during the Opening Session.
Selected excerpts
“As we grapple with uncertainty and crises on multiple fronts – the war in Ukraine and the inherent international security crisis that comes with it, the health, economic, environmental and geopolitical crises – this is a time to demonstrate that multilateralism works. A time to demonstrate that the WTO can deliver for the international community, and the people we serve.”
“Now, more than ever, the world needs WTO members to come together and deliver. We also need to deliver for those who seek to join us – the many countries, especially from Africa, Central Asia, and the Middle East who want to accede to the WTO.”
“Trade is an instrument for development, it's not an end in itself. In fact, tapping into international markets for value-added goods and services has been history's most proven path towards development. But too many of our members have not been able to start or stay on this path.”
pdf MC12 Opening Session: Statement by Dr Ngozi Okonjo Iweala, WTO Director-General (91 KB)
In closing, the Director-General stated that MC12 achieved an “unprecedented package of deliverables”. Furthermore,
“The package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time. They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic cooperation will be able to exist alongside growing strategic competition.”
pdf MC12 Closing Session: Speech by the Director-General (191 KB)
Thematic areas
MC12 has a number of thematic areas to be covered during the Conference. Briefing notes designed to provide background information on issues relevant to the Ministerial Conference are available to read online:
MC12 Documents, Decisions and Declarations
The following non-exhaustive list of outcome documents from MC12:
pdf MC12 Outcome Document (81 KB)
pdf Ministerial Statement on WTO reform (56 KB)
pdf Declaration of Ministers of the Group of Small and Vulnerable Economies (SVEs) (79 KB)
pdf Sanitary and Phytosanitary Declaration: Responding to modern SPS challenges (Revision) (82 KB)
pdf Statement on Inclusive Trade and Gender Equality (55 KB)
pdf G-33 Ministerial Statement on WTO Agriculture Negotiations (58 KB)
pdf Ministerial Declaration on Cotton (146 KB)
pdf MC12 Draft Ministerial Decision on the TRIPS Agreement (114 KB)
pdf MC12 Draft Ministerial Decision on Agriculture (88 KB)
pdf MC12 Draft Ministerial Declaration on Trade and Food Security (71 KB)
pdf Agreement on Fisheries subsidies: Draft text (131 KB)
pdf Agreement on Fisheries subsidies: Draft text – Addendum (267 KB)
Contributions from African countries and the African Group
African Trade Ministers have recognised the need to build coherence by ensuring that the African Group’s negotiating objectives at the WTO fully support continental objectives such as industrialisation, structural transformation and integration of the continent; taking note that, due to the unprecedented challenges facing African Countries, the existing rules based multilateral trading system is in need of a reform that addresses the structural deficiencies in the system while re-enforcing the principles of fairness, transparency and equity. They have committed to strengthen coordination in the African Group at the WTO on our common positions and to ensure that development is an integral component of all negotiating outcomes for all African economies.
Relevant documents and statements are available to download below.
pdf Statement by H.E. Ms Assome Aminata Diatta, Minister of Trade and SMEs, Senegal (63 KB)
pdf African Ministers of Trade Declaration on WTO Issues (108 KB)
pdf Work programme on electronic commerce: Communication from India, Indonesia, South Africa (67 KB)
pdf Africa and Development: Communication from the African Group (80 KB)
pdf OACPS Ministerial Declaration (126 KB)
pdf EAC Trade Ministers Statement on WTO (79 KB)
Civil society contributions
pdf CSOs call on ministers to reject current draft of TRIPS Decision (unofficial version) (43 KB)
pdf International Chamber of Commerce (ICC) Statement (282 KB)
tralac Analysis and commentary
Gerhard Erasmus
Noncedo Vutula and Thembekile Mlangeni
Noncedo Vutula and Thembekile Mlangeni
Noncedo Vutula
Kedibone Machiu, Mpho Leseka, Noncedo Vutula, Thembekile Mlangeni
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Local news
The party’s over as mining and manufacturing production crash in April (Daily Maverick)
The mining sector has been one of the star performers of the South African economy, but that is like being the highest hill in Holland. Nevertheless, the sector’s reboot in the early stages of the pandemic and red-hot metals prices translated into record company earnings and a tax windfall for the Treasury just when it needed it most.
Among other things, this has been reflected in hefty current account balances, which in turn have kept the rand afloat, South African Reserve Bank data on Thursday showed. The surplus on the current account of the balance of payments widened to R143-billion in the first quarter of this year from R132-billion in the fourth quarter of last year. This is a good thing and helps, for example, to keep the prospects of an International Monetary Fund bailout at bay. South Africa’s trade balance also widened in Q1 to R360-billion from R336-billion in the previous quarter, and the country’s terms of trade improved as well. So it is deeply concerning that production in the mining sector, and its contribution to gross domestic product (GDP), has been in a state of steady decline. Statistics South Africa (Stats SA) said on Thursday that mining production fell by almost 15% in April on a year-on-year basis, and by 4.3% compared with the previous months.
SA to participate in agricultural negotiations in Geneva (SAnews)
Agriculture, Land Reform and Rural Development Minister, Thoko Didiza, will be attending the World Trade Organization (WTO) Ministerial Conference on agricultural negotiations, scheduled to take place in Geneva, Switzerland, from 12 to 16 June 2022. The negotiations are based on Article 20 of the Agreement on Agriculture, which provides for the continuation of the negotiations on issues relating to agricultural support and protection. The last major decision relating to agricultural negotiations was taken at the Nairobi WTO Ministerial Conference held in December 2015, with the elimination of export subsidies.
“To date, progress has been limited with members mainly repeating known positions. The divide remains largely between developed and developing member states,” the department said in a statement. The department said that South Africa’s priority in agricultural negotiations is to achieve a substantial and real reduction of trade distorting domestic support and to ensure sufficient policy space to carry out developmental policies that seek to address poverty, inequality and low economic growth.
“South Africa’s view is that market access negotiations should start once substantial progress has been made with domestic support. This is to ensure that historical imbalances are addressed and the playing field is levelled before engaging in further market access negotiations. “Approximately 70% of South Africa’s agricultural exports are already duty free, incorporating the Southern African Development Community (SADC) Trade Protocol, the Economic Partnership Agreement (EPA) with the European Union, African Growth and Opportunity Act (AGOA) with the United States of America and the African Continental Free Trade Agreement (this agreement is not yet implemented),” the department said.
Sh32bn terminal pushes Kenya’s harbours to top five in Africa (Business Daily)
Kenya now is among the countries with the five largest harbours in Africa after completion and handover of a Sh32 billion container terminal in Mombasa. The Japanese contractor handed over the second container terminal to the Kenya Ports Authority this week in a major boost to maritime trade. The new terminal put up by Toyo Construction Company, brings on board an additional annual capacity of 450,000 Tonnes Equivalent Units (TEUs) to the Mombasa port, a move that will increase turnaround time for ships talking at the facility.
“We shall put our best foot forward to ensure optimal utilisation of this facility for the benefit of Kenya and the region,” said KPA acting MD John Mwangemi. With the completion of the project, the authority has achieved its target of expanding capacity ahead of demand. By 2023, the Port of Mombasa is expected to handle approximately 1.7 million containers up from the current 1.4 million.
Half of small millers shut down on maize shortage (Business Daily)
Half of the small-scale millers have shut their businesses due to a lack of maize in a move that is likely to see consumers pay more for flour. United Grain Millers Association chairman Ken Nyagah said the maize shortage forced processors to shut since the beginning of this month as they lack the financial muscles to import the grain compared with their large-scale counterparts
The maize shortage has also hit large-scale processors that are not milling continuously as they should but at least they are still operating because of the purchases that they are making from Zambia and Malawi. “At least 50 percent of our members have closed because of an acute shortage of maize in the market at the moment. Locally there are hardly in stocks that we are getting from farmers,” said Mr Nyagah. The government allowed millers to import maize outside of the region duty-free but the processors argued that the produce from the world market is more expensive and not economically viable to ship in at the moment. As such, millers are now importing the grain from Malawi and Zambia, with a 90-kilogramme bag landing at Sh5,200 in Nairobi.
Lamu port livestock exports start in 2023 (Business Daily)
Kenya plans to use the Lamu port in exporting livestock to the Middle East by next year as the country seeks to extend its reach to the world market. Livestock PS Harry Kimtai said the government had set aside Sh500 million for the construction of a livestock facility at the Lamu port. The PS said Kenya has signed various sanitary protocols with the Middle East countries to facilitate the export of livestock products. “We want to establish facilities at the Lamu port that will support the docking of ocean vessels to allow the loading of livestock using the right procedures that take into consideration the issue of animal welfare,” said Mr Kimtai. Kenya has mainly been exporting high-value products such as butter, ghee, powder and long life milk product such as UHT to the Arab nations as it sought to diversify its market beyond the East African region. The Lamu port is ideal for livestock exports because of its proximity to the key animal production areas in northeastern Kenya.
Kenyatta, Mohamud talks clear way for miraa trade, flights resumption (The East African)
Kenya will resume exports of miraa (khat) to Somalia in two weeks following a thawing of relations that saw President Uhuru Kenyatta make his first trip to Mogadishu Thursday since the renewing of diplomatic ties between the two countries last June. Kenya’s Agriculture Secretary Peter Munya said Mr Kenyatta brokered the deal with new President Hassan Sheikh Mohamud on Thursday that will see the lifting of a two-year ban.
Mr Munya said the new Somalia regime had promised improved diplomatic relations. He said the trade talks were cemented after the Kenyan delegation, in which he was part, led by President Kenyatta, attended Mr Mohamud’s inauguration in Mogadishu Thursday. Mr Munya said talks were complete and what was remaining was the signing of the agreement that will also see Somalia sell seafood and other produce to Kenya.
Somalia closed access to its market for Kenya in 2020 following a political fallout between the two countries under former President Mohamed Abdullahi “Farmaajo”. The ban led to a loss of more than 50 tonnes of Kenyan khat valued at more than Ksh20 million ($171,000) a day.
Tanzania exports to Kenya hit Sh272.7 billion in first quarter (The Citizen)
Tanzania exported goods worth $ 118.6 million in the first quarter (January to March) of this year, it was revealed on Wednesday. The increased exports to the neighbouring country has forced the Tanzania Revenue Authority (TRA) to post its officials to Mombasa and Nairobi to facilitate pre-arrival clearance of goods.
During the period Kenya exports to Tanzania were valued at $139.4 million, according to the East African Business Council (EABC).Kenya is also mulling deployment of officials from its taxman, Kenya Revenue Authority (KRA) to the Horohoro-Lungalunga border to facilitate pre-arrival clearance of exports.
Speaking at the EABC Trade Facilitation Forum at Horohoro-Lunga Lunga One Stop Border Post (OSBP), EABC executive director John Bosco Kalisa decried delays at the border. He said it was a pity that clearance of goods at Horohoro OSBP by the Kenyan clearing agents has led to delays and longer
Nankhumwa irked by intended sale of maize to Zimbabwe, pens President Chakwera (Malawi Nyasa Times)
Leader of Opposition in Parliament, Kondwani Nankhumwa, has written President Lazarus Chakwera asking him to intervene and stop the sale of maize by the Agriculture Development Corporation (ADMARC) to Grain Millers of Zimbabwe saying the decision will likely negatively impact Malawi’s food security situation.
He said what is suspect about the decision to sell the maize is the fact that not long ago Minister of Finance, Sosten Gwengwe assured Malawians that ADMARC will not proceed with the deal after it was exposed by the media.
Nankhumwa said the general prediction by experts as well as ordinary Malawians is that there will be hunger this year, adding that the decision to sale the maize therefore defies logic. “Mr. President, you may be well aware that many experts, as well as ordinary Malawians, are against this sale of maize by Admarc precisely because all indications are that many households are likely to face hunger this year due to an anticipated low yield,” said Nankhumwa in the letter.
He said it is a fact that food security in this country is largely determined by the availability and accessibility of maize because it is a staple crop, which is consumed by almost all Malawians on a daily basis.
Take advantage of expanded market created by AfCFTA — President Akufo-Addo urges Ghanaian Industries (GhanaToday)
President Nana Addo Dankwa Akufo-Addo has called on Ghanaian manufacturing industries to take advantage of the access to expanded markets created by the African Continental Free Trade Area (AfCFTA) agreement. President Akufo-Addo said one of the main challenges that have affected Africa’s industrialisation drive is the lack of access to expanded markets. He said economies of scale were an important tool for industrialisation but with small fragmented markets in Africa, industrial development had always been a problem. President Akufo-Addo said this on Wednesday in Tema when he commissioned Nestlé Ghana’s Ghc175.4 million-expansion plant for the production of Cerelac, an infant food, for export to countries in West and Central Africa.
Delay in passing standards law slowing Industry growth (News Ghana)
Ghana’s quest to become the number-one trading hub in Africa could end up in an anticlimax if the Standards Authority Bill currently before Parliament is not passed into law with a sense of urgency. The Bill would address the critical issues of Standardisation and Conformity Assessment by empowering the Ghana Standards Authority (GSA) with the requisite legal backing needed to address the current variations of the age-long challenge of substandard goods that flood the country’s markets. Not only does the presence of such crappy goods pose a grave danger to consumers but they also erode the confidence of consumers in patronizing goods from the Ghanaian markets altogether. It is a double jeopardy which the GSA has struggled to address because as it stands now, the Authority lacks the legal mandate. It is a shocking reality that has been ignored for far too long.
FG intensifies efforts to remove Nigerian exports from EU’s restriction list (The Guardian Nigeria)
The Nigerian Export Promotion Council (NEPC) has stated that the Ministry of Industry Trade and Investment, has inaugurated a committee composed of the NEPC and other regulatory agencies to ensure the removal of Nigeria from the European Union’s (EU) restriction list. The Executive Director and Chief Executive Officer, NEPC, Dr. Ezra Yakusah, on the sidelines of its advocacy programme on export trade house, Cairo Egypt, said the committee which has less than two months to go, was specifically set up to make recommendations on how to remove Nigerian products from the EU list. According to him, the Council is also taking proactive measures to ensure that some of these products are removed from EU restrictions by ensuring these products meet stipulated EU requirements. In his words: “Sometimes the problem is due to poor packaging and a lack of mandatory or voluntary certifications. So we decided to take the challenge by deploying our ‘go global, go for certification’ programme to train over 150 Small and Medium Enterprises (SMEs) free of charge. We want to ensure that these products are removed from the EU list.
Egypt extends ban on staples including wheat, flour and corn for three more months - document (Reuters)
Egypt has extended the ban on the export of wheat, flour, corn, lentils, pasta, fava beans and all kinds of vegetable oil for three more months, its trade ministry said in a document seen by Reuters on Wednesday. The ministry said it would allow exports of any excess of the local market’s needs of these goods but only after approval from the ministry. This excess amount would be estimated by the ministry of supply. Egypt banned exporting these staples in March.
Libya oil shutdown expands with threat to close new port (Al Arabiya)
A blockade of Libyan oil output by groups aligned with forces in the east of the country expanded on Thursday and Friday with the closure of two more export terminals, a threat to close another, and reduced production at a major field, engineers said. On Thursday exports were halted at the ports of Ras Lanuf and Es Sider.
Libyan oil output had already fallen by about half to 600,000 barrels per day after groups closed the major Sharara and El Feel fields last month, though work at Sharara briefly resumed this week before stopping again. Groups closing the facilities have demanded that Tripoli-based Abdulhamid al-Dbeibah hand over the role of prime minister to Fathi Bashagha, who the eastern-based parliament backed for that post in March.
UAE wants to boost trade with Morocco via faster shipping: Economy minister (Al Arabiya)
The United Arab Emirates wants to bolster trade with Morocco to reach $7 billion within 10 years from $800 million in 2021, UAE Economy Minister Abdullah bin Touq al-Marri said on Thursday in Rabat.F or that purpose, the two countries will speed up container shipping to seven days from 40 days, al-Marri told Reuters before a visit to Africa’s largest port in Tangier, northern Morocco.
The UAE minister said he would discuss a trilateral deal with Moroccan officials to step up trade between Morocco, the UAE and Israel. The UAE and Israel have a free trade agreement.” This will offer great opportunities for traders and investors,” he said.
Addressing European Energy Security Through Equatorial Guinean LNG Exports (Africa Newsroom)
Rich with 1.5 trillion cubic feet of natural gas reserves and with an objective to become a regional gas processing hub, Equatorial Guinea’s gas journey has been both ambitious and highly successful. A number of exploration campaigns, large-scale project developments and regional partnerships have served as key drivers of the country’s gas expansion agenda, and now, using the African Continental Free Trade Agreement as well as its strategic location on Africa’s west coast, the country is gradually positioning itself as a regional Gas Mega Hub (GMH) as well as global exporter.
What separates Equatorial Guinea from other gas producing countries in Africa is the Ministry of Mines and Hydrocarbons’ GMH initiative, a comprehensive development model to utilize unexploited offshore gas resources to drive energy security and economic growth. Since the launch of the GMH in 2018, the country has made significant progress to enhance exploration and production as well as the development of gas infrastructure and processing facilities, strengthening the country’s export capacity. In addition to processing domestic resources from fields including the 580 billion cubic feet offshore Alen Gas Project, Equatorial Guinea’s Alba Liquefied Petroleum Gas and Punta Europa onshore facility serve as the official processing platform for the entire region. Through partnerships with neighboring producers including Cameroon, Nigeria and the Republic of the Congo, Equatorial Guinea not only processes its own resources but regional reserves, converting gas into liquefied natural gas (LNG), ready for export.
Structural reforms stimulate Somalia’s investment climate (Daily Sabah)
Since the 2012 establishment of the Federal Government of Somalia (FGS), a number of structural reforms have been put in place to boost domestic business and foreign direct investments (FDI). The reforms have, over the last four years, mainly focused on fixing impediments faced by potential investors such as the lack of a comprehensive legal framework, a civil and commercial justice system, weak dispute resolution mechanisms, enforcing contracts and inefficient public financial management systems. The overall enabling climate for investment similarly revolves around issues like land management, public procurement and disposal arrangements, banking regulations, contract management regulations, bilateral trade agreements, as well as free and responsible media. In all these areas, priorities have over the years been identified for policy, legal and regulatory improvements to remove these bottlenecks.
African trade and development news
Investment flows to Africa reached a record $83 billion in 2021 (UNCTAD)
Foreign direct investment (FDI) to African countries hit a record $83 billion in 2021, according to UNCTAD’s World Investment Report 2022 published on 9 June. This was more than double the amount reported in 2020, when the COVID-19 pandemic weighed heavily on investment flows to the continent. Despite the strong growth, investment flows to Africa accounted for only 5.2% of global FDI, up from 4.1% in 2020. While most Africa countries saw a moderate rise in FDI in 2021, around 45% of the total was due to an intrafirm financial transaction in South Africa. “If we exclude this transaction, the increase in FDI flows to Africa, while still positive, would be more in line with what we observed in other developing regions,” said James Zhan, director of UNCTAD’s investment and enterprise division.
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FDI to Southern Africa increased almost tenfold to $42 billion. The strong increase was due primarily to a large corporate reconfiguration in South Africa – a share exchange between Naspers and Prosus in the third quarter of 2021. New project announcements in the country included a $4.6 billion clean energy project finance deal sponsored by UK-based Hive Energy and a $1 billion greenfield project by US-based Vantage Data Centers to build its first African campus.
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West Africa sees FDI increase by 48% to $14 billion. Nigeria, West Africa’s largest recipient of FDI, saw its flows double to $4.8 billion, mainly because of a resurgence in investments in the oil and gas sectors.
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Investment flows to East Africa increased by 35% to $8.2 billion Ethiopia, a central hub for China’s Belt and Road Initiative, saw FDI flows rise by 79% to $4.3 billion in 2021. Four out of five international project finance announcements in the country were in renewables.
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Central African FDI remained flat at $9.4 billion While investment flows to Central Africa remained flat, FDI to the Democratic Republic of the Congo rose by 14% to $1.9 billion, with investment trends remaining positive primarily because of flows to offshore oil fields and mining.
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FDI to North Africa declined by 5% to $9.3 billion in 2021 Investment flows to Morocco rose by 52% to $2.2 billion in 2021 while Egypt saw its FDI drop by 12% to $5.1 billion. Despite the decline, Egypt was Africa’s second-largest FDI recipient.
Mo Ibrahim: Africa must be allowed to use gas in energy transition (African Business)
Across three days in late May, the 2022 Ibrahim Governance Forum brought together world leaders, climate experts and African youth to discuss the nuances of the climate crisis in Africa and began to articulate the continent’s unique position ahead of Cop27 in Egypt.
Forum founder Mo Ibrahim, the Sudanese-British telecoms billionaire, tells us why he believes Africa needs to be allowed to use its gas resources as a transition fuel to close the energy supply gap.
“Africa’s case” can be articulated around three main points. First, as the least industrialised continent, Africa is the continent least responsible for climate change. However, as, like Covid, the climate crisis knows no borders, this also means that Africa is the most vulnerable to its impact, with less adaptation means.
Second, we need to strike the right balance between climate protection and access to energy for all people on the planet, between climate justice and energy justice.
Last but not least, Africa’s potential in biodiversity, renewable energy sources, and minerals key to low-carbon economy, is to be seriously considered. The continent can play a pivotal role in a green sustainable economy, provided the relevant hurdles are correctly addressed: financial and human capacities, infrastructures, governance.
Cop27 is therefore an opportunity for Africa to put these considerations forward to the global community, and to ensure that the climate debate is inclusive of the continent’s specific needs and potential.
Africa’s development agenda cannot move forward without addressing the continent’s energy gap and at present, there is no other viable alternative to using gas, the least polluting of all fossil fuels, as a transition fuel to close this gap.
global supply chains contribute to carbon emissions through transportation of raw commodities one-way, and processed products back the other – sea freight being by far the worst, as a recent report published by the AFC (Africa Finance Corporation) highlighted. In Africa, boosting local processing of raw commodities and local manufacturing for growing local markets can definitely contribute to lowering carbon emissions at global level. This means a better integrated continent, where intra-African trade is consequently upgraded.
Sub-Saharan Africa’s big companies still resilient to Ukraine war, China slowdown (ZAWYA)
Countries in Sub-Saharan Africa (SSA) still struggle to return to pre-pandemic economic growth, although most rated companies in the region have remained resilient to the impact of the war in Ukraine and slowdown in Chinese economy, according to the latest analysis. So far, many businesses in SSA, particularly exporters, continue to see moderate impact from the ongoing turbulence and don’t see the urgency to tap into capital markets yet, as higher commodity prices tend to offset rising costs, S&P said. ”Increasing commodity prices are benefiting many key countries, but high debt burdens, elevated cost of debt and limited fiscal flexibility remain a drag on sovereigns’ credit quality, while rising food and energy prices, alongside a busy election cycle, will delay fiscal consolidation,” the ratings agency noted. Commodity and energy prices have skyrocketed and financial conditions have tightened due to the Russia-Ukraine conflict, fuelling recession fears. According to the World Bank, food and energy will remain expensive for the next three years.
As for the economies in SSA, there are no signs that the course will change soon. According to S&P, the region’s recovery from the pandemic is still lagging that in other markets.
China’s trade ties with Africa continue to strengthen (Namibia Economist)
Trade between China and Africa is growing. The General Administration of Customs of China recently noted that bilateral trade between China and Africa amounted to US$254.3 billion in 2021, an increase of 35.3% from 2020. In the first quarter of 2022, China’s Customs Data confirmed that trade between the two regions increased by 23%, to US$ 64. 8 million.
Africa exported goods worth US$ 105.9 billion to China, an increase of 43.7% from the previous year. China is increasingly importing agricultural products and manufacturing goods from Africa, in addition to its continued strong focus on oil, precious minerals and metals. African imports from China mainly focus on manufactured goods such as electronics, clothing and appliances, and technology.
Data from the Chinese Ministry further revealed that over the last 20 years, China’s trade with Africa has risen 20-fold, showing that China is one of Africa’s biggest bilateral trading partners. To balance the trade gap, China has also pledged to import US$ 300 billion of African products by 2025. The country has also increased the number of products that can be exported to China tariff-free.
Electronic Certificate of Origin to Facilitate Trade in SADC Region (SADC)
Challenges which traders and customs officials have been facing in using the manual Certificate of Origin (CoO) in the Southern African Development Community (SADC) will be resolved as soon as the SADC Electronic Certificate of Origin (e-CoO) becomes operational. The SADC e-Certificate of Origin Framework was approved by the Committee of Ministers of Trade in 2019. The Framework will help to facilitate the application of the CoO electronically, thus easing cross-border trade in SADC. This will result in the smooth movement of goods across the Region to end consumers.
Implementation of the eCoO is expected to contribute to the reduction of non-tariff barriers to trade and enhance participation of SADC Member States in the regional value chain and ultimately, support successful implementation of the SADC Industrialisation Strategy and Roadmap (2015-2063) in the consolidation of the SADC FTA. For the implementation of the e-CoO concept regionally, the Regional eCoO Framework will facilitate to harmonise the process of automation for registration, issuance, approval and transmission of the CoO.
The eCoO systems is equipped with security features such as online e-CoO authenticity verification, optical watermarking technology to distinguish between original and copies of CoOs issued. The e-CoO is being considered under the SADC Free Trade Area (FTA) whose objectives are to further liberalise intra-regional trade in goods and services; ensure efficient production; contribute towards the improvement of the climate for domestic, cross-border and foreign investment; and enhance economic development, diversification and industrialisation of the Region. Currently preparation for launching of the SADC eCoO is underway for July 2022 and it is expected that all Member States will implement the eCoO by 2024.
ECOWAS advocates enabling policy for Africa’s agric devt (New Telegraph)
The Economic Community of West African States (ECOWAS) has said that agribusiness development in Nigeria and other countries in Africa requires the provision of an enabling policy, legal and economic environment. The Head of Agriculture Division, ECOWAS Commission, Mr. Ernest Aubee, explained that agriculture in the continent remains one of the most important sectors, saying that the share of agriculture in the continent’s Gross Domestic Product (GDP) had increased to 19.9 per cent in 2020/2021 from 17.8 per cent in 2019/2020.
He stressed that agribusiness contributed approximately 25 per cent of Africa’s GDP and provided 70 per cent employment, while agriculture-based products accounted for over 50 per cent of all exports from Africa. Aubee noted at an African agribusiness webinar in a paper titled: “Sustainable Agribusiness in Africa,” that increased public and private sector investments on the continent was critical, adding that agribusiness has the potential to drive the socio-economic development of Africa. He said: “Agribusiness refers to the enterprises, industry and field of study of value chains in agriculture and in the bio-economy. It refers to a combination of agriculture and business activities that seek to achieve specific objectives of profitability efficiency and effectiveness and embrace the value chain concept of agriculture from production to consumption.
“However, challenges are access to finance for smallHolder farmers; poor infrastructure from farms to markets, (processing, packaging and markets), inadequate transport networks (road, sea, air), limited agricultural technologies, availability of relevant macro and sectoral policies and regulations to drive the sector; lack of commitment to investments in agriculture in accordance with SDG, AU Agenda 2063/Malabo Declaration, ECOWAP etc. “Also, there is limited local private sector engagements and education and modernisation of agribusiness in Africa.” He recommended building human capacities in the agribusiness value chain with emphasis on women, youths and the poor.
Guest blog: Global warming and the “Africanisation” of International Investment Law? (ICC)
In August 2021, the United Nation’s Intergovernmental Panel on Climate Change published a report on climate change based on more than 14,000 studies developed by scientists around the world. Issuing a “code red for humanity”, the report makes clear that global warming will only intensify over the course of the next 30 years.
This threat is particularly acute for the African continent. The World Meteorological Organization’s State of the Climate in Africa 2019 report indicates that increasing temperature and sea levels, changing precipitation patterns and more extreme weather are threatening human health, safety, food, and water security on the continent. Now more than ever African States must ensure that the promotion of foreign direct investment through the conclusion of international investment agreements (IIAs) does not undermine environmental protection measures or exacerbate the impending climate crisis. Thus, African States are increasingly incorporating environmental provisions in their IIAs. The breadth of these reforms across the continent, and their influence globally has led some commentators to refer to the “Africanisation” of international investment law.
One example is the 2012 Model BIT of the Southern African Development Community (SADC), which was among the first to impose obligations and responsibilities on investors as opposed to just States, expressly “seeking an overall balance of the rights and obligations among the State Parties, the investors, and the investments” under the agreement. The 2012 Model BIT includes numerous articles that impose obligations on investors concerning the environment, human rights, and corruption. Subsequently, in December 2016, Nigeria and Morocco concluded a BIT that included many of the environmental obligations for investors proposed by the SADC Model BIT and the ECOWAS Supplementary Act on Investments.
Global economy news
Global Supply Chain Disruptions : Competition Policy Implications (World Bank)
This note complements prior World Bank work analyzing the technical drivers of supply chain disruptions from 2021 onwards. The focus of this note is to shed light on the role of market structure and dynamics by: (a) analyzing how market dynamics and industry structure may have contributed to the current situation; (b) outlining implications for value chains in developing countries; and (c) suggesting further policy and research priorities. On the demand side unexpected demand spikes in the United States have created disruptions due to the sheer volume of logistics throughput needed and the sudden, unexpected rebound in demand that is contributing to the “bullwhip effect.” On the supply side, capacity constraints with respect to port-hinterland connections have been the main bottleneck rather than maritime shipping per se. However, this note raises the concern that industry structure and alliance practices within the maritime shipping, shipbuilding, and container manufacturing sectors may be contributing to the extreme reaction of shipping prices. In the short term, policy makers in developing countries can help mitigate the effects of rising shipping costs and decreasing service levels by extending the timeframes of trade finance and removing barriers to overland trade. Although there is little that governments outside of China, Europe, and the United States can do to directly solve the process bottlenecks, market characteristics suggest that the global logistics industry may be susceptible to collusive outcomes, which exacerbate price spikes. Thus, governments could pay closer attention to potential anticompetitive behavior, especially in maritime shipping and hinterland logistics. In the medium to long term, policy makers, regulators, and researchers should more carefully consider efficiency–resilience tradeoffs in the global logistics industry. Key topics to explore include investigations into potential anticompetitive behavior by shipping lines and increased scrutiny over mergers and alliance practices among logistics service providers and the supplying manufacturing industries. Public-private and private initiatives to facilitate data sharing may also help improve forecasting, which could help mitigate the effects of demand volatility. This note was predominantly prepared before the invasion of Ukraine by the Russian Federation, which started in February 2022. In the short term, the war is likely to exacerbate the congestion at European ports and disrupt Asia-Europe rail links, potentially leading to higher shipping prices. In the long term, it remains to be seen whether decreases in global demand due to the war will lower shipping demand and prices. Nevertheless, the long-term structural constraints to competition in the sector highlighted in this note remain the same overall.
Grain shipping trade navigates turbulent waters (World-Grain.com)
COVID-19 lockdowns and the invasion of Ukraine by Russia have created uncertainty across shipping trade lanes. Indeed, perhaps not since the Cold War have supply chain resilience and geopolitical turmoil loomed so large in global trade. The disruptions have arguably impacted the grain shipping trade more than any other, with grain prices and shipping costs soaring. The war in Europe has resulted in Ukraine’s exports of wheat and other agricultural products being largely shut off from the world due to the ongoing Russian blockade and/or its control of export facilities in the Black Sea. This is inflating global food prices and threatening social disintegration in some of the poorest countries of Africa and the Middle East, which depend on Black Sea exports and are struggling to find replacements.
Grain supply chains are not just being affected by the direct impact of war on grain exports from the Black Sea. Tight availabilities of fertilizers amid sanctions on Russia and Belarus have been a major issue for some countries, especially in South America and Africa, Cooper said. “Some countries are trying to resolve supply disruptions via switching to other producers, for example, Nigeria’s purchase of potash from Canada,” he said. Additionally, logistics in the container sector remains difficult, which especially hampers the rice trade between India and Africa and also has been hampering US containerized exports of agricultural products.
Despite the crises, bulk handling companies maintain good results (Logistics Update Africa)
Following two years of playing a central role in maintaining global trade during the pandemic, bulk handling companies are proving their strength and resilience once again in the face of the Russian-Ukrainian conflict. Saving time and lowering the operating costs for their customers, the benefits are numerous, and illustrative of strong and resilient players who support a sector in full rebound.
The current rise in transportation costs is creating uncertainty for many businesses. A study by Economist Impact found that the effect on trade will be most pronounced in Africa and South America. Faced with these rising prices and the need to maintain trade flows, some businesses are trying to reduce costs and transit times by working with companies like Nectar Group, one of the largest providers of integrated unloading and bagging services.
AU Chair Urges Ukraine to Demine Odesa Port to Ease Wheat Exports (VOA)
Senegalese President and African Union Chair Macky Sall on Thursday urged Ukraine to demine waters around its Odesa port to ease much needed grain exports from the war-torn country. Russia’s invasion of Ukraine and Western sanctions have disrupted grain deliveries from the two countries, fueling fears of hunger around the world. Cereal prices in Africa, the world’s poorest continent, have surged because of the slump in exports, sharpening the impact of conflict and climate change and sparking fears of social unrest. If wheat exports do not resume from Ukraine, Africa “will be in a situation of very serious famine that could destabilize the continent,” Sall told French media outlets France 24 and RFI. Russia and Ukraine produce 30% of the global wheat supply. But grain remains stuck in Ukraine’s ports because of a Russian blockade and Ukrainian mines, while Western sanctions on Moscow have disrupted exports from Russia.
WTO Ministerial Conference preview: four key issues to be resolved (The Institute of Export and International Trade)
Next week sees the start of the pivotal 12th World Trade Organisation Ministerial Conference, with decision-makers from around the world coming together to review the current functioning of the multilateral trading system and future priorities for the Geneva-based body. The war in Ukraine and the ensuing global food crisis means this will be “no ordinary ministerial conference,” Business Standard reports.
The IOE&IT here looks at the four most pressing policy issues that are likely to be discussed.
1) The global food crisis
2) Tariff moratorium on e-commerce
3) Environment and trade
4) Covid IP Waiver
At-risk nations seek cash for climate losses, fear UN ‘talk shop’ (Thomson Reuters Foundation)
The surging costs of climate change-driven destruction have made vulnerable nations poorer by about one-fifth, 55 such countries said on Wednesday, as fears grow that U.N. discussions on money for states to repair and avoid harm could become a “talk shop”. “Loss and damage” caused by more extreme weather and rising seas is a key issue at mid-year U.N. climate talks in the German city of Bonn, as negotiators launched a three-year dialogue this week on a topic that has long divided rich and poorer economies. The “Glasgow Dialogue” emerged after a push for a new loss-and-damage fund for vulnerable countries floundered at the U.N. COP26 summit in Scotland last year due to resistance from donors including the United States and some European governments. But small island states and other countries that are already bearing the brunt of a warming world - from more powerful storms in Madagascar to disappearing islets in the Marshall Islands - urged wealthy governments not to hold back progress in Bonn.
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Minister Thoko Didiza attends World Trade Organisation 12th Ministerial Conference on Agricultural Negotiation in Geneva, Switzerland, 12-16 Jun (South African Government)
Minister Didiza to attend the World Trade Organisation 12th Ministerial Conference on Agricultural Negotiation in Geneva, Switzerland from the 12th to the 16th June 2022The Minister of Agriculture, Land Reform and Rural Development, Ms. Thoko Didiza, MP will from the 12th to the 16th of June 2022 attend the World Trade Organisation Ministerial conference on agricultural negotiations in Geneva, Switzerland. The last major decision related to the agricultural negotiations was at the Nairobi Ministerial Conference of the WTO in December 2015 with the elimination of export subsidies. At the Ministerial Conference in Buenos Aires in December 2017, no joint declaration or work program could be agreed by the WTO membership. To date, progress has been limited with members mainly repeating known positions. The divide remains largely between developed and developing members. In addition, there are huge differences between the USA and China and India.
South Africa’s priority in the agricultural negotiations is to achieve a substantial and real reduction of trade distorting domestic support and to ensure sufficient policy space to carry out developmental policies that seeks to address poverty, inequality and low economic growth. For South Africa, the negotiations need to follow a certain sequence with domestic support as a priority. Market access negotiations can only start once substantial progress has been made with domestic support. This is to ensure historical imbalances are addressed and the playing field is leveled before engaging in further market openings.
Approximately 70% of South Africa’s agricultural exports are already duty free incorporating the SADC Trade Protocol, the EPA agreement with the EU, AGOA with the USA and including the African Continental Free Trade Agreement (this agreement is not yet implemented). South Africa’s major challenges regarding market access are in the SPS field and those are not negotiated with the Agreement on Agriculture.
Cabinet approves public consultations on illegal metals trade (SAnews)
Cabinet has approved that public consultations be undertaken on proposals to restrict the trade of illegally obtained scrap and processed metals. Addressing reporters following this week’s Cabinet meeting, Minister in the Presidency, Mondli Gungubele, said the theft of scrap metal and copper cable from public infrastructure hinders the performance of the economy by imposing enormous costs.
“Some of the disruptions include the supply of energy and rail services due to vandalised rail tracks. They impose additional transport costs on commuters due to disrupted commuter transport. Vandalised and unsecured electricity cables pose safety risks to communities, especially children.”
Japan-South Africa business forum a boost for SA economy (SAnews)
Minister in the Presidency, Mondli Gungubele, says strengthening ties with Japan can present increased economic opportunities for South Africa. The Minister was briefing media on Cabinet decisions on Thursday. This after the Japanese government, together with the Department of Trade, Industry and Competition (dtic), launched the Japan-South Africa Business Forum last week.
“Japan is one of our most important trade partners and a leading investor in a number of South African sectors, ranging from automobiles to advanced mining machinery, and from agribusiness to financial services. “Cabinet welcomed the outcomes of the recent Japan-South Africa Business Forum, which agreed to an ambitious work programme that includes collaboration on green industrialisation, electric vehicle technologies and green hydrogen.
“SA exports to Japan increased from R61 billion in 2011 to R150 billion in 2021. Last year, SA imported R34 billion worth of goods... resulting in a R114 billion trade surplus in South Africa’s favour with Japan,” the department said.
Kenya to begin exports of livestock products from Chinese-built port in 2023 (CGTN Africa)
Kenya will begin to export livestock products from the Chinese-built Lamu Port in 2023, a government official said Wednesday. Harry Kimtai, the principal secretary of the Ministry of Agriculture, Livestock, Fisheries, and Cooperatives, told journalists in Nairobi, the capital of Kenya, that the government has allocated 500 million shillings (4.27 million U.S. dollars) for the construction of an efficient transport corridor for livestock at the port. “We want to establish facilities at the Lamu port that will support the docking of ocean vessels to allow the loading of livestock using the right procedures that take into consideration the issue of animal welfare,” Kimtai said. Lamu Port, which is being built by China Communications Construction Company, can handle vessels with a capacity ranging from 12,000 to 18,000 twenty-foot equivalent units (TEUs). Kenya commissioned the first berth of the Lamu port in May 2021, which is part of the Lamu Port South Sudan-Ethiopia Transport (LAPSSET) corridor.
Tanzanians can now invest in SADC without BOT waiver (IPPMedia)
TANZANIANS can now invest in Southern Africa Development Community (SADC) countries without seeking waiver from the Bank of Tanzania (BOT). “This is expected to increase investor base and competition in government securities market,” said a statement by the Monetary Policy Committee after its meeting on 6th June 2022 to assess the conduct of monetary policy in March and April 2022, recent global and domestic economic situation. However, according to the regulations, government securities purchased shall not be transferred to a resident within six months from the date of purchase.
US-Ghana Business Forum comes off on June 16, 2022 (Myjoyonline)
The U.S Chamber of Commerce and the American Chamber of Commerce Ghana will organize the 3rd high-level meeting between US and Ghanaian Government Officials and Businesses on the official visit of the Deputy Secretary of Commerce, Don Graves.The U.S.-Business Forum is aimed at deepening diplomatic and commercial partnerships between Ghana and the United States for successful implementation of the African Continental Free Trade Agreement (AfCFTA).The theme for 2022 U.S.-Ghana Business Forum is: “Leveraging the AfCFTA to Promote U.S-Africa Commercial Partnerships.” This event is in line with the drive by the AfCFTA Secretariat to engage the private sector, the African diaspora, and other strategic partners for the effective implementation of the Agreement.
The 2022 Forum aims to strengthen trade and investment, promote business partnerships, and opportunities between U.S. and Ghanaian businesses and review the manufacturing and digital sectors as enablers for implementation of the single market project in Africa. At the end of the conference, it is expected that U.S.-Ghana commercial partnership will be projected and enhanced, focused on improving the investment climate in Ghana and the African continent.
DRC may hold key to prosperity in East Africa (China Daily)
In Africa’s COVID economic recovery strategies, countries need to embrace the trinity of unification, regionalism and multilateralism to spur industrialization, economic growth and development. As Africa as a whole is one of the most affected economies in the world, the World Bank estimates that approximately 40 million people on the continent have been pushed into extreme poverty due to the pandemic’s devastating impact. However, the pandemic merely triggered compounded issues that Africa has suffered from for decades.
The Democratic Republic of Congo is one country that has chosen unification, regionalism and multilateralism over unilateralism. On April 8, the DRC signed a treaty of accession to the East Africa Community, becoming the seventh member of the regional bloc, which also includes Burundi, Kenya, Rwanda, South Sudan, Tanzania and Rwanda.
Faced with the challenge of immense poverty, the DRC has about 60 million people who live on less than $1.90 a day, the international poverty line. This comes at a time when the country with a population of more than 94 million has ample natural resources such as gold, diamonds, aluminum, cobalt and copper, significant arable land and hydropower, as well as immense biodiversity and the world’s second-largest rainforest.
The East Africa Community, which aims to strengthen the ties among its member states through a common market and a common customs tariff to help achieve economic growth in the region, faces a tall order in the re-engineering of the economy of the DRC-a country that was once ravaged by conflict and war. However, will the DRC have an impact on the East Africa Community?
How taxes are driving illicit trade in Kenya (BusinessLIVE)
A rapid rise in the cost of living in Kenya — brought on by inflation on essential goods and heavy taxes — is thought to be fuelling the illicit trade in goods. Timothy Kamau* is a trader in the Kenyan town of Bungoma, near the border with Uganda. He’s ready to shut up shop, he says, as buyers have taken their custom to the store next door, where goods that have been smuggled into the country are sold more cheaply. Or he needs to find a way into the illicit economy himself. “I am looking for a connection in Uganda so that I can start getting goods from there to keep me afloat,” Kamau tells the FM.
Malawi Must Step Up Efforts to Address Critical Gender Gaps to Unlock Untapped Economic Potential and Empower Women (World Bank)
Malawi’s efforts in closing the gender gap require urgent improvements in schooling rates for girls at the upper secondary level, lowering maternal mortality rates, further decreasing the fertility rate, ending child marriages, and addressing constraints on access to various assets that affect women’s productivity as farmers, entrepreneurs, and wage workers, according to two new World Bank reports. The new Malawi Gender Assessment and Gender-Based Violence Assessment reports show that with more than 12 laws, 10 policies, and nine international or regional treaty obligations related to advance gender equality, Malawi has an enabling environment anchored in a progressive Constitution and relevant legislation. However, low and fragmented allocation of resources to support implementation of existing laws, policies, and programs, continues to constrain efforts to close the remaining gender gaps and prevent GBV.
Ghana Can Leverage Trade Policies to Accelerate Export Diversification and Economic Transformation for Jobs (World Bank)
Ghana’s merchandise trade competitiveness declined over the last decade, resulting in a reduction in the number of exporting firms and their participation in Global Value Chains (GVCs). However, improvements in transport logistics and access to ICT infrastructure over last decade can be leveraged for expanded trade and economic transformation; a key pathway to the creation quality jobs, says the World Bank’s latest trade analysis for the country. The newly released Ghana Trade Competitiveness Diagnostic- Strengthening Ghana’s Trade Competitiveness in the Context of AfCFTA, notes that trade in services and foreign direct investments are also important for ensuring deeper integration into GVCs and efficiency of the manufacturing sector.
“The potential benefit offered by the AfCFTA (about 0.5% additional GDP growth per annum over next ten years) – is very significant, says Pierre Laporte, World Bank Country Director for Ghana, Liberia and Sierra Leone “This should motivate Ghana to harness the transformative potential of trade by cultivating export-oriented activities in both manufacturing and services and following up with the outstanding negotiations and implementation of the AfCFTA protocols.”
AGI pushes for duty exemption on raw material imports (The Business & Financial Times)
Producers want a review of import duty on raw materials meant for production so as to make locally-made products competitive. Ideally, the Association of Ghana Industries (AGI) – which is the umbrella-body of leading local manufacturers – says such taxes are paid after production and not directly on import of raw materials, as it is the case in this country.
“We want importers of raw materials to be considered, because elsewhere producers do not pay duty on imports,” said AGI’s Chief Executive Officer, Seth Twum Akwaboah.
He spoke during the 11th Association of Ghana Industry and Quality Awards launch in Accra, and lamented that making producers pay duty on imported raw materials and then also taxing the final product constitutes an unwarranted double tax burden on them. He said these taxes end up being passed on to the final consumer, and are part of the reason domestically-made goods are uncompetitive in their pricing relative to imported ones.
Ghana Moves Motion On Role of African Parliaments In Accelerating Intra-African Trade at Ongoing 52nd CPA Regional Conference (Peace FM Online)
Ghana’s delegation at the 52nd CPA Africa Regional Conference has moved a motion on the role of African Parliaments in accelerating Intra-African trade. The motion which was moved by the Majority Leader, Osei Kyei-Mensah-Bonsu on behalf of the Rt. Hon. Speaker, Alban Sumana Bagbin and the Parliament of Ghana as a whole is expected to fashion out ways to stimulate local and intra-African trade in a bid to reduce the shocks of the global crises being felt by African countries. Hon. Osei Kyei-Mensah-Bonsu in moving the motion outlined the significance of the trade agreement which he said will turn around the negative to extremely low economic growth being witnessed on the African market as well as its unsustainable fiscal deficits and the constant increase in rising debt levels. “As a direct consequence of COVID-19, African economies experienced negative to extremely low economic growth, unsustainable fiscal deficits, rising debt levels, huge populations being pushed below the poverty brackets and balance of payment problems. As African economies were about to emerge from the shocks of COVID-19, entered the war in Ukraine which is affecting food, fuel, and steel products prices as well as access to international finance.”
“Besides, to achieve the Sustainable Development Goal (SDGs) and the African Union’s Agenda 2063, intra-African Trade will undoubtedly play a key role in ameliorating the poor living conditions of the disadvantaged and repositioning them towards medium to long term inclusive and sustainable growth.”
The United Nations Industrial Development Organization (UNIDO), Global Affairs Canada and the Government of Ghana, through the Ministry of Environment, Science, Technology & Innovation (MESTI), have launched the Ghana Circular Economy Centre Project to support the country’s just transition to a circular economy. “As Ghana seeks to diversify its economy, create export revenue and improve labour and capital productivity, it is also aiming to become a global leader in the transition to circular economy”, said Dr. Kwaku Afriyie, Minister for Environment, Science, Technology and Innovation (MESTI), during the launch event. He reminded stakeholders about the need for all to contribute to environmental protection by thinking and acting circular at all times, “Transitioning to a circular economy will be advantageous to Ghana and will help the country generate green decent jobs, reduce inequality, minimize the impact of climate change on the environment, and provide the economy with a competitive advantage”.
That controversial duty on imported vehicles (The Guardian Nigeria)
The controversy surrounding the recent imposition of 15 per cent National Automobile Commission (NAC) levy on imported used vehicles by the Nigeria Customs Service (NCS) is not unexpected, given the struggling economic condition of Nigerians, and the complications that are bound to attend the levy. Stakeholders such as the African Association of Professional Freight Forwarders and Logistics and the Association of Nigerian Licensed Customs Agents, among others have bluntly rejected the new tax while a few others are largely indifferent in this regard. The NCS, on its own part has indicated that the reported increases are as a result of the migration of the Service from the old version of the ECOWAS Common External Tariff (CET) to the new one commencing in 2022, in line with the World Customs Organisation. This has raised some issues in relations to the conduct of import trade in the country.
The situation needs to be properly reviewed given that while the Customs Services in many other African countries are reducing taxes, the NCS is introducing new ones with the backing of the Federal Ministry of Finance. All these have significant impact on the price of used cars and other related goods in the Nigerian economy. The quest for more revenue by government should not lead to some unnecessary crisis at the ports.
How nanotechnology can revive Nigeria’s textile industry (The Conversation)
Nigeria’s cotton production has fallen steeply in recent years. It once supported the largest textile industry in Africa. The fall is due to weak demand for cotton and to poor yields resulting from planting low-quality cottonseeds. For these reasons, farmers switched from cotton to other crops. Nigeria’s cotton output fell from 602,400 tonnes in 2010 to 51,000 tonnes in 2020. In the 1970s and early 1980s, the country’s textile industry had 180 textile mills employing over 450,000 people, supported by about 600,000 cotton farmers. By 2019, there were 25 textile mills and 25,000 workers. The industry competes in a global textile market that was valued at US$ 993.6 billion in 2021 and is expected to grow at a rate of 4.0% from 2022 to 2030. Once the continent’s leader, Nigeria spends on average US$4 billion a year to import textiles that it could produce itself. Imports put pressure on foreign exchange reserves, jobs and local demand for cotton. Technical innovation could make the textile sector more competitive – not only by improving cotton production but also by improving textile quality. This can be achieved in Nigeria.
Nowadays, textiles’ properties can be greatly improved through nanotechnology – the use of extremely small materials with special properties. Nanomaterials like graphene and silver nanoparticles make textiles stronger, durable, and resistant to germs, radiation, water and fire. Adding nanomaterials to textiles produces nanotextiles. These are often “smart” because they respond to the external environment in different ways when combined with electronics. They can be used to harvest and store energy, to release drugs, and as sensors in different applications.
At the moment, Nigeria is not benefiting from nanotextiles’ economic potential as it produces none. With over 216 million people, the country should be able to support its textile industry. It could also explore trading opportunities in the African Continental Free Trade Agreement to market innovative nanotextiles.
Optimizing U.S. Strategic Policy: A Regional Approach to Ethiopia (The Strategy Bridge)
The world order that emerged after the collapse of the Soviet Union is fading. The economic, political, and security interests of the United States are being challenged globally. Between the war in Ukraine, heightened tensions in the South China Sea, hostile rhetoric and behavior from North Korea and Iran, and a “wildfire of terrorism” in Africa, policy development and resource management have become a bewildering exercise. Within such a complex environment, the U.S. risks being caught off-guard by regions lower in policy priority that hold enormous potential to increase global instability.
The U.S. government’s approach to the unresolved conflict and weaponization of hunger in Ethiopia highlights these dilemmas, frustrating interventions rather than resolving them.
The opportunity exists in Ethiopia for the U.S. to change how it approaches foreign aid, conducts bilateral relationships, and facilitates regional security roles in Africa. U.S. policy should focus on enhancing the capacity of African-led regional bodies to moderate and reconcile closely linked political, economic, and security issues that often degenerate into humanitarian crises. A regional approach in Ethiopia and elsewhere in Africa can help to protect U.S. interests from hurried unilateralism and excessive burdens on limited national resources, if stewarded effectively. Ethiopia is a potential model and case study for the viability of regionally-led solutions to threats against U.S. interests abroad.
African trade and integration news
The 2021 African Integration Report issued under the theme “Putting Free Movement of Persons at the centre of Continental Integration”, is based on the African Multidimensional Regional Integration Index (AMRII). The Index was developed by the African Union Commission (AUC) and the Regional Economic Communities (RECs), with the participation of the Association of African Central Banks and national statistical agencies. The 2021 Africa Regional Integration Index (ARII) assesses the regional integration status and efforts of African countries. ARII compares each country to the other countries in its regional economic community and to the countries of Africa as a whole.
The report captures the opportunities and challenges that come with these significant developments in the African regional integration agenda and provides a comprehensive and structured review of the status of integration and gives innovative policy recommendations for accelerating the ongoing regional integration process.
The overall assessment score for the integration process within the continent is 0.62 on a scale of 0 to 1. The overall AMRII scores for each of the RECs are the arithmetic mean of the scores obtained in the 8 dimensions of the index. These scores are a reflection of the efforts made within each of the RECs. The RECs which are making the most effort are, the East African Community (EAC); the Economic Community of West African States (ECOWAS); the Common Market for Eastern and Southern Africa (COMESA); the Economic Community of Central African States (ECCAS). Overall, they have scores exceeding 0.6 in a rating range between 0 and 1. On the other hand, the Intergovernmental Authority on Development (IGAD); the Community of Sahel-Saharan States (CEN-SAD); and the Arab Maghreb Union (AMU) are just above the average value of 0.5. The fact of not having defined plans or programmes in certain dimensions of integration such as free movement, financial and monetary integration is one reason for the poor overall performance of these RECs.
The Report shows that the average progress of the RECs in the implementation of free movement of persons is moderate at 0.68 on a rating scale between 0 and 1. ECOWAS and EAC stand out from other RECs in the evaluations, with respective ratings of ECOWAS (100%) and EAC (96%); all the other RECs score below 65%. This can be explained by the difficulties experienced in either implementing the regional free movement protocols or the abolition of visas in their Member States.
VITAL INDEX: Standard Bank launches its Africa Trade Barometer to plug information gap (Daily Maverick)
Economies in sub-Saharan Africa have struggled to regain their growth momentum after Covid-19. The region is not rising, nor collapsing, but it is decelerating, says Dr Albert Zeufack, the World Bank’s chief economist for Africa. In particular the region’s three largest economies — Nigeria, South Africa and Angola — are experiencing sluggish growth momentum. Beyond the short-term shocks inflicted by the pandemic and Russia’s invasion of Ukraine, reviving Africa’s fortunes requires deeper structural changes that will transform subsistence agriculture, support the creation of smart cities and accelerate maths and science education. These objectives seem so Herculean that they often lead to paralysis. However, recognising that trade is Africa’s heartbeat and that stimulating trade would drive economic growth, it’s possible to ask a smaller, more targeted question: what can be done to stimulate trade? One answer, from Standard Bank, is to provide business owners, investors and policymakers with detailed information on trade happening across the region. The result is the inaugural publication of Standard Bank’s Africa Trade Barometer, which will be released biannually.
“Trade is deeply rooted in Africa’s DNA and integral to its history and future development,” says Philip Myburgh, head of Trade and Africa-China at Standard Bank.
“Insight is key to leveraging trade to build resilience,” he says. “In a world of disrupted local and global supply chains — and on a continent with significant development and infrastructural challenges — businesses face an array of both new and perennial risks. Understanding and resolving pain points in this landscape requires insight.”
AfCFTA: Why regional support is crucial for effective implementation (The New Times)
In order to support the implementation processes of the African Continental Free Trade Area agreement, Regional Economic Communities (RECs) need to make informed choices about how to reap the benefits presented by the agreement, while at the same time managing the challenges that may be encountered in the course of the implementation. Wamkele Mene, Secretary-General of the AfCFTA Secretariat, stressed this Tuesday, June 7, on the occasion of the second coordination meeting of the CEOs of RECs, on the implementation of the AfCFTA held at the EAC Headquarters, in Arusha, Tanzania. The meeting sought to take stock of the progress made since the last meeting in Accra in 2021. Mene said the implementation of the AfCFTA will likely influence future trade policies of the RECs. “In this regard, effective collaboration between the RECs and the AfCFTA Secretariat is necessary to ensure that the AfCFTA outcomes are consistent with regional advancements in trade integration made thus far and the projections for the future,” Mene said. “Therefore, the coordination meetings offer us an opportunity to listen to one another, to better understand our areas of difference, and to work together to build consensus around common positions critical to our success at creating an African Economic Community.”
Afreximbank Backs Titan Trust Bank with a US$300 Million Intra-African Investment Finance Facility (Afreximbank)
African Export Import Bank (Afreximbank) has announced the disbursement of a US$300 million Intra-African Investment Financing Facility to Titan Trust Bank (TTB) to support its acquisition of a majority stake in Union Bank Plc, Nigeria (UBN). The deal will enhance the competitive dynamics of the Nigerian banking sector, while maintaining confidence in the country’s financial services and broader financial stability. The recently disbursed financing will complement the funds required for the proposed acquisition. Afreximbank’s financial support enables TTB to secure the acquisition of a well-capitalised bank with an extensive network, enabling the entity to better serve vital economic activities of the public sector, companies, and small and medium-sized enterprises.
Afreximbank will continue to support the new merged entity in trade finance to promote intra- and extra-African trade through its broad range of programmes and initiatives, including the Afreximbank Trade Facilitation Programmes (AfTRAF) and AfPAY, the Bank’s international payment services. The development impact of the acquisition is immense as TTB will leverage the merged entity to provide financing of about US$3 billion over the medium term of which over US$600 million will directly support intra-regional trade finance.
AfcFTA: 28 banks join $500m pan-African settlement platform (Daily Trust)
One year after the take-off of the African Continental Free Trade Agreement (AfCFTA), no fewer than 28 banks in Africa joined the Pan-African Payment and Settlement System (PAPSS), which took off with a $500m facility with an additional 24 banks on the waiting list. PAPSS is a creation of the African Export-Import Bank (Afreximbank) to facilitate intra-African trades through the settlement of transactions in local currencies in the light of the AfCFTA take-off. Daily Trust reports that there are over 40 different currencies in the African continent and over time many traders within the continent would be demanding for payment in foreign currencies, especially dollars.
The pilot scheme of the payment system took off with $500m in West Africa while 28 banks have so far joined the platform even as 24 others are on the verge of signing into the platform.
Ogbalu disclosed that the target is to bring the over 500 banks in Africa on board while there are plans by the Afreximbank to increase the contribution to $3bn as soon as the pilot scheme in West Africa completes.
AFCFTA-Anchored Pharma Initiative Holds Virtual Induction of National Pharma Consultants (UNECA)
The United Nations Economic Commission for Africa (ECA)’s led AfCFTA-anchored Pharmaceutical Initiative held a virtual induction meeting for the six (6) recently appointed National Pharmaceutical Consultants from 6 (six) of the 10 pilot countries (Djibouti, Ethiopia, Kenya, Rwanda, Seychelles & Sudan), spread out over a 5-day period. The induction focused on the three key pillars, namely, Pharmaceutical Pooled Procurement, Localized Pharmaceutical Production, Regulatory Harmonization as well as Partnership & Resource Mobilization and Communications, commencing with a general introduction to the project, a discussion on administrative procedures, as well as what is expected from the consultants.
The Assembly of Heads of State and Government of the African Union held its 35th Ordinary Session on the 5th and 6th of February 2022 in Addis Ababa, Ethiopia. Discussions were held on several issues to meet the Agenda 2063 Aspirations for the “Africa We Want”:
The Assembly endorsed 2022 as the African Union Year of Nutrition under the theme “Strengthening Resilience in Nutrition and Food Security on The African Continent: Strengthening Agro-Food Systems, Health and Social Protection Systems for the Acceleration of Human, Social and Economic Capital Development”.
The Assembly adopted the proposed reforms of the organizational structures of the AU Organs, Representational, Technical and Specialized Offices including the Secretariat of the African Continental Free Trade Area (AfCFTA), the Economic, Social & Cultural Council (ECOSOCC), African Peer Review Mechanism (APRM) and the African Space Agency (AfSA)
Urged for signing and ratification of the legal instruments establishing the African Monetary Fund and African Investment Bank; and, in the case of the African Central Bank, advocate for rapid attainment of macroeconomic convergence to lead Africa towards Pan-African economic and monetary union.
The Assembly noted the progress achieved since the start of trading under the AfCFTA on 1 January 2021, and directed the AfCFTA Secretariat to implement the AfCFTA Private Sector Engagement Plan. The Assembly also held deliberations on other key issues: Migration; Adoption of Legal instruments; The 4th Mid-Year Coordination Meeting; The Summit on Industrialization and Economic Diversification; AU Humanitarian Summit and Pledging Conference; and Extraordinary Summit on Terrorism; and Key Appointments.
The future of African oil and gas: Positioning for the energy transition (McKinsey)
Africa’s oil and gas industry is entering a new era. As the world looks to accelerate its transition away from fossil fuels, the pressures on the continent’s oil and gas producing nations are mounting. Our analysis has found that most are highly exposed to the global energy transition, as their economies depend on oil and gas revenues, while their reserves both cost more to produce and are, on average, more carbon-intensive than oil and gas from other regions. At the same time, energy demand on the continent threatens to outstrip supply. Over the next two decades, rapid population growth and industrialization are expected to drive strong energy demand growth across the continent—including for fossil fuels. McKinsey modeling estimates that African energy demand in 2040 could be around 30 percent higher than it is today, compared with a 10 percent increase in global energy demand
While these dynamics bring challenges that will need to be negotiated, they also create a clear opening for the continent to take stock and reconsider its energy approach. If oil and gas producing countries in Africa consider steps to create enabling environments, improve access to available capital pools, and attract the right skills and capabilities, they could both meet the energy needs of their developing populations and position themselves strongly in a new energy landscape.
Africa seeks far-reaching climate policy and finance (African Business)
Many regions of Africa felt the health impacts of the Covid pandemic less strongly than other parts of the world, but the economic and social effects have still been keenly felt – and none more so than in efforts to tackle climate change. Construction of projects vital to the greening of the power system dropped behind schedule, while companies charged with supplying solar panels and clean cooking equipment struggled to keep going in the face of disrupted supply chains, movement restrictions and a fall in financial support from the international donor community. At the same time, Africans on low incomes seeking to buy clean energy products such as household solar panels deferred their purchases in the face of an uncertain future. But there are signs of a revival in the clean energy sector as Covid restrictions ease and business and daily life return to something approximating normal. But it remains to be seen whether the mechanism likely to bring the greatest improvement in climate outcomes on the continent – the UN climate change process – can be cranked up to full speed.
African leaders acknowledge that agreement over reducing the use of coal as a feedstock in power stations – responsible for about 40% of annual global CO2 emissions – is also a positive for the climate-vulnerable counties on the continent. But there was disappointment that China and India had weakened the wording of the commitment to ‘phasing down’ coal use, rather than pledging to phase it out in the near term. However, South Africa, the continent’s largest coal producer, did secure investments and loans of $8.5bn from international partners to transition from coal to green energy – said to be the largest single tranche of climate finance made to date.
At the same time as pushing coal usage down, South Africa also intends to invest in the growing green hydrogen economy, seeking to become a global hub by harnessing its copious solar and wind resources to produce hydrogen using electrolysis, a power intensive but clean method of production compared to commonly used methods using fossil fuels with carbon emissions as a by-product. South Africa has an added incentive to develop green hydrogen because it is a major source of platinum, which is used as a catalyst in the electrolysis process.
But overall, international support for climate change measures in Africa has fallen short of expectations. Developed countries still haven’t met a target set in 2009 to invest $100bn a year to help meet developing countries’ climate adaptation and mitigation needs – and many believe that even that amount is not enough.
Why E. Africa had a swift recovery from Covid impact (The Citizen)
The East African economies registered increased growth last year despite the devastating impact of Covid-19 in 2020.The growth averaged 5.9 percent in 2021 compared to an average of 2.3 percent in 2020 when the pandemic hit the region. This is contained in the bloc’s ‘Economic Performance and Outlook’ released ahead of last week’s tabling of the 2022/23 budget estimates. The speedy recovery is largely attributed to public investments and strong performance in the productive sectors. The growth (in 2021) was also largely supported by increased removal of Covid-19 related restrictions, mainly in the travel sector. Compared to 2021, projections are that the economic growth in the East African Community (EAC) bloc will decrease to 5.3 percent this year. The EAC budget estimates for 2022/23 fiscal year were tabled before the East African Legislative Assembly (Eala) on Thursday last week. The regional organisation intends to spend a total of $91.5 million, out of which $37.4 million will be raised by the development partners.
Turn EAC into a single tourism destination, Uganda lawmakers (Dailynews)
A group of Ugandan MPs visiting the country have urged East African Community (EAC) partner states to collectively promote and market the Community as a single tourist destination. Led by Richard Muhumuza Gafabusa, an MP for Bwamba County, the lawmakers said it was important for the partner states to harmonize their national laws on tourism and related sectors, a move he said will attract more tourists to the region. “It is very important to market EAC as a single tourist destination as the sector boasts of huge potential in natural resources,” observed the lawmaker. Despite the difference in resources, flora and fauna, the legislator insisted it was still possible to have EAC as a single tourism destination. “There is a need of fast-tracking the ratification of the Protocol on Tourism and Wildlife Management and for the EAC to provide additional resources for the Tourism and Wildlife Management Unit,” explained Mr Gabafusa, from the Uganda Tourism Board (UTB) pavilion here recently.
Iran eyes implementing barter trade with Africa (Tehran Times)
Iranian Trade Promotion Organization (TPO) deputy head for export markets development has said his organization is looking for ways to implement barter trade mechanisms with the country’s African trade partners, the TPO portal reported. “Given the implementation of barter trade mechanism by the Trade Promotion Organization with several countries, we hope to benefit from this platform with African trade partners as well,” Ahmad-Reza Alaei Tabatabaei said. The official noted that the TPO has prepared a list of 1,100 commodity items that can be included in the barter trade with African countries. Referring to the TPO plans to expand trade with Africa, Tabatabaei announced the improvement of export infrastructure and strengthening of the presence of Iranian commercial attachés in the said continent.
According to the official, the most important challenge for Iranian businessmen regarding Africa is the lack of knowledge and familiarity with its markets. He further noted that another important challenge in the way of expanding trade with African countries is transportation and logistics, especially the need for developing maritime transportation infrastructure.
Global economy news
It’s time to rebuild the WTO and make international trade a lever for sustainable development (Equal Times)
The World Trade Organization (WTO) is holding its twelfth ministerial conference from 12 to 15 June in Geneva, Switzerland, against a background of conflictual international relations. Mired in its own existential crisis, the WTO has become incapable of fulfilling the role entrusted to it when it was created in 1995 – negotiating world trade rules and resolving trade disputes. This crisis is an opportunity to rebuild a WTO that supports ecological transition, decent work and the fight against pandemics.
As a result of the WTO’s paralysis, trade negotiations are taking place outside its framework through dozens of bilateral and regional free trade agreements, which have continued to steadily rise in number. The new WTO Director-General, Ngozi Okonjo-Iweala, aims to restore the WTO’s status.
The WTO’s existential crisis is an opportunity to reshape it to make world trade more consistent with sustainable development objectives. Firstly, negotiations will not break the deadlock unless they take into account the interests of developing countries. While the latter want to strengthen the “special and differential treatment” they enjoy, the developed countries want to reduce its scope. The WTO grants not only specific treatment to the 46 least developed countries, but also preferential treatment to all developing countries, which can generally be given more time than developed countries to implement liberalisation agreements.
Secondly, a solution must be found to resolve the trade disputes between Western countries and China.
Thirdly, the paralysis of the WTO Appellate Body is an opportunity to reform it and to strengthen the possibility of using anti-dumping measures.
Extending safeguarding measures to social and environmental issues would give states sufficient scope for action to curb dumping and make international trade a lever for sustainable development.
Finally, the majority of trade now takes place under preferential agreements, as a result of the proliferation of bilateral and regional free trade agreements. These are allowed under Article XXIV of the General Agreement on Tariffs and Trade, but they lead to a fragmentation of the international trading system. The fundamental problem with these bilateral free trade agreements is that they guarantee binding rights for transnational corporations and investors, but not their obligations with regard to social and environmental standards.
Manufacturing sector recovery continues but future is unpredictable (UNIDO)
The most recent data on global manufacturing production, covering the fourth quarter of 2021, confirm the recovery of the world economy and its manufacturing sector, albeit with seasonal, regional and sectoral differences. High technology industries had a better production performance and, therefore, recovered faster. It is clear from the data that the economic situation keeps improving as many countries gradually phase out economic and social restrictions, although new trends in the pandemic may still jeopardize the fragile recovery, as shown by recent events in South-East Asia.
The latest UNIDO World Manufacturing Report, published by the United Nations Industrial Development Organization (UNIDO), includes the most recent official data on global manufacturing production. The Quarterly Report points to a recovery with a year-over-year growth of 3.3 per cent in the fourth quarter of 2021, but also shows a different pace of recovery across regions and sectors.
The UNIDO report also reveals varying trends across industrial sectors. Currently, medium-high- and high- (4.7 per cent), as well as low-technology industries (3.8 per cent), achieved a better production performance than industries using medium-low technology (1.4 per cent), such as manufacturing of mineral products or basic metals. Many of the higher-technology industries have already reached and exceeded their pre-pandemic production levels. However, one exception to this is the manufacturing of motor vehicles. The sector has not been able to return to production levels prior to the pandemic and even faced a year-over-year output reduction of 9.1 per cent this quarter due to supply chain difficulties.
WTO report highlights role of trade in meeting SDGs and assisting economic recovery (WTO)
In its report to the 2022 HLPF, the WTO emphasizes the contribution of trade to improving people’s livelihoods and achieving the five SDGs under review.
On SDGs 14 and 15, the report highlights that WTO rules provide space for accommodating environmental concerns, such as measures aimed at protecting life below water and on land, in trade policy considerations. At the WTO, negotiations are under way, the report underlines, on curbing harmful fisheries subsidies while groups of members are discussing three new environmental initiatives: (i) Trade and Environmental Sustainability Structured Discussions (TESSD), (ii) Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP) and (iii) Fossil Fuel Subsidy Reform (FFSR).
Leaders and decision-makers in the rapidly evolving digital sphere have affirmed their commitment to harness new and emerging technological solutions for the good of all of humanity. This year’s World Summit on the Information Society (WSIS) Forum, building on a wide-ranging international policy discussion process started in 2003, reasserted the vital link between digital technologies and global action to ensure sustainable development. Information and communication technology (ICT) experts and implementers fostered ground-breaking partnerships, showcased the latest innovations, exchanged best practices, and announced new tools and initiatives, particularly in the Forum’s intense final week in Geneva, Switzerland.
“Digital technologies offer solutions to all these challenges,” said Houlin Zhao, Secretary-General of the International Telecommunication Union (ITU), one of the Forum’s main organizers. “In these past 11 weeks, the WSIS Forum has brought to life the many benefits of ICTs in areas as critical and diverse as education, health, financial inclusion, climate change, accessibility, cybersecurity, smart cities, and many more.”
War in Ukraine threatens to unleash ‘unprecedented wave’ of global hunger and destitution (UNCTAD)
More than three months since the start of the war in Ukraine, people globally are facing a cost-of-living crisis not seen in more than a generation, with escalating price shocks in the global food, energy and fertilizer markets – in a world already grappling with the COVID-19 pandemic and climate change. An estimated 1.6 billion people in 94 countries are exposed to at least one dimension of the crisis, and about 1.2 billion of them live in “perfect-storm” countries which are severely vulnerable to all three dimensions – food, energy and finance – of the cost-of-living crisis, according to the latest findings of the United Nations Secretary-General’s Global Crisis Response Group (GCRG) on food, energy and finance systems.
New UN Food Outlook report: World’s most vulnerable are paying more for less food (FAO)
The global food import bill is on course to hit a new record of US$1.8 trillion this year, but higher prices and transport costs rather than volumes account for the bulk of the expected increase, according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO).”Worryingly, many vulnerable countries are paying more but receiving less food,” FAO says in its latest Food Outlook. The global food import bill is projected to rise by $51 billion from 2021, of which $49 billion reflects higher prices. Least Developed Countries (LDCs) are anticipated to undergo a 5-percent contraction in their food import bill this year, while sub-Saharan Africa and the group of Net Food-Importing Developing Countries are both expected to register an increase in total costs, despite a reduction in imported volumes. “These are alarming signs from a food security perspective, indicating that importers will find it difficult to finance rising international costs, potentially heralding an end of their resilience to higher prices,” the report notes.
“In view of the soaring input prices, concerns about the weather, and increased market uncertainties stemming from the war in Ukraine, FAO’s latest forecasts point to a likely tightening of food markets and food import bills reaching a new record high,” said FAO economist Upali Galketi Aratchilage, lead editor of the Food Outlook.
FAO has proposed a Food Import Financing Facility to provide balance-of-payment support to the low-income countries most reliant on food imports as a strategy to safeguard their food security.
DG Okonjo-Iweala and negotiations chair join call to ‘stop the fish meltdown’ on Ocean Day (WTO)
With only days before the MC12, which will be held on 12-15 June in Geneva, DG Okonjo-Iweala and Ambassador Wills welcomed joint efforts of over 180 environmental organizations to draw attention to ongoing WTO negotiations for new global rules on fishing subsidies that will combat the depletion of fish stocks and secure the livelihoods of people who depend on them.
Under the mandate from the previous Ministerial Conference and the UN Sustainable Development Goal Target 14.6, negotiators have been given the task of securing agreement on disciplines to eliminate subsidies for illegal, unreported and unregulated fishing and to prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, with special and differential treatment being an integral part of the negotiations.
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Local news
Just transition holds opportunities, but also risks for South Africa’s liquid fuel value chain (Engineering News)
A just transition of the liquid fuels value chain to a low- and zero-carbon value chain presents opportunities for South Africa, but also holds risks in terms of timing and the impact of the transition on workers and employment. These were some of the impacts discussed by researchers and industry practitioners and experts during a virtual event hosted by economic research institution Trade and Industrial Policy Strategies (TIPS) on June 7.
Shipping industry disruption trends and the impact on insurance (COVER Magazine)
As factories and supply chains come back to life after years of pandemic-related lockdowns, it is causing transport bottlenecks, rising shipping costs, and shortages of commodities. South Africa also faces large-scale congestion and logistical challenges at its ports, due to decaying railway infrastructure, as well as damage from the floods in Kwa-Zulu Natal. What is the impact on insurance during such an unprecedented time? There is a perfect storm brewing in the shipping industry. Brought on by an extraordinary set of global and local circumstances, it is having the domino effect of driving global and local inflation to levels not seen for decades, with significant cost implications on the transportation of goods, as well as the goods themselves.
“The impact of this situation on South Africa could undermine post-COVID-19 economic recovery. Consumers and businesses may have to make difficult trade-offs when it comes to the transportation of goods, paying an inflated price for these items, and coping with shortages,” says Boyd.
Govt probes energy price impact (New Era)
Finance minister Iipumbu Shiimi said government has embarked on a study to fully comprehend the overall impact of elevated energy prices on food prices and supplies. The study aims to mitigate the impact of increasing energy prices and aims to determine any additional measures government has to take to reduce the burden on businesses and consumers. Shiimi made these remarks on Monday at the press briefing where government officials provided feedback on the just ended World Economic Forum in Davos, Switzerland. Consumers have been struggling with massive increases in food prices and more expensive bank loans, factors forcing them to tighten their belts even more. On top of this, the country has experienced massive fuel price increases.
In order to mitigate the local impact of rising international oil prices, the mines and energy ministry temporarily reduced fuel levies by 50%. In April 2022, Cabinet approved the ministry’s recommendation to temporarily reduce these levies from May to July 2022. Fuel levies and taxes make up 34% to 45% of the cost of Namibian fuel per litre.
Specific levies imposed on Namibian petrol and diesel prices include a customs and excise duty for the SACU Revenue Pool; National Energy Fund Fuel Levy (comprised of the fuel equalisation levy, Namcor levy and National Oil Storage Facility levy); road user charges, which go to Road Fund.
KQ eyes more cargo flight for Kisumu route (Business Daily)
Horticulture business in the Lake Region is set to get a boost as the national carrier, Kenya Airways plans to increase cargo flights at the Kisumu International Airport. Kenya Airways also plans to triple cargo flights to the Netherlands and United Kingdom. “We are likely to have more frequencies of shipment being lifted from Kisumu,” said Kenya Airways Cargo officer Joseph Omwanda.
Some of the fresh produce in the Lake Region include avocados, fish, chilies, mangoes, pineapple, peanuts, bananas and traditional green vegetables. The news come as the region plans to resume the export of chili from Kisumu. The shipment of the produce had taken a break due to low supply.
Uganda has reached middle income status, says Museveni (Monitor)
Uganda has reached the middle income status despite an onslaught of crises in the past three years, President Museveni said on Tuesday. According to official data, the nation’s economy stood at about $45.7billion by the exchange rate method or $131billion by the Purchasing Power Parity (PPP) system- one week to the FY2022/23 Budget Day. “This means that the GDP per capita is $1046. We have now passed that figure of middle income status ($1,030),” Mr Museveni observed as he delivered the annual State of the Nation Address in Kampala. Speaking in-person to mainly ruling NRM party legislators, Mr Museveni June 7 expressed confidence that Uganda would maintain its spot above the middle income status GDP per capita minimum of about $1,030.
Tanzania to spend $3b to service debts: Finance minister (The East African)
The Tanzanian government is planning to spend Tsh9.09 trillion ($3.9 billion) on debt servicing during the financial year 2022/23, Finance and Planning Minister Mwigulu Nchemba has said. The amount is part of the Tsh14.94 trillion ($6.4 billion) that he requested Parliament to endorse for his ministry’s budget for the next financial year that is set to kick off on July 1, he said on Tuesday. Dr Nchemba told Parliament that out of the Tsh14.94 trillion ($6.4 billion), about Tsh13.62 trillion ($5.8 billion) is meant for recurrent expenditures, with the rest being channelled into development projects
Ghana moves motion on accelerating Intra-African trade at ongoing 52nd CPA Regional Conference (GBC Ghana Online)
Ghana’s delegation at the 52nd CPA Africa Regional Conference has moved a motion on the role of African Parliaments in accelerating Intra-African trade. The motion which was moved by the Majority Leader, Osei Kyei-Mensah-Bonsu on behalf of the Rt. Hon. Speaker, Alban Sumana Bagbin, and the Parliament of Ghana as a whole are expected to fashion out ways to stimulate local and intra-African trade in a bid to reduce the shocks of the global crises being felt by African countries. Mr. Kyei-Mensah-Bonsu in moving the motion outlined the significance of the trade agreement which he said will turn around the negative to extremely low economic growth being witnessed on the African market as well as its unsustainable fiscal deficits and the constant increase in rising debt levels. “As a direct consequence of Covid- 19, African economies experienced negative to extremely low economic growth, unsustainable fiscal deficits, rising debt levels, huge populations being pushed below the poverty brackets, and balance of payment problems. As African economies were about to emerge from the shocks of Covid-19, entered the war in Ukraine which is affecting food, fuel, and steel products prices as well as access to international finance.”
Nigerian seaports to undergo upgrade, boost trade (The Guardian Nigeria)
Nigerian seaports have experienced decades of infrastructural decay and reduction in commercial shipping activities. At a recent media parley, the Managing Director of the Nigerian Ports Authority (NPA), Mr. Muhammad Bello-Koko, decried the long years of abandonment and highlights the authority’s efforts to make ports real catalysts of trade.
We have very old ports. One of the major problems of the Eastern ports is the decay in infrastructure. Tin Can Island port is practically collapsing. Therefore, we took a holistic review of those decaying infrastructures and decided to focus our budget on the rehabilitation of the quay walls and others.
We must rehabilitate Tin Can, Apapa and other ports. What we have done was to start talking to lending agencies, but we don’t intend to borrow from them. We are asking the terminal operators if they have operated in this place for 10 to 15 years, especially as some of them, their leases are about to expire, we need to know how much money are they going to put back into this.
Nigeria Air: NCAA Re-Echoes SAATM, AfCFTA Benefits (The Will)
The Director-General of the Nigerian Civil Aviation Authority (NCAA), Capt Musa Nuhu, has advised that, for Nigeria to benefit fully from the Single African Air Transport Market (SAATM) initiative, the country has to build strong airlines. Speaking at the presentation of Air Transport Licence (ATL) to interim management of Nigeria Air on Monday in Abuja, Capt Nuhu said that ATL was a prerequisite for the airline to acquire Air Operation Certificate (AOC) to start operating. According to him, the NCAA works and supports all operators currently existing and aspiring in the industry to get necessary documents after meeting all the requirements.
Informing that the regulator works with the operators, he emphasised that “As a regulator, we work with operators. That is a goal to promote the growth of the industry. It is important to have strong airlines in Nigeria in view of the Single African Air Transport Market.”
Inside Dongo Kundu’s plan to create regional industrial hub (Business Daily)
The Dongo Kundu Special Economic Zones Authority (SEZ) is set to start in July, kicking off a chain of events that are expected to make Mombasa a regional logistics and manufacturing hub. The centre will comprise an export-processing zone (EPZ), industrial parks, free trade zones, as well as other auxiliary services such as tourism, meeting, conferencing and exhibitions. It will also have zoned residential areas for workers. “Phase one consisting the industrial park - one of the projects whose detailed designs have been completed—will include, the port, the free trade zone, power supply, as well as water reservoir,” said Kiyonori Matsushima the Special Economic Zone Development Advisor at JiCA.”Already a port access road inside the zone and SEZA administration block are under construction. The latter is set for completion within the year.”
Tunisia Plans Gradual Subsidy Cuts in 2023 as IMF Deal in Focus (Bloomberg)
Tunisia will begin gradually reducing food and energy subsidies in 2023, its trade minister said, as the cash-strapped North African nation readies for fresh talks with the International Monetary Fund. The move will reduce subsidy spending that has risen to 4.2 billion dinars ($1.4 billion) in 2022 from 3.2 billion dinars the year before, minister Fadila Rabhi said Tuesday at a press conference. Cash transfers will be disbursed to people on lower incomes, she said.
African trade news
Instant payment systems are key for cross-Africa commerce (The East African)
The high cost of sending and receiving payments from one region to another is proving to be one of the biggest challenges to trading within Africa even as the continent eyes increased commerce and investment from a free trade area. The Africa Continental Free Trade Area (AfCFTA) is projected to increase the volume of exports in Africa by 29 percent and intra-Africa trade by 81 percent, lift over 60 million Africans from extreme poverty and raise the continent’s real income by seven percent to $450 billion by 2035.In East Africa, according to the United Nations Economic Commission for Africa (UNECA), AfCFTA will create at least eight million new jobs and yield an estimated $35 billion in welfare gains. But the high cost of cross-border transactions may haul the prospects of the continental trade agreement, added to the jitters of partial implementation of the terms of the same and persisting non-tariff barriers.
Private sector firms yet to leverage AfCFTA (BusinessGhana)
Majority of private sector firms in the country are yet to develop a corporate strategy to gain competitive advantage of the Africa Continental Free Trade Area (AfCFTA), nearly 18 months after trading started. A Senior Partner of AB & David Africa, a law firm, David Ofosu-Dorte, described the situation as worrying and urged the firms not to hesitate to come up with the strategy to enable them to benefit from the initiative. Mr Ofosu-Dorte, who was addressing the Ghana Academy of Arts and Sciences (GAAS) Forum 2022 in Accra last Monday, said the failure to develop a corporate strategy by businesses was not the lack of knowledge of the AfCFTA, but the lack of ability to take advantage of the initiative and see Africa as a big market for their products.
Rwanda to host Poultry Africa again, event takes place in October 2022 (Feed Navigator)
The Africa focused trade show, showcasing feed to food innovation for the poultry industry in Sub-Saharan Africa, started in 2017 as a biennial B2B international trade show, and this year’s event, in Kigali, Rwanda, will be the third edition. The show will be located in the Kigali Convention Centre (KCC), one of the largest venues in the region.
Africa’s poultry industry is set for strong growth over the next decade, according to forecasts from Rabobank. It says the industry could grow at a compound annual rate of around 4.7% from a current valuation of US$25bn, with markets such as South Africa, Nigeria, Algeria, Ethiopia, and Morocco leading the charge.
Global economy news
OECD Economic Outlook reveals heavy global price of Russia’s war against Ukraine (OECD)
Russia’s invasion of Ukraine immediately slowed the recovery from the COVID-19 pandemic and set the global economy on a course of lower growth and rising inflation. The OECD’s latest Economic Outlook projects global growth to decelerate sharply to around 3% this year and 2.8% in 2023, well below the recovery projected in the previous Economic Outlook last December.
The economic and social impact of the war is strongest in Europe, with many of the countries hardest hit in Europe, given exposure through energy imports and refugee flows.
“Countries worldwide are being hit by higher commodity prices, which add to inflationary pressures and curb real incomes and spending, dampening the recovery,” OECD Secretary-General Mathias Cormann said during the presentation of the Outlook. “This slowdown is directly attributable to Russia’s unprovoked and unjustifiable war of aggression, which is causing lower real incomes, lower growth and fewer job opportunities worldwide.”
DG Okonjo-Iweala urges members to seize opportunity at MC12 to deliver meaningful outcomes (WTO)
“Many gaps remain but we are making progress. Let us keep on the pressure, let us keep up the work at this critical juncture,” DG Okonjo-Iweala said in her role as Chair of the Trade Negotiations Committee (TNC). “The next hours will be critical. We need to use each hour effectively to close as many gaps as possible. The success of this whole endeavour is in our hands. Let us deliver. The people outside are waiting for us and, believe it or not, I really think we will do it.” Following the reports from chairs and facilitators of the respective negotiating bodies working on potential MC12 deliverables, the DG summarized the state of play of what she characterized as the “four pillars plus”: fisheries subsidies, agriculture, the WTO response to the pandemic (including the waiver to the Agreement on Trade-related Aspects of Intellectual Property Rights) and WTO reform, plus development and least-developed country (LDC) issues. Members have agreed on the need to close the remaining gaps before MC12 in these areas, she said, and ministers should be able to work in Geneva “with a manageable agenda and ensure productive ministerial engagement.”
Chair introduces streamlined agriculture negotiation texts for MC12 (WTO)
“We are on the verge of something positive,” the Director-General told the meeting. She once again urged members to show restraint in their comments, with a view to improving prospects for reaching consensus on the texts before the 12th Ministerial Conference (MC12), which begins on 12 June. The chair said the four-page document further streamlined the three draft negotiating texts, which comprise a draft ministerial decision on agricultural trade, a draft ministerial declaration on trade and food security, and a draft ministerial declaration on exempting from export restrictions food purchased by the UN’s World Food Programme (WFP) for humanitarian purposes.
She said the revised draft decision on agricultural trade sought to strike a balance across negotiating topics, without prejudicing any future proposals that members might want to table for discussion.
Plastic pollution: Can aid for trade help least developed countries tackle this crisis? (Trade for Development News)
As governments prepare for negotiations on a global treaty on plastic pollution, aid for trade can support LDC efforts to tackle this pollution crisis across the life cycle of plastics. Several pathways for cooperation can be pursued at the World Trade Organization. Plastic pollution is a major threat to the environment, human health, and sustainable development. In March 2022, governments adopted a landmark resolution at the United Nations Environment Assembly (UNEA) to launch negotiations on a legally binding international instrument on plastic pollution. The ambition is to conclude a treaty by the end of 2024. Importantly, the resolution addresses the full life cycle of plastics. In 2019, the value of international trade across the life cycle of plastics—from feedstocks and primary forms of plastics through to manufactured products and plastic waste—reached over US$1 trillion. This underlines the centrality of trade to the global plastics economy.
WTO updates joint indicative list of critical COVID-19 vaccine inputs (WTO)
The revised version of the list incorporates feedback received from industry and reflects 13 new critical inputs that were identified. These are mostly products relevant for the process of vaccine manufacturing such as consumables and specific equipment. In addition, the revision updates the indicative tariff codes to take into account the introduction of the changes resulting from the Harmonized System (HS) 2022 version.
Rich countries falling short on half their promised $40bn climate adaptation finance, research says (Sky News)
Rich countries are delivering little more than half the $40bn a year they promised to poor countries to help them adapt to impacts of climate change, according to new analysis.
Research by climate think tank the International Institute for Environment and Development (IIED) suggests developed countries and multilateral organisations are on track to channel $21.8bn in climate adaptation finance a year by 2025, more than $18bn short of the sum promised at last year’s COP26 climate talks.
“Climate change is now a reality,” said Madeleine Diouf Sarr, climate lead in Senegal’s environment ministry and chair of the Least Developed Countries (LDC) group of 46 vulnerable nations at COP talks. She told Sky News the latest report from United Nations scientists the IPCC showed the impacts are “worse in poorest countries like LDC countries, small island countries”, and highlighted the resources gap “between what is needed and what is actually available”.
It comes as negotiators meet in Bonn to examine progress made since COP26, and just before the G7 leaders summit where the UK - which retains the COP presidency until COP27 in November - will hope to put pressure on other rich countries.
Europe turns to Africa as energy crisis worsens (Voice Online)
EUROPEAN NATIONS are increasingly turning to Africa for energy resources as they attempt to wean their reliance off of Russian gas and oil amid the war with Ukraine. Algeria, Congo and Nigeria are already just some of the countries to have reportedly signed new deals across the continent. Earlier this month, the President of Senegal, Macky Sall, announced to the German Chancellor Olaf Scholz that the west-African country was “ready to work” on supplying liquid natural gas (LNG) throughout European nations. Along the border of Mauritius, it is understood that Senegal is in possession of the largest deposits of natural gas. It comes after African leaders and European oil giants met at the African Energy Summit in London last month to strike new oil trade deals which is expected to leave many African countries in debt.
Wheat exports ban to cut access for international speculators, says S Jaishankar (Moneycontrol)
India imposed a ban on wheat exports to protect the domestic market and to cut access for speculators, Indian External Affairs Minister, Subrahmanyam Jaishankar, told the Globsec 2022 Bratislava Forum on June 3.Lower output coupled with strong domestic demand had pushed the Indian government to impose a wheat ban on exports on May 14. However, trading firms that had already secured letters of credit (LCs) to export grain before the ban were allowed to proceed with those sales. The government had also made abundantly clear that it would continue to cater for the genuine need of neighbouring countries and food-deficit nations through government-to-government deals and fulfil supply commitments already made. “What we saw was that the low-income buyers were being squeezed out, the wheat was growing, but was actually being stopped from being traded, in a way our goodwill was being used for speculation. So, we had to do something to stop that, because it was also impacting us at home - prices were going up,” explained Jaishankar.
The role of industrial zones in SME growth in emerging markets (Oxford Business Group)
As governments across Africa look to bolster the economic potential of small and medium-sized enterprises (SMEs), industrial parks and special economic zones (SEZs) are emerging as key enablers of their development. SMEs are the backbone of the global economy, particularly in emerging markets, where they make up 90% of all businesses and create 50% of all jobs. The impact is higher in Africa, where SMEs employ around 80% of the continent’s workforce. But while SMEs are a major economic driver, there is also significant room for further growth.
Given their economic potential, supporting SMEs is seen as a key path to expanding the middle class and achieving more inclusive economic growth in emerging markets. Although SMEs have long been central to national growth and development plans, this focus has intensified as a result of the pandemic.
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South Africa’s economy is now back to pre-pandemic levels (BusinessTech)
South African gross domestic product (GDP) expanded by 1.9% in the first quarter of 2022, representing a second consecutive quarter of upward growth. The size of the economy is now at pre-pandemic levels, with real GDP slightly higher than what it was before the Covid-19 pandemic, Statistics South Africa said on Tuesday (7 June). However, the release covers the first quarter of the year, which means that the economic impact of the devastating floods in KwaZulu-Natal, which occurred during the second quarter in April, will only reflect in the GDP results due for release in September. The release also largely ignores South Africa’s recent intense round of load shedding – which primarily occurred in March and April.
On the production side of the economy, eight of the ten industries recorded positive growth in the first quarter, with manufacturing the key performer. The sharp increase in manufacturing output was mainly driven by a rise in the production of petroleum and chemicals, food and beverages, and metals and machinery, StatsSA said. “Finance, real estate and business services, as well as trade, also made sizable positive contributions to GDP growth. Trade activity was buoyant in the first quarter, with positive results from wholesale, retail, motor trade, and catering and accommodation. “After a strong fourth quarter, agriculture growth was more subdued in the first quarter, edging higher by 0,8%. The rise in the first quarter was mainly underpinned by increased horticulture production.” On the downside, both mining and construction contracted in the first quarter.
IMF worried about impact of South Africa’s growth outlook on poverty (Engineering News)
The International Monetary Fund (IMF) said on Tuesday at the end of a visit to South Africa that its staff were increasingly concerned about the country’s economic growth outlook and the implications on employment, poverty and inequality. Africa’s most industrialised economy has recovered from the Covid-19 pandemic faster than many analysts had predicted, with data on Tuesday showing first-quarter output reached pre-pandemic levels.
Kenya’s Growth Expected to Slow in 2022 Due to Ongoing Drought, Ukraine Crisis (World Bank)
Kenya’s real gross domestic product (GDP) is projected to grow by 5.5 percent in 2022 and 5.2 percent on average in 2023–24. This growth rate, while still strong, will be a moderation following a remarkable recovery in 2021 from the worst economic effects of the pandemic, when the country’s economy grew by 7.5 percent, much higher than the estimated average growth in Sub-Saharan Africa of 4 percent. According to the 25th edition of the World Bank Kenya Economic Update, Aiming High: Securing Education to Sustain the Recovery, the impact of the war in Ukraine is weighing on the global economic recovery from the pandemic. Domestically, a key risk to the outlook is a further worsening of the current drought, which is having a devastating effect on food security and livelihoods in affected parts of the country and is necessitating increased social spending on food assistance. For example, using the Integrated Food Security Phase Classification, it is estimated that 3.1 million Kenyans (out of 13.6 million) living in counties with arid and semi-arid land are food insecure. The baseline economic projections assume that below average rains will hamper agricultural performance and accounts for the downside effects of the ongoing war in Ukraine through increased global commodity prices.
Coffee trade risks disruption in July as new rules start (Business Daily)
Kenya’s multi-billion-shilling coffee trade is at risk of disruption starting July as the Capital Markets Authority (CMA) and Nairobi Coffee Exchange remain mum over the establishment of the Direct Settlement System (DSS) as the old regulations come to an end this month. The CMA had extended the use of the old coffee regulations to June 30 in the absence of DSS in place. The platform is meant to facilitate payment between farmers and coffee brokers. The new law — the Capital Markets (Coffee Exchange) Regulations 2020 — was to be effected in July 2020 but since then it has been postponed twice amid fights between the CMA and the Ministry of Agriculture.
Ghana to lose out on AfCFTA gains due to high cost of doing business – AGI (BusinessGhana)
As the cost of doing business continues to rise in the country, the Association of Ghana Industries (AGI), is cautioning that Ghana could miss out on the expected benefits from the much-touted African Continental Free Trade Area (AfCFTA).
Data from the Ghana Statistical Service shows that the year-on-year producer price inflation which measures the average change in the prices of goods and services received by domestic producers for their production activities increased to 31.2%.
The 31.2 % year-on-year producer price inflation for all industries indicates that between April 2021 and April 2022, prices received by domestic producers for the production of their goods and services increased by 31.2 %.
In April 2022, two out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 38.6 percent. Manufacture of coke, refined petroleum products and nuclear fuel recorded the highest inflation rate of 76.1 percent, while the Publishing, printing and reproduction of recorded media recorded the least inflation rate of 2.6 percent
AFREXIM, NACC, experts seek solutions to challenges impeding AfCFTA (Businessday)
African Export-Import Bank (AFREXIM) and other trade experts have charged the Nigerian government to deploy mechanisms aimed at maximising the opportunities of Africa Continental Free Trade Area (AfCFTA), one year post-implementation. The experts gave the advice on Tuesday during a Breakfast Meeting organised by the Nigerian-American Chamber of Commerce (NACC) in Lagos. The meeting had the theme: “One Year of AfCFTA: Opportunities, Challenges and the Nigerian-American Partnership”. They said the call became pertinent following observations that the country was not harnessing the benefits of the AfCFTA due to structural and trade-related issues such as inadequate payment system integration, logistics and trust. Mr Mike Ogbalu, Chief Executive Officer, Pan-African Payment and Settlement System (PAPSS), said there was a need for Nigeria to utilise the efficient payment system to facilitate Intra-African trade.
He said the platform if utilised would save African traders about 5 billion dollars annually in currency convertibility. “Intra-African trade is about 15 to 18 per cent which is by far the lowest intra-continental trade globally. “High cost, high dependence on foreign exchange and inefficient payment systems contribute to these poor statistics. “Cross-border transactions are very expensive leading to an estimated five billion dollars in payment charges annually. “Most cross-border payment transactions originating from African banks are cleared outside the continent with less than 20 per cent of the total payment flows being cleared in Africa.
Egypt’s exports to EU, int’l blocs rise by 77% in 2021 (Egypt Today)
Egypt’s exports to the international blocs of which the African country is not a member rose by 76.9 percent in 2021 to reach $20 billion up from $11.3 billion in 2020, the Central Agency for Public Mobilization and Statistics (CAPMAS) has reported.
Egypt’s exports to the European Union (EU) ranked first among these blocs as they rose by 85.9 percent from $7.8 billion in 2020 to $14.6 billion in 2021, the country’s statistical agency said. This was followed by the Egyptian exports to North American Free Trade Agreement (NAFTA) bloc, which amounted to $3.4 billion in 2021 against $2.4 billion in 2020, up by 44.4 percent. The European Free Trade Association (EFTA) came last regarding the Egyptian exports, which declined by 65.9 percent to reach $51.6 million down from $151.1 million in2020.
On the other side, Egypt’s imports from these blocs rose by 14.2 percent to amount to $38.1 billion in 2021 compared to $33.3 billion in the previous year.
Egyptian Ministries Sign Export Deals to African & Arab Nations (Cairoscene)
Four landmark agreements were signed with various Egyptian entities at the 47th Annual Meeting of the Islamic Development Bank Group in Sharm El Sheikh, including the Ministry of International Cooperation, the Ministry of Planning and Economic Development, and the Ministry of Trade and Industry. These deals include the establishment of the Export Academy under the Aid for Trade Initiatives for Arab States plan, which is hoped to increase exports to USD 100 billion annually. The other agreements involved signatures from other members of the Arab Africa Trade Bridges (AATB) Program, which will help enhance Egyptian exports across Africa by organising Egyptian trade missions, bringing Egyptian companies into trade fairs and economic forums in African nations, and involve Egyptian entities in workshops and meetings amongst exporters and importers all throughout the continent.
Djibouti strategically placed to become global ICT center, says Adesina (AfDB)
African Development Bank Group President Dr. Akinwumi Adesina met with President Ismail Omar Guelleh of Djibouti and senior government officials at the weekend to discuss the country’s economic progress and opportunities. Adesina was on a two-day official visit to the Horn of Africa nation. For more than two hours, he and President Guelleh discussed ways of transforming Djibouti’s economy as the country strives to achieve its vision of becoming an information, communication and technology (ICT) hub in the region.
Adesina said: “Djibouti needs to look beyond the port, diversify its economy and scale up development. Flying over the country, one sees huge tracts of dry land. But it is only when one meets and talks to the people in this country that one realizes, there is no drought in terms of ideas, creativity, passion and determination.”
SMEs Minister calls on businesses to use the WTO platform (Business in Cameroon)
The Cameroonian Minister of SMES, Achille Basilekin III, issued a note on May 30 to inform local economic operators of the existence of the TRADE4MSME platform. The latter was launched by the World Trade Organization (WTO) to accompany businesses and help them boost exports. “This important tool for promoting SMEs provides a set of information and useful data on export opportunities to growth markets, and informs on the regulatory and operational procedures relating to import and export, to enable micro, small, and medium enterprises to position themselves effectively in the international market,” the official said. This platform is presented as an aid to decision-making for SMEs in Cameroon.
Sierra Leone’s economy was severely impacted by COVID-19 in 2020 and the first half of 2021. Fiscal slippages, the war in Ukraine, and concerns about global growth pose renewed challenges. The surge in international fuel and food prices has set back a nascent recovery and projected growth in 2022 has been revised down to 3.6 percent, from 5.9 percent at the time of the 3rd/4th review in July 2021. The shock has added pressure in several areas, such as poverty and other key development indicators, inflation, exchange rate, foreign exchange reserves, as well as an already highly constrained fiscal position. Inflation has been revised up to 22.1 percent (end-of-period, 2022) from 12 percent, given higher import prices and exchange rate depreciation.
“The medium-term outlook remains challenging on account of the deteriorating terms of trade, more uncertain global prospects, and remaining COVID-19 risks. A global supply shock resulting from the war in Ukraine is negatively impacting global growth and accentuating inflation, with spillovers to Sierra Leone. Further increases in already high global fuel and food prices could deteriorate budget and external balances, as well as development outcomes.
African trade and integration news
Trade Barometer: Trade index (Standard Bank)
Launched in 2022, Standard Bank’s Africa Trade Barometer seeks to provide the analysis and insight to intelligently inform and grow Africa’s trade ecosystem.
The report focuses on Angola, Ghana, Kenya, Mozambique, Namibia, Nigeria, South Africa, Uganda, Tanzania and Zambia – and presents one of the most comprehensive views of actual trade, as experienced on-the-ground by real African businesses transacting within and between these 10 markets, as well as globally.
The Africa Trade Barometer serves as evidence of our ambition to become Africa’s leading trade bank, by providing the market insight to drive client growth across the continent.
Africa’s regional integration still lagging behind other regions (African Business)
Africa’s trade with the rest of the world far outweighs the level of trade between African countries, reducing the continent’s ability to deal with external shocks, said Stephen Karingi, Director of Regional Integration and Trade Division at the United Nations Economic Commission for Africa (ECA). A UNCEA report found that all regional economic communities in Africa, except the East African Community (EAC) and the Intergovernmental Authority on Development (IGAD), are importing more from the European Union than from within their own respective communities. “The most shocking thing is that only 11% of Africa’s agricultural produce is traded inside the continent,” said Karingi, reinforcing the need for the continent to shorten supply chains as agricultural commodities face supply constraints due to Russia’s invasion of Ukraine.
The African Continental Free Trade Area (AfCFTA) presents an enormous opportunity for Africa to boost intra-African trade, eliminating 90% of tariffs on goods and creating a single market of more than one billion consumers with a total GDP of more than $3trn. However, even though the AfCFTA was signed in 2018 there is still “a long way to go” to implement the free trade deal across African Union member states, Karingi said.
African countries must strengthen their efforts to absorb shocks – Songwe (African Business)
The Covid-19 pandemic has reversed two decades of development in Africa, driving an estimated 55 million people into extreme poverty in 2020, said Vera Songwe, Under-Secretary-General of the United Nations and Executive Secretary of the Economic Commission for Africa (ECA).
AfCFTA: Border hurdles dampen free trade deal expectations (The East African)
African traders and companies are facing challenges operating across the borders despite the opening up of a $1.2 billion market in January 2021.The latest study by the United Nations Economic Commission for Africa (UNECA) on selected African countries shows that things are not working on the ground after the African Continental Free Trade Area (AfCFTA) agreement came into effect on January 1 last year. The survey conducted in seven countries — Angola, Côte d’Ivoire, Gabon, Kenya, Namibia, Nigeria and South Africa — shows companies have a neutral to slightly negative perception of the investing and trading environment across Africa. The AfCFTA Country Business Index survey, which was launched in 2018, shows that the private sector has a negative perception of trade in goods, suggesting that more work needs to be done to remove tariff and non-tariff barriers. According to the survey, firms in the sampled countries appear to have negative perceptions of unauthorised charges, customs procedures and additional fees.
Regional parliament wants Rusumo border trade bottlenecks addressed (The New Times)
Members of the East African Legislative Assembly (EALA) on Tuesday, June 7, decried the numerous challenges traders face at the Rusumo border crossing between Rwanda and Tanzania. Lawmakers stressed that regional countries should swiftly tackle issues at the border, and at other EAC borders, with urgency so as to better facilitate trade and the movement of people. Unharmonised tax rates, limited access to essential utilities, as well as lack of laboratory and testing equipment from the Tanzania Bureau of Standards, Tanzania Food and Drug Authority, and even a medical laboratory to facilitate respective inspection tasks, among others, was observed by members of the Assembly’s standing Committee on Communication, Trade and Investment, during an oversight activity in October 2021.
ECA implements key recommendations from CoM2021 (African Business)
On regional integration, the ECA has helped 10 African countries implement AfCFTA strategies and overseen the formulation of seven new national strategies.... It also developed a Country Business Index tool that uses high-quality data to assess the impact of the AfCFTA on the private sector, which was deployed in five countries.
Fresh Impetus to Implement COMESA Protocols on Free Movement (COMESA)
The COMESA Protocols on free movement have over the years faced slow pace of implementation, with many decisions of the Council of the Ministers calling on Member States to speed up ratification. The protocols are on the Gradual Relaxation and Eventual Elimination of Visa Requirements (commonly known as the visa protocol) and on the Free Movement of Persons, Services, Labour and the Right of Establishment and Residence.
Concerned at the slow pace of implementation, the COMESA Council of Ministers have made several decisions to spur action on this front. This led to the creation of two COMESA Task Forces on the implementation of the legal instruments, the COMESA Council of Ministers Decisions and capacity building on the COMESA programme on free movement protocol.
Implementation of the protocols is critical in deepening COMESA’s regional integration for economic development under the Free Trade Area. This is in respect to trade in goods and services, in the context of the COMESA Trade in Services Protocol which requires movement of labour, among others, as a factor of production and service providers. Once validated, the draft strategy and roadmap/ action plan will be presented to the COMESA Ministers responsible for immigration for adoption and subsequent implementation.
Enforcing competition would ease food price hikes in east and southern Africa (Moneyweb)
Small and medium-scale farmers and agri-businesses in east and southern Africa are getting a raw deal. To succeed they need fair and integrated regional markets. Research by the Centre for Competition, Regulation and Economic Development has highlighted the need for better integration of regional economies as a step towards food security in the region. Powerful commercial interests, high transport costs and poor access to facilities such as for storage mean that small and medium-scale farmers are often not getting fair prices for the food they grow. Fair prices are those that meet demand and cover reasonable costs of supply including transport across borders.
The fragile food systems in the region, combined with increasing concentration at multiple levels of key value chains, calls for a regional competition policy for resilient and sustainable regional value chains. A stronger regional market referee to monitor and enforce competition rules would level the playing field for fairer food markets.
Report: COVID-19 slows progress towards universal energy access (WHO)
The COVID-19 pandemic has been a key factor in slowing progress toward universal energy access. Globally, 733 million people still have no access to electricity, and 2.4 billion people still cook using fuels detrimental to their health and the environment. At the current rate of progress, 670 million people will remain without electricity by 2030 – 10 million more than projected last year. The 2022 edition of Tracking SDG 7: the energy progress report shows that the impacts of the pandemic, including lockdowns, disruptions to global supply chains, and diversion of fiscal resources to keep food and fuel prices affordable, have affected the pace of progress toward the Sustainable Development Goal (SDG 7) of ensuring access to affordable, reliable, sustainable and modern energy by 2030. Advances have been impeded particularly in the most vulnerable countries and those already lagging in energy access. Nearly 90 million people in Asia and Africa who had previously gained access to electricity, can no longer afford to pay for their basic energy needs. The impacts of the COVID-19 crisis on energy have been compounded in the last few months by the emergency in Ukraine, which has led to uncertainty in global oil and gas markets and has sent energy prices soaring.
Africa remains the least electrified in the world with 568 million people without electricity access. Sub-Saharan Africa’s share of the global population without electricity jumped to 77% in 2020 from 71% in 2018 whereas most other regions saw declines in their share of the access deficits. While 70 million people globally gained access to clean cooking fuels and technologies, this progress was not enough to keep pace with population growth, particularly in sub-Saharan Africa.
The report finds that despite continued disruptions in economic activity and supply chains, renewable energy was the only energy source to grow through the pandemic. However, these positive global and regional trends in renewable energy have left behind many countries most in need of electricity. This was aggravated by a decrease in international financial flows for the second year in a row, falling to US$ 10.9 billion in 2019.
African Development Bank Group President Dr Akinwumi Adesina wrapped up his official visit to Kenya on Friday, meeting with African diplomatic envoys and international development partners in Nairobi. He called for joint collaborative support to help accelerate Africa’s development. “Africa’s pace of development must be accelerated. We must work together for the continent to prosper, be competitive, and address the challenges facing it,” he said. Adesina said Africa was the continent being impacted the most from climate change. He said as the world prepared for the next global climate summit (COP27) in Egypt this November, many African countries could still not access green climate financing because they had not developed required national determined contributions and long-term strategies. So far, only three African countries—Benin, Morocco and South Africa—have developed long term strategies.
The African Development Bank has been pushing for the channelling of International Monetary Fund Special Drawing Rights to African countries through the Bank. The president explained that in this manner, they could be leveraged by a factor of four on the international capital market. He said this could help African countries deal with debt issues and allow them to invest more in transformative developments.
The Ministers Responsible for Gender and Women’s Affairs from the Southern African Development Community (SADC) Member States will be in Lilongwe, Republic of Malawi on 10 June 2022, to review progress on the implementation of the gender and development programmes in the region. Honourable Patricia Kaliati, Minister of Gender, Community Development and Social Welfare of the Republic of Malawi, will chair the meeting in her capacity as the Chairperson for SADC Ministers Responsible for Gender and Women’s Affairs. The Ministers will track the progress in implementation of the SADC Protocol on Gender and Development, through the review of the 2022 SADC Gender and Development Monitor on Women in Politics and Decision-making, focussing specifically on Article 12 on Representation, Article 13 on Participation, and Article 5 on Special Measures of the Protocol.
As part of implementing the SADC Regional Multi-dimensional Women Economic Empowerment Programme (RMD-WEEP) 2020-2030, the Ministers will review the progress on the SADC Industrialisation and Women’s Economic Empowerment Project (IWEE Project), a project aimed at increasing women-owned businesses’ and female entrepreneurs’ participation in value addition for selected sectors and regional value chains (RVCs).
Global economy news
Global Economic Prospects June 2022: Stagflation Risk Rises Amid Sharp Slowdown in Growth (World Bank)
Compounding the damage from the COVID-19 pandemic, the Russian invasion of Ukraine has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation, according to the World Bank’s latest Global Economic Prospects report. This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike. Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than 4.1 percent that was anticipated in January. It is expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade in the near term, pent-up demand fades, and fiscal and monetary policy accommodation is withdrawn. As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly 5 percent below its pre-pandemic trend.
“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” said World Bank President David Malpass. “Markets look forward, so it is urgent to encourage production and avoid trade restrictions. Changes in fiscal, monetary, climate and debt policy are needed to counter capital misallocation and inequality.”
800% increase in UN appeal needs for extreme weather-related emergencies over last 20 years – new Oxfam research (Oxfam International)
The amount of money needed for UN humanitarian appeals involving extreme weather events like floods or drought is now eight times higher than 20 years ago — and donors are failing to keep up, reveals a new Oxfam brief today. For every $2 needed for UN weather-related appeals, donor countries are only providing $1. Average annual extreme weather-related humanitarian funding appeals for 2000-2002 were at least $1.6 billion and rose to an average $15.5 billion in 2019-2021, an 819 percent increase. Rich countries responsible for most of today’s climate change impacts have met only an estimated 54 percent of these appeals since 2017, leaving a shortfall of up to $33 billion. The countries with the most recurring appeals against extreme weather crises — over 10 each — include Afghanistan, Burkina Faso, Burundi, Chad, Democratic Republic of Congo, Haiti, Kenya, Niger, Somalia, South Sudan and Zimbabwe.
The report, “Footing the Bill”, says that the increasing frequency and intensity of extreme weather events due to climate change is putting more pressure on an already over-stretched and underfunded humanitarian system. The costs of the destruction from these storms, droughts and floods are also increasing inequality; people in poorer communities and low-income countries are the worst hit yet they lack the systems and funding that wealthier countries have to cope with the effects. The richest one percent of people on Earth are emitting twice as much carbon pollution as the poorest half of humanity.
M-Pesa to transact in 200 countries after deal with Visa (Business Daily)
Millions of M-Pesa customers can now pay for goods and services in more than 200 countries under a deal with Visa that further cements the platform’s leading position as a mobile money service provider. Safaricom inked the deal with Visa to form M-Pesa GlobalPay Visa Virtual card that allows them to transact up to Sh150,000 per payment and Sh300,000 per day. The deal is set to lift the profile of M-Pesa at the international stage as it takes on global giants. “By partnering with Visa to provide the M-Pesa GlobalPay Visa virtual card, we are looking to bridge the gap for our customers who would like to use M-Pesa anywhere across the world,” Safaricom CEO Peter Ndegwa said.
LDC Group demands emission cuts and climate finance in Bonn (EnviroNews Nigeria)
Six months since COP26 in Glasgow, Parties to the UN Framework Convention on Climate Change (UNFCCC) are meeting at the Bonn Climate Change Conference to take forward negotiations on the global response to the escalating climate crisis.
Ms. Madeleine Diouf Sarr, who represents the 46 least developed countries (LDCs) at the talks, sets out the LDC Group’s expectations, saying: “The climate crisis is worsening: our people and communities are suffering from the devastating impacts of climate change, while emissions continue to rise. In Bonn, governments must commit to fair and ambitious action to cut emissions and provide adequate support to the poorest and most vulnerable, so we can adapt to the impacts of climate change and address the loss and damage it causes.” Key issues up for discussion at Bonn include a new goal for climate finance to support developing countries address climate change; a work programme for scaling up countries’ emissions reductions targets to match the level needed to limit warming to 1.5°C; finance to address loss and damage caused by climate change; and the beginning of a “global stocktake” to assess progress on the implementation of the Paris Agreement.
Ms. Sarr said, “The issue of finance to address losses and damages already being experienced in our countries because of climate change deserves more than a dialogue. Countries with much greater responsibility and capabilities than ours must close the funding gap so that when the impacts of climate change hit – when houses and hospitals are washed away, when crops are destroyed, when islands sink and when whole communities are displaced – the costs don’t land on the already vulnerable households. A failure to cut emissions and provide adequate finance for adaptation is increasingly causing loss and damage in our countries, and we’re paying for it.”
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Wamkele Mene: South Africa’s jitters about free trade rules are ‘not supported by evidence at all’ (Daily Maverick)
South Africa’s small and medium businesses have nothing to fear when trading finally starts under the African Continental Free Trade Area (AfCFTA), says Wamkele Mene of the free trade area’s secretariat . Some feel they could be swamped by the asymmetrical rules that will be applied in the first 15 years to protect less-developed countries – of which South Africa isn’t one. “It is not supported by evidence at all,” Mene tells DM168 in his office in Accra, with reference to the free trade that already exists between South Africa and its neighbours in the Southern African Development Community. “If your market is not swamped by products from within your free trade area, who is going to swamp your market from outside your proximity [when you extend duty-free access]?” he asks.
Fruit exports: Russian trade gap now a major advantage (Food for Mzansi)
Many South African citrus growers who exported to pre-war Russia have already found alternative markets. But one leading export and distribution company has pushed through the chaos and maintained trade relations. As a result, Pomona Fruit has benefited from a lucrative gap in the Russian market. Owner Francois Hugo tells Food For Mzansi that a window of opportunity was created when Mzansi’s citrus trade with Russia – South Africa’s fifth biggest export market – was blocked due to the invasion of Ukraine and subsequent sanctions. When trade resumed a few weeks later, a number of exporters had suspended dealings with Russia because of payments, shipping delays and spiralling shipping costs. “Unlike other export companies, our company’s strategy was to push through the chaos instead of identifying alternative markets,” says Hugo. “The other exporters who diverted left a gap in the market, thus creating a much higher demand for fresh produce.”
Namibian exports shrink (New Era)
The value of exports in April 2022 decreased by 36.4% to N$5.5 billion from N$8.7 billion reported in March 2022. In addition, when compared to N$6.5 billion recorded in April 2021, exports decreased by a notable 15.4%.According to the Namibia trade statistics bulletin for April 2022, imports stood at N$8.8 billion, reflecting a decrease of 5.2% month-on-month and an increase of 43.1% when compared to the same month the previous year. Namibia Statistics Agency (NSA) released the bulletin last week, adding that following these movements in both flows, Namibia’s total merchandise trade (exports plus imports) with the rest of the world decreased by 20.3% from its March 2022 level of N$18 billion. When compared to the same month the previous year, total trade increased by 13%.
Looking at the trade balance, according to NSA, during the month under review, Namibia recorded a trade deficit to the tune of N$3.3 billion. This reflects a worsened deficit when compared to the N$619 million recorded the previous month and an inferior trade deficit when compared to a surplus of N$365 million recorded in the month of April 2021. The trade balance compares the country’s trade flow with the rest of the world in terms of export earnings and expenditure on imports. Over the period (April 2021 to April 2022), Namibia recorded a deficit averaging N$2.5 billion and only recorded a trade surplus in April 2021.
Namport records a 6% cargo increase amid global challenges (Namibia Economist)
Namibia’s Port Authority (Namport) said the total year on year cargo handled amounted to 6.5 million tons, indicating an increase of 6%, amid challenges such as the COVID-19 pandemic, global container shortage and blank sailings. This was confirmed by Namport CEO, Andrew Kanime in a Namport bulletin released last week Friday, where he also highlighted that vessel visits also increased by 289 vessels or 22%. “The increase in vessel calls was predominantly due to an increase in petroleum vessels, Namibian and foreign fishing vessels, foreign tugs as well as research vessels,” Kanime added.
Kanime said this increase was mainly due to increased containerized commodities such as copper, charcoal, frozen fish, marble, frozen poultry, sugar, chemicals, scrap steel and wooden products.
Zimbabwe’s US$3bn platinum deal all but collapses in a shambles (Bulawayo24)
IT was noisily touted as a game changer for Zimbabwe’s mining sector, and the economy; a centrepiece of government’s ambitious yet unrealistic US$12 billion target for the industry by next year and catalyst to transform Zimbabwe into a knowledge-driven industrialising upper middle income economy by 2030.In its Vision 2030 document, titled Towards a Prosperous & Empowered Upper Middle Income Society by 2030, government says: “This will be realised through support for local processing of Zimbabwe’s diverse mineral resource endowment, with thresholds for beneficiation and value addition spelt out. Envisaged investments involve beneficiation of such minerals as platinum, chrome, lithium, nickel, diamond cutting and polishing, copper, gold and coal, with strengthening of linkages along the mineral value chain.
However, the Great Dyke Investments (GDI) project in Darwendale, 65 kilometres west of the capital Harare, which has the potential to become one of the world’s biggest platinum mines with capacity to reboot Zimbabwe’s collapsing economy, has stalled and now faces collapse for myriad reasons.
Traders in Kenya feel pain of dollar shortage (The East African)
Relentless depreciation of the Kenyan shilling is raising concern among importers and businesspeople who are experiencing first-hand the pain of a dollar shortage that has seen them part with up to Ksh120 per dollar against the quoted rate of Ksh116.The Kenya Association of Manufacturers on May 30 expressed worries over the dollar shortage, claiming members, who mainly rely on imported raw materials, cannot access dollars at the official market rates.
In the past year, the shilling has fallen by $0.0007 from about $0.0093 to $0.0086, meaning that what Kenyans could buy at $100 previously now costs at least $8 more, without factoring in inflation.
Kenyan economist Kwame Owino told The EastAfrican that the higher depreciation rate of the shilling could be due to internal policies and regulations constricting the inter-bank forex market.
URA eases restrictions on the importation of used cars (New Vision)
Uganda Revenue Authority (URA) has reviewed restrictions imposed on the importation and warehousing of old cars in the country. According to the URA Commissioner General, John Rujoki Musinguzi, the move to review the warehousing restrictions on old motor vehicles has been occasioned by the current global economic trends and inflation. “Considering the current global economic, geo-political trends that caused creeping inflation in Uganda, URA has adopted a more gradual but progressive approach to the restriction of warehousing of used motor vehicles,” Musinguzi said during a meeting with leaders of used motor vehicle importers and car dealers. The new measure, URA officials said, will take effect on July 1, 2022.
ECA and partners support interbank market development in Zambia (UNECA)
The Economic Commission for Africa (ECA), in collaboration with Bank of Zambia (BOZ), and Stichting Frontclear Technical Assistance Program (Stichting FTAP), a foundation for money market development initiatives and partner of ECA, organized a 2-day workshop to kick-off the Tradeclear Feasibility Study in Zambia.
Money markets in many African countries face the challenge of segmentation and are underdeveloped. Tradeclear is an Umbrella Guarantee Facility that would mitigate the counter-party credit risk in interbank transactions and improve market participation, depth, and liquidity. It is designed to resolve market segmentation and build trusted credit lines. By doing so, funding and risks are better distributed in the financial system, improving monetary policy transmission, and contributing to the overall resilience of the economy.
It is against this backdrop that ECA launched the technical assistance project on Tradeclear feasibility study for Zambia, in collaboration with Frontclear. The workshop was an opportunity to introduce the concept and structures of Tradeclear to over 40 participating bank stakeholders and to begin data and information gathering.
Rising cost of doing business, production could hamper Ghana’s AfCFTA benefits – AGI (GhanaWeb)
The Association of Ghana Industries (AGI) has cautioned Ghana could likely miss out on the expected gains from the implementation African Continental Free Trade Area (AfCFTA). According to the Greater Accra Regional Chairman of the Association, Tsonam Akpeloo, the increasing cost of doing business and production in the country could hamper Ghana’s efforts in the free trade regime.
Speaking in an interview with Citi Business News, the AGI regional Chairman called on government to adopt pragmatic measures to help drive down the cost of doing business and production citing an example such as countries like Kenya.
“Dividends from the recent increase in excitement around the AfCFTA may not be realized. This is because producing locally in Ghana is not competitive compared to other African countries. The cost of inputs is increasing at a rate that can’t be compared to anywhere else in the sub-region,” he is quoted by Citi Business News
For us to be competitive and for us to favourably trade and benefit from the AfCFTA we need to make sure steps are taken to produce cheaply because at the end of the day consumers in the open market will only consider price and quality. Our competitors in other countries like Kenya are receiving massive support which makes us uncompetitive,” Tsonam Akpeloo added.
UNCTAD organizes workshop on contribution of SEZs to boost economic diversification in Africa (BusinessGhana)
UNCTAD in collaboration with African Union and German corporations has organized a two-day workshop on the contribution of Special Economic Zones (SEZs). The symposium is to boost economic diversification in Africa in the context of AfCFTA. The programme was organised at Labadi Beach Hotel on June 2nd and 3rd. The workshop dubbed “Special Economic Zones In Ghana As A Tool For Industrialization And Diversification” was aimed at sharing best practices on special economic zones development and to contribute to the process of the implementation of the AfCFTA.
The workshop presented the main lessons learned from the development of SEZs in Africa and the implementation of SEZs-targeted policies. It addressed the key factors that contribute to the success of zones through the evaluation of key success stories in the continent.
Crude oil, urea, cocoa beans, electricity top Nigeria’s export list in Q1 2022 (Nairametrics)
Nigeria exported merchandise worth N7.1 trillion in the first quarter of 2022, rising by 23.13% compared to N5.77 trillion recorded in the previous quarter and 137.88% higher than the N2.98 trillion recorded in the corresponding period of 2021. This is contained in the foreign trade report, released by the National Bureau of Statistics (NBS). The increase in Nigeria’s export earnings turned the foreign trade balance in favour of Nigeria for the first time since Q2 2021 and the highest since Q3 2019. Notably, Nigeria recorded a foreign trade surplus of N1.19 trillion in review quarter compared to N173.96 billion deficit recorded in Q4 2021.
Chad experienced a second consecutive year of recession in 2021. The country has struggled to fully recover since the 2016 recession that followed the 2014-15 oil price shock. In 2020, the COVID-19 pandemic and the related oil prices fall hit Chad, throwing it off the growth recovery trajectory it had been on since 2018. The COVID-19 crisis has had an impact on the livelihoods of poor and vulnerable households. According to the high frequency phone surveys conducted in 2020, two-thirds of households reported a loss in their total income, 57 % of households receiving transfers saw a decline in this source of income, and a fifth of households seeking health care were unable to access it.
The report states that a gradual economic recovery is projected as oil prices peak in global markets and international trade and economic activity recover in agriculture and industry. Moreover, a successful debt restructuring process under the G20 Common Framework would provide substantial relief to Chad by helping restore a sustainable fiscal balance, which in turn would allow the country to increase social and investment spending over the long term.
Egyptian government signs agreements to support exports (Egypt Independent)
Egypt’s government signed some action programs, documents and memoranda of understanding with international institutions to support exports and enhance the role of the Egyptian export sector. Egypt plans to establish an export academy to increase exports to US$100 billion annually. On the sidelines of the annual meetings of the Islamic Development Bank 2022, held in Sharm el-Sheikh, Prime Minister Mostafa Madbouly witnessed the signing of a work program between the Ministry of Trade and Industry, the International Islamic Trade Finance Corporation, the Islamic Corporation for the Insurance of Investment and Export Credit, and the African Export-Import Bank, in favor of Egypt. This comes under the Bridges Program for Arab-African Trade, as part of a framework to implement projects that support the economy and enhance the export sectors during 2022-2023.
The work program aims to enhance the benefit of the Continental Free Trade Agreement; the proposed activities of the program include organizing trade missions to several African countries.
The program also aims to support the participation of companies in economic forums and trade fairs in the countries of the continent, secure exports and investment projects in Africa, and provide financing and guarantees for exports.
African trade and integration news
The African Continental Free Trade Area (AfCFTA) agreement entered into force in 2019. It aimed to increase intra-African trade by eliminating import duties. Its planners hoped to double intra-African trade if non-tariff barriers were also reduced. It was a major milestone in the continent’s regional integration. Inadequate transport infrastructure and services could hamper the realization of AfCFTA’s benefits. The urgent need to improve transport connectivity in Africa in the context of AfCFTA has created new research demands. This report explored the effects of AfCFTA on trade flows in the African region and asked how the AfCFTA signatories could reap the agreement’s full benefits through the integrated planning of trade and transport. The report’s specific objectives were to forecast the demand for different modes of transport—road, rail, maritime and air because of AfCFTA; Estimate the infrastructure investments required for different modes of transport; Estimate the impact of improvements in transport infrastructure and services on the volume of intra-African trade; Forecast the demand for equipment for different modes of transport—trucks for roads, rolling stock for railways, aircraft for air transport and ships for maritime transport—because of AfCFTA. The study constructed four scenarios based on the factors that have the highest impacts and are most uncertain. Such factors fell into two categories: AfCFTA implementation and socio-economic development; Transport services and infrastructure.
AfCFTA: Diverse Payment Channels are the Foundation of Enhanced Intra-African Trade (TechEconomy.ng)
Eighteen months since the commencement of the African Continental Free Trade Agreement (AfCFTA), and despite less than ideal circumstances due to the COVID-19 pandemic, 43 African states have ratified the agreement. What’s more, nearly 90 percent of negotiations on product-specific rules have been concluded, covering more than 70 percent of intra-African trade. But while the foundations for enhanced exchanges between African markets may be laid, the emphasis is now on implementation, which demands that attention be placed on the continent’s payment landscape.
Private sector calls EA to harmonise rules of origin with Africa FTA (The East African)
Private sector players want the criteria used to determine the origin or nationality of a product under the East African Community reviewed in light of the African Continental Free Trade Area (AfCFTA) agreement. According to the East African Business Council, the rules of origin could be a game changer for the continent as long as they are simple, transparent, predictable and business friendly. Despite the region having adopted EAC Tariff Offer for Category ‘A’ products, amounting to 90.2 percent, the region is yet to trade with the rest of the continent under the AfCFTA that came into force last year. The rules of origin define the conditions that firms must comply with in order to authenticate that their goods originate from the Free Trade Area (FTA) and are thus eligible for preferential treatment.
They are a “passport” enabling goods originating within the FTA to circulate duty-free in the area.
Regional assembly roots for business friendly laws (Dailynews)
THE East African Legislative Assembly (EALA) has laid emphasis on creating laws that will improve the business environment in the region. Speaking during the courtesy visit to East African Business Council (EABC) recently, EALA Chairperson Christopher Nduwayo noted that the regional assembly was committed to formulating business-centric laws to spur intra-EAC trade and investments.
In his rejoinder EABC Policy and Trade advisor, Adrian Njau applauded the EAC partner state for adopting 35 per cent tariff as the fourth band of the EAC Common External Tariff a move set to boost regional value chains and industrialisation. Mr Njau further expounded that tax distortions impede the free movement of goods, services, service suppliers, labour and capital and urged the MPs to champion ratification of the ‘EAC Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income’ in a bid to reduce the cost of doing business and attract more investments. “Non -Tariff Barriers continue stifling intra-EAC trade and arise from protectionist measures by partner states,” he stated.
According to Mr Njau, overdue operationalisation of the EAC Trade Remedies Committee tasked to handle matters relating to the application of Rules of Origin and trade disputes, anti-dumping measures, subsidies and countervailing measures, safeguard measures has aggravated the problem of resolving NTBs in the region.
Costs, competition drive truckers to innovate (The East African)
Stiff competition from the standard gauge railway (SGR) coupled with the increasing cost of fuel, taxes and insurance premiums has forced Kenyan truckers to be innovative to remain afloat. The government directed that all cargo delivered at the Mombasa port be exclusively railed inland to Nairobi via the SGR although this is being contested in court. Some truck owners have converted their vehicles into specialised trucks to ferry out-of-gauge cargo that could not be hauled by the SGR while others have moved to neighbouring countries where there is still business.
Among businesses that have taken advantage of the heavy infrastructural developments in the region to transport out-of-gauge cargo such as oversize containers and reefers is Transtrailers, Simpet Global Logistics and Seven Stars, which have invested heavily in modern technologies for handling over-size cargo.
East Africa’s economic recovery prospects facing headwinds (The East African)
East African countries face more hurdles in efforts to recover from the effects of the Covid-19 pandemic, signalling hard times for households and businesses. Rising public debt, mounting inflationary pressures, falling revenue collections, weakening currencies, and the Russian invasion of Ukraine have combined to slow down the pace of economic recovery. East Africa’s situation is compounded by rising political temperatures in Kenya ahead of the August 9 General Election, as neighbouring countries fear possible disruption of the supply chain on the Northern Corridor linking the landlocked Great Lakes Region with the seaport of Mombasa.
According to the Uganda central bank, private sector credit growth remains weak and below historical trends despite the full reopening of the economy in January as rising commodity prices continue to dent consumer0s’ perception of the economy and its near-term outlook.
Ministers meet to give Congo entry in EAC nod (The East African)
The East African Community Council of Ministers will meet on June 8 to finalise admission of the Democratic Republic of Congo into the bloc. The 42nd Ordinary Meeting of the Council of Ministers scheduled from June 8-11 is also expected to discuss the deployment of an election observer mission to Kenya, make a decision on who will host the East African Monetary Institute, and receive EAC Audit report. The EAMI whose role is crucial for the implementation of the Monetary Union protocol. The DRC formally joined the EAC on April 8, 2022 when President Felix Tshisekedi signed the deed of Accession to the Treaty establishing the EAC. The draft roadmap for DRC integration features three more major priorities across the organs and institutions of the EAC.
“The EAC is developing a roadmap that details how the DRC will implement various EAC commitments such as Customs Union, Common Market, Monetary Union and Political Federation and join various areas of cooperation,” said Dr Peter Mathuki, EAC Secretary General.
Create enabling environment for agribusiness to thrive – ECOWAS (Blueprint Newspapers)
The Head of Agriculture Division in the ECOWAS Commission, Mr. Ernest Aubee, has stated that, agribusiness development in Africa requires provision of enabling policy, legal and economic environment. This is even as he said increased public and private sector investments in the continent is critical. Aubee stated this recently while presenting a paper with the title, “Sustainable Agribusiness in Africa”, during an Africa agribusiness webinar”.
He said agriculture in the continent remains one of the most important sectors, saying the share of agriculture in continental GDP increased to 19.9% in 2020/2021 from 17.8% in 2019/2020 with agribusiness contributing approximately 25% of Africa’s GDP and 70% employment while agriculture based products accounts for over 50% of all exports from Africa. According to him, agribusiness has the potential to drive socio-economic development on the Continent.
Africa cocoa nations unite for fair prices as bad harvests and fertilizer shortages bite (Food Ingredients First)
Ghana, Côte d’Ivoire and most recently Nigeria have allied in an effort to boost cocoa farmers’ incomes, denouncing foul play in the cocoa trading market. The move comes as the world’s largest cocoa-growing countries ramp up efforts for fair treatment, pay and to eliminate adverse practices in the industry, for good. The cocoa regulatory authorities in western Africa claim that since the COVID-19 pandemic began, some companies have been bypassing payments of a living income differential (LID) of US$400 per metric ton of cocoa beans. The LID initially came into effect in 2020 to level the playing field and ensure fair payment to cocoa farmers.
The Conference of the States Parties (CoSP) to the African Medicines Agency (AMA) Treaty, held their First Ordinary Session in Addis Ababa, Ethiopia from 1 to 2 June 2022. The meeting sought to establish the Conference of the States Parties’ Rules of Procedure as well as deliberate on the AMA Headquarters Assessment Report and make recommendations on the Agency’s host country. Representatives of the African Union Commission and the African Union Development Agency (AUDA-NEPAD) participated in the meeting.
H.E. Minata Samate Cessouma, Commissioner for Health, Humanitarian Affairs and Social Development representing H.E. Moussa Faki Mahamat, Chairperson of the AU Commission, reaffirmed the Commission’s commitment in providing all the necessary support to the States Parties to the AMA Treaty towards the operationalization of the AMA at the earliest. Furthermore, the Commissioner highlighted the importance of the first meeting to the operationalization of the AMA, in order to enhance the capacity of the States Parties and AU recognized Regional Economic Communities (RECs) to regulate medicines, medical products and technology. Thus, enhance their efforts in the fight and elimination of the sale, and consumption of falsified and substandard medicines, medical products and technologies.
A call to introduce the Seed Index into the Comprehensive African Agriculture Development Programme (CAADP) Biennial Review (BR) process was unanimously endorsed at the 3rd Steering Group meeting of the African Seed and Biotechnology Partnership Platform (ASB PP), held from 23-25 May 2022 in Kampala, Uganda. It is to be recalled that the 40th Ordinary Session of the Executive Council held on 2-3 February 2022 in Addis Ababa, Ethiopia endorsed the African Seed and Biotechnology Partnership Platform and accompanying Operational Guidelines as the coordination mechanism for the implementation of the African Seed and Biotechnology Programme (ASBP): the strategic framework for the development of the seed sector in Africa
The deliberations were graced by Dr. Godfrey Bahiigwa, Director of Agriculture and Rural Development Directorate at the African Union Commission, as the Chair of the Steering Group. In his opening remarks, Dr. Bahiigwa noted that Seed sector development has been on the agenda of Heads of State and Government since 2005, who underscored access to quality seed in enhancing agricultural production and productivity. Hence, “the introduction of the Seed Index in the CAADP BR will allow us to report on progress made in seed sector development in Africa to the African Union Assembly,” he added.
Global economy news
DG Okonjo-Iweala: Time for members to show restraint and agree on texts for MC12 (WTO)
At an agriculture negotiating meeting for delegation heads on 1-2 June, Director-General Ngozi Okonjo-Iweala and the chair of the agriculture negotiations, Ambassador Gloria Abraham Peralta (Costa Rica), heard members’ feedback on three draft texts that emerged from an informal consultation process which the DG has led since early May. With the 12th Ministerial Conference (MC12) fast approaching, the DG urged members to restrain their comments to the extent possible so that “simple, short, beautiful and balanced” texts could be sent for ministers’ consideration.
The three texts include a draft ministerial decision on agricultural trade reforms, a draft ministerial declaration on trade and food security, and a draft ministerial declaration which would exempt from export bans food bought by the UN’s World Food Programme (WFP) for humanitarian purposes.
Devex Newswire: A critical moment for the TRIPS waiver (Devex)
Next week, negotiators will take another shot at an intellectual property rights agreement for COVID-19 vaccines. What’s the state of play? As negotiations within WTO over a compromise intellectual property waiver on patents for COVID-19 vaccines continue, activists have accused rich countries of trying to introduce further restrictions. That includes efforts by the U.K. government to extend the waiver only to finished products and not the ingredients and tools needed to produce COVID-19 vaccines, says Fatima Hassan, founder of Health Justice Initiative. A Geneva-based insider confirmed that delegates are still grappling over the scope of the waiver.
A group of U.K.-based civil society organizations issued a statement last week criticizing their government for refusing to clarify its position on the TRIPS waiver “beyond the repeated assertion that IP rules were responsible for the rapid development of COVID-19 medical tools and do not present a barrier to access.” Hassan is calling on supporters of the original waiver proposal to respond in kind.
Russia mulls easing wheat exports, sets stage for price drop (Business Daily)
The news that Russia may allow the resumption of wheat exports along the Black Sea has raised hopes that rising consumer prices of bread and flour in the local market will ease in the short term. The movement of grain along the Black Sea, which accounts for 34 percent of global wheat supply, was completely interrupted following the invasion of Ukraine by Russia in March, locking out millions of tonnes from being exported to the world market. About 66 percent of wheat that Kenya imports come from the two countries and the current blockade has seen the price of a 400g loaf of bread rise to Sh55 from Sh50 with a two-kilogramme packet of flour retailing at Sh202 from Sh150 in April.
“We have seen some sorts of stability in the world market and it will be good news for consumers should the prices fall,” said Bimal Shah, chief executive officer of Broadways Bakeries. The price of wheat jumped 28 percent between April and May after India announced banning the export of produce to protect its local stocks.
Kenya Association of Manufacturers and a host of other stakeholders in the grain industry said the government should remove duty for the next year to cushion consumers from high costs.
WTO-World Bank publication stresses key role of trade in responding to health crises (WTO)
“This report underscores how trade is a force for good in terms of enabling access to medical goods and services – but also points to where we can improve,” DG Okonjo-Iweala said. “It is a timely reminder, a week ahead of our 12th Ministerial Conference, of how trade is part of the solution to many of the big challenges of our time, whether in public health or the environment.”
“A main lesson of the report is that trade plays an important role in ensuring access to medical goods and services both in normal times and, as the past two years have shown, in times of crisis,” DG Okonjo-Iweala added.
ITU/UNESCO Broadband Commission urges faster global action on digital development (ITU)
The Broadband Commission for Sustainable Development met in Kigali, Rwanda, this weekend to pinpoint new actions that can drive faster progress towards universal meaningful access to digital networks and services. The high-level advocacy group came together for its annual Spring Meeting at the invitation of the Commission Co-Chair, H.E. President Paul Kagame of Rwanda, ahead of the landmark digital development conference held every four years by the International Telecommunication Union (ITU): the World Telecommunication Development Conference (WTDC).In his opening remarks to the meeting, President Kagame told Commissioners: “We are still living in tough times, economically, politically, and in terms of global public health. The immediate future is full of uncertainties and risks. But one thing is sure: All of the challenges we face can be handled faster, better, and more equitably, by investing in universal, affordable broadband.”
Commissioners and Special Guests representing government leaders, heads of international organizations and private sector companies, along with civil society and academia, discussed the power of digital transformation to create broad and positive socio-economic impact and looked at ways to rapidly increase access to broadband, foster innovative partnerships, empower youth, and build trust in online spaces. In particular, they confronted chronic connectivity challenges and discussed how to ensure affordable, sustainable, and equitable access to digital services across regions, especially in the world’s 46 Least Developed countries, where 17% of the population is still without a mobile broadband signal, and hundreds of millions more kept offline by high prices, lack of digital skills and awareness, and a dearth of usable, relevant and accessible content.
Enter the Platform World: What Are the Prospects for the Global South? (RIAC)
The regional integration projects of the Global South have advanced notably in the past several years with AfCFTA and RCEP among the most significant achievements. At the same time, there is tremendous scope for a far greater variability and diversity in the platforms that may be launched by Global South economies, the most sizeable and comprehensive of which could include the aggregation of CELAC (Latin America), African Union (Africa), SCO (Eurasia). A more diverse set of regional blocs that targets deeper integration could feature a BRICS+ platform that comprises the South African Development Community (SADC), MERCOSUR, BIMSTEC, China-ASEAN FTA, Eurasian Economic Union (EAEU).
The world economy is entering a stage in which platforms are becoming key aggregation vehicles at the level of corporates, countries and regions. The Global South countries are starting to play catch-up vis-à-vis the advanced economies in building such platforms, with substantial advances made in building regional platforms in Africa and Asia in the past several years. The world economy needs greater platform diversity as well as greater optionality in trade/investment flows and an expansion in the array of reserve currencies something that could emanate from greater activism in this area coming from the Global South.
The regional integration projects of the Global South have advanced notably in the past several years with AfCFTA and RCEP among the most significant achievements.
World Environment Day: Earth ‘cannot keep up with our demands’ (UN News)
“It is vital we safeguard the health of its atmosphere, the richness and diversity of life on Earth, its ecosystems and its finite resources. But we are failing to do so,” said the UN chief. “We are asking too much of our planet to maintain ways of life that are unsustainable,” he cautioned, noting that this not only hurts the Earth, but also its inhabitants.
By providing food, clean water, medicines, climate regulation and protection from extreme weather events, Mr. Guterres reminded that a healthy environment is essential for people and the Sustainable Development Goals (SDGs). “It is essential that we wisely manage nature and ensure equitable access to its services, especially for the most vulnerable people and communities,” Mr. Guterres underscored.
The recent Stockholm+50 environment meeting reiterated that all 17 SDGs rely on a healthy planet to avert the triple crises of climate change, pollution and biodiversity loss. The Secretary-General outlined recommendations to activate renewable energy everywhere by making renewable technologies and raw materials available to all, cutting red tape, shifting subsidies and tripling investment.
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Local trade news
National rail policy to support local industry, manufacturing (Engineering News)
The National Rail Policy White Paper has a deliberate bias towards local manufacturing to ensure industrialisation and the local production of steel, railway lines, rolling stock and supplies, and the State and private sector operators should procure all supplies from South African manufacturers, Transport Minister Fikile Mbalula said this week. “The obsolete state of much of our rail infrastructure and rolling stock, and the limitation imposed by narrow gauge tracks, as well as the underuse of the existing rail network, are some of the most notable challenges facing the sector,” he stated.
The Consulate-General of South Africa in Lubumbashi, Democratic Republic of Congo, Ms Nosicelo Mbele says the DRC Mining Week presents an opportunity for South African businesspeople to network and create ties that can be translated into exports of their products and services. Mbele was addressing the South African business delegation that is currently showcasing at the DRC Mining Week show which started today and will end on Friday, 3 June 2022.The twenty mining exporters are supported by the Department of Trade, Industry and Competition (the dtic) to participate and exhibit their products and services at the DRC Mining Week, through its Export Marketing and Investment Assistance (EMIA) Scheme. The objective of the scheme is to develop export markets for South African products and services and to recruit new foreign direct investment into the country.
“There are huge unexploited opportunities for South African exporters to increase exports of capital goods into the DRC’s mining industry with potential exports of mining equipment and related products estimated to be around R569 million. The country holds a wealth of opportunities, not just in mining, but as well as in agriculture and retail, telecommunications, mining and construction, logistics and other services, electricity and infrastructure,” said Mbele.
Zimbabwe’s trade balance narrows by 68% (NewZimbabwe.com)
THE gap between Zimbabwe’s imports and exports narrowed down by 68% in April, partly attributed to surging manufacturing output, Zimbabwe National Statistics’ (ZIMSTAT) recent trade report has established. The document released Wednesday, shows that the latest trade balance at minus US$49,9 million is far below the minus US$156,27 million recorded in March, signifying a 68,04% decline. The statistics are in sync with recent data by ZIMSTAT, indicating that the country’s manufacturing sector capacity utilisation increased to 66% for the fourth quarter of 2021.
During the period, the country’s main exports included semi manufactured gold (30.1%), nickel mattes, including platinum group of minerals (PGMs) (22.8%), nickel ores and concentrates (14.7%), tobacco (11.5%), industrial diamonds (5.0%), among others. “South Africa remained Zimbabwe’s major trading partner, with exports standing at 40,6% compared to 42,9% in March 2022. Exports to the United Arab Emirates constituted 34,1% in April 2022 compared to 313% in March 2022. “During this period, the value of exports to China increased to 9,9% on 2 April 2022, from 5,9% in March the same year,” the report said.
Zimbabwe abandons debt relief initiative (The Zimbabwe Mail)
The Zimbabwe government has abandoned its plan to access a debt relief facility under the Highly Indebted Poor Countries (HIPC) initiative, meant to resolve its unsustainable debt, Business Times reported. HIPC could have seen Zimbabwe’s unsustainable debt with international financial institutions cancelled. The latest development was revealed by the permanent secretary in the Ministry of Finance and Economic Development, George Guvamatanga on Tuesday this week. He said the government was now working on a new strategy to clear its debts. “The strategy we are pursuing now does not consider HIPC. I think it is a hybrid strategy which we think is fit for purpose,” Guvamatanga told Business Times on the sidelines of the European Investment Bank and First Capital Bank event in the capital on Tuesday.
IMF Executive Board Concludes 2022 Article IV Consultation with Kingdom of Lesotho (IMF)
Since early 2020, Lesotho has been hit simultaneously by the pandemic, declining transfers from the Southern African Customs Union (SACU), climate shocks, and the impact of the war in Ukraine. Despite a swift response by the authorities, the fallout from the pandemic—including delays to large infrastructure projects, supply chain disruptions, layoffs in the textiles sector, and weak external demand—has weighed on social and economic development, amplifying legacy structural challenges. Growth has been revised down to 2.1 percent in FY21/22 after contracting by 6 percent in FY20/21, and is forecast by staff at 2.7 percent in FY22/23 and 1.4 percent on average thereafter. The war in Ukraine has hindered food imports, exacerbating agricultural disruptions due to floods and the pandemic. Global price increases in food and fuel, which account for over half of the consumer basket, are hurting the vulnerable, with inflation expected to reach 6.8 percent in FY22/23.
Tanzania seeks to be key rice producer in Africa (The Citizen)
Tanzania is racing against time to become Africa’s rice hub. To begin with, the country wants to meet East Africa’s total rice demand, a senior government officer has said. Tanzania – which is the 4th largest producer of rice in Africa and the second-largest in Eastern and Southern Africa - has put in place plans and measures to increase rice production annually in an effort to reach a tipping point in 2030 and thus be able to feed the region and beyond, according to the director of the Mechanisation Division in the Ministry of Agriculture, Ms Anna Mwangamilo. “We have adopted a transformative technology-dependent agricultural system model for rice, which includes mass adoption of improved seeds usage and other tools, including modern irrigation,” Ms Mwangamilo told journalists in Dar es Salaam yesterday.
She noted the provision of substantial market opportunities for smallholder farmers in the last three years, has led to assured national self-sufficiency and a sizeable surplus for export, making rice one of the most significant cash crops in Tanzania.
Nigeria has low capacity to galvanize youths for economic development – NEPC boss (Vanguard)
The Executive Director of Nigeria Export Promotion Council, NEPC, Ezra Yakusak, on Thursday, said one of the challenges bedeviling the nation is low capacity to galvanize the youths into productive ventures for economic development. Yakusak said that the country is blessed with a large portion of youthful population ready to contribute in building a strong and prosperous economy. “However, the challenge has always been low capacity to galvanize the youths into productive ventures for economic development”, he added.
Nigeria takes step towards gas pipeline deal with Morocco (The Arab Weekly)
Nigeria’s government has directed its state-run oil company NNPC to press ahead with a deal on a gas pipeline to Europe through Morocco. Africa’s gas resources are increasingly in the spotlight as the European Union looks to wean itself off Russian supplies following the invasion of Ukraine in February. Approval for a memorandum of understanding on the gas project with West African regional bloc ECOWAS was given after a cabinet meeting, Nigeria’s Petroleum Minister Timipre Sylva told reporters in Abuja late Wednesday.
Nigeria is Africa’s top oil producer and a major supplier of gas and liquefied natural gas. The minister said: “This gas line will take gas to 15 West African countries and to Morocco and through Morocco, to Spain and to Europe”.
After cyclones, conflict and Covid-19, recovering Mozambique prepares next five-year strategy (AfDB)
The African Development Bank has launched preparations for its next five-year Mozambique country strategy after a trying period that included cyclones, security challenges and the Covid-19 pandemic. The African Development Bank, in coordination with Mozambique’s Ministry of Economy and Finance, hosted a workshop on 12, 13 and 16 May 2022 on the Bank’s 2018-2022 Country Strategy Paper completion report, which will detail the results of the strategy. The event also covered the new 2023-2027 Country Strategy Paper and a review of the Bank’s portfolio of projects in Mozambique.
Minister of the Economy and Finance, Ernesto Max Elias Tonela, said the national economy was beginning to recover from external shocks and the economic contraction witnessed in 2020. “The country has experienced considerable macroeconomic and political stability, which has attracted greater volumes of domestic and foreign investment, including the valuable contribution of the African Development Bank. I would like to reaffirm our commitment to strengthen cooperation with the African Development Bank,” the Minister said. He said the government’s strategy was in line with the pillars defined jointly with the African Development Bank for Mozambique.
Why government should consider going to the IMF – Dr. Yamson (GhanaWeb)
Economist, Dr Ishmael Yamson, has detailed reasons Ghana should consider an International Monetary Fund programme amidst the current economic crisis. According to Dr Yamson the Fund has all Ghana needs to solve its crisis. Ghana’s economy is currently facing a critical economic crisis due to the COVID-19 crisis and the Russia-Ukraine crisis. The Economist posits that even though the government had earlier stated that it would not opt for an IMF programme, the best solution to tackle these issues is to apply for an IMF.
Ghana-UK trade relations: UK plans to increase its £800m FDI (The Business & Financial Times)
The United Kingdom (UK) government says it will continue to increase its bilateral trade in Ghana – an investment which is currently more than £847million in key areas of the country’s economy – for the next decade. Briefing the B&FT on a recent quest by the two countries to deepen trade and bring more investment into Ghana, High Commissioner of the UK to Ghana, Harriet Thompson, said the over-£800million investment in the country remains the top FDI from Europe and one of the biggest in this generation. She said the two countries have renewed pacts to increase trade and investment and chart new paths which will consolidate their bilateral ambition.
Madagascar launches safeguard investigation on paints (WTO)
Where information requested from interested parties in this investigation is not provided within the time allowed, decisions will be made on the basis of the best information available. “All persons having substantial interest and wishing to be considered as interested parties in this investigation must make themselves known and may request a questionnaire from the ANMCC, the authority in charge of the investigation, within 30 days of from the start of the investigation.
African trade and development news
Africa’s access to financing at competitive rates is vital for the continent’s recovery (allAfrica.com)
In an environment of elevated debt vulnerabilities exacerbated by increased fiscal exposure to the pandemic, extreme weather events and rising food and energy prices, improving Africa’s access to financing at competitive rates is vital for the continent’s recovery from the pandemic. Concessionary financing from multilateral and bilateral sources remains the dominant source of Africa’s development financing. However, notwithstanding their low-cost of use, concessional financing is lacking in scale and scope to adequately respond to Africa’s financing needs. For instance, with respect to scale, the continent’s SDG financing gap of $345 billion annually is about a third of the IMF’s total balance sheet of $1 trillion.
Rising financing needs, inadequate concessional financing and declining eligibility for such resources have compelled several countries to access capital markets to close their development financing gaps. But this has come at a cost.
Why Kenya is backing fresh UN agency calls for debt service relief (Business Daily)
Kenya has welcomed a renewed push by African ministers of finance backed by the UN Economic Commission for Africa (UNECA) for rich countries to extend debt service relief for regional countries to help their economies recover from the Covid-19 pandemic and weather the impacts of the Ukraine war. Echoing calls by the UN agency and the African ministers, Kenya says calls for debt relief are timely and if heeded would provide a “breathing space” to help Kenya and other African countries cushion regional economies from the fallout caused by the latest Russia and Ukraine war crisis. Debt servicing obligations are feared could crowd out other critical expenditures by African governments in response to the economic fallout from the latest crisis, according to analysts.
East African states rush to impose new taxes on imported goods (The East African)
Following the May 5 decision by East African Community Finance ministers to adopt a 35 percent rate for the fourth band of the region’s common external tariff (CET), member countries are working to identify, review and impose new taxes on imported goods to protect local industries. The new tax whose implementation starts from July 1 will affect commodities such as iron, steel, dairy and meat products. Other affected imports are cereals, cotton, textiles, edible oils, beverages and spirits.
The CET’s four bands include one for raw materials, which attract zero percent tax, intermediate goods that attract 10 percent tax; secondary intermediate goods charged at 25 percent tax and finished goods, the fourth band, which now stands at 35 percent. “The process of identifying which products fall in the fourth band is now complete. Most of the products under this band are readily available in the region and, therefore, will attract more tax to import,” said Betty Maina, Kenya’s Cabinet Secretary for Trade, Industrialisation and Enterprise Development.
Finished goods that cannot be produced in the region have been allocated the third band, she added.
Deepening economic integration, strengthening regional peace and security mechanisms, and implementing the road map for the attainment of the EAC Monetary Union are some of Hon. (Dr.) Peter Mathuki’s key priorities in steering the regional integration agenda in the next year. The EAC Secretary General underscored these priorities during a virtual forum dubbed, ‘State of the EAC Forum - SG’s 1 year in office,’ seeking to share the progress, achievements, and challenges of the EAC in the last year, and the way forward. The Secretary General listed the admission of the Democratic Republic of Congo (DRC) into the bloc, adoption of 35% as the 4th Band of the EAC Common External Tariff, and resolution of 23 pressing Non-Tariff Barriers (NTBs) among the key achievements the Community registered during the last year.
Further, he shared that five EAC Partner States, had launched their own Trade Information Portal (TIP). The portals map out all imports, exports and transit procedures, including fees and time in the respective Partner States in an effort to enhance regional trade.
Liberia, DRC, South Sudan, Chad, provide lessons on promoting resilience in Africa (AfDB)
The Independent Development Evaluation (IDEV) unit at the African Development Bank has published two evaluation reports that examine the relevance, effectiveness, efficiency and sustainability of the Bank’s work in transition states, countries where the main development challenge is fragility. The first report analyzed the implementation of the Bank’s 2014-2019 Strategy for Addressing Fragility and Building Resilience in Africa. During the evaluation period, the Bank approved 354 operations in 22 transition states, representing an overall investment of $6.48 billion. Four countries, Liberia, Democratic Republic of Congo (DRC), South Sudan and Chad, served as case studies in the evaluation. The report draws lessons from the experiences of the Bank and makes recommendations that informed the Bank’s recently approved new Fragility Strategy for 2022-2026.
A second evaluation examined the ability of the Bank’s Transition Support Facility to reduce fragility and build resilience in eligible countries. At the heart of the lessons captured by IDEV are the four main principles that form the fragility lens adopted by the Bank: flexibility to adapt operations and objectives to various contexts; responsiveness to unforeseen urgent needs; selectivity to achieve the greatest impact; and staying engaged across the spectrum of fragility.
The African Development Bank affirmed its commitment to supporting African countries to harness their mineral resources at the recent Mining Indaba held in Cape Town. The African Development Bank and the African Legal Support Facility (ALSF) took the opportunity to compare notes with governments, investors, partners, and other collaborators involved in the African mining industry at the Indaba. The Bank delegation convened a side-event to discuss ways to finance the development of Africa’s green minerals and effective African participation in the global battery and electric vehicle value chain. “Africa needs to promote policies that enable the creation of more value on the continent through resource-based industrialization, build productive capacities and develop intra-African exports and trade by leveraging on the African Continental Free Trade Area (AfCFTA),” said Dr. Vanessa Ushie, Acting Director of the African Development Bank’s African Natural Resources Centre.
The discussions were premised on Africa’s significant green mineral resources, which provide a unique opportunity for the continent to contribute to the energy transition, and attracted a large audience from various African countries, industry, development finance institutions, commercial banks, and mining professionals.
How Are “Africa’s Business Heroes” Reshaping Entrepreneurship on the Continent? (Forbes Africa)
Entrepreneurship in Africa is booming. There is enormous potential for small businesses and entrepreneurs to become a transformative force in powering both local impact and economic growth. At the Jack Ma Foundation, we believe that the future will be built by entrepreneurs. That is why, four years ago, we launched the Africa’s Business Heroes prize competition to spotlight and support talented entrepreneurs across Africa. Each year, 10 “heroes” win a share of a $1.5 million grant and gain access to unparalleled mentoring, networking, and training opportunities. Through their ventures, these outstanding entrepreneurs are generating positive impact for their communities. As we launch our fourth competition, we’d like to reflect on the achievements of our Heroes thus far. Collectively, our Heroes have created over 2,000 jobs and raised over $10 million USD. They’ve launched new products and services, expanded geographically and highlighted the transformative power of entrepreneurship.
Global economy news
Factbox: What could the WTO ministerial conference achieve? (Reuters)
Ministers from across the globe are convening for a conference at the World Trade Organization in Geneva for the first time in more than four years from June 12-15. It comes at a critical juncture for the body and for global trade. read more The meeting, delayed twice by COVID-19, is a chance for the 27-year-old body to prove it can respond to what Director-General Ngozi Okonjo-Iweala has described as a “polycrisis” of economic, health, environmental and security challenges. Nobody expects a package of deals but Okonjo-Iweala has urged negotiators to work continually to get “at least one or two” concrete outcomes.
Grain supply tops Putin-African Union head talks agenda (ABC News)
Russian President Vladimir Putin hosted the chairman of the African Union, Senegal's President Macky Sall on Friday for talks expected to focus on how to get grain supplies stuck amid the fighting in Ukraine moving again. African countries imported 44% of their wheat from Russia and Ukraine between 2018 and 2020, according to U.N. figures, and wheat prices have soared around 45% as a result of the supply disruption, according to the African Development Bank.“Africa has no control over production or logistics chains and is totally at the mercy of the situation,” Sall said recently.
Russia, the world's largest wheat exporter, has urged the West to lift sanctions imposed over its military action in Ukraine so that grain starts flowing freely to global markets. While food and fertilizer are exempt, sanctions have targeted Russian shipping and made international shipping companies reluctant to transport Russian cargoes.
Stronger Trade Systems for Better Health (World Bank)
Governments used a wide range of trade and trade-related policies to bolster domestic availability of critical medical goods and services. Measures to liberalize imports and limit exports of medical goods surged in the first two quarters of 2020. According to an analysis conducted for this report, these measures increased average trade costs for medical goods by about 60 percent. Governments also adopted emergency measures to facilitate trade, ease regulatory bottlenecks, and promote the diffusion of health technologies. To reduce physical contact between traders and border authorities, many countries expedited a transition from paper-based to electronic documents. Countries also simplified trade procedures to facilitate the flow of critical supplies. The pandemic uncovered gaps in international cooperation, including a lack of information on the stocks and availability of critical inputs; a lack of mechanisms to mobilize financing to develop vaccines and therapeutics; and barriers to the rapid movement of certified medical products across borders.
International trade statistics: trends in first quarter 2022 (OECD)
Following six quarters of sustained growth, the value of international merchandise trade for the G20 reached a new high in Q1 2022. Exports and imports increased by 3.6% and 5.8%, as compared to Q4 2021 and measured in current US dollars. The increase is largely explained by rising commodity prices, as the war in Ukraine and COVID-19 containment measures in East Asia placed further pressure on the prices of traded goods and on already strained supply chains. Growth in exports and imports of services for the G20 are estimated at around 2.0% and 1.1% in Q1 2022, respectively, compared to the previous quarter and measured in current US dollars. The preliminary estimates are well below the rates of 6.2% and 3.1% recorded in Q4 2021 for exports and imports, reflecting weaker trade in the transport sector in East Asia and a general slowdown in services trade across most of the G20 economies for which data are available.
Cloud tools help minimise supply chain disruptions (Business Daily)
Manufacturers and distributors can leverage cloud enterprise resource planning (ERP) tools to revolutionise the way they do business and manage disruption as the impact of the global pandemic, regional instabilities, and natural disasters continues to cause supply chain volatility. Supply chain disruptions have resulted in the need for highly agile organisations that are responsive to ever-changing market needs. A recent survey shows that 70 percent of manufacturing and distribution businesses experienced supply chain disruptions and 60 percent of businesses were unable to engage and collaborate with customers and suppliers in real-time. While collaboration and supply chain disruptions have been the biggest areas of impact, only 45 percent of businesses have the systems in place to address these disruptions and effectively collaborate with external suppliers and customers.
Fast-tracking implementation of eTrade Readiness Assessments: Second edition (UNCTAD)
The COVID-19 pandemic has been accompanied by a surge in e-commerce and uptake of digital solutions by businesses and consumers. It has also underscored the significant divides that exist in terms of digital readiness, hampering many countries’ ability to harness e-commerce and the digital economy. UNCTAD’s eTrade Readiness Assessments (eT Readies) have already helped 29 countries, mainly Least Developed Countries (LDCs), to identify the main barriers and opportunities for e-commerce development. But the assessments are only the beginning. Their real value comes to fruition when moving from policy recommendations to implementation. That is why UNCTAD set up the eT Ready Implementation Support Mechanism (ISM) in 2020. Since then, several capacity-building, knowledge sharing and stakeholder engagement activities have been organized to strengthen incountry implementation capacities and better empower in-country Focal Points, that are playing a pivotal role in mobilizing national stakeholders from both the public and private sectors, although not without challenges.
Report: COVID-19 Slows Progress Towards Universal Energy Access (World Bank)
The COVID-19 pandemic has been a key factor in slowing progress toward universal energy access. Globally, 733 million people still have no access to electricity, and 2.4 billion people still cook using fuels detrimental to their health and the environment. At the current rate of progress, 670 million people will remain without electricity by 2030—10 million more than projected last year. The 2022 edition of Tracking SDG 7: The Energy Progress Report shows that the impacts of the pandemic, including lockdowns, disruptions to global supply chains, and diversion of fiscal resources to keep food and fuel prices affordable, have affected the pace of progress toward the Sustainable Development Goal (SDG 7) of ensuring access to affordable, reliable, sustainable and modern energy by 2030. Advances have been impeded particularly in the most vulnerable countries and those already lagging in energy access. Nearly 90 million people in Asia and Africa who had previously gained access to electricity, can no longer afford to pay for their basic energy needs.
Africa remains the least electrified in the world with 568 million people without electricity access. Sub-Saharan Africa’s share of the global population without electricity jumped to 77 percent in 2020 from 71 percent in 2018 whereas most other regions saw declines in their share of the access deficits. While 70 million people globally gained access to clean cooking fuels and technologies, this progress was not enough to keep pace with population growth, particularly in Sub-Saharan Africa.
Legal Barriers to Women’s Economic Empowerment (IMF Finance & Development Magazine)
When women begin to participate more in the economy, good things happen. There’s more growth, less inequality, and greater financial stability. So, why is women’s labor force participation still so low in so many countries? Katharine Christopherson is an Assistant General Counsel in the IMF Legal Department and coauthor of some new research that looks at the legal impediments to women’s economic activity across the globe. In this podcast, journalist Rhoda Metcalfe and Katharine Christopherson discuss the outdated laws that hold women back and what drives countries to reform them.
WTO members discuss key findings of Aid for Trade Monitoring and Evaluation Exercise (WTO)
The responses reveal that trade remains prominent in governments’ development strategies in 2020 and highlight its role in addressing the impact of the COVID-19 pandemic and in assisting in economic recovery. WTO members and their Aid-for-Trade partners were able to reorient their strategies to meet the challenges arising from the pandemic, with high priority now being given to trade facilitation, growth of micro, small and medium-sized enterprises (MSMEs), trade connectivity, women’s economic empowerment, e-commerce and green economic growth. Introducing the latest figures on Aid for Trade, the Organisation for Economic Co-operation and Development reported an increase in global Aid-for-Trade disbursements and noted that Aid for Trade represented 30 per cent of Official Development Assistance worldwide. Disbursements amounted to USD 48.7 billion in 2020, up 3 per cent from 2019. Commitments have also increased, up 18 per cent from 2019 to USD 65 billion in 2020. The highest share of Aid-for-Trade flows — 38 per cent — was directed to Africa, with 35 per cent to Asia.
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Local news
Copper could be the ‘new gold’ for South Africa: CEO (BusinessTech)
Big Tree Copper chief executive Jan Nelson expects a steady climb in demand for the red metal over the next three decades. This, as the world, has turned its full attention to sustainable energy and a greener economy. Recent panic over the conflict in Ukraine and its subsequent threat to Europe’s reliance on Russian energy saw a surge in the metal trade to around $10,900 per ton (R169,700). Pricing has since eased to what Nelson calls a ‘more realistic level’ but he said that over the next few decades demand should steadily increase with a long-term view of 500% growth by 2050.
Nelson said demand is expected to exceed supply with an expected upward trajectory of around 16-20% by the end of the decade. At current production rates, a deficit of at least 6 million tons is forecast, he said.
Given the metal’s history in the market, Nelson believes that the wild-card nature of copper’s pricing will continue to see short and near term fluctuations but a longer view forecasts an incremental upward trajectory.
Role confirmed for local green entrepreneurs in economic recovery, just transition (Engineering News)
There are number of opportunities for local green entrepreneurs in South Africa and they can play a pivotal role in the country’s economic recovery and just energy transition; however, it is imperative that challenges in the ecosystem be addressed and for support for participants to be bolstered. This was indicated by speakers during economic research institution Trade & Industrial Policy Strategies’ (TIPS’s) webinar, titled “Unpacking the Green Economy Ecosystem: Business Development Support Services for Local Green Entrepreneurs”, on June 1.
Zimbabwe: Mozambican Government Bans Meat Imports From Zimbabwe (allAfrica)
The Mozambican government has prohibited, as of Wednesday of the current week, the import of animals, and animal products and by-products from Zimbabwe due to the resurgence of cases of foot-and-mouth disease in that country. The measure comes after the Zimbabwean Tax Authority notified the Mozambican authorities last Friday, about the outbreak of foot-and-mouth disease in Mashonaland Central province, Mbire district, which borders Mozambique. The government has also decided to ban the import wild ungulates, and of fodder for cattle, goats, pigs and sheep. The Mozambican government is also carrying out the supervision of the movement of animals and targeted products along the main borders and other road entry points into the country.
The Economic Commission for Africa (ECA), Sub-Regional Office for Southern Africa (SRO-SA), in collaboration with the Common Market for Eastern and Southern Africa (COMESA) with Permanent Secretaries (PS) of Commerce and Industry from Zambia and Zimbabwe held a two-day high-level meeting to discuss the implementation of a common agro-industrial park (CAIP) between the two countries. The objective of the meeting was to update the two Permanent Secretaries on the progress on the implementation of the industrial cooperation programme between the two countries focusing on the common agro-industrial park; discuss the funding opportunities for activities in the park; propose a possible location of the park; review the draft harmonized policy, legal, regulatory, and institutional framework for the park and agree on a roadmap for the initiative’s subsequent phases.
Kenya’s plan to call the shots in LPG logistics (Business Daily)
Kenya seeks to dominate in the supply of Liquefied Petroleum Gas (LPG) by constructing the biggest import and storage gas facility in Mombasa and licensing more private companies to compete with Tanzania which has dominated the business for years in the region. The announcement to construct a 25,000 tonnes storage facility by the Kenya Pipeline Company (KPC) which will connect to the Sh42 billion new Kipevu Oil Terminal 2 (KOT) at the port of Mombasa comes few days after Kenya banned imports of gas from Tanzania through the Namanga border. The facility in Mombasa once completed will quicken the loading of cooking gas for distribution by trucks which will help to cut demurrage costs.
Uhuru hails direct coffee export by farmers (The Star, Kenya)
President Uhuru Kenyatta has termed the direct export of coffee by smallholder farmers as remarkable sector reform that is earning them double dividends. Speaking during the Madaraka Day celebrations in Nairobi, the head of state said his government has over the last three years eliminated the barriers created by the overly complex coffee industry structure that denied farmers their rightful share. This is the second time in less than a week Uhuru is hailing reforms in the coffee sector that have seen six coffee unions licensed by the Capital Markets Authority as brokers. Last week during the G25 African Coffee Summit, he cited a case where KipKelion District Cooperative Union earned double returns for being the first farmers-led broker to directly export coffee to South Korea.
“This is a historic achievement for small-scale coffee farmers across the country. Farmers from Kericho, Nandi and Bomet counties earned an average rate of Sh116 per kg of Cherry compared to an average of Sh76,’’ Uhuru said. He added that those market gaps must be sealed to make farming cool.
Buy your raw materials from Ghana Agric Minister tells importers of organic fertilizer (GhanaWeb)
Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto is urging importers of organic fertilizers to start patronizing their raw materials from local sources. This according to him will boost efforts being made towards the production of more organic fertilizer even as imports have been distorted due to the Russia-Ukraine crisis. Farmers have in recent times, a shortage in the supply of fertilizers and the increment in their prices as well. The Agric Minister noted that government is working to support the use of organic fertilizer in the country.
Rising gold prices could offer windfall revenue (The Business & Financial Times)
The mining sector could once again be the economy’s saviour, as gold prices continue to firm up in the face of a global economic crisis.
Price of gold, which is known to gain momentum during economic crisis as investors often consider it as safe haven, averaged US$1,866 per ounce between January and April 2022 from US$1,788 per ounce within the same period in 2021, with the Ghana Chamber of Mines expecting this positive price trend to continue. This, coupled with expected higher output from large-scale gold miners according to the Chamber’s projections, means government could be in for a revenue windfall in what could be a huge boost in the face of tightening fiscal space, falling revenues from other sectors against rising expenditure.
Barriers to trade, barriers to poverty reduction? How Nigeria can harness trade to lift people out of poverty (World Bank Blog)
Nigeria’s aspiration to lift all of its people out of poverty by 2030 presents a serious challenge. Even before COVID-19, 4 in 10 Nigerians lived below the national poverty line – some 80 million people. The global pandemic, rising inflation, and ongoing uncertainty related to the war in Ukraine – combined with relentless population growth – have made Nigeria’s poverty-reduction goals more challenging than ever. Many potential poverty-reducing policies for Nigeria are considered in detail in a new report, A Better Future for All Nigerians: Nigeria Poverty Assessment 2022.
Trade presents one vital – but often untapped – pathway to poverty reduction. Through its effects on investment, technology transfer, and competition, trade can help growth – boosting job creation, increasing domestic value added, and reducing the price of goods that Nigerians buy along the way. All of these effects may contribute to reducing poverty.1
Yet trade may have different impacts on households depending where in the country they live, what jobs they do, and whether they are rich or poor : even if trade leaves people better off on average, some households could lose out.
Development Bank Ghana’s entry is timely for banks, entrepreneurs—GCB MD (BusinessGhana)
The Managing Director of GCB Bank PLC (GCB), Mr. Kofi Adomako, says the arrival of the new Development Bank Ghana (DBG) is timely for banks like GCB and also for the growth of Small and Medium-sized Enterprises (SME) in the country.
Mr. Adomako who was speaking to the collaboration between GCB and DBG, stated that “DBG is actually not going to be a commercial bank or behave like one; rather it is a wholesale bank and will typically on lend, like many other development banks, to commercial banks to intervene in markets. DBG has come at the right time in a country like Ghana. It is true we have had other banks who tried to play the role of development banks but DBG comes with a big difference. The difference DBG brings is its independence, governance and the way it was set up.” He explained that, “the development partners that DBG brings to the market are immense. I think the Bank has come at the right time and it is going to be a different bank from what we have seen in the past.
DBG is not going to compete with commercial banks but it is going to bring out the value in commercial banks in the sense that it is going to on-lend over much longer terms, in both foreign currency and Cedis which commercial banks have lacked for a long time and has stifled the growth of SMEs. So, DBG coming into the market is timely for a bank like GCB Bank. We see them as a unique partner, who will help us deepen our focus in the market and help us develop those areas in agribusiness, ICT, tourism for which much needed funding is required.”
Ethiopian Airlines convert passenger planes into cargo aircraft (CGTN Africa)
Ethiopian Airlines is accelerating efforts to convert passenger planes into freight aircraft as demand for cargo movement continues to rise. Africa’s leading airliner is keen to expand its cargo business which has surged after the pandemic-induced disruptions in supply chains.
The airline owns one of Africa’s largest and globally competitive Maintenance, Repair, and Operation divisions. So far the Ethiopian MRO, which was launched in April this year, has excelled in converting air crafts into freighters.
The Addis Ababa based aircraft wing is now converting passenger planes including this Boeing 767 aircraft into a cargo jets as it eyes a bigger slice of the cargo trade. According to Ethiopian Airlines Group CEO Mesfin Tasew, the Cargo business is expected to bring increased opportunities for the carrier which is boosting its capacity.
Morocco’s Southern Mega Projects to Boost Africa’s Trade Development (Morocco World News)
Morocco’s major infrastructure projects in its southern regions, especially the new Dakhla Atlantic port and the Tiznit-Dakhla highway, are set to contribute to the development of African trade as well as regional trade, a former Senegalese official has said.
CSOs Seek Suspension Of Taxes, Import Duties On Sanitary Pads, Petition Lawmakers (The New Dawn Liberia)
Several civil society organizations (CSOs) including Community Healthcare Initiative (CHI), Paramount Young Women Initiative (PAYOWI) and others have called on President George Manneh Weah to issue an Executive Order suspending taxes and import duties on sanitary pads. They believe that this will impact women and girls’ access to sanitary pads, making them more affordable and accessible.
A recent UNESCO study on sub-Saharan Africa showed that 1 in 10 girls misses school during their menstrual cycle, and the missed days equal 20% of a school year. “We ask the Government, through the Legislature, to amend the Revenue Code removing all taxes applicable to the importation and sale of sanitary pads in Liberia,” the CSOs’ petition noted.
Gambia, Equatorial Guinea sign accords to build diplomatic ties, trade (The Point)
The Gambia and Equatorial Guinea, Sunday, 29th May 2022 signed four bilateral agreements to establish diplomatic and trade links between the two countries, at a ceremony in the Presidential Palace in Malabo. The agreements are the Joint Communique on the establishment of diplomatic relations between The Gambia and Equatorial Guinea, Cooperation Framework Agreement between The Gambia and Equatorial Guinea, MOU on Diplomatic Consultations between the Foreign Ministries and Agreement on Reciprocal Exemption of visas for holders of diplomatic and service passports. The Cooperation Framework Agreement establishes the Joint Commission for Economic, Commerce, Scientific and Technical Cooperation.
During the ceremony, President Adama Barrow and his counterpart H. E. Teodoro Obiang Nguema Mbasogo, President of the Republic of Equatorial Guinea, affirmed the mutual benefits of establishing relations between the two countries would yield. President Barrow said the two countries could gain a lot when they work in partnership to exploit their natural resources for the benefit of their people.
World Bank Supports Economic Recovery through Resilient Tourism and Blue Economy Investments in Cabo Verde (World Bank)
The World Bank approved today an International Development Association credit in the amount of US$30 million for the five-year Resilient Tourism and Blue Economy Development in Cabo Verde Project. Complementary co-financing of US$5 million will be provided through a grant from the Global Program for the Blue Economy Multi-Donor Trust Fund. Cabo Verde’s tourism sector has seen exceptional growth in the last two decades and is a crucial driver of growth and job creation, reaching an estimated 25 percent of GDP. The Covid-19 pandemic represented a major setback with arrivals collapsing by 75 percent in 2020, affecting tourism and ancillary sectors particularly hard. In addition to the unparalleled economic shock, the pandemic also highlighted structural challenges in the tourism sector, including overconcentration of arrivals in two islands and a single market segment, weak local supply chain linkages, and environmental sustainability issues—particularly in coastal areas.
As Growth Slows, Madagascar Needs a New Reform Drive To Steer Clear of the Economic Storm (World Bank)
The latest economic update for Madagascar suggests that the economy is facing new headwinds following bouts of COVID-19 (coronavirus), a series of extreme weather events and the fallout from the conflict in Ukraine at the start of 2022. An economic recovery had started in Madagascar in 2021 but was interrupted in 2022 by a sequence of domestic and international shocks which are expected to result in growth slowing to 2.6 percent in 2022 (from 4.4 percent in 2021), with the poverty rate now expected to remain close to 81 percent. According to the Madagascar Economic Update: Navigating Through the Storm, the crisis is Ukraine is expected to affect Madagascar mainly through slowing demand from key trading partners and rising oil prices, which are projected to lead to growing fiscal pressures due to a lack of adjustment of regulated fuel prices and growing losses of the national utilities company JIRAMA. Beyond conjunctural factors, the decline in private investment and job creation since the outset of the crisis are expected to constraint in the growth potential of the economy moving forward. In this context, growth is expected to pick up to a slower than expected 4.2 percent in 2023 and 4.6 percent in 2024.
Morocco economic rebound threatened by drought, Ukraine war (RFI)
The North African kingdom had bounced back last year after a sharp recession in 2020 due to the coronavirus pandemic, and the government of gas tycoon Aziz Akhannouch had forecast growth this year topping three percent. But since Russia’s invasion of Ukraine he has been forced to slash that figure to at most 1.7 percent, telling parliament that “sudden external events and climate change” were to blame. The International Monetary Fund has forecast even lower growth of 1.1 percent. Morocco has pumped resources into diversifying its manufacturing sector, particularly by attracting auto giants such as Renault. But those efforts “have not changed the structure of the economy”. That is the conclusion of a 2021 report by a commission on the “New Model of Development” (NMD), a strategy announced last year which sets out ambitious plans including slashing Morocco’s wealth gap and doubling per capita economic output by 2035.
African trade and integration news
Transport and logistics infrastructure essential to AfCFTA implementation (The Business & Financial Times)
Industry players have acknowledged the need to prioritize transport supply chain logistics simultaneously with the implementation of the AfCFTA in order for the continent to achieve optimum benefits from the Single Continental Market agreement.
Speaking at the 2022 Charted Institute of Logistics and Transport Africa Forum in Accra, a Deputy Minister of Trade and Industry, Herbert Krapa said the AfCFTA offers the opportunity to develop intra-regional value chains that to goes beyond only exploiting and exporting raw materials from the smallest supplier to big manufacturers.
“We must develop linkages that enhance our ability and capacity to feed industry in a sustainable way if we are to reap the full benefit of our integration agenda, much of our efforts must be to ensuring that all participants are on the right side of the value chains,” he said.
Cote d’Ivoire repositions for AfCFTA with globally-fit workforce and infrastructure dev’t (The Business & Financial Times)
Francophone nation, Cote d’Ivoire, is repositioning itself for the African Continental Free Trade Area (AfCFTA) with ongoing developmental projects and strategic investments aimed at building ready and skilled workforce across the trade and logistics value chain, including the teaching of trade-related courses in English.
According to Senior Regional Procurement Officer West and Central Africa for IFAD, and Chairperson of CILT-WiLAT Cote d’Ivoire, Ms. Carine Toure Yemita, the move will position Cote d-Ivoire to take advantage of the single continental market with its competitive and globally-oriented graduates or workforce.
“Capacity building is something everyone will need but especially in Africa, we need to improve the capacity levels of our people. Based on our strategy, we’re confident that the future will be better.
African Development Bank (AFDB) Proposes Industrial Hubs To Make Africa A Manufacturing PowerHouse (Tekedia)
In a bid to make Africa a manufacturing powerhouse, the African Development Bank (AFDB) has proposed that the continental free trade agreement, CFTA, moves beyond trade to industrial manufacturing zones that create jobs for African citizens. Speaking at the AFDB annual meetings held in Accra Ghana, the President of the Bank Mr. Akinwunmi Adesina suggested that the African region should not just be a trade region, but also a region where more value-added manufacturing products are traded. In his words, “I think African Continental free trade (AFCTA) should not just be a trade region, but an industrial manufacturing zone where we trade value-added manufacturing products from national and regional value chains that are competitive globally”.
He stated that the AFCTA should drive the creation of zones that will offer infrastructures, facilities, and incentives that drive manufacturing in the continent as it is done in Asia and South America to create jobs. He further disclosed that the AFDB is working to ensure that Africa transitions to sustainable energy that can drive factories to drive manufacturing. Mr. Akinwunmi revealed that 86 percent of AFDB investments in power generation will go into renewable energy.
EAC on track to achieve single currency by 2024, says Kadaga (Monitor)
First Deputy Prime Minister and Minister for East African Community Affairs (EAC) Rebecca Kadaga has said that if everything goes according to plan, the EAC will by 2024 have a Single Currency. Speaking during the Uganda-DR Congo Business Summit in Kinshasa, Ms Kadaga said member states are now working on the finer details to choose a country to host the East African Monetary Institute that will later become the East Africa Central Bank
“By the end of this year, we should be knowing which country is hosting the monetary institute. The institute will be the East African Central Bank … We expect that if we move according to plan, by 2024, we shall have a Single Currency,” she told more than 200 delegates at the summit.
EAC tables US$91.5 Million Budget Estimates before EALA for the 2022/2023 Financial Year (EAC)
The East African Community (EAC) has tabled before the East African Legislative Assembly (EALA) the budget estimates for the 2022/2023 Financial Year totaling US$91,579,215. Presenting the speech before the Assembly, the Chairperson of the Council of Ministers and Kenya’s Cabinet Secretary for EAC and Regional Development, Hon. Betty C. Maina, said that the budget estimates for the Financial Year 2022/22023 are being presented at a time when the world’s economic recovery from the COVID-19 pandemic is under threat from the rising prices of fuel and other commodities, occasioned by the Russian - Ukrainian conflict. “Economic growth in the EAC region averaged 5.9 percent in 2021, compared to an average of 2.3 percent in 2020. The strong regional economic growth in 2021 was largely supported by increased removal of COVID-19 related restrictions, public investments and strong performance in the productive sectors,” said Hon. Maina.
“Global economic growth is expected to slow down from 6.1 percent in 2021 to 3.6 percent in 2022. Economic growth in the EAC region is projected to decline from an average of 5.9 percent in 2021 to 5.3 percent in 2022 and 5.7 percent in 2023,” she added.
The 2022/2023 Budget is themed ‘Accelerating Economic Recovery and Enhancing Productive Sectors for Improved Livelihoods.’
Post-harvest losses: EAC steps in to help farmers (Food for Mzansi)
Post-harvest losses occur in hugely concerning percentages in six East African countries where food security is under threat. To address this, an intergovernmental organisation has developed an action plan to help farmers reverse post-harvest loss. The United Nations’ Food and Agriculture Organization (FAO) estimates that an annual third of the world’s total agricultural industries deals with post-harvest loss. In the East African Community (EAC), post-harvest loss accounts for 50% in tubers and root vegetables, nearly 70% in fruits and vegetables and 30% in cereals.
According to EAC deputy secretary-general for the productive and social sector, Christophe Bazivamo, they have adopted a fruit and vegetables strategy, as well as a management action plan. This forms part of their efforts to find solutions to reducing post-harvest losses.
A detailed article published on FoodForAfrika.com explores the negative impacts of post-harvest loss and the four pillars of food security that must be realised. According to the article not only does it negatively impacts a country’s food security, but it also has a knock-on effect on levels of nutrition. The article furthermore details practical ways in which the EAC plans to reduce these losses.
Enforcing competition would ease food price hikes in east and southern Africa (The Conversation)
Small and medium-scale farmers and agri-businesses in east and southern Africa are getting a raw deal. To succeed they need fair and integrated regional markets. Research by the Centre for Competition, Regulation and Economic Development has highlighted the need for better integration of regional economies as a step towards food security in the region. Powerful commercial interests, high transport costs and poor access to facilities such as for storage mean that small and medium-scale farmers are often not getting fair prices for the food they grow. Fair prices are those that meet demand and cover reasonable costs of supply including transport across borders.
During the course of our research we came across examples of how the odds are stacked against most small and medium-scale farmers. Take the experience of Endrina Maxwell, a small producer in Malawi.
Investors assess regional railway prospects (The New Times)
Potential investors are weighing income prospects in financing the implementation of the Standard Gauge Railway (SGR) project, according to the African Development Bank (AfDB) Director General for Eastern Africa, Nnenna Lily Nwabufo. Currently, Rwanda has two route options on the table, the Kenyan Standard Gauge Railway route for the northern corridor and Isaka-Kigali Standard Gauge Railway for the central corridor.
She disclosed that investors are looking at the likely volume of services and trade attached to the railway project and whether there is enough income to be generated from that to be sure of investment viability. Nevertheless, she said that the intention is to “raise more money internally” as each involved country will have to make a commitment of the amount of money they will allocate to the project from the funding they get from the bank.
Ghana ranked 1st, 2nd in West Africa, Africa as best destination for investments, trade – Fitch Solutions (Myjoyonline)
Ghana has been ranked 1st in West Africa and 2nd in Sub Saharan Africa by Fitch Solutions, research arm of ratings agency Fitch, as the best destination for investments and trade. With a Trade and Investment Risk score of 50.9%, the country outperformed the West Africa average of 36.4%.Despite the challenges facing the economy, the country also placed 88th out of 201 markets globally in terms of competitive environment for investments and trade. For Economic Openness, Ghana scored 58% and 50% for Trade and Investment Risk. In terms of Government and Legal Intervention, the nation scored 45% each respectively. Similarly, with a Crime and Security Risk score of 51%, Ghana outperformed the West Africa average of 33.3% and ranks in 1st place regionally and in 90th place out of 201 markets globally.
The report pointed out that Ghana’s markets have strong fundamentals, including a track record of private investment in energy infrastructure, comparatively high political stability and security, and a relatively diverse competitive landscape. It however expressed worry about the depreciation of the cedi which it said will in the near term make private investors more reluctant to invest in Ghana’s infrastructure sector. It therefore do not expect private investments to meaningfully cushion the negative impact of subdued public infrastructure spending on the market’s construction industry growth.
28th Conference of Directors General of Customs of the West and Central Africa Region (WCO)
The 28th Conference of Directors General of Customs of the WCO West and Central Africa (WCA) Region was held on 26 and 27 May 2022 in Brazzaville, Republic of the Congo.
The Conference was aimed at evaluating progress with the implementation of the Region’s Strategic Plan and the recommendations made by the Directors General of Customs at their 27th Conference, which took place virtually on 30 November 2021. It was also convened to examine the reports of the WCO Secretariat, the Office of the Vice-Chair, the regional entities and the regional (IT) working group, as well as to review a draft proposal to restructure Members’ contributions to the regional fund and discuss other emerging topics.
The WCO Secretary General, in his opening remarks, thanked the authorities of the Republic of the Congo for their hospitality, before outlining the WCO Data Strategy and inviting participants to rise to the challenges of this year’s theme, namely “Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem”. Later in the Conference, he delivered a keynote speech covering the items on the Agenda of the upcoming Policy Commission and Council sessions, aimed at addressing the concerns raised by Members during the regional consultations on the Strategic Plan. In this context he touched upon various topics that the Secretariat has been working on, including Green Customs and Fragile Borders.
India-Africa relations prospering on mutual respects & co-operations among others (NewsOnAIR)
Dating back several centuries, the relations between India and African countries are driven and shaped by a number of factors, including trade and investments, cultural, historical and political engagements.
India and Africa’s historical links and relations have experienced a revival in recent years and both sides understand the fact that it is a win-win situation as growing relations are mutually beneficial. India-Africa trade has grown to around 66.7 billion US dollar in 2019-20. Around 8% of Indian imports are from Africa and around 9% of Africa’s imports are from India. The investment of India’s public and private sector enterprises are increasing in Africa, making it the 8th largest investor in African.
In recent years, besides loan and investment, India has also given ample amount of aid to Africa to fight the Covid-19 pandemic. Under the Vaccine Maitri initiative, India supplied 24.7 million doses of Made of India Covid vaccines to 42 countries in Africa.
Clearly, India looks to engage with Africa meaningfully, focusing much on its core competencies like human resource development, training and skill development, IT, ITES, education and healthcare services unlike China who focuses majorly on developing manufacturing capacities and infrastructure in Africa. While, China’s economic model of engagement with Africa looks attractive and has also paid rich dividend in recent years, the fascination for India’s support for democratic practices, processes, institutions and people to people engagement is high in Africa.
Global economy news
Closed-down ports, held-up containers, and waiting ships in Odesa, Shanghai, or Los Angeles have an impact on supply chains and consumer prices around the world. As shipping markets are global, it is above all the smaller and more vulnerable economies that are more negatively affected by capacity shortages and freight rate increases.
As maritime transport freight rates go up, consumer prices will increase as well. Although it is often said that the shipping costs make up only a small proportion of the final price of high street shop prices, the historically high freight rates – especially for containerised shipping – do trickle down and lead to higher inflation.
Already in our UNCTAD Review of Maritime Transport 2021, we had simulated that the high freight costs will be passed on and lead to an additional increase in consumer prices by 1.5 percentage points globally, with Small Island Developing States and Least Developed Countries experiencing significantly higher surges. Latest data by the IMF confirms that our earlier simulation was spot on.
An update of this assessment for an upcoming UNCTAD expert meeting show that the situation is not improving: As inflation has now reached us all, the contribution of container shipping costs to the price increases is rising. Globally, consumer prices are expected to go up by 1.6 percentage points; in Least Developed Countries the simulated increase is 2.4 percentage points, and in Small Island Developing States it reaches plus 8.1 percentage points.
IMF says it’s looking at ways to channel SDRs to development bank (BusinessLIVE)
The African Development Bank (AfDB) is lobbying rich nations to use their rights to International Monetary Fund (IMF) reserve assets to help it raise funding to support poorer countries, the first such initiative undertaken by a multilateral lender. “We’re pioneering for Africa but also pioneering for multilateral development banks,” which can complement and magnify the work of the IMF, AfDB CFO Hassatou Diop N’Sele said in an interview. The IMF injected a record $650bn into the global fiscal system in 2021 to mitigate the impact of the coronavirus by releasing special drawing rights (SDRs) to its member states.
The AU has called for an additional $67bn to support the continent, with part of it channelled through its regional lender. Under an AfDB proposal, wealthy nations would lend their SDRs to the Abidjan-based bank, which could account for these assets as equity and leverage them to raise three to four times as much funding to support African economies.
Western sanctions policy mindless: Russian official (The Herald)
THE chairperson of the Federation Council of the Federal Assembly of the Russian Federation, Ms Valentina Ivanovna Matvienko, who arrives in the country today for a three-day official visit, has described the Western sanctions policy as mindless. Ms Matvienko is set to have high-level meetings and engagements with President Mnangagwa and other heads of national institutions on how Russia and Zimbabwe can elevate their strategic co-operation in the face of Western sanctions. Both Russia and Zimbabwe have been targeted by Western countries through sanctions for their preference of a fairer world where sovereign countries can determine their destinies within the confines of international law.
Speaking to The Herald prior to her visit, Ms Matvienko emphasised that “developing relations with African countries is one of Russia’s foreign policy priorities”.
Confronting a perfect long storm (IMF Blog)
The pandemic, war in Ukraine, the threat to food security, and the resurgence of global poverty. Heatwaves, droughts, and other extreme weather events. These are not random shocks. Nor are they a perfect storm in the conventional sense, a one-off conjuncture of bad events. We face instead a confluence of lasting structural insecurities—geopolitical, economic, and existential—each reinforcing the other. We have entered a perfect long storm.
There is no lack of private and market finance. But channeling it to meet the needs of the commons requires a proactive public sector and well-designed frameworks for risk-sharing with the private sector. Policies and standards to rapidly scale up the deployment of clean energy technologies that are already proven, and to incentivize large scale infrastructural investments such as in smart transmission and distribution grids, will be critical to achieving significant cuts in emissions by 2030. However, almost half the technologies needed to reach net zero by mid-century are still being prototyped. Governments must put skin in the game to leverage private sector R&D, and promote demonstration projects, to accelerate the development of these technologies and bring them to market. Besides getting to net zero on time, they should aim to spur major new industries and job opportunities.
A more fragmented world (IMF Blog)
The rare confluence of geopolitical, economic, and technological forces now confronting the world may reverberate for generations.
The war in Ukraine is thrusting us into a fraught period of geopolitical realignment, supply disruptions, food and energy insecurity, and more volatile financial markets. These shocks could shake social and political stability in some countries while weakening the ability of the world as a whole to confront its foremost long-term challenge, climate change. A more fragmented world, says Singapore’s Tharman Shanmugaratnam, makes greater investment in global public goods even more urgent—an effort he argues will require unprecedented public-private collaboration and a stronger, more effective multilateralism.
New report highlights positive impact of WTO technical assistance activities (WTO)
This document shows the swift reaction of the WTO Secretariat to the COVID-19 pandemic, WTO Deputy Director-General, Xiangchen Zhang, said in the foreword to the report. He stressed that, with innovation and flexibility, the WTO Secretariat was able to continue providing support to developing countries and least-developed countries despite the constraints posed by the pandemic, such as travel restrictions.